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.

CIO Priorities For 2018: IT Thought Leaders Share Their Predictions

Rod Tansimore

For a provocative look into the near future of technology applications in business, we asked leading members of the SAP ecosystem to share their prophecies. For CIOs, who are rapidly evolving into an advisory role, the demands increasingly call for tough decisions on where to invest: what technologies, what skills, what new business models? Here’s what our gurus have to say.

Mala Anand, SAP, President, SAP Leonardo and Analytics

2018 will be the tipping point for cloud analytics with the growth of cloud data and applications. This trend will fuel demand for end-to-end cloud analytic platforms that deliver a rich set of analytic capabilities to discover, plan, predict, visualize, prepare, collaborate, model, simulate, and manage while leveraging common data logic. The software-as-a-service (SaaS) model offers business a way to take advantage of continual product innovations in a seamless experience with a common user experience, and will address analytical requirements throughout the organization at a lower TCO vs. fragmented solutions that cause inconsistencies and distorted data views.

Christine Ashton, SAP, Digital Office ERP Cloud, Global Chief Digital Officer

2018 will see a fundamental shift in the role of the CIO in businesses that recognize the value of instant, limitless scalability and immediate access to innovation. Postmodern CIOs will become innovation leaders with a seat – and a key voice – among the C-suite. This will mean:
• Moving from operating IT to innovating business operations
• Swapping owning software for leveraging interlocking solutions across an ecosystem
• Shifting from managing teams to growing an inclusive, confident workforce
• Changing the focus from keeping the lights on to delivering differentiation

The driver behind each will be to equip successful, business-wide digital transformation.

Mark Barrenechea, OpenText, CEO and Chief Technology Officer

As IoT-connected devices push the limits of the cloud, a new paradigm where the cloud and edge computing meet will emerge. Edge computing moves processing power closer to the source of data, sending only data worth keeping to the cloud. Reducing costs and stored volumes of IoT-related data, the device itself will process time-sensitive data, quicker and with reduced network latency. As the number of devices continues to increase, edge computing will push the cloud into a supporting role. Together, the cloud and edge computing will provide the infrastructure needed to support the ever-expanding IoT universe. @markbarrenechea, @opentext

Brian Berns, Knoa Software, CEO

Most companies have little to no insight into how their employees are interacting with their ERP software. This lack of visibility is very costly, as it directly leads to a decrease in employee productivity. In 2018, businesses will increasingly adopt user analytics to gain insight into employee engagement with their software suites. This trend will be accelerated by the move to cloud and mobile enterprise solutions, as well as by the increased importance of user experience for a new generation of knowledge workers. User analytics are bound to become a key technology for IT organizations, which will enable them to measure application usage and identify inhibitors to adoption such as clunky user interfaces, process complexity, and heavy customization.

Orlando Cintra, SAP, SVP, SAP Cloud Platform, Latin America & Caribbean

Companies and C levels will realize that IT is the solved part of the equation. That said, they will turn a lot of attention to proving real business cases with high value so they can innovate with real purpose. Companies in an on-premise model will start to see their costs increasing dramatically compared with the cloud, since all the major players’ investments are going to cloud. Finally, innovation experts, data scientists, tech gurus, and specialists with good track records with success innovation projects will be in demand. The market will not produce talent to meet the expected demand. Companies In the niche to prepare new professionals will have big growth.

Ratnang D. Desai, Deloitte Consulting LLP, Managing Director

2018 will be the year when rapid evolution of technology will force organizations to “Reimagine Everything.” It is not enough to simply reengineer a business process. IT will play a critical role in helping organizations reimagine how disruptive technologies such as cognitive, cloud, and blockchain will fundamentally transform all functions. IT will take the next big step in its transformation, as well. IT and the business will work as true partners and collaborate seamlessly to quickly harness the power of disruptive technologies and turn it into a sustained competitive advantage.

Archana Deskus, Hewlett Packard Enterprise, Global Chief Information Officer

We live in a hybrid data and compute world, requiring flexibility and new architectures with sophistication to span edge to core, enabling distributed machine learning systems to distill end-to-end data insights. Increasingly, we will see the use of machine learning to turn that insight into action, in real time, enabling the hypercompetitive enterprise to disrupt business models and industries to create new experiences and revenue models. None of this will be possible without powerful, future-proof software-defined and memory-driven infrastructure that is consumed in novel, flexible ways. Outcomes as a Service will be the ideal IT delivery model going forward.

