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Who’s In Charge of Digital Transformation? You Are!

Timo Elliott

Each year, I present at about 50 conferences around the world, talking to business and IT audiences about the impact of the latest technologies. I’ve been doing this for a long time, but I’ve recently noticed a change.

When I talk about topics such as analytics and Big Data, audiences are clearly looking for lessons learned that they can apply to their own organizations. But now many of my presentations are about digital transformation, and the reaction has been subtly different.

Audiences are still very interested in hearing real-life stories about organizations that have embarked on digital transformation. But the feedback is less “how can I make that work for me?” and more “wow, that’s interesting! I wonder who’s going to do that in my company?” In other words, they think it’s important – for somebody else.

It’s a big difference, because digital business is a big deal. IDC believes that by the end of this year, two-thirds of global companies will have digital transformation at the center of their corporate strategy. And these transformations are changing how companies operate, calling into question the role of today’s IT in tomorrow’s business innovations.

CIOs have always been told to get closer to the business – but now their very survival may depend upon it. New executive titles such as “chief data officer” are proliferating, and Gartner says there are two different types of CIOs emerging: the “chief innovation officers” who spearhead the technology-led business models of the future and the “chief infrastructure officers” who are relegated to looking after the IT plumbing.

IDC’s research shows that digital business has thus far relied on a culture of experimentation and innovation driven primarily by the business and shadow IT – and this is set to continue. For example, Gartner says that in 2017 – for the first time ever – the average chief marketing officer will spend more on technology than the average CIO. These funds are being used to create “islands of innovation” outside the realm of core IT, creating standalone cloud or mobile applications for customer experience, new analytical applications, or new Internet of Things use cases.

The key challenge for traditional CIOs is that these innovation use cases have tended to deliver new revenue streams and significant business value. Instead of “just” enabling business processes and services, technology now creates new ecosystem platforms for partners and new product offers for customers.

This has emphasized the differences between the revenue-generating agile digital business teams and “costly, slow, and inflexible” core IT systems. But the easy innovation wins are coming to an end and consumer expectations are rising. IDC emphasizes that in next phase of digital transformation, having a strong company-wide digital platform will separate the “thrivers” from the “survivors.”

But business leaders and shadow IT have an awful track record when it comes to taking innovation from internal project silos and turning it into a robust corporate standard. The core skills of traditional IT are essential for the next phase of digital transformation success. But IT staff need to step up and lead the creation of these new platforms, not just wait for the business to come to them with fully formed plans.

You may think of yourself as providing data services and support to business users, and that it’s their job to change the way the company does business. But they can’t do it without you. Managing data is the most important strategic skill in your organization, and business people just don’t have the expertise required.

So who’s responsible for digital transformation in your business? You are!

It’s time to Unlock Your Digital Super Powers: Learn how digitization helps companies be Live Businesses.

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Timo Elliott

About Timo Elliott

Timo Elliott is an Innovation Evangelist for SAP and a passionate advocate of analytics, business intelligence, and digital transformation. He was the eighth employee of BusinessObjects and for the last 25 years, he has worked closely with SAP customers around the world on new technology directions and their impact on real-world organizations. His articles appear regularly in publications such as Forbes, ZDNet, The Guardian, and Digitalist Magazine. He has worked in the UK, Hong Kong, New Zealand, and Silicon Valley, and currently lives in Paris, France. He has a degree in Econometrics and a patent in mobile analytics. 

Five Ways To Avoid ERP Project Failure

Julien Delvat

“To err is human, but to really foul things up you need a computer,” said Paul R. Ehrlich. Gartner adapted the saying to the enterprise in its “Predicts 2016” report: “through 2018, 90% of organizations will lack a postmodern application integration strategy and execution ability, resulting in integration disorder, greater complexity, and cost.” To put it bluntly, many ERP projects are doomed to fail!

The research and advisory group still offers hope for companies that adopt postmodern ERP: “This new environment promises more business agility, but only if the increased complexity is recognized and addressed.”

We have seen our fair share of complex and challenging projects that have “gone south.” Turning them around and putting them back on the right track is frequently the reason we’re called in. I’d like to share with you some of the lessons we’ve learned to help you avoid the predicted IT armageddon.

