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Top Secrets For Ensuring A Successful Digital Transformation

Ruchi Verma

Buzzwords such as “disruption” and “uberization” seem to be on the tip of every executive’s tongue these days, but these are more than just trendy concepts. The reality is that organizations across all industries and types of business are rewriting the rules of strategy.

Business transformation is no longer just about digitization of customer experience, work, and resources, but taking customers by surprise with innovative and highly personalized offers and experiences at every opportunity available. A recent study by Massachusetts Institute of Technology and Accenture reports that companies that reach a higher level of digital maturity are 26% more profitable, grow 9% faster, and achieve 12% higher market valuations than their industry peers.

Customers trying to innovate or reform their business models are mainly driven by two strategic motivations: growth and protection.

They want to grow by becoming an always-on service provider, opening new revenue streams with IoT and connected devices, providing payment flexibility, and moving to multi-sided business models such as transacting on behalf of third parties. They also want to protect their core by providing go-to market agility and cost savings as well as automation and scaling.

Figure 1: 5 key imperatives for your monetization journey

One thing for sure is that a transformation journey starts with aligning the three primary elements involved: people, process, and technology. Following that, the biggest challenge lies in spotting new growth opportunities and being ready—i.e., being agile enough to respond quickly and able to successfully scale in the process of monetizing them.

In this blog, I will explore the imperatives from end customer’s perspective. This is important as customers are co-creating their own journeys today; they demand instant engagement and personalization. Understanding customer expectations and mapping them to the organization’s capabilities is the first step towards truly monetizing the digital transformation and aiding sustainable growth by multiplying ARPUs (average revenue per users) while keeping the customer churn low. The rapid growth of all types of devices (wearables, smartphones, tablets, good old desktops, among others) and app culture has made it imperative for service providers to remain highly contextual and consistent across multiple channels.

Top five customer expectations and associated imperatives

Figure 2: Customer expectations and associated impact on organizations

1. Visibility, predictability, usage controls, accurate charging, and responsive customer service

With the advent of the prepaid economy, customers expect full predictability on their consumption. They want to pay exactly for what they have consumed and have complete flexibility in managing the services in which they are enrolled.

This means that the “always-on” service provider must be able to create targeted subscription offers that are instantly available for quotes and orders across all channels, and that they can meter and rate real-time subscription charges and usage-based fees. These critical abilities should be backed up by strong self-care options that capture customers in one moment and allow them to navigate seamlessly – understanding that although happiness drives loyalty, simplifying processes and reducing the amount of input required from customers has an even greater impact on churn.

2. Rich, single-source, seamless services

Today’s companies, brands, and manufacturers have multiple distribution partners as the result of geographic and organizational spread. The ability to manage both channel and marketplace partners in a highly automated manner is essential for smooth operations in a distributed supply chain. It is imperative that disseminating details of revenue-sharing, apportionment, commissions, and royalties along the entire value chain be easy to apply and manage flexibly. A second imperative is to bill consumers in a rich, single-sourced invoice for any combination of consolidated products and services they may consume across complex supply chains.

3. Payment flexibility

From Venmo to Uber to Snapchat, the payment landscape is undergoing massive shifts, all of which point toward one overarching outcome: the gradual decline of “transactional uniformity.” Offering the freedom to choose a preferred payment option is a clear mandate in order to retain customers. Standard payment options such as credit or debit and online payments are expectations of the past. What today’s customers demand is flexibility in payment cycles such as prepaid, postpaid, deferred payments, and invoices per different cycles.

Offering differentiated billing and payment services targeting individual customer segments while automating payment handling from any channel is crucial. In an Ernst & Young paper on billing transformation, authors David Connolly and Rick Raisinghani point out that as a service provider’s first and most frequent touch point with its customers, billing presents an opportunity to create a positive experience and to build longstanding relationships.

Additionally, with the underlying objective of cost-savings due to automation, these prerequisites are mandatory: thorough review of customer history to avoid late or missing payments, and having an effective credit and collection management system along with a receptive payment handling and receivable system to continuously evaluate credit risk and thus lower DSO (days sales outstanding).

