Integration: The Key To Digitizing Procurement Processes

Vasudha Karanam

People in procurement, supply chain, and finance functions often choose the best software for their individual responsibilities so they can take advantage of the innovative capabilities it has to offer. However, this creates challenges for IT – with different systems for different but related functions across the organization.

What’s more, IT is also increasingly dealing with transitions from on-premise to cloud solutions, along with the need to manage multiple cloud or hybrid infrastructures. Add in the rapid adoption of business networks to extend procurement processes for collaboration with partners and suppliers, and the IT challenges become even more complex.

For IT staff, all of this can seem daunting, as they must deal with fragmented data; disrupted, inefficient processes; multiple sources of truth; and inconsistent communication. So what’s an IT organization to do?

Striving for excellence, despite the challenges

IT departments work diligently to integrate disparate solutions into their existing infrastructures so they can provide a unified user experience.

This also holds true for companies that want to truly realize the benefits of digitizing procurement processes, and in particular, business networks. A seamless integration between cloud-based solutions and existing infrastructures is key to driving performance, speed, agility, visibility, and control.

Simplifying the path for business networks

For procurement, supply chain, and finance functions, business commerce networks have become an integral part of how companies manage their buying, selling, and supply chain management processes. With more and more buyers and suppliers joining these networks, IT must find an integration path that is scalable and empowering. The optimal option is an underlying integration process that provides self-service capabilities which are simple enough for organizations to quickly navigate on their own.

In fact, simple, self-service, and fast are three core requirements for innovative, best-in-class integration solutions. Here’s why:

  • Simple: Buyers and suppliers want an easy-to-use integration setup that guides them through the process step by step with a single sign-on.
  • Self-service: People who use business commerce networks regularly want a user-friendly interface so they can configure, test, and deploy the solution quickly, without any need for outside help.
  • Fast: Speed is also key for users that want to get into production rapidly. Integration that can be completed within hours is ideal.

Solutions with these advantages allow suppliers to interact with multiple customers by connecting just once, with a single configuration for all customers. With greater visibility into a single source of truth, suppliers can make more informed and confident decisions.

Ultimately, this leads to a faster market-to-cash cycle, greater order and invoice accuracy, lower processing costs, and higher customer satisfaction. And integration processes like this alleviate the burden on IT, which saves time and money for the organization overall.

To learn more about how to digitize and integrate your procurement processes, join SAP for an informative Webinar on simplifying integration on June 29. You’ll also hear from our customer, Devon Energy, on the benefits of integrating procurement, supply chain, and finance operations into a single source of truth. Register now.

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Vasudha Karanam

About Vasudha Karanam

Vasudha Karanam is an IT/Platform product marketer with SAP Ariba. With over 11 years of experience in IT, she has spent the last 8 years focused on the procurement solutions sector. She is actively involved in creating product marketing strategies for IT/Platform solutions. She is responsible for integrated marketing plans, growth initiatives, and go-to-market plans for IT/Platform solutions from SAP Ariba.

Vasudha was previously responsible for various roles including marketing release readiness and business analytics for SAP Ariba sales and marketing. She holds an MBA from Birmingham City University, UK.

DataOps Is The Next Big Thing

Ella Brand

Data is mainstream. In today’s world, there is an explosion of data sources because of all the advancements in collection: sensors on the Internet of Things (IoT), new apps, and social media. There’s also the realization that data can be a competitive advantage and the perception of the need to democratize it.

Thought leaders of digital transformation and disruption already understand the value of proper business process modeling. Accepting that everyone wants to be data-driven, we should all recognize that data flows are nothing else but business workflows without prose.

That’s why it’s important to not just have dedicated development operations (DevOps) teams in place, as Thomas Di Giacomo wrote in his latest Digitalist blog, but also to hire enthusiastic data operations (DataOps) experts for effective collaboration between product management, data engineering, data science, and business operations. Talents are not that easy to find, and the wording of these jobs descriptions (“operations,” “process engineering”) isn’t that hot. But it needs to become sexier, and I see a chance that this is happening quite soon. Just remember the rise of the data scientist.