First we’ll look at what postmodern ERPs are. Then, we’ll see what can be done during implementation to mitigate the risk of an upcoming catastrophe. Last, I’ll show how the right partner can help your organization avoid a doomsday disaster.

Postmodern ERPs

Gartner defines the postmodern ERP as: “a technology strategy that automates and links administrative and operational business capabilities (such as finance, HR, purchasing, manufacturing, and distribution) with appropriate levels of integration that balance the benefits of vendor-delivered integration against business flexibility and agility.”

What strikes me as interesting in this definition is what they’ve missed from it: the deployment options – on-premises or cloud? These considerations are detailed in Gartner’s HOOF Model:

Postmodern ERPs HOOF Model. Source: Gartner

Take a moment to look through this and evaluate where your organization currently sits and where it is heading. With that in mind, let’s look at how to increase the chances for your journey to be successful.

Siloed applications

As described above, one of the keys to postmodern ERPs is the integration of applications provided by diverse vendors, moving away from “monolith mega-suites.” By contrast, best-of-breed applications have a tendency to support integration only with their own tools. For instance, some cloud applications deliver a long list of interfaces (APIs) to interact with their solution, but are limited to read-only interactions. This means that the application will most likely not be able to be integrated into new automated business processes.

In order to help break your corporate silos, you need to avoid recreating them with software. This requires a shift in the mindset from “module” software (CRM, finance, procurement), to a process platform focusing on end-to-end business scenarios.

For instance:

  • Replace “CRM” with “Order to Cash” or “Quote to Cash” processing
  • Replace “Procurement” with “Procure to Pay”
  • Replace “Asset Management” with “Acquire to Retire”
  • Replace “CAD” with “Idea to Offering”
  • Replace “Analytics” with “Record-to-Report”

This will ensure a seamless experience for the end users and simplify your application landscape.

Incomplete scope

The cloud ERP landscape is still heterogeneous. A large number of solutions grew from a specialized scope and expanded into the ERP domain, or from small target customers to larger ones. However, unless a large scope is covered, including Gartner’s main topics – finance, HR, purchasing, and distribution – then integration is increasingly complex and hard to maintain.

As an example, if a professional services company uses an accounting software as its main system of record and combines it with a time and expenses package as well as a payroll solution, some key architecture decisions need to be considered:

  • Where should employee master data be maintained?
  • How should you handle errors and corrections of time entries?
  • How should workflows and approvals be handled?

Without an out-of-the-box integration, these simple questions could easily give nightmares to the most seasoned IT teams.

Cloud washing

Software vendors are now expected to have a cloud option. However, some took shortcuts by simply hosting their solutions, providing remote access, and changing their licenses to a subscription model.

This “cloud washing” is far from the postmodern ERP definition we saw earlier. Robust solutions should offer:

  • Browser-based solutions (no download)
  • Similar user experience across different devices (with responsive design for smaller screens)
  • Multi-tenant or elastic options for improved total cost of ownership (TCO)

Postmodern ERPs should have a cloud-first principle with a consistent strategy for back-end and user experience. Ensure you identify such key differentiators when selecting your solution.

Misalignment to your corporate strategy

“Good ERP is more than just good software. It involves an institutional commitment to connecting people, processes, and resources,” said James Young. We’ve seen countless software purchase decisions that made sense at the level of cost center manager or for a small business unit, but were counterproductive to the overall company-wide strategy.

On a recent project, the CIO of a large company told us, “for security and legal reasons, we have a zero-cloud policy.” However, during the subsequent roadmap analysis, we uncovered a slew of critical Web applications for CRM, human resources, and reporting, unbeknown to him.

Another mistake is to align your IT strategy with a vendor roadmap. On our last roadmap exercise for a multinational consumer products manufacturing company, our analysis concluded that there wasn’t enough value in its main software provider’s current release, and that a better strategy would be to leapfrog this release in 2016 and implement the next major release in 2017, thus reducing the impact of change and improving the chances of value realization.

Go at it alone

As the Gartner report concludes: “It really is time that the significant investments enterprises make in ERP solutions reap real benefits. ERP vendors and [software integrators) must raise their game on implementation approaches, renovating and revisiting their own implementation methodologies for speed and with greater emphasis on the benefits realization activities.”

