How IT Teams Can Stop Obstructing Digital Transformation

Rob Glickman

In every boardroom across the globe, digital transformation is a top agenda item. Company leaders might frame it as digital engagement, evolution in customer expectations, or seamless delivery of new experiences. But in the view of Deloitte Consulting CTO Bill Briggs, digital transformation represents an existential threat of disruption – even for IT.

According to Bill and his colleague Mike Brinker, global practice leader for Deloitte Digital, it’s time for executives to wake up and recognize that technology is eroding traditional product-based advantages – providing fertile ground for a new competitive battleground. To examine this new reality, Bill and Mike appeared together on “The New Business Battleground – Digital Technologies,” a “Coffee Break with Game Changers Radio” episode on May 9, 2017, presented by SAP and produced and moderated by Bonnie D. Graham (follow on Twitter: @SAPRadio #SAPRadio). Click to listen to the full episode.

Ready or not, digital transformation will go on

When it comes to digital transformation, there’s no longer a clear goalpost. Bill believes that well-planned strategies are a necessary element for digital transformation; however, the days of extended, clearly defined transformation initiatives are gone. “Businesses never know exactly how the world will look when they get to the intended finish line,” he noted. With the courage to plot a course and correct it later on, executives can shift how they think about an opportunity at any moment and take immediate action.

Mike agreed that the digital economy is about the “fast beating the slow,” not giants beating the small. “This new environment requires the ability to pivot,” he remarked. “So many organizations are addicted to delivering performance results that they are afraid to shift their plans, make a new investment, and move forward in a new way.”

Digital transformation cannot be viewed as IT’s albatross

The piece that sometimes gets lost in the shuffle is IT. Bill remarked that there’s always a question of how the IT shop will transform itself in line with the ambitions laid out by the business. “The right speed for IT is ‘faster,’ and keeping up might require fundamental reimagining of the skill sets on hand,” he advised. “For example, we’ve seen financial services companies acquire creative agencies because they believe that visual design is a core part of delivering solutions.”

However, Mike advised that CIOs must also extend IT systems to the edge of the technology infrastructure, where the majority of innovation is happening. “We all live immersive, digital lives,” he observed. “We have mobile devices, Internet of Things sensors, wearables, and much more. There are hundreds of use cases across every industry where we can bring to life new ways of doing business, boosting productivity and creating more intuitive ways to work by using these tools.”

Imagine boldly, but keep your eye on today

Undertaking a digital strategy may be a forward-looking exercise, but businesses cannot divorce themselves from todays’ realities. “Boldly imagine tomorrow, but be aware of how the vision fits into existing facilities, operations, talent, business model, and technology,” Bill cautioned.

Mike added that it is equally important that businesses think beyond their existing product and service offering to drive change deep within the organization. “A great example is an engine manufacturer that shifted to a leasing model because customers were no longer committing large amounts of capital. And it monetized flight data for use in maintenance, and is now making more money by offering data as a service.”

To achieve this level of innovation, Bill argued that IT organizations cannot afford to confine themselves with biased thinking. Instead, digital transformation needs new ideas. “We are hiring more analysts directly from a university campus who are coming in with fresh perspectives,” he remarked.

Predictions for the post-digital era

Mike and Bill expect that within a very short time, the digital landscape will become invisible as mixed reality, the Internet of Things, machine learning, cognitive intelligence, advanced analytics, and much more become a seamless part of people’s personal and professional lives.

As the word “digital” disappears from our vernacular, Mike predicted that computing will become exponentially cheaper and more ubiquitous. “Sensors will be embedded in everything in our work and personal lives. We’re going to see more artificial intelligence and more robotic process automation. Businesses that start up with no employees will deliver full-service operations through automation. I think that trend will continue to disrupt a lot of incumbents.”

While Bill concurred, he envisioned that businesses will stop emphasizing which technologies are adopted and focus on what they should deliver next. “The future of health and wellness, finance, and government – you name it, technology will be fueling what’s possible.”

 Listen to the SAP Radio show “The New Business Battleground: Digital Technologies” on demand.