Besides the DataOps talents, proper solutions to tackle the challenges of DataOps will spring up like mushrooms within the next couple of years: Data pipelining, data orchestration, data governance, and policy management solutions will be necessary to work with the data wherever it is stored instead of moving it around. Doing it that way is not just pricey, but also a waste of time. Being faster is an obvious advantage: Imagine you can already see the data insights and cause action while your competitors are still figuring out when and where to move the data from one silo to another. Established companies worry: How can we ensure that sensitive data remains safe if it’s available to everyone? DataOps requires many businesses to comply with strict data governance regulations and there are definitely legitimate concerns.

Gartner is defining DataOps as a hub for collecting and distributing data, with a mandate to provide controlled access to systems of record for customer and marketing performance data, while protecting privacy, usage restrictions, and data integrity. DataOps is a way of managing data wherever it’s located, get it cleaned, versioned, transformed, enriched, and delivered. I can see one big trend that is causing the need for DataOps:

Agility. Every business is using this buzzword to express its state-of-the-art flexibly. If carried to its logical conclusion: Agile data processes are by definition never carved out of stone; the processes, the technologies, and even the frameworks should rather be questioned whenever possible and if necessary redesigned or adjusted to establish an environment that is focused on efficiency, quality, interdisciplinary and continuous improvement. We simply can’t afford to exclude data from an agile decision-making process to achieve the velocity of innovation demanded by the digital economy.

We need a new culture, a new approach; one that does for data what DevOps did for infrastructure. The goal should be to improve results by bringing together the data supplier with the data consumer and at the same time getting rid of a static data lifecycle. Let the DataOps journey begin.

Learn more

Want to learn about SAP’s approach of making your DataOps management a lot of easier and what the future Big Data warehousing is about? Then register for the upcoming Webinar on January 24 at 11:00 a.m. ET/17:00 p.m. CET. You’ll hear from Marc Hartz, product manager of SAP Data Hub. See you there!

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Ella Brand

About Ella Brand

Ella Brand is the product marketing lead for SAP Data Hub with expertise and a general focus on analytics and Big Data solutions.

How Content Management Greases The Wheels Of Human Interactions

Bil Khan

Part 3 in the 3-part “Content Management ROI” series

When building a business case for investing in enterprise content management (ECM) solutions, it’s easy to overlook the human element. Sure, ECM solutions provide effective management of all types of enterprise content throughout the content lifecycle. Ideally, they provide for the secure, automated capture, storage, organization, and search of documents, complete with archiving and records management for auditing and compliance. But for what purpose?

Ultimately, ECM solutions aren’t about the content; they are for people who need fast, easy access to information, and the ability to search in a way relevant to their roles. This capability enables people to work together and solve problems faster: a contact center agent assisting a frustrated customer, for example, or an insurance underwriter onboarding a new policy, or an engineering team with easy, on-site access to current changes to construction drawings via mobile devices.

You know what it’s like in the real world before ECM. An internal customer asks you to provide time-sensitive information for an important report. But to do that, you need to interact with various systems with different interfaces. You log into each and do your best, but after two hours of effort, you can’t find what you need, as the content is fragmented and in different formats. It may not have been handled correctly, and isn’t easily searchable. It takes you five working days to dig around and uncover what’s needed – and you still can’t be sure your file is complete or whether it’s the most current document. You ultimately find it by digging around in paper files. But by then, the process for your internal customer has broken down.

A connected enterprise

ECM digitizes the end-to-end process for both structured data and unstructured content, organizing it for searchability and connecting it across the enterprise. Now information is automatically catalogued, up to date, and accessible from anywhere, on any device. The content is access-controlled and compliant, with a complete audit trail of the most recent changes. Now users can devote their time to more important tasks, confident that files are complete and current, and thus better meet the needs of employees, customers, and suppliers. ECM literally transforms how work gets done and problems get solved, and unlocks huge improvements in productivity, efficiency, and job satisfaction while reducing job stress.

Why? Because information greases the wheels of human interactions, which are fundamental to how we as humans innovate, collaborate, and work. As noted by Forrester in the recent TEI study on ECM solutions, when people and teams are extended, that’s when the magic happens. In this study:

“Each organization gave Forrester an account of discovering value so great that they were reluctant to calculate a financial amount. What is the value, for example, of automatically generating a technical drawing that describes exactly the one-off assembly part the company wishes to purchase from an overseas supplier, with all supporting documents to initiate, authorize, and pay for the purchase? Lead time and errors go to zero, with follow-on value from the company’s customers in the form of loyalty and repurchase. Or another example: what is the value of putting a property diagram in the hands (or rather, onto a mobile device) of a utility worker so she knows exactly where (and where not) to dig? ‘We can’t put a number on that,’ was heard repeatedly during the interviews.”