But let’s face it: simple just ain’t easy! Despite efforts from ERP vendors to facilitate the onboarding of new teams and the standardization of the connectivity of their applications, the integration piece still needs expertise on both applications. Such skills are usually few and far between but are critical to the success of your project.

So, if your future postmodern ERP implementation project becomes scary, “if there’s something weird, And it don’t look good, Who you gonna call?”

To create a Live Business, check out this infographic to learn The Essentials of Process Digitization Excellence.

This article originally appeared in BlueFin Solutions.

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Julien Delvat

About Julien Delvat

With over 15 years’ experience of developing cost management applications at SAP Labs France, coupled with significant experience of architecting, designing and implementing these systems for clients across the globe and industries, Julien Delvat is perfectly placed to offer Bluefin’s customers unrivalled expertise in the colliding worlds of finance and technology. His contributions to the SAP Financials community have been recognized through publications in professional blogs and journals like SCN.com and SAP Expert, as well as multiple speaking and panel opportunities at conferences like SAP Financials, SAP Controlling, Sapphire / ASUG, and SAP TechEd. He is most passionate about his roles as an ASUG volunteer for the Financials community and as an SAP Mentor, working as a trusted advisor to build new communication channels between SAP and its customers.

How Digital Transformation Is Rewriting Business Models

Ginger Shimp

Everybody knows someone who has a stack of 3½-inch floppies in a desk drawer “just in case we may need them someday.” While that might be amusing, the truth is that relatively few people are confident that they’re making satisfactory progress on their digital journey. The boundaries between the digital and physical worlds continue to blur — with profound implications for the way we do business. Virtually every industry and every enterprise feels the effects of this ongoing digital transformation, whether from its own initiative or due to pressure from competitors.

What is digital transformation? It’s the wholesale reimagining and reinvention of how businesses operate, enabled by today’s advanced technology. Businesses have always changed with the times, but the confluence of technologies such as mobile, cloud, social, and Big Data analytics has accelerated the pace at which today’s businesses are evolving — and the degree to which they transform the way they innovate, operate, and serve customers.

The process of digital transformation began decades ago. Think back to how word processing fundamentally changed the way we write, or how email transformed the way we communicate. However, the scale of transformation currently underway is drastically more significant, with dramatically higher stakes. For some businesses, digital transformation is a disruptive force that leaves them playing catch-up. For others, it opens to door to unparalleled opportunities.

Upending traditional business models

To understand how the businesses that embrace digital transformation can ultimately benefit, it helps to look at the changes in business models currently in process.

Some of the more prominent examples include:

  • A focus on outcome-based models — Open the door to business value to customers as determined by the outcome or impact on the customer’s business.
  • Expansion into new industries and markets — Extend the business’ reach virtually anywhere — beyond strictly defined customer demographics, physical locations, and traditional market segments.
  • Pervasive digitization of products and services — Accelerate the way products and services are conceived, designed, and delivered with no barriers between customers and the businesses that serve them.
  • Ecosystem competition — Create a more compelling value proposition in new markets through connections with other companies to enhance the value available to the customer.
  • Access a shared economy — Realize more value from underutilized sources by extending access to other business entities and customers — with the ability to access the resources of others.
  • Realize value from digital platforms — Monetize the inherent, previously untapped value of customer relationships to improve customer experiences, collaborate more effectively with partners, and drive ongoing innovation in products and services,

In other words, the time-tested assumptions about how to identify customers, develop and market products and services, and manage organizations may no longer apply. Every aspect of business operations — from forecasting demand to sourcing materials to recruiting and training staff to balancing the books — is subject to this wave of reinvention.

The question is not if, but when

These new models aren’t predictions of what could happen. They’re already realities for innovative, fast-moving companies across the globe. In this environment, playing the role of late adopter can put a business at a serious disadvantage. Ready or not, digital transformation is coming — and it’s coming fast.

Is your company ready for this sea of change in business models? At SAP, we’ve helped thousands of organizations embrace digital transformation — and turn the threat of disruption into new opportunities for innovation and growth. We’d relish the opportunity to do the same for you. Our Digital Readiness Assessment can help you see where you are in the journey and map out the next steps you’ll need to take.

