How Governments Are Building The Digital Future

Natalia Panina

Many governments now recognize that investing in the digital economy by providing digital channels, apps, and websites that link citizens to public bodies brings economic benefits.

The UK government’s Cloud First policy, for example, requires state departments to consider cloud solutions before alternatives. The Australian government procures $6 billion of information and communications technology (ICT) services annually. Combined with state and territory governments, public sector expenditure on ICT accounts for about 30% of the domestic market.

The Australian government wants to reduce the cost of its ICT by eliminating duplication and fragmentation. It intends to lead by example in using cloud services to reduce costs and lift productivity. Austria’s Federal Computing Center and Denmark’s equivalent body have built shared service centers to standardize and simplify the business processes of state departments. These governments are leading the way to a digital future.

Why are mature governments going digital?

Because advanced technologies now enable us to drive digital transformation to achieve the following:

  1. Enable the public sector to manage a country’s resources more efficiently
  1. Generate more value for citizens and businesses by using new business models and providing digital services
  1. Enable businesses to grow by means of public sector digitalization

There are plenty of projects that demonstrate how state departments have improved tax collection by collaborating online with taxpayers, optimized back-office processes, and saved money by preventing fraud. And they have increased income by better managing assets, like land and buildings, and improved construction planning and accounting.

It is important to prioritize strategic projects, such as building a digital infrastructure, setting up a national program to equip society with digital skills, creating the right economic environment, encouraging small business to increase productivity, and so on. To execute on their strategies, governments are establishing private cloud organizations to centralize operations across focus areas.

Many state agencies, which act on behalf of governments, have made infrastructure as a service (IaaS) or platform as a service (PaaS) their number-one priority. But real business value can only be achieved if a government’s strategy is amplified by a partnership with a trusted IT adviser that is able to advise on software as a service (SaaS), or even on a model for outsourcing business processes that is on top of the digital platform.

Companies around the globe demonstrate the benefits of data-driven management in state departments, unified processes, cooperation with citizens through the entire omnichannel platform, and embedding valuable Internet of Things (IoT) scenarios in the IT infrastructure. These and many other revolutionary solutions are creating frictionless government as an enabler of the digital economy.

Boosting efficiency and delivering better public services

Technology helps governments boost their efficiency and deliver better public services. The arrival of cloud computing comes at a time when many governments are urging their IT departments and agencies to optimize the cost of delivering IT services and, at the same time, become more flexible and responsive – in essence, to do more with less.

Building a management system for an entire government on one robust platform is definitely the way for the future, as it enables organizations to unify analytical reporting, gain insights from data, and discover new revenue streams.

The digital technologies available today make it possible to use historical data alongside predictive analytics augmented by machine learning so that people can work smarter. Meaningful information from data could be used in many business applications to optimize processes and assist employees. Another example of how technologies can make a real difference in the public sector is blockchain as a service. It can transform how governments and citizens interact by increasing trust and cutting the time it takes agencies to serve citizens.

Such advances have considerable potential in domains such as tax and revenue management, social security, and finance. The benefits could be replicated across all public services to considerable effect. That is why governments are now building private cloud platforms as part of their digital transformation strategy.

Learn more about Running Future Cities on Blockchain.


Natalia Panina

About Natalia Panina

Dr. Natalia Panina, is Vice President Middle& Eastern Europe Public services General Manager & Innovation Lead at SAP. Natalia has been working for SAP 20 years. Since 2014 Natalia is developing SAP business is Middle & Eastern countries launching SAP innovations to public organizations, supporting cross country best practice exchange and shaping the unique digital transformation roadmap for Governments.

For SMS Messaging, Getting Routing Right Is Important

William Dudley

On December 3rd, 1992, engineer Neil Papworth sent the first SMS message: “Merry Christmas.”  Since that time, SMS has risen, fallen, and has somewhat stabilized.

While person-to-person (or P2P) SMS has certainly declined, SMS-based mobile messaging continues to evolve and innovate. Nowhere is this more apparent than in application-to-person (A2P) messaging, or “enterprise messaging,” as it is sometimes called. Numerous analysts have forecast that A2P messaging will continue growth and prominence through at least the rest of this decade.

Why is this? SMS is still the most ubiquitous, far-reaching messaging channel in the world and will remain so for quite some time. While there are a growing number of non-SMS messaging/social media options (WhatsApp, Snapchat, Facebook Messenger, WeChat, and many more), virtually all of these require both the sender and receiver to be using the same solution. This leads to significant fragmentation – notwithstanding that many of these non-SMS chat apps are and will become significant A2P channels going forward. Otherwise, SMS continues to show strength in that regard.