I would argue that these are examples of what’s possible when easy, fast access to enterprise information is at employees’ fingertips.

An asset management example

To illustrate further, consider the example of using digital twins, which Gartner identified as one of the top 10 strategic technology trends for 2018. Gartner noted that well-designed digital twins of assets have the potential to significantly improve enterprise decision-making.

How do you go about building a digital twin for your enterprise assets?

The key is to enable a 360-degree view of all information related to your equipment from both internal and external sources in order to create a complete digital replica of your physical assets, processes, and systems. Without a way to connect the information from all these sources, you may end up with incomplete or inaccurate information. Integrating an ECM solution into a network – one that connects suppliers, OEMs, and third-party service providers – could be the fastest, easiest way to achieve a 360-degree view of all information.

It’s important to note that assets are continuously changing because of maintenance, repairs, and other events. These changes may require updates in multiple systems of record to ensure safety, efficiency, and operational integrity. This means that the digital twin needs to be constantly updated with new information (think updated operating manuals, repair manuals, and training videos).

Integration with an intelligent network solution provides a single, intuitive interface to easily access online asset information from external sources such as suppliers, OEMs, engineering and procurement companies, and third parties. You can use this external information to enrich the asset data, including any documents, and then propagate this information through internal systems such as those for plant maintenance, as well as GIS, SCADA, content management, and engineering design systems.

This integration allows you to make informed decisions about managing and maintaining your assets, and it delivers far-reaching operational advantages such as:

  • Lower plant maintenance costs as a result of more efficient spares and parts management
  • Reduced safety and compliance risk through more accurate equipment data
  • Increased plant uptime due to more complete and accurate asset information
  • Improved plant reliability and enhanced operational compliance

Learn more

I encourage you to read the Forrester study to understand how the digitization of unstructured information is not only the starting point for digital transformation, but also for more efficient, effective, and rewarding human interactions central to how your business operates. Once content is stored systematically and cataloged so it can be intelligently searched and retrieved, quickly and easily, by the people who need it, you’ve paved the way for their success.

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Why Strategic Plans Need Multiple Futures

By Dan Wellers, Kai Goerlich, and Stephanie Overby , Kai Goerlich and Stephanie Overby

When members of Lowe’s Innovation Labs first began talking with the home improvement retailer’s senior executives about how disruptive technologies would affect the future, the presentations were well received but nothing stuck.

“We’d give a really great presentation and everyone would say, ‘Great job,’ but nothing would really happen,” says Amanda Manna, head of narratives and partnerships for the lab.

The team realized that it needed to ditch the PowerPoints and try something radical. The team’s leader, Kyle Nel, is a behavioral scientist by training. He knows people are wired to receive new information best through stories. Sharing far-future concepts through narrative, he surmised, could unlock hidden potential to drive meaningful change.

So Nel hired science fiction writers to pen the future in comic book format, with characters and a narrative arc revealed pane by pane.

The first storyline, written several years before Oculus Rift became a household name, told the tale of a couple envisioning their kitchen renovation using virtual reality headsets. The comic might have been fun and fanciful, but its intent was deadly serious. It was a vision of a future in which Lowe’s might solve one of its long-standing struggles: the approximately US$70 billion left on the table when people are unable to start a home improvement project because they can’t envision what it will look like.

When the lab presented leaders with the first comic, “it was like a light bulb went on,” says Manna. “Not only did they immediately understand the value of the concept, they were convinced that if we didn’t build it, someone else would.”

Today, Lowe’s customers in select stores can use the HoloRoom How To virtual reality tool to learn basic DIY skills in an interactive and immersive environment.

Other comics followed and were greeted with similar enthusiasm—and investment, where possible. One tells the story of robots that help customers navigate stores. That comic spawned the LoweBot, which roamed the aisles of several Lowe’s stores during a pilot program in California and is being evaluated to determine next steps.