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Rob Glickman

About Rob Glickman

Rob Glickman is Vice President of Audience Marketing at SAP, where he leads a team chartered with the articulation of SAP’s point of view of the business value of Cloud computing both internally within SAP, as well as externally to customers, partners and influencers. He brings 20 years of marketing experience ranging from lean startups to large enterprises, including running Product Marketing for Symantec and seven years at eBay where he had various marketing leadership roles globally. A dual EU and US citizen with extensive international work and life experience, Rob has a BA from Skidmore College and an International MBA from Thunderbird Graduate School.

The CIO Becomes Cool Again

Daniel Renkel

A CIO’s key to success in digital times is the creation of a digital platform and building new relationship strengths within the company.

Not long ago, CIOs were organizationally supervised by the CFO. IT was a means to an end in order to secure the operational backbone of a company, and IT spend was not well seen. The present topics around the CIO manifest itself in terms like “bi-modal IT” or “two-speed IT.” Simply put: IT spending is split into two buckets, the “keeping the lights on bucket” and the “let’s be innovative bucket.”

Contrary to the past, where 80% of IT spend was used to keep the machines running, today the table has flipped to using only 20% to keep the lights on. This means that the rest of the budget is freed up for innovation purposes. So 65% of CIOs are measuring the success of their organization against different KPIs than before.

Strategic bet for CIOs: Building a digital platform

Based on more than 150 CxO engagements per year, the SAP Center for Digital Leadership has derived digital patterns that indicate a clear trend that will reshape the role of the CIO in a great fashion: building a digital platform and defining a digital ecosystem.

Depending on the specific industry a company belongs to, this strategic task has already gained significant traction. Two examples of this are the insurance and health industries, which are changing their very traditional business models by opening up and incorporating various players along their value chains.

Instead of a product-centric focus, the right way forward is expanding an organization’s value chain by establishing a digital platform for suppliers, partners, and even competitors on which to collaborate. We see this digital platform defined as a cloud-based open ecosystem with open interfaces fostering more and agile innovation, which is a much-needed requirement for the “servitization” of products.

As the topic of the digital ecosystem is a more strategic one, it often belongs to the CEO. However, the underlying infrastructure might be the key responsibility of the future CIO.

An example of such a digital ecosystem with an underlying digital platform is the partnership between SAP and the European Space Agency (ESA). With cloud platform, the technological infrastructure is brought together with patterns around digital leadership and innovation while ESA provides its vast amount of Earth Observation data. The result is an enriched open ecosystem that can be leveraged by small businesses, startups, and large organizations alike to create and provide real business value and solve some of the biggest challenges around climate effects, natural disasters, digital farming, or gas pipeline management.

Triangle of success: CIO, CEO, line-of-business heads

When you search “Chief Information Officer” online, the number of articles headlining that the CIO is the new leader of the digital transformation is overwhelming. But saying that the CIO is the sole key force behind a company’s transformation into a digital business is too narrow-minded. It is much more a symbiosis between a visionary CEO, bold line-of-business managers, and a forward-thinking CIO that will enable an organization to self-transform. The CEO is the one to paint the picture of a visionary digital ecosystem that the CIO will bring to life in tandem with the respective line managers by providing a digital platform.

The renaissance of the CIO

The role of the CIO has been changing over the last few years and decades. From the “king of the servers” to the “digital enabler,” the CIO has been in the spotlight as well as the shadows. Now, with new business models waiting to be created and entire industries ready to be overhauled, all of this will need the enabling technology as a foundation for innovation. It is once more the time for the CIO to stand on stage and reach well-deserved attention.

About the SAP Center for Digital Leadership

As a leading digital pioneer, the SAP Center for Digital Leadership helps CxO customers and their organizations to navigate their digital transformation and lead with innovation. Based on SAP’s internal digital transformation learnings, the research agenda and meetings with more than 150 CxO customers per year, the center provides leaders with best practices for leading digital transformation.

The network and partner ecosystem represents today’s and tomorrow’s leaders in digital business. Partners like European Space Agency and Wacom trust the center and jointly create digital open ecosystems.

For more information, visit www.sap.com/digitalleadership.

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Daniel Renkel

About Daniel Renkel

Daniel Renkel is an IT business consultant for the Center of Digital Leadership at SAP.

CIO Strategy: To Improve Employee Engagement, Buy Cupcakes

Manik Narayan Saha

Research clearly shows that highly engaged employees are good for business. People who feel connected to their employer are more productive, generate more revenues, and help the company thrive.