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So why is it important that SMS messages be routed correctly? The global SMS ecosystem consists of a separate, logical, or A2P connectivity network – one where mobile network operators (MNOs) have approved, and in many cases, monetized, this type of mostly commercial and non-human-generated traffic. Traditionally, the A2P network uses separate connectivity from the general conversational or person-to-person (or P2P) connections. The reasons for this are numerous; however, a significant reason is that it helps to control spam and “grey route traffic” over the P2P networks.

What do I mean by grey route traffic? Grey route traffic is typically A2P SMS traffic that attempts delivery outside of approved A2P connections or routes into the MNOs. Grey route traffic tries to leverage the P2P network and ubiquitous connectivity to avoid MNO fees or approval processes. Much of it attempts to take advantage of MNOs, aggregators, and even senders. As the ability to reach consumers through SMS is immensely valuable, there are numerous messaging aggregators and service providers that use a variety of tactics to attempt to circumvent MNO-supported routing standards.

Unapproved routing puts businesses and consumers at risk

When unscrupulous messaging aggregators try to circumvent operator-approved and monetized routes, they put the business that is paying for the messages at substantial risk, due to non-delivery of these messages. The mobile ecosystem is becoming increasingly vigilant against so-called grey route traffic and has deployed SMS firewalls (and continues to do so) as well as more aggressive spam control measures.

This practice also increases the risks to consumers by exposing them to potential spam and/or fraudulent messages (phishing attacks, etc.).  There are a growing number of unscrupulous, do-it-yourself SMS websites that promise low prices per message and bulk messaging. These services can typically cater to anonymous senders, and the sites use a variety of methods to hide the messages among legitimate P2P messages and connections.

The sites may also leverage SIM farms – an organization that leverages thousands of SIMs (or subscriber identity modules), connected to computer servers instead of mobile devices – to send large amounts of messages. They may also be used by unscrupulous senders to send unsolicited messages to large numbers of consumers with the further goal of obfuscating just who the sender is. The messages appear as if they are legitimate P2P messages; the originator is a phone number of a mobile operator (which is where the SIM cards are from). SIM farms are also attractive to some businesses because they are very cheap. Messages from them may be bounced from service provider to service provider in order to avoid legitimate operator connections. That is why the routes they use into MNOs are known as grey routes.

MNOs don’t like SIM farms and do take measures to shut them down. Additionally, when they are uncovered as sources of mobile spam, they can be shut down by authorities. In the UK, the Information Commissioner’s Office (ICO) is an independent body set up to uphold information rights, and takes enforcement action against SIM farms and nuisance calls and spam texts.

What is behind grey route trends?

Most of the world’s MNOs apply termination fees to SMS traffic entering their network from another network through standardized agreements. Termination fees were put into place in the early days of SMS as a measure to help control spam. While that goal was accomplished to a point, as SMS traffic continued to grow, the underlying SS7 networks were left relatively open as there are various types of signaling beyond SMS that must flow between MNOs. In the P2P messaging world, traffic between two MNOs is typically balanced – meaning conversational – and termination fees effectively cancel each other out.

Grey routes will many times take advantage of national P2P traffic, by setting up shop within a targeted country. Often, originators are outside of the country, leveraging thousands of “local” or national phone numbers of SIMs in the SIM-farm, allowing the message to appear as a P2P message bound for subscribers with a local origination number. This practice breaks the balanced nature between the operators. But since each number may be used only a small part of the time, it gets through various types of filters that the destination operator has in place.

This is but one example of how legitimate A2P or enterprise messaging traffic can suffer as it travels several hops into the destination operator. Enterprise customers may pay lower prices, but the traffic has a relatively low chance of delivery. And due to multiple hops, there is no way to validate that the message even made it to the destination. Consequently, many enterprises are getting heavily fleeced by these bad actors as they are billed for messages sent but not ultimately delivered. Because of the lower prices that many “bulk messaging aggregators” are able to support via SIM-farms and other vulnerabilities, this practice most definitely attracts spammers that send unsolicited messages to subscribers without their consent, violating laws and regulations in most countries.

Mobile operator benefits of trusted message routing

Trusted messaging aggregators contract directly with MNOs and other trusted aggregators to provide approved routes to mobile operators. These service providers offer the highest-quality routes to mobile operators – many, if not most – with such features as handset or network delivery receipts. Additionally, when working with each MNO, trusted aggregators may be able to negotiate termination rates that enable the aggregator to then pass along favorable pricing to enterprise customers.