Up next I’ll discuss the impact of digital transformation on processes and work. Until then, you can read more on how digital transformation is impacting your industry.

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Ginger Shimp

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


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Unleash The Digital Transformation

Kadamb Goswami

The world has changed. We’ve seen massive disruption on multiple fronts – business model disruption, cybercrime, new devices, and an app-centric world. Powerful networks are crucial to success in a mobile-first, cloud-first world that’s putting an ever-increasing increasing amount of data at our fingertips. With the Internet of Things (IoT) we can connect instrumented devices worldwide and use new data to transform business models and products.

Disruption

Disruption comes in many forms. It’s not big or scary, it’s just another way of describing change and evolution. In the ’80s it manifested as call centers. Then, as the digital landscape began to take shape, it was the Internet, cloud computing … now it’s artificial intelligence (AI).

Digital transformation

Digital transformation means different things to different companies, but in the end I believe it will be a simple salvation that will carry us forward. If you Bing (note I worked for Microsoft for 15 years before experiencing digital transformation from the lens of the outside world), digital transformation, it says it’s “the profound and accelerating transformation of business activities, processes, competencies, and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way.” (I’ll simplify that; keep reading.)

A lot of today’s digital transformation ideas are ripped straight from the scripts of sci-fi entertainment, whether you’re talking about the robotic assistants of 2001: A Space Odyssey or artificial intelligence in the Star Trek series. We’re forecasting our future with our imagination. So, let’s move on to why digital transformation is needed in our current world.

Business challenges

The basic challenges facing businesses today are the same as they’ve always been: engaging customers, empowering employees, optimizing operations, and reinventing the value offered to customers. However, what has changed is the unique convergence of three things:

  1. Increasing volumes of data, particularly driven by the digitization of “things” and heightened individual mobility and collaboration
  1. Advancements in data analytics and intelligence to draw actionable insight from the data
  1. Ubiquity of cloud computing, which puts this disruptive power in the hands of organizations of all sizes, increasing the pace of innovation and competition

Digital transformation in plain English

Hernan Marino, senior vice president, marketing, & global chief operating officer at SAP, explains digital transformation by giving specific industry examples to make it simpler.

Automobile manufacturing used to be the work of assembly lines, people working side-by-side literally piecing together, painting, and churning out vehicles. It transitioned to automation, reducing costs and marginalizing human error. That was a business transformation. Now, we are seeing companies like Tesla and BMW incorporate technology into their vehicles that essentially make them computers on wheels. Cameras. Sensors. GPS. Self-driving vehicles. Syncing your smartphone with your car.

The point here is that companies need to make the upfront investments in infrastructure to take advantage of digital transformation, and that upfront investment will pay dividends in the long run as technological innovations abound. It is our job to collaboratively work with our customers to understand what infrastructure changes need to be made to achieve and take advantage of digital transformation.

Harman gives electric companies as another example. Remember a few years ago, when you used to go outside your house and see the little power meter spinning as it recorded the kilowatts you use? Every month, the meter reader would show up in your yard, record your usage, and report back to the electric company.

Most electric companies then made a business transformation and installed smart meters – eliminating the cost of the meter reader and integrating most homes into a smart grid that gave customers access to their real-time information. Now, as renewable energy evolves and integrates more fully into our lives, these same electric companies that switched over to smart meters are going to make additional investments to be able to analyze the data and make more informed decisions that will benefit both the company and its customers.

That is digital transformation. Obviously, banks, healthcare, entertainment, trucking, and e-commerce all have different needs than auto manufacturers and electric companies. It is up to us – marketers and account managers promoting digital transformation – to identify those needs and help our clients make the digital transformation as seamlessly as possible.

Digital transformation is more than just a fancy buzzword, it is our present and our future. It is re-envisioning existing business models and embracing a different way of bringing together people, data, and processes to create more for their customers through systems of intelligence.

Learn more about what it means to be a digital business.

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Goswami Kadamb

About Goswami Kadamb

Kadamb is a Senior Program Manager at SAP where he is responsible for developing and executing strategic sales program with Concur SaaS portfolio. Prior to that he led several initiatives with Microsoft's Cloud & Enterprise business to enable Solution Sales & IaaS offerings.