And the comic about tools that can be 3D-printed in space? Last year, Lowe’s partnered with Made in Space, which specializes in making 3D printers that can operate in zero gravity, to install the first commercial 3D printer in the International Space Station, where it was used to make tools and parts for astronauts.

The comics are the result of sending writers out on an open-ended assignment, armed with trends, market research, and other input, to envision what home improvement planning might look like in the future or what the experience of shopping will be in 10 years. The writers come back with several potential story ideas in a given area and work collaboratively with lab team members to refine it over time.

The process of working with writers and business partners to develop the comics helps the future strategy team at Lowe’s, working under chief development officer Richard D. Maltsbarger, to inhabit that future. They can imagine how it might play out, what obstacles might surface, and what steps the company would need to take to bring that future to life.

Once the final vision hits the page, the lab team can clearly envision how to work backward to enable the innovation. Importantly, the narrative is shared not only within the company but also out in the world. It serves as a kind of “bat signal” to potential technology partners with capabilities that might be required to make it happen, says Manna. “It’s all part of our strategy for staking a claim in the future.”

Planning must become completely oriented toward—and sourced from—the future.

Companies like Lowe’s are realizing that standard ways of planning for the future won’t get them where they need to go. The problem with traditional strategic planning is that the approach, which dates back to the 1950s and has remained largely unchanged since then, is based on the company’s existing mission, resources, core competencies, and competitors.

Yet the future rarely looks like the past. What’s more, digital technology is now driving change at exponential rates. Companies must be able to analyze and assess the potential impacts of the many variables at play, determine the possible futures they want to pursue, and develop the agility to pivot as conditions change along the way.

This is why planning must become completely oriented toward—and sourced from—the future, rather than from the past or the present. “Every winning strategy is based on a compelling insight, but most strategic planning originates in today’s marketplace, which means the resulting plans are constrained to incremental innovation,” says Bob Johansen, distinguished fellow at the Institute for the Future. “Most corporate strategists and CEOs are just inching their way to the future.” (Read more from Bob Johansen in the Thinkers story, “Fear Factor.”)

Inching forward won’t cut it anymore. Half of the S&P 500 organizations will be replaced over the next decade, according to research company Innosight. The reason? They can’t see the portfolio of possible futures, they can’t act on them, or both. Indeed, when SAP conducts future planning workshops with clients, we find that they usually struggle to look beyond current models and assumptions and lack clear ideas about how to work toward radically different futures.

Companies that want to increase their chances of long-term survival are incorporating three steps: envisioning, planning for, and executing on possible futures. And doing so all while the actual future is unfolding in expected and unexpected ways.

Those that pull it off are rewarded. A 2017 benchmarking report from the Strategic Foresight Research Network (SFRN) revealed that vigilant companies (those with the most mature processes for identifying, interpreting, and responding to factors that induce change) achieved 200% greater market capitalization growth and 33% higher profitability than the average, while the least mature companies experienced negative market-cap growth and had 44% lower profitability.

Looking Outside the Margins

“Most organizations lack sufficient capacity to detect, interpret, and act on the critically important but weak and ambiguous signals of fresh threats or new opportunities that emerge on the periphery of their usual business environment,” write George S. Day and Paul J. H. Schoemaker in their book Peripheral Vision.

But that’s exactly where effective future planning begins: examining what is happening outside the margins of day-to-day business as usual in order to peer into the future.

Business leaders who take this approach understand that despite the uncertainties of the future there are drivers of change that can be identified and studied and actions that can be taken to better prepare for—and influence—how events unfold.

That starts with developing foresight, typically a decade out. Ten years, most future planners agree, is the sweet spot. “It is far enough out that it gives you a bit more latitude to come up with a broader way to the future, allowing for disruption and innovation,” says Brian David Johnson, former chief futurist for Intel and current futurist in residence at Arizona State University’s Center for Science and the Imagination. “But you can still see the light from it.”

The process involves gathering information about the factors and forces—technological, business, sociological, and industry or ecosystem trends—that are effecting change to envision a range of potential impacts.

Seeing New Worlds

Intel, for example, looks beyond its own industry boundaries to envision possible future developments in adjacent businesses in the larger ecosystem it operates in. In 2008, the Intel Labs team, led by anthropologist Genevieve Bell, determined that the introduction of flexible glass displays would open up a whole new category of foldable consumer electronic devices.