The physical connection to the operator may be through the global SS7 network, or now, more than likely, through direct, secure IP connections, and more increasingly, IPX connectivity. Whether connected through IP or SS7, the sender and the aggregator are recognized by the MNO and as such, traffic from this source will be prioritized and delivered.

Trusted aggregators will also work to ensure that traffic delivered to the MNO is from trusted sources and can filter any traffic that is not. If an MNO requests that all their incoming traffic – especially international traffic – flow through the aggregator, they can stem the bleeding of revenue due to uncontrolled inbound messaging through unmanaged SS7 channels. With the addition of an SMS firewall into an MNO’s ecosystem, the MNO now has a valuable set of tools available to manage its network and traffic, while protecting subscribers from unsolicited messages. This point is further emphasized as in many countries, MNOs are increasingly being held accountable for non-solicited or spam traffic reaching their subscribers. For example, in India, the regulator TRAI amended regulations calling for a Rs. 5000 fine for every SMS spam complaint.

Enterprises and brands benefit the most from trusted routing

Shutting down grey-route and untrusted, multi-hop SMS routing certainly benefits the MNOs, but it is the end-customers – the enterprises, brands, and other organizations that are sending the messages – that stand to benefit the most. These are the organizations that pay the money to send messages, and they expect and deserve a high conversion rate[2]. When messages are sent through low-cost providers, these organizations are lulled into thinking that their messages will all reach their intended destinations. Furthermore, many organizations rely on high conversion rates to reach their target ROI on the messaging investment. Low-cost or “too low to be true” is just that – too good to be true. Enterprises will never reach target conversion rates.

The concept of consent – that is, the end users consenting to receive certain commercial SMS messages – is at the center of most legal issues around SMS messaging. If an organization’s messages are received by an MNO’s network, and there is not a readily identifiable sender address, then many of these messages are very likely subject to being blocked as spam since they cannot be readily identified, regardless of whether or not the end subscriber consented to receive them.

Enterprises that use SMS for marketing must comply with a growing array of regulations such as TCPA in the United States, Canada’s Anti-SPAM Law (known as CASL), TRAI regulations in India, and the ICO regulations in the UK, to name but a few. All of these have provisions around identity and consent; however, by simply trying to avoid lawful MNO termination fees, they are already on the wrong foot and at worse, can be subject to legal troubles.

Finally, one of the most important reasons for using trusted routes to mobile operators is for delivering two-factor authentication (2FA) tokens to subscribers. Those suppliers and messaging providers that use “cheap routes,” and those that may take advantage of grey routes, do a major disservice to the overall concept of 2FA over SMS. One of the biggest complaints about 2FA over SMS is that many times, the delivery rates are low. Another factor that has targeted 2FA over SMS has been SS7 network interception of messages. While rare, this issue and deliverability issues can be heavily mitigated if the 2FA providers would simply use approved routes into mobile operators. In our own experience, we see successful delivery rates of many millions of 2FA tokens into operators around the world at success rates greater than 97%! But, it is our policy to use approved operator routes. It is not our policy to use grey routes, but instead, we rely on our own direct, approved routes into our mobile operator partners with SAP Digital Interconnect.

The bottom line is: Yes, it very much does matters what route a message takes to reach a mobile operator and the consumer. There are legal ramifications as well as quality – whether simple notifications or high-value 2FA PIN codes.


[2] Conversion rate: A measure of successful SMS respondents vs. the number of messages sent. In other words, how many end subscribers responded or acted on the message the received.


William Dudley

About William Dudley

William Dudley is group director, mobile evangelist, and strategist of the Industry & LoB Products at SAP Digital Interconnect (formerly known as SAP Mobile Services). He has many years of experience building and managing telecommunications network infrastructures. He defines global strategy and solutions for SAP Digital Interconnect, a business unit of SAP, within the mobile ecosystem, focusing on solutions for messaging, mobile-enabled online security, next-generation networks (5G, LTE, IPX), and consumer engagement through mobile channels. As mobile evangelist, Mr. Dudley communicates through both internal and external publications, social media and is active in industry groups. You may follow him on Twitter at @wdudley2009. His primary blog site is

Want Disruptive Change? There’s An Algorithm For That (Or Soon Will Be)

Jessica Schubert

Trust me – it’s not you. Our world really is more unpredictable than ever. Even the best-laid strategies are being disrupted, whether they are focused on the workplace’s culture, technical environment, market dynamics, customer behavior, or business processes. But central to these uncertainties is one constant: an algorithm guiding every step along the evolutionary trail to digital transformation.