4. Error-free transparent billing and consolidated invoices

Often, the inability of invoicing systems to integrate multiple services and third-party charges leads to time-consuming, manual processes. Receiving complicated and unclear invoices not only frustrates customers, but it can also be directly responsible for loss in revenue.

Customers appreciate a consolidated approach as it simplifies invoice management and payment processes. Rather than having to manage multiple invoices for all orders placed with your company over the past week, month, or other time period, customers can manage and pay a single bill.

Every invoice you generate introduces additional opportunities for error, misplaced documents, and payment delays. Invoice consolidation makes sense for companies with customers that routinely place multiple orders per billing period. Some of the financial and operational AR benefits that can be achieved with a consolidated invoicing approach include more efficient receivables processes, higher customer satisfaction levels, reduced billing errors, and improved compliance and audit trails.

5. Quick and easy issue resolution

Quick, hassle-free issue resolution an important imperative for loyal and happy customers. Often, lack of process coordination between sales, service, and collections, and lack of common data model causes delays in processing customer issues. We see this often as the financial landscape of many companies was built in a highly siloed fashion, making it very difficult to obtain a 360° view on the customer financial and historical data.

Having a back-end system that integrates credit, collections, and dispute management with service processes improves agent efficiency by providing of 360-degree customer view, including interaction history, fact sheets, and detailed financial views resulting in lower TCO. Improved interactions and efficiency that focuses on customer needs supports seamless dispute handling and increases customer satisfaction.

Today, many organizations understand that the impact of billing processes are not limited to the back office. Billing affects customer satisfaction and customer retention, and a customer-focused billing strategy can create real competitive differentiation. As a common denominator for the business processes introduced by marketing, finance and accounting, customer service, and IT, billing systems run in parallel to a customer journey.

From designing monetization policies to managing and mediating sales and orders, handling collections, commissions and royalties, and analyzing consumption data to improve future pricing, an efficient billing system ticks off the imperative checklist and is instrumental in providing a truly seamless customer journey for businesses— inside and out.

For more on this topic, see Why Digital Transformation Is Not Just About Technology.

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Ruchi Verma

About Ruchi Verma

Ruchi Verma is a global market development specialist, supporting the SAP Hybris Billing solution suite, at SAP. She has wealth of experience in driving technological transformations and process improvements in retail, telecom, and banking industries. Her interest lies in analyzing technological trends and how they impact business model innovations. Based out of Paris, she is focusing on how strong billing solutions can aid monetization of digital transformation and help companies in tackling their business model transformation challenges. She holds an Master of Business Administration (M.B.A.) from HEC Paris with specialization in Marketing and Digital Transformation.

Machine Learning: Man Vs. Machine Or Man + Machine?

Jean Loh

Part 1 of a 2-part series

Is there one term to describe the fantastic machines and infinite computing power built around the cloud, innovative chips, and semiconductors already in use by a growing number of companies?

“Artificial intelligence (AI) technology,” according to SAP’s senior director of advanced analytics, Chandran Saravana, on Coffee Break with Game Changers Radio, presented by SAP on May 3, 2017.

He and SAP’s senior director of Big Data initiatives, David Jonker, joined producer/moderator Bonnie D. Graham (follow on Twitter: @SAPRadio and #SAPRadio) for a lively discussion on “Machine Learning: Man vs. Machine Or Man + Machine?”

Chandran observed, “Businesses are already relying heavily on this level of AI. We’re at the top level right now. But when it comes to machine learning, you have to bridge a big gap to teach the machines how to learn – so machines can become smarter every day.”

New to the term machine learning? It describes a computer science subfield that analyzes algorithms iteratively to find hidden insights, but without being explicitly told where to look. Examples include Google’s self-driving car, Facebook’s personalized news feeds, and Amazon’s pushing relevant purchase recommendations to customers. An upcoming use case comes from financial services, where companies are combining this technology with linguistic-rule creation to detect and prevent fraud.

Machine learning offers a range of applications across every industry and line of business, from HR and marketing to finance, with use cases reflecting who you are and your mindset.