Mark Dudgeon, IBM, Global SAP Chief Technology Officer

I expect to see adoption of SAP S/4HANA ramp up significantly in 2018, with SAP S/4HANA Cloud providing an increasingly relevant option for organizations. Blockchain will be an increasingly hot topic, with a number of cross-industry and line-of-business use cases starting to come into mainstream – resolving issues with fractured ecosystem networks, providing transparency and single version of the truth across enterprises. Augmented reality (AR) and virtual reality (AR) are niche technologies in the world of business IT, but I expect to see the use cases expanding beyond training and education into areas such as service and maintenance.
Twitter: @MarkPDudgeon
LinkedIn: MarkPDudgeon

Mike Golz, SAP, Senior Vice President and Regional Chief Information Officer, Americas

As digital transformation takes hold and disrupts more industries, companies need to move from declaring it as critical (78% according to a recent Oxford Economics study) to truly committing to a digital strategy (currently at a dismal 3% in the same study). Whether the change primarily affects a company’s business model, its business processes, or the way people work, the underlying technologies, like machine learning, human/digital interfaces, IoT, or blockchain, are fairly well understood by now. Look no further than your phone. Chances are that you are using them as a consumer today. 3-D printing might look like an exception to consumerization; however, my insoles are based on iPhone pictures uploaded to an app.

Paul Lewis, Hitachi Vantara, Chief Technology Officer, Americas

During 2018, the nature of the CIO’s job will change from the role of “delivery executive” to that of “IT business executive,” realigning the focus from project status and infrastructure uptime to delivering on the three business imperatives. These are: operational efficiency, new customer experiences, and diversified business models of the corporations’ digital transformation strategy. People development will also become the primary consideration for innovation in IoT, AI, and cloud, which are creating a necessity to upskill, re-skill, and replace expertise and experience across disciplines by utilizing platforms to access partner ecosystems of talent, technology, and information.

Follow Paul on his BlogTwitter, and LinkedIn.

Greg McStravick, SAP, President of Database and Data Management

Data will continue to explode in 2018. Gartner predicts that 95% of new products will contain IoT capabilities, and that means companies will have to contend with a deluge of information even more voluminous than we see today. Organizations that have taken a wait-and-see approach to data management will be bulldozed over by those that made the early investments to make sense of it. Systems that enable data sharing, pipelining and governance along with intelligent machine learning and artificial intelligence in one connected landscape will be a game changer for every organization that wants to remain competitive. @McStravickGreg

Nathan Pearce, Capgemini UK, SAP Practice, Business Development and Innovation Lead

In 2018, we will witness another year of disruptive technologies. In particular, machine learning, combined with AI and data, will change the game in consumer engagement and personalization to help drive loyalty and advocacy. There will also be further developments upon VR and AR across many sectors. @npearce111

Manik Narayan Saha, SAP, Regional Chief Information Officer, APJ

Customers’ digital experience will continue to drive prioritization for companies around engagement, purchase decisions, and brand loyalty. I expect to see higher polarization between companies offering a great digital experience. AI will start to have an impact on traditional business processes – especially relating to back-office, shared services, and mid-office functions. Cloud will become the de facto standard to run the digital enterprise. Except in regulated industries, there is now even less of a compelling argument not to move to cloud-based services, and benefit from scale, agility, and speed. And I will be closely watching to see how the tech industry responds to EU GDPR, and helps customers make a successful transition. @maniksaha

Thomas Saueressig, SAP, Chief Information Officer, Global Head of IT Services

Machine learning and artificial intelligence will grow out of its experimental, early-adopter stage and hit the tipping point to broad adoption. Intelligent services will expand from consumer focus and supporting processes into the core of the enterprise and will become mainstream by 2019. The most underestimated theme I see will be the EU’s General Data Protection Regulation (GDPR). It will gain momentum in 2018 and eat up a fair amount of enterprises’ innovation capacities. Finally, advances in technology will not only shift our focus to other aspects of the services we offer, but will drastically change the way we work. New innovations are disrupting the status quo with exponential speed, requiring us to continuously adapt and learn.

Ronald van Loon, Simplilearn, Advisory Board Member & Big Data and Analytics Course Advisor

In 2018, machine learning applications will continue to mature, with each vendor featuring a domain-specific solution. Organizations need fully integrated, end-to-end data management platforms to handle increases in different data streams, including deep learning applications, while having the ability to transform this data into actionable insights. AI and deep learning applications in voice recognition and video analytics will also accelerate. Edge analytics will progress, corresponding with the massive increase in connected devices. It provides real-time analytic solutions at any point where data is generated, addressing data management challenges related to large amounts of data that can’t be centrally analyzed.