But did you know that IT can contribute to this success? According to new research from IDC [1], companies that develop a strong relationship between IT and the lines of business can measurably increase corporate performance.

IDC compared two types of enterprises: those where IT proactively worked with the business and those that did not cultivate a close relationship. Over three years, the companies with the strong IT-business connection achieved:

  • 90% greater growth in revenue from new product lines [1]
  • 80% greater growth in revenue from established product lines [1]
  • 50% greater improvement in compliance-related activities [1]

Introducing IT Day

These are compelling results that any CIO would be pleased to deliver. Yet creating active engagement between IT and the business can be challenging. Many employees view IT as a mere service provider—one to be consulted only when there is a problem.

How can an innovative, forward-thinking CIO demonstrate to employees that IT is more than just a support function? And how can IT help the company grow, modernize, and create market advantage?

At the SAP office in Singapore, the IT services team recently organized an IT Day to showcase our capabilities. Our goals: to educate employees on how IT delivers value to SAP and to demo the IT services that help employees work more effectively and efficiently.

Around 200 employees from multiple lines of business attended IT Day, following three tracks:

  • Expert talks that focused on the areas where IT is driving user productivity, cybersecurity, and innovation
  • Expert booths, modeled after the Apple Genius Bar, where employees received immediate service and experienced cool new products
  • Vendor booths, which provided special product offers to employees

To sweeten the deal and attract even more on-site employees, we also offered an afternoon snack of cupcakes, tea, and coffee. All 200 cupcakes were devoured in less than an hour. Employees were also eligible to participate in prize drawings.

Enabling productivity through IT

On the IT team, our goal is to enable SAP to transform into a digital enterprise using the best-in-class solutions, products, and services available in the market. Especially in the current era, IT can have a tremendous positive impact across the entire company by enabling the right technology for the organization.

From a strategic perspective, this meant focusing on two key aspects of the enterprise:

  1. Digitalization of enterprise business processes for efficiency – simplifying, automating, and massively scaling out existing business processes to meet the new demands of the digital economy. This meant upgrading our existing processes to support new business models such as volume business and subscription- and consumption-based billing. At the same time, the IT team is constantly thinking about how new technology can make a difference – for instance, using machine learning to significantly increase automation levels at our shared services organization.
  1. Digitalization of personal workspaces for higher productivity: Another key goal of the IT organization is rapidly enabling the SAP workforce to be agile, efficient, and productive so that the value each employee brings to the company multiplies exponentially.

At the IT Day, attendance was higher than anticipated, and the feedback was very positive. We offered sessions where employees learned how collaboration tools can help them be more productive working in virtual teams, and demonstrated in action the machine learning technology I mentioned above.

By actively engaging with our customers proactively, I think the IT services organization took steps toward increasing employee understanding of how we support their efficiency, productivity, and satisfaction. As the research shows, a strong IT-business partnership with engaged employees is a competitive advantage—so those cupcakes were definitely a worthwhile investment.

A great resource for CIOs is available at the SAP Technology is Live hub where there is a rich library of research and insights into the most relevant topics in the world of IT and digital transformation.

[1] IDC Perspective, “Six Priorities and Behaviors of Successful IT Organizations,” doc #US42251116, January 2017.

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Manik Narayan Saha

About Manik Narayan Saha

Manik Narayan Saha is the regional CIO for SAP Asia Pacific and Japan. Based in Singapore, Saha leads a global multinational and multicultural IT organization. As part of the SAP Senior Leadership team in APJ, he represents IT Services to more than 25,000+ employees in the region. As companies rapidly move to a digital agenda, Saha works closely with SAP’s leadership team in APJ to execute on enabling SAP as the digital enterprise. Saha is a member of the Insead Alumni Network and a Regional Ambassador of the Insead International Directors Network for Singapore. Saha received his degree in Computer Engineering from Nanyang Technological University (Singapore) and has a Masters in Applied Finance from the Singapore Management University.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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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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Jenny Dearborn: Soft Skills Will Be Essential for Future Careers

Jenny Dearborn

The Japanese culture has always shown a special reverence for its elderly. That’s why, in 1963, the government began a tradition of giving a silver dish, called a sakazuki, to each citizen who reached the age of 100 by Keiro no Hi (Respect for the Elders Day), which is celebrated on the third Monday of each September.