“Each company has a predictable algorithm that’s driving its business model,” said Sathya Narasimhan, senior director for Partner Business Development at SAP, on a live episode of Coffee Break with Game Changers Radio, presented by SAP and produced and moderated by SAP’s Bonnie D. Graham. “When we understand how data affects outcomes and bring sensor data online, it’s easier for the infrastructure to process this information to create additional insights,” she explained. Sathya was joined on the program by a panel of thought leaders featuring Darwin Deano, principal at Deloitte Consulting LLP, and Patricia Florissi, global CTO for Dell EMC Sales.

This observation is very telling of the predictive power of algorithms. Think about it: Amazon proposes what should be in your shopping cart. Netflix recommends the next movie you should watch. Google is serving up ads that tug at your heart (and wallet). And all of this wouldn’t be possible without an algorithm running in the background that predicts what people want, how they behave, and what will influence their actions.

Click to listen to the full episode.

Digital technology nears a tipping point – toward enlightenment

Smart business leaders know that tomorrow’s competitive edge requires rapid innovation across their organization today. Machine learning, Internet of Things, artificial intelligence, blockchain, analytics, and Big Data – there are so many choices available. And businesses have a great opportunity now to begin figuring out how to harness and invest in them.

Patricia believes that this reality may soon reach a tipping point as data volumes continue to swell. “We are entering an enlightened age where there is so much data and computing and processing power that we can infer that our quality of life will fundamentally improve,” she observed.

Recent disruption in agriculture certainly proves Patricia’s point. Although the Internet of Things has been around for 20 years, farmers and their suppliers are just starting to capitalize on the generated data because the power needed to process and analyze it has finally arrived. Now, farmers are collecting and analyzing data generated from GPS and sensors buried in the field soil and embedded in farming equipment to improve crop yields and resource use. This is a significant advancement as farmers find new ways to increase food production – possibly by as much as 70% – to keep pace with a global population that is projected to grow from 7.6 billion today to 9 billion by 2050.

Darwin added that technology is now so affordable that the digital landscape is “starting to see patterns emerge, where some archetypes are beginning to develop as the technology matures.”

The predictive power of algorithms and humans drives business outcomes

One of the best examples of the maturing landscape of technology and algorithms is the current state of artificial intelligence and deep learning.

“Artificial intelligence has evolved, especially with deep learning, to teach computers or to help computers automatically learn how we do things and what we do without being told the rules,” Patricia commented. “The more data being observed, the more patterns can be detected and the more accurate the generalization.”

However, Darwin cautioned against heavy reliance on this technology. “We need to protect ourselves against the erosion of basic cognitive skills, which can be an unintended side effect,” he warned. With cognitive technology, people must have rapid interpretation and response, and algorithms may not always be able to satisfy that need. Humans must maintain the cognitive skills required to do this themselves.

Whether employees have the processing speed and full insight they need to make decisions boils down to a company’s willingness to invest in capabilities required to get work done effectively. “I have realized, after spending the last six years assessing developing strategies for various companies, that businesses gain market share and grow faster because of the investments they make to improve the predictive power of their algorithms,” mentioned Sathya.

The future of algorithms: blockchain, humanity, and ecosystems

As technology and processing power become more mature and powerful, new opportunities for digital innovation will inevitably emerge in the near future.

For Sathya, this future hinges on the arrival of blockchain as a mainstream technology. “We are likely entering an environment where we are relying on fewer regulations and less government interference in how businesses work. To ensure that this new paradigm does not undermine the standard of living of people and the society they live in, multiple parties – such as manufacturers, suppliers, financial services, customers, and government – will need to work together in a way that is less intrusive, more efficient and transparent, and trusted and secure.”

Darwin believes that this change will bring about a new renaissance. “We’re talking about humans being replaced by artificial intelligence, machine learning, and the Internet of Things. However, technology automated to the nth degree will actually free us from acting like technology zombies always engaged with smartphones.”

Patricia anticipates that Sathya’s and Darwin’s predictions will eventually bring about an era of optimized ecosystems and innovative models. “Companies that learn how to nurture, cultivate, and enable vibrant ecosystems, platforms, and new business models will be the digital beginners,” she said. “They are redefining how transactions are conducted and the currency used. Ultimately, the ecosystem, cross-education, and cross-pollination will be key to their transformation.”

Listen to the SAP Radio show “Future-Proof Your Business: Digital Solutions Now!” on demand.


Jessica Schubert

About Jessica Schubert

Jessica Schubert is the director of Global Partner Marketing, Deloitte Alliance Lead, at SAP. Her specialties include strategic partnerships, business alliances, go-to-market strategy, product marketing, and demand generation.

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 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.


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

About Stephanie Overby


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.


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