Will these innovations result in a world of man versus machine or man plus machines?

Looking back in time

David added historical perspective. “In the 18th century, machines were seen by many skeptics as taking over the world. At that time, the focus was on man plus machine, not man versus machine, but people were worried nonetheless. Of course, we can see today the dramatic, positive, impact this advancement had on our society, economy, and personal wealth in the Western world. I am a proponent of machine learning in a person-plus-machines future.”

Chandran noted the importance of adding the human quality of empathy when designing end-user experiences of a product, service, or point of interaction. “Machines can do many things, but there are always disproportionate capabilities when it comes to people. We [humans] have the cognitive abilities to think and respond to certain types of emotions. Whether you’re selling a product or service, customers are key,” he continued.

David pointed out that human brains have difficulty correlating a particular observation when assessing massive volumes of data. “This is where the machine can help the human to become smarter. You leverage the machines to understand this data, learn from it, and help humans make a better version of it.”

Call to action: embrace and adapt to machine learning

Given the pace of business, people need a machine to perform deep analysis. David acknowledged, “Machine learning can assist the human, coming back to that whole idea of person plus machine. When we talk about enabling the intelligent enterprise, it’s that combination that’s going to be so fundamental to building the future.”

But we first need a better understanding of how to manage and leverage Big Data. Chandran said, “Teaching these machines how to learn requires a lot of skills sets, such as those of data scientists and machine-learning architects and specialists.” Universities and other educational institutions are developing programs and expertise to bridge this gap.

The future of the workforce?

David observed that much of the current workforce will need to be “retooled” to take on machine learning. “An adjustment needs to happen in the workforce. The challenge is acquiring specialized skills sets and a background in science, technology, engineering, or math (STEM) … it’s a huge opportunity.”

“Machine learning capabilities need to be extended to a variety of users in the enterprise, not just the data scientist role,” advised Chandran. “Those without a STEM background need the right tools to leverage machine learning to gain the insights to build a simple, predictive model.”

David concluded, “Machine learning isn’t about theorizing in an ivory tower. It’s about empirically looking at data, inferring insights, and reflecting on it in a way that humans typically do not. If they can’t figure out how to move things across the business, organizations will not reap the full benefits of machine learning.”

As in the Industrial Revolution, the companies and pioneers who can rethink their business in fundamentally new ways will thrive.

Learn more

Listen to Coffee Break with Game-Changers Radio: “Machine Learning Trends – Part 1: Enabling the Intelligent Enterprise” on demand.

Automation is the top priority for global business organizations that want to drive costs down. Join Randy Garrison of SAP and Weston Jones of Ernst & Young, LLP on July 17 at 1 p.m. EDT to understand what robotic process automation can offer you today and in the future. Register now!

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Jean Loh

About Jean Loh

Jean Loh is the Director, Global Audience Marketing, LOB Finance, at SAP. She is an experienced marketing and communication professional, currently responsible for developing thought leadership content that is unbiased and audience-led while addressing market challenges to illuminate and solve the unmet needs of CFOs and the wider global finance audience.

Transform Your IT Department With IT-As-A-Service

Daniel Newman

The as-a-service model supplies businesses with scalable, consumption-based services to increase speed and agility while driving revenue and reducing costs. As businesses have turned towards software-as-a-service (SaaS), video conferencing-as-a-service (VCaaS), platform-as-a-service (PaaS), and even cloud-as-a-service (CaaS) to lower costs and increase agility, it makes sense that IT-as-a-service (ITaaS) is now available—and recommended.

Switching to an IT as a service model (and mindset) means taking the focus off the functional roles of IT and enabling an IT department that is much more agile, better aligned with business goals, and customer-centric. As an operational model, ITaaS delivers to an enterprise only the hardware, software, and staff needed at any given time. ITaaS can be internal or external or a combination of the two. It can be cloud-based or on-site—or a combination of the two. ITaaS should be as flexible in delivery as it is in ability.

Judith Hurwitz says of the benefits of ITaaS, “By transitioning to an IT-as-a-service model, IT organizations are transforming themselves from traditional IT groups to brokers of a variety of public and private cloud services, third-party managed service providers, and traditional data center services.”