To take advantage of that advance, Intel would need to be able to make silicon small enough to fit into some imagined device of the future. By the time glass manufacturer Corning unveiled its ultra-slim, flexible glass surface for mobile devices, laptops, televisions, and other displays of the future in 2012, Intel had already created design prototypes and kicked its development into higher gear. “Because we had done the future casting, we were already imagining how people might use flexible glass to create consumer devices,” says Johnson.

Because future planning relies so heavily on the quality of the input it receives, bringing in experts can elevate the practice. They can come from inside an organization, but the most influential insight may come from the outside and span a wide range of disciplines, says Steve Brown, a futurist, consultant, and CEO of BaldFuturist.com who worked for Intel Labs from 2007 to 2016.

Companies may look to sociologists or behaviorists who have insight into the needs and wants of people and how that influences their actions. Some organizations bring in an applied futurist, skilled at scanning many different forces and factors likely to coalesce in important ways (see Do You Need a Futurist?).

Do You Need a Futurist?

Most organizations need an outsider to help envision their future. Futurists are good at looking beyond the big picture to the biggest picture.

Business leaders who want to be better prepared for an uncertain and disruptive future will build future planning as a strategic capability into their organizations and create an organizational culture that embraces the approach. But working with credible futurists, at least in the beginning, can jump-start the process.

“The present can be so noisy and business leaders are so close to it that it’s helpful to provide a fresh outside-in point of view,” says veteran futurist Bob Johansen.

To put it simply, futurists like Johansen are good at connecting dots—lots of them. They look beyond the boundaries of a single company or even an industry, incorporating into their work social science, technical research, cultural movements, economic data, trends, and the input of other experts.

They can also factor in the cultural history of the specific company with whom they’re working, says Brian David Johnson, futurist in residence at Arizona State University’s Center for Science and the Imagination. “These large corporations have processes and procedures in place—typically for good reasons,” Johnson explains. “But all of those reasons have everything to do with the past and nothing to do with the future. Looking at that is important so you can understand the inertia that you need to overcome.”

One thing the best futurists will say they can’t do: predict the future. That’s not the point. “The future punishes certainty,” Johansen says, “but it rewards clarity.” The methods futurists employ are designed to trigger discussions and considerations of possibilities corporate leaders might not otherwise consider.

You don’t even necessarily have to buy into all the foresight that results, says Johansen. Many leaders don’t. “Every forecast is debatable,” Johansen says. “Foresight is a way to provoke insight, even if you don’t believe it. The value is in letting yourself be provoked.”

External expert input serves several purposes. It brings everyone up to a common level of knowledge. It can stimulate and shift the thinking of participants by introducing them to new information or ideas. And it can challenge the status quo by illustrating how people and organizations in different sectors are harnessing emerging trends.

The goal is not to come up with one definitive future but multiple possibilities—positive and negative—along with a list of the likely obstacles or accelerants that could surface on the road ahead. The result: increased clarity—rather than certainty—in the face of the unknown that enables business decision makers to execute and refine business plans and strategy over time.

Plotting the Steps Along the Way

Coming up with potential trends is an important first step in futuring, but even more critical is figuring out what steps need to be taken along the way: eight years from now, four years from now, two years from now, and now. Considerations include technologies to develop, infrastructure to deploy, talent to hire, partnerships to forge, and acquisitions to make. Without this vital step, says Brown, everybody goes back to their day jobs and the new thinking generated by future planning is wasted. To work, the future steps must be tangible, concrete, and actionable.

Organizations must build a roadmap for the desired future state that anticipates both developments and detours, complete with signals that will let them know if they’re headed in the right direction. Brown works with corporate leaders to set indicator flags to look out for on the way to the anticipated future. “If we see these flagged events occurring in the ecosystem, they help to confirm the strength of our hypothesis that a particular imagined future is likely to occur,” he explains.

For example, one of Brown’s clients envisioned two potential futures: one in which gestural interfaces took hold and another in which voice control dominated. The team set a flag to look out for early examples of the interfaces that emerged in areas such as home appliances and automobiles. “Once you saw not just Amazon Echo but also Google Home and other copycat speakers, it would increase your confidence that you were moving more towards a voice-first era rather than a gesture-first era,” Brown says. “It doesn’t mean that gesture won’t happen, but it’s less likely to be the predominant modality for communication.”