That first year, there were 153 recipients, according to The Japan Times. By 2016, the number had swelled to more than 65,000, and the dishes cost the already cash-strapped government more than US$2 million, Business Insider reports. Despite the country’s continued devotion to its seniors, the article continues, the government felt obliged to downgrade the finish of the dishes to silver plating to save money.

What tends to get lost in discussions about automation taking over jobs and Millennials taking over the workplace is the impact of increased longevity. In the future, people will need to be in the workforce much longer than they are today. Half of the people born in Japan today, for example, are predicted to live to 107, making their ancestors seem fragile, according to Lynda Gratton and Andrew Scott, professors at the London Business School and authors of The 100-Year Life: Living and Working in an Age of Longevity.

The End of the Three-Stage Career

Assuming that advances in healthcare continue, future generations in wealthier societies could be looking at careers lasting 65 or more years, rather than at the roughly 40 years for today’s 70-year-olds, write Gratton and Scott. The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

It will be replaced by a new model in which people continually learn new skills and shed old ones. Consider that today’s most in-demand occupations and specialties did not exist 10 years ago, according to The Future of Jobs, a report from the World Economic Forum.

And the pace of change is only going to accelerate. Sixty-five percent of children entering primary school today will ultimately end up working in jobs that don’t yet exist, the report notes.

Our current educational systems are not equipped to cope with this degree of change. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is outdated by the time students graduate, the report continues.

Skills That Transcend the Job Market

Instead of treating post-secondary education as a jumping-off point for a specific career path, we may see a switch to a shorter school career that focuses more on skills that transcend a constantly shifting job market. Today, some of these skills, such as complex problem solving and critical thinking, are taught mostly in the context of broader disciplines, such as math or the humanities.

Other competencies that will become critically important in the future are currently treated as if they come naturally or over time with maturity or experience. We receive little, if any, formal training, for example, in creativity and innovation, empathy, emotional intelligence, cross-cultural awareness, persuasion, active listening, and acceptance of change. (No wonder the self-help marketplace continues to thrive!)

The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

These skills, which today are heaped together under the dismissive “soft” rubric, are going to harden up to become indispensable. They will become more important, thanks to artificial intelligence and machine learning, which will usher in an era of infinite information, rendering the concept of an expert in most of today’s job disciplines a quaint relic. As our ability to know more than those around us decreases, our need to be able to collaborate well (with both humans and machines) will help define our success in the future.

Individuals and organizations alike will have to learn how to become more flexible and ready to give up set-in-stone ideas about how businesses and careers are supposed to operate. Given the rapid advances in knowledge and attendant skills that the future will bring, we must be willing to say, repeatedly, that whatever we’ve learned to that point doesn’t apply anymore.

Careers will become more like life itself: a series of unpredictable, fluid experiences rather than a tightly scripted narrative. We need to think about the way forward and be more willing to accept change at the individual and organizational levels.

Rethink Employee Training

One way that organizations can help employees manage this shift is by rethinking training. Today, overworked and overwhelmed employees devote just 1% of their workweek to learning, according to a study by consultancy Bersin by Deloitte. Meanwhile, top business leaders such as Bill Gates and Nike founder Phil Knight spend about five hours a week reading, thinking, and experimenting, according to an article in Inc. magazine.

If organizations are to avoid high turnover costs in a world where the need for new skills is shifting constantly, they must give employees more time for learning and make training courses more relevant to the future needs of organizations and individuals, not just to their current needs.

The amount of learning required will vary by role. That’s why at SAP we’re creating learning personas for specific roles in the company and determining how many hours will be required for each. We’re also dividing up training hours into distinct topics:

  • Law: 10%. This is training required by law, such as training to prevent sexual harassment in the workplace.

  • Company: 20%. Company training includes internal policies and systems.

  • Business: 30%. Employees learn skills required for their current roles in their business units.

  • Future: 40%. This is internal, external, and employee-driven training to close critical skill gaps for jobs of the future.

In the future, we will always need to learn, grow, read, seek out knowledge and truth, and better ourselves with new skills. With the support of employers and educators, we will transform our hardwired fear of change into excitement for change.

We must be able to say to ourselves, “I’m excited to learn something new that I never thought I could do or that never seemed possible before.” D!

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