If that statement alone does not convince you, here are four more reasons why ITaaS should be on every CIO’s radar:

ITaaS can be more effective and cost-efficient

As with so much change that has been driven by anything “as a service” and cloud computing, ITaaS enables streamlining operations and speeding up development. It also lowers cost because the up-front investment is minimal compared to having all hardware, software, and staff in-house. Businesses only use what they need, and the cost of doing so can be projected out. The services can scale if and when needed. Software upgrades and hardware are kept up-to-date. And the business can tap into an IT expertise without paying the high cost of having that expertise on the payroll.

Legacy business functions are still used

When using ITaaS, organizations can still use those legacy business functions that are at the core of their business. There is no need to completely walk away from the “old” way of doing IT, or from those legacy systems or functions. Sure, they might be slow and seemingly not able to keep pace with a fast-moving market. Supplemented with ITaaS, however, CIOs are no longer faced with decisions about optimizing outdated equipment as an either/or scenario: Either update the old, or invest in the new.

ITaaS can stabilize the environment

A third reason to have ITaaS on your radar screen is because it can stabilize your IT environment while also allowing for flexibility in the cloud. As mentioned above, the pricing is stabilized and predictable, and businesses pay only for what they need at any given time. In addition, ITaaS can improve security and lower risk, as well as ensure the hardware and software are up-to-date. You’re able to respond quickly to market changes and demands without putting any of your own infrastructure at risk—or rendering it unusable. Although the word “stabilize” might seem like an odd choice in this context, ITaaS can stabilize what otherwise might be a volatile and chaotic environment if your IT department tried to keep up with all the ever-changing demands placed on it using only internal resources.

ITaaS enables customized cloud computing and IT

With ITaaS, hybrid cloud and IT can be customized to meet your business needs, and offer an alternative to cloud computing vendors. As John Wellen puts it, “The goal is to transform and optimize enterprise-specific IT operations using self-managed service provider models that leverage cloud technologies more economically than licensed commercial cloud providers.” With ITaaS, organizations can use a mixed IT strategy to benefit from the best of both worlds: components hosted internally and components externally.

Organizations today want IT to add business value, and I mean in a monetary way as well. ITaaS makes this possible. However, it’s not an overnight change. It takes time to transition into working with an ITaaS model, because it is as much a cultural shift as it is a change in the way IT is viewed and the expectations the business units have of the IT department. Businesses can ease the transition and lower the risk with a gradual approach, implementing ITaaS only in higher-priority areas first—although that approach inherently has its own risks, as Peter Bendor-Samuel explains in an article for CIO.com.

This post was brought to you by IBM Global Technology Services. For more content like this, visit IT Biz Advisor.

Photo Credit: pinkhypo Flickr via Compfight cc

 

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Daniel Newman

About Daniel Newman

Daniel Newman serves as the Co-Founder and CEO of EC3, a quickly growing hosted IT and Communication service provider. Prior to this role Daniel has held several prominent leadership roles including serving as CEO of United Visual. Parent company to United Visual Systems, United Visual Productions, and United GlobalComm; a family of companies focused on Visual Communications and Audio Visual Technologies. Daniel is also widely published and active in the Social Media Community. He is the Author of Amazon Best Selling Business Book "The Millennial CEO." Daniel also Co-Founded the Global online Community 12 Most and was recognized by the Huffington Post as one of the 100 Business and Leadership Accounts to Follow on Twitter. Newman is an Adjunct Professor of Management at North Central College. He attained his undergraduate degree in Marketing at Northern Illinois University and an Executive MBA from North Central College in Naperville, IL. Newman currently resides in Aurora, Illinois with his wife (Lisa) and his two daughters (Hailey 9, Avery 5). A Chicago native all of his life, Newman is an avid golfer, a fitness fan, and a classically trained pianist

Taking Learning Back to School

Dan Wellers

 

Denmark spends most GDP on labor market programs at 3.3%.
The U.S. spends only 0.1% of it’s GDP on adult education and workforce retraining.
The number of post-secondary vocational and training institutions in China more than doubled from 2000 to 2014.
47% of U.S. jobs are at risk for automation.