How to Keep Experiments from Being Stifled

Once organizations have a vision for the future, making it a reality requires testing ideas in the marketplace and then scaling them across the enterprise. “There’s a huge change piece involved,”
says Frank Diana, futurist and global consultant with Tata Consultancy Services, “and that’s the place where most
businesses will fall down.”

Many large firms have forgotten what it’s like to experiment in several new markets on a small scale to determine what will stick and what won’t, says René Rohrbeck, professor of strategy at the Aarhus School of Business and Social Sciences. Companies must be able to fail quickly, bring the lessons learned back in, adapt, and try again.

Lowe’s increases its chances of success by creating master narratives across a number of different areas at once, such as robotics, mixed-reality tools, on-demand manufacturing, sustainability, and startup acceleration. The lab maps components of each by expected timelines: short, medium, and long term. “From there, we’ll try to build as many of them as quickly as we can,” says Manna. “And we’re always looking for that next suite of things that we should be working on.” Along the way certain innovations, like the HoloRoom How-To, become developed enough to integrate into the larger business as part of the core strategy.

One way Lowe’s accelerates the process of deciding what is ready to scale is by being open about its nascent plans with the world. “In the past, Lowe’s would never talk about projects that weren’t at scale,” says Manna. Now the company is sharing its future plans with the media and, as a result, attracting partners that can jump-start their realization.

Seeing a Lowe’s comic about employee exoskeletons, for example, led Virginia Tech engineering professor Alan Asbeck to the retailer. He helped develop a prototype for a three-month pilot with stock employees at a Christiansburg, Virginia, store.

The high-tech suit makes it easier to move heavy objects. Employees trying out the suits are also fitted with an EEG headset that the lab incorporates into all its pilots to gauge unstated, subconscious reactions. That direct feedback on the user experience helps the company refine its innovations over time.

Make the Future Part of the Culture

Regardless of whether all the elements of its master narratives come to pass, Lowe’s has already accomplished something important: It has embedded future thinking into the culture of the company.

Companies like Lowe’s constantly scan the environment for meaningful economic, technology, and cultural changes that could impact its future assessments and plans. “They can regularly draw on future planning to answer challenges,” says Rohrbeck. “This intensive, ongoing, agile strategizing is only possible because they’ve done their homework up front and they keep it updated.”

It’s impossible to predict what’s going to happen in the future, but companies can help to shape it, says Manna of Lowe’s. “It’s really about painting a picture of a preferred future state that we can try to achieve while being flexible and capable of change as we learn things along the way.” D!


About the Authors

Dan Wellers is Global Lead, Digital Futures, at SAP.

Kai Goerlich is Chief Futurist at SAP’s Innovation Center Network.

Stephanie Overby is a Boston-based business and technology journalist.


Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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The Human Factor In An AI Future

Dan Wellers and Kai Goerlich

As artificial intelligence becomes more sophisticated and its ability to perform human tasks accelerates exponentially, we’re finally seeing some attempts to wrestle with what that means, not just for business, but for humanity as a whole.

From the first stone ax to the printing press to the latest ERP solution, technology that reduces or even eliminates physical and mental effort is as old as the human race itself. However, that doesn’t make each step forward any less uncomfortable for the people whose work is directly affected – and the rise of AI is qualitatively different from past developments.

Until now, we developed technology to handle specific routine tasks. A human needed to break down complex processes into their component tasks, determine how to automate each of those tasks, and finally create and refine the automation process. AI is different. Because AI can evaluate, select, act, and learn from its actions, it can be independent and self-sustaining.

Some people, like investor/inventor Elon Musk and Alibaba founder and chairman Jack Ma, are focusing intently on how AI will impact the labor market. It’s going to do far more than eliminate repetitive manual jobs like warehouse picking. Any job that involves routine problem-solving within existing structures, processes, and knowledge is ripe for handing over to a machine. Indeed, jobs like customer service, travel planning, medical diagnostics, stock trading, real estate, and even clothing design are already increasingly automated.

As for more complex problem-solving, we used to think it would take computers decades or even centuries to catch up to the nimble human mind, but we underestimated the exponential explosion of deep learning. IBM’s Watson trounced past Jeopardy champions in 2011 – and just last year, Google’s DeepMind AI beat the reigning European champion at Go, a game once thought too complex for even the most sophisticated computer.