We invite you to stay tuned to the Digitalist Magazine to see where 2018 takes us. Best wishes for a productive and prosperous New Year.

Where will technology take finance in the coming year? See How Finance Is Thriving In A Digital World: 17 Experts Share Their 2018 Predictions.

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Rod Tansimore

About Rod Tansimore

Rod Tansimore is a senior director of IT Technology Programs at SAP. He started his career as a systems engineer at IBM and moved on to hold numerous leadership roles in product management, product marketing, sales, and market development for large and small technology companies. Rod has B.S. in Engineering from Northwestern University and an MBA from Columbia University.

Why CIOs Need To Be Postmodern

Christine Ashton

Part 1 in the “Postmodern CIO” series

Businesses are more reliant on technology than ever before, but that doesn’t mean that CIOs are supposed to focus solely on maintaining their enterprise applications and IT infrastructure. Regardless of the size of the company they work for, the days when a CIO’s primary role was just keeping the lights on are long gone. Or at least they are for the generation of CIOs with a vision for using technology to enable their businesses to reconfigure themselves for the rapidly evolving digital marketplace.

More and more CIOs are leaving the gritty technical details to their IT managers and becoming innovation leaders, occupying a seat at the table with the rest of the C-suite. In doing so, they’re assuming greater responsibility, moving from operating a system of record and running reports to overseeing a post-modern technology and services environment that underpins the truly digital business.

From cloud and mobile technologies to APIs and software as a service (SaaS), undergoing a digital transformation means providing your employees with the tools and solutions they need in order to do their jobs quickly and correctly. This new breed of CIO needs to enable the instant, limitless scalability and immediate access to innovation that come with being a genuinely digitally enhanced organization. Here’s are just a few ways postmodern CIOs stand out from their predecessors:

The role of the postmodern CIO

1. From operating IT to innovating business operations

IT professionals have never been in such a strong position to help their colleagues in the wider business achieve their goals. The IT department can now proactively move to create simplified processes, tools, and capabilities that the business team could only have dreamed of, delivering value for internal users, suppliers, and customers.

2. From owning software to leveraging ecosystems

IT environments no longer need to contain disconnected pieces of software, but dozens or hundreds of interlocking parts that together form a coherent business technology ecosystem. Developing the capability to help the business take advantage of this constantly evolving environment is crucial. Helping the business learn how it can reconfigure itself in near real time to develop new capability and to take advantage of innovations is how the postmodern CIO can create added value. Making a shift from an architectural view of the technology ecosystem to a business design perspective will be a key milestone for the success of any postmodern CIO.

3. From managing teams to growing talents

Mentoring and team-building are already crucial skills for any CIO, but the task becomes even more crucial as the competition for tech talent grows fiercer. A talented, inclusive, and confident IT workforce is the catalyst for business innovation, and postmodern CIOs need to put their focus on building a well-oiled talent pipeline to hire and retain the best people.

4. From keeping the lights green to delivering differentiation

CIOs need to be so much more than glorified tech support and should consider how they can hold suppliers more accountable to deliver services and stated outcomes. In today’s competitive business landscape, technology can be a source of differentiation between you and your rivals. Those CIOs who really get their hands dirty and strive to understand how they can use technology to benefit their company are best-positioned to lead and react to rapidly changing business objectives and market conditions.

5. From receiving CFO tasks to becoming the COO and advising the CEO

In this new CIO era, IT professionals expect – and are expected – to provide a vision for how the business can leverage technology to deliver results and meet targets. But sometimes they are the only ones who can see the benefits of that vision. By focusing on short-term return on investment, finance can sometimes have a restraining effect on innovative projects that are oriented to the medium or long term. Instead, CIOs might want to consider taking a “phased approach,” working with the business on some clearly defined projects, implemented in a way that, if successful, could be instantly scalable. Such an approach can help cut the perceived risk and help guide CFOs on how their IT investments will reap future dividends. Equally, the pace of technological change means being able to show the instant impact of technology adoption, and it can be a key way for IT to contribute in real time.

Final thoughts

CIOs and other IT leaders need to decide whether they’re going to lead technological change proactively or continue to be a cost-led, shadow procurement department and let change lead them. It’s a choice between dynamism and stasis.

Today’s postmodern CIOs need a strong vision for their company’s future that allows them to make the shift from building static architectures that require a lot of maintenance to keep them relevant, to promoters of innovation in all areas to stay ahead of the curve (and competitors).

Traditional change management won’t work for the digital transformation era. Learn about The New DNA of Change.

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Christine Ashton

About Christine Ashton

Christine is global chief digital officer, Digital Office ERP Cloud at SAP