Our overarching approach to education is top down, inflexible, and front loaded in life, and does not encourage collaboration.

Smartphone apps that gamify learning or deliver lessons in small bits of free time can be effective tools for teaching. However, they don’t address the more pressing issue that the future is digital and those whose skills are outmoded will be left behind.

Many companies have a history of effective partnerships with local schools to expand their talent pool, but these efforts are not designed to change overall systems of learning.


The Question We Must Answer

What will we do when digitization, automation, and artificial intelligence eject vast numbers of people from their current jobs, and they lack the skills needed to find new ones?

Solutions could include:

  • National and multinational adult education programs
  • Greater investment in technical and vocational schools
  • Increased emphasis on apprenticeships
  • Tax incentives for initiatives proven to close skills gaps

We need a broad, systemic approach that breaks businesses, schools, governments, and other organizations that target adult learners out of their silos so they can work together. Chief learning officers (CLOs) can spearhead this approach by working together to create goals, benchmarks, and strategy.

Advancing the field of learning will help every business compete in an increasingly global economy with a tight market for skills. More than this, it will mitigate the workplace risks and challenges inherent in the digital economy, thus positively influencing the future of business itself.


Download the executive brief Taking Learning Back to School.


Read the full article The Future of Learning – Keeping up With The Digital Economy

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Dan Wellers

About Dan Wellers

Dan Wellers is the Global Lead of Digital Futures at SAP, which explores how organizations can anticipate the future impact of exponential technologies. Dan has extensive experience in technology marketing and business strategy, plus management, consulting, and sales.

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Why Millennials Quit: Understanding A New Workforce

Shelly Kramer

Millennials are like mobile devices: they’re everywhere. You can’t visit a coffee shop without encountering both in large numbers. But after all, who doesn’t like a little caffeine with their connectivity? The point is that you should be paying attention to millennials now more than ever because they have surpassed Boomers and Gen-Xers as the largest generation.

Unfortunately for the workforce, they’re also the generation most likely to quit. Let’s examine a new report that sheds some light on exactly why that is—and what you can do to keep millennial employees working for you longer.

New workforce, new values

Deloitte found that two out of three millennials are expected to leave their current jobs by 2020. The survey also found that a staggering one in four would probably move on in the next year alone.

If you’re a business owner, consider putting four of your millennial employees in a room. Take a look around—one of them will be gone next year. Besides their skills and contributions, you’ve also lost time and resources spent by onboarding and training those employees—a very costly process. According to a new report from XYZ University, turnover costs U.S. companies a whopping $30.5 billion annually.

Let’s take a step back and look at this new workforce with new priorities and values.

Everything about millennials is different, from how to market to them as consumers to how you treat them as employees. The catalyst for this shift is the difference in what they value most. Millennials grew up with technology at their fingertips and are the most highly educated generation to date. Many have delayed marriage and/or parenthood in favor of pursuing their careers, which aren’t always about having a great paycheck (although that helps). Instead, it may be more that the core values of your business (like sustainability, for example) or its mission are the reasons that millennials stick around at the same job or look for opportunities elsewhere. Consider this: How invested are they in their work? Are they bored? What does their work/life balance look like? Do they have advancement opportunities?

Ping-pong tables and bringing your dog to work might be trendy, but they aren’t the solution to retaining a millennial workforce. So why exactly are they quitting? Let’s take a look at the data.

Millennials’ common reasons for quitting

In order to gain more insight into the problem of millennial turnover, XYZ University surveyed more than 500 respondents between the ages of 21 and 34 years old. There was a good mix of men and women, college grads versus high school grads, and entry-level employees versus managers. We’re all dying to know: Why did they quit? Here are the most popular reasons, some in their own words:

  • Millennials are risk-takers. XYZ University attributes this affection for risk taking with the fact that millennials essentially came of age during the recession. Surveyed millennials reported this experience made them wary of spending decades working at one company only to be potentially laid off.
  • They are focused on education. More than one-third of millennials hold college degrees. Those seeking advanced degrees can find themselves struggling to finish school while holding down a job, necessitating odd hours or more than one part-time gig. As a whole, this generation is entering the job market later, with higher degrees and higher debt.
  • They don’t want just any job—they want one that fits. In an age where both startups and seasoned companies are enjoying success, there is no shortage of job opportunities. As such, they’re often looking for one that suits their identity and their goals, not just the one that comes up first in an online search. Interestingly, job fit is often prioritized over job pay for millennials. Don’t forget, if they have to start their own company, they will—the average age for millennial entrepreneurs is 27.
  • They want skills that make them competitive. Many millennials enjoy the challenge that accompanies competition, so wearing many hats at a position is actually a good thing. One millennial journalist who used to work at Forbes reported that millennials want to learn by “being in the trenches, and doing it alongside the people who do it best.”
  • They want to do something that matters. Millennials have grown up with change, both good and bad, so they’re unafraid of making changes in their own lives to pursue careers that align with their desire to make a difference.
  • They prefer flexibility. Technology today means it’s possible to work from essentially anywhere that has an Internet connection, so many millennials expect at least some level of flexibility when it comes to their employer. Working remotely all of the time isn’t feasible for every situation, of course, but millennials expect companies to be flexible enough to allow them to occasionally dictate their own schedules. If they have no say in their workday, that’s a red flag.
  • They’ve got skills—and they want to use them. In the words of a 24-year-old designer, millennials “don’t need to print copies all day.” Many have paid (or are in the midst of paying) for their own education, and they’re ready and willing to put it to work. Most would prefer you leave the smaller tasks to the interns.
  • They got a better offer. Thirty-five percent of respondents to XYZ’s survey said they quit a previous job because they received a better opportunity. That makes sense, especially as recruiting is made simpler by technology. (Hello, LinkedIn.)
  • They seek mentors. Millennials are used to being supervised, as many were raised by what have been dubbed as “helicopter parents.” Receiving support from those in charge is the norm, not the anomaly, for this generation, and they expect that in the workplace, too.

Note that it’s not just XYZ University making this final point about the importance of mentoring. Consider Figures 1 and 2 from Deloitte, proving that millennials with worthwhile mentors report high satisfaction rates in other areas, such as personal development. As you can see, this can trickle down into employee satisfaction and ultimately result in higher retention numbers.

Millennials and Mentors
Figure 1. Source: Deloitte


Figure 2. Source: Deloitte

Failure to . . .

No, not communicate—I would say “engage.” On second thought, communication plays a role in that, too. (Who would have thought “Cool Hand Luke” would be applicable to this conversation?)

Data from a recent Gallup poll reiterates that millennials are “job-hoppers,” also pointing out that most of them—71 percent, to be exact—are either not engaged in or are actively disengaged from the workplace. That’s a striking number, but businesses aren’t without hope. That same Gallup poll found that millennials who reported they are engaged at work were 26 percent less likely than their disengaged counterparts to consider switching jobs, even with a raise of up to 20 percent. That’s huge. Furthermore, if the market improves in the next year, those engaged millennial employees are 64 percent less likely to job-hop than those who report feeling actively disengaged.

What’s next?

I’ve covered a lot in this discussion, but here’s what I hope you will take away: Millennials comprise a majority of the workforce, but they’re changing how you should look at hiring, recruiting, and retention as a whole. What matters to millennials matters to your other generations of employees, too. Mentoring, compensation, flexibility, and engagement have always been important, but thanks to the vocal millennial generation, we’re just now learning exactly how much.

What has been your experience with millennials and turnover? Are you a millennial who has recently left a job or are currently looking for a new position? If so, what are you missing from your current employer, and what are you looking for in a prospective one? Alternatively, if you’re reading this from a company perspective, how do you think your organization stacks up in the hearts and minds of your millennial employees? Do you have plans to do anything differently? I’d love to hear your thoughts.

For more insight on millennials and the workforce, see Multigenerational Workforce? Collaboration Tech Is The Key To Success.

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