Where does AI leave human?

This raises an urgent question for the future: How do human beings maintain our economic value in a world in which AI will keep getting better than us at more and more things?

The concept of the technological singularity – the point at which machines attain superhuman intelligence and permanently outpace the human mind – is based on the idea that human thinking can’t evolve fast enough to keep up with technology. However, the limits of human performance have yet to be found. It’s possible that people are only at risk of lagging behind machines because nothing has forced us to test ourselves at scale.

Other than a handful of notable individual thinkers, scientists, and artists, most of humanity has met survival-level needs through mostly repetitive tasks. Most people don’t have the time or energy for higher-level activities. But as the human race faces the unique challenge of imminent obsolescence, we need to think of those activities not as luxuries, but as necessities. As technology replaces our traditional economic value, the economic system may stop attaching value to us entirely unless we determine the unique value humanity offers – and what we can and must do to cultivate the uniquely human skills that deliver that value.

Honing the human advantage

As a species, humans are driven to push past boundaries, to try new things, to build something worthwhile, and to make a difference. We have strong instincts to explore and enjoy novelty and risk – but according to psychologist Mihaly Csikszentmihalyi, these instincts crumble if we don’t cultivate them.

AI is brilliant at automating routine knowledge work and generating new insights from existing data. What it can’t do is deduce the existence, or even the possibility, of information it isn’t already aware of. It can’t imagine radical new products and business models. Or ask previously unconceptualized questions. Or envision unimagined opportunities and achievements. AI doesn’t even have common sense! As theoretical physicist Michio Kaku says, a robot doesn’t know that water is wet or that strings can pull but not push. Nor can robots engage in what Kaku calls “intellectual capitalism” – activities that involve creativity, imagination, leadership, analysis, humor, and original thought.

At the moment, though, we don’t generally value these so-called “soft skills” enough to prioritize them. We expect people to develop their competency in emotional intelligence, cross-cultural awareness, curiosity, critical thinking, and persistence organically, as if these skills simply emerge on their own given enough time. But there’s nothing soft about these skills, and we can’t afford to leave them to chance.

Lessons in being human

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level – and to do so not just as soon as possible, but as early as possible.

Singularity University chairman Peter Diamandis, for example, advocates revamping the elementary school curriculum to nurture the critical skills of passion, curiosity, imagination, critical thinking, and persistence. He envisions a curriculum that, among other things, teaches kids to communicate, ask questions, solve problems with creativity, empathy, and ethics, and accept failure as an opportunity to try again. These concepts aren’t necessarily new – Waldorf and Montessori schools have been encouraging similar approaches for decades – but increasing automation and digitization make them newly relevant and urgent.

The Mastery Transcript Consortium is approaching the same problem from the opposite side, by starting with outcomes. This organization is pushing to redesign the secondary school transcript to better reflect whether and how high school students are acquiring the necessary combination of creative, critical, and analytical abilities. By measuring student achievement in a more nuanced way than through letter grades and test scores, the consortium’s approach would inherently require schools to reverse-engineer their curricula to emphasize those abilities.

Most critically, this isn’t simply a concern of high-tuition private schools and “good school districts” intended to create tomorrow’s executives and high-level knowledge workers. One critical aspect of the challenge we face is the assumption that the vast majority of people are inevitably destined for lives that don’t require creativity or critical thinking – that either they will somehow be able to thrive anyway or their inability to thrive isn’t a cause for concern. In the era of AI, no one will be able to thrive without these abilities, which means that everyone will need help acquiring them. For humanitarian, political, and economic reasons, we cannot just write off a large percentage of the population as disposable.

In the end, anything an AI does has to fit into a human-centered value system that takes our unique human abilities into account. Why would we want to give up our humanity in favor of letting machines determine whether or not an action or idea is valuable? Instead, while we let artificial intelligence get better at being what it is, we need to get better at being human. That’s how we’ll keep coming up with groundbreaking new ideas like jazz music, graphic novels, self-driving cars, blockchain, machine learning – and AI itself.

Read the executive brief Human Skills for the Digital Future.

Build an intelligent enterprise with AI and machine learning to unite human expertise and computer insights. Run live with SAP Leonardo.


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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu