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.

Application Development: Transforming Innovation Expectation Into Real Business Value

Klaus Weber

Whether they’re just getting started or leading a disruptive movement, most companies, in some capacity, are using a variety of technologies to support fast, agile, and precise operations. But this is only the beginning. According to IDC, investments in digital transformation initiatives will reach $1.7 trillion worldwide by the end of 2019 – a 42% increase when compared to 2017 spend.

Steadily, companies are growing more curious and reliant on cloud platforms, predictive analytics, artificial intelligence, blockchain, omnichannel commerce, the Internet of Things, mixed reality, and conversational bots to form a foundation of next-generation business models and ecosystems. And if the World Economic Forum’s Digital Transformation Initiative study is correct, these transformations may entirely or fundamentally shift the business model of one in three companies until 2020.

It’s becoming clear that businesses across all industries, sizes, and regions are dedicating significant chunks of time, money, and effort to redefine themselves with digital technology. But eventually, there’s a point where brand differentiation is difficult to achieve when every competitor is digitalizing and connecting the same things.

The hunt for the next big competitive advantage: “I’m looking for it, and I need to make it real”

To survive – let alone grow – in a world where virtually everything is being digitalized, businesses are transforming themselves at an unyielding, lightning-fast pace. And it’s not just competitors that are turning up the heat on digital transformation. Customers, business partners, and employees are contributing their share by demanding simpler, faster, and more personalized interactions – accessible anytime, anywhere, and through the channel and device of their choosing.

When we look at paragons of digital leadership such as Amazon, Netflix, Zappos, and Apple, it becomes clear that adopting the latest technologies helps them pull away from their competitors by widening the performance gap. They understand and expect that standard applications are designed to help jump-start the must-have capabilities for competing in the digital economy – and that their competitors can achieve the same. But when solving unique complex challenges, blazing disruptive trails, or bringing a new corporate vision to life, they also build new capabilities on top of standard platforms and technologies to deliver distinct value to their stakeholders.

From discovery to delivery, businesses can innovate and deliver tailored, high-value, fully maintained applications by following a streamlined, agile development process that includes:

  • Exploration workshops: Engaged in design thinking, innovators and their stakeholders tap into their curiosity and look beyond what they think is possible to discover opportunities that are valuable to the business and translate ideas into a first-design prototype.
  • Innovation sprints: This is where everything that’s been discovered can be used to zero in on the exact business need and direction. Research is conducted and concepts are created in a series of iterative innovation sprints to quickly devise journey maps that reflect user personas and profiles. Process and interaction flows are also validated with key users through storyboarding, and user interaction is tested with wireframes and mockups.
  • Innovation projects: During this phase, innovation concepts built during innovation sprints are transformed into productive solutions ready to be deployed in the cloud, on-premises, or in a hybrid environment and tightly integrated with the stable, core, standard solution. Through the flexibility and transparency of an agile development approach that consistently revolves around the user, innovators develop unique software solutions that use the latest technologies and generate new value early and often.
  • Services for support, continuous improvement, and operations: The business leverages the resources needed to protect and run their individualized solutions over the long term. They can choose the right deployment option that fits their needs and scales to their business and technical landscape. By taking advantage of the same unified support infrastructure and cloud operations centers as the software provider, the company can reap the benefits of increased operational stability, reduced operating costs, and better innovation cycles.

This agile, iterative development process helps businesses open up a competitive advantage that is truly unique, distinct, and disruptive. Through a flexible guided experience, innovative ideas and prototypes are quickly transitioned into real-life working systems.

Individualized innovation turns expectation into industry-disruptive leadership

The more digital our world becomes, the more everyone – from the plant worker on the shop floor to the executive in the boardroom – engages in curious thinking about the possibilities of technology. Every day, most people imagine how much easier life and work could be if they go beyond the basic functions of standard technology and design tailored solutions to optimize the value of goods, services, and user experiences.

To pick out the right innovative ideas and use them to achieve industry-disruptive leadership status, businesses must look beyond the boundaries of existing technology and uncover hidden insights and opportunities through collaborative discovery and ideation. From there, sparks of inspiration can be converted into real solutions that accelerate the delivery of superior customer service, fulfillment of company goals, and achievement of a long-term vision.

Discover how the SAP Innovative Business Solutions organization can help your business find its unique competitive advantage. Visit sap.com/InnovBizSolutions, and read our announcement.

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Klaus Weber

About Klaus Weber

Klaus Weber is executive vice president and general manager of SAP Innovative Business Solutions, which empowers visionary enterprises to achieve their greatest goals through unique, leading-edge software innovation. Weber has more than 25 years of SAP experience in developing innovative products and leading organizations that deliver high-quality client-focused solutions that translate business needs into solutions that deliver real business value.

Top 5 CIO Blogs Of November 2017

Jean Loh

A series of blogs about user experience design attracted a lot of interest in November, with two on the best-read list. Other popular topics: streamlining finance processes in shared service centers with machine learning, boosting procurement efficiency with artificial intelligence, and some really good suggestions on cybersecurity. Take a look if you missed any of these great blogs.

AI And Messaging Apps: What Every CIO Needs To Know About Trends In User Experience Design

Reshaping The Value Of Shared Services With Machine Learning

What Every CIO Needs To Know About User Experience Design Trends

Five Ignored Practices That Can Disarm Your Cybersecurity Time Bomb

It’s Time For Corporate Spending To Manage Itself

For more hot topics, read More Than Noise: Digital Trends That Are Bigger Than You Think.

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Jean Loh

About Jean Loh

Jean Loh is the director, Global Audience Marketing 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, CIOs, and the wider global finance and IT audience.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


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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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Finance And HR: Friends Or Foes? Shifting To A Collaborative Mindset

Richard McLean

Part 1 in the 3-part “Finance and HR Collaboration” series

In my last blog, I challenged you to think of collaboration as the next killer app, citing a recent study by Oxford Economics sponsored by SAP. The study clearly explains how corporate performance improves when finance actively engages in collaboration with other business functions.

As a case in point, consider finance and HR. Both are being called on to work more collaboratively with each other – and the broader business – to help achieve a shared vision for the company. In most organizations, both have undergone a transformation to extend beyond operational tasks and adopt a more strategic focus, opening the door to more collaboration. As such, both have assumed three very important roles in the company – business partner, change agent, and steward. In this post, I’ll illustrate how collaboration can enable HR and finance to be more effective business partners.

Making the transition to focus on broader business objectives

My colleague Renata Janini Dohmen, senior vice president of HR for SAP Asia Pacific Japan, credits a changing mindset for both finance and HR as key to enabling the transition away from our traditional roles to be more collaborative. She says, “For a long time, people in HR and finance were seen as opponents. HR was focused on employees and how to motivate, encourage, and cheer on the workforce. Finance looked at the numbers and was a lot more cautious and possibly more skeptical in terms of making an investment. Today, both areas have made the transition to take on a more holistic perspective. We are pursuing strategies and approaching decisions based on what delivers the best return on investment for the company’s assets, whether those assets are monetary or non-monetary. This mindset shift plays a key role in how finance and HR execute the strategic imperatives of the company,” she notes.

Viewing joint decisions from a completely different lens

I agree with Renata. This mindset change has certainly impacted the way I make decisions. If I’m just focused on controlling costs and assessing expenditures, I’ll evaluate programs and ideas quite differently than if I’m thinking about the big picture.

For example, there’s an HR manager in our organization who runs Compensation and Benefits. She approaches me regularly with great ideas. But those ideas cost money. In the past, I was probably more inclined to look at those conversations from a tactical perspective. It was easy for me to simply say, “No, we can’t afford it.”

Now I look at her ideas from a more strategic perspective. I think, “What do we want our culture to be in the years ahead? Are the benefits packages she is proposing perhaps the right ones to get us there? Are they family friendly? Are they relevant for people in today’s world? Will they make us an employer of choice?” I quite enjoy the rich conversations we have about the impact of compensation and benefits design on the culture we want to create. Now, I see our relationship as much more collaborative and jointly invested in attracting and retaining the best people who will ultimately deliver on the company strategy. It’s a completely different lens.

Defining how finance and HR align to the company strategy

Renata and I believe that greater collaboration between finance and HR is a critical success factor. How can your organization achieve this shift? “Once the organization has clearly defined what role finance and HR must play and how they fundamentally align to the company strategy, then it’s more natural to structure them in a way to support such transformation,” Renata explains.

Technology plays an important role in our ability to successfully collaborate. Looking back, finance and HR were heavily focused on our own operational areas because everything we did tended to consume more time – just keeping the lights on and taking care of our basic responsibilities. Now, through a more efficient operating model with shared services, standard operating procedures, and automation, we can both be more business-focused and integrated. As a result, we’re able to collaborate in more meaningful ways to have a positive impact on business outcomes.

In our next blog, we’ll look at how finance and HR can work together as agents of change.

For a deeper dive, download the Oxford Economics study sponsored by SAP.

Follow SAP Finance online: @SAPFinance (Twitter)LinkedIn | FacebookYouTube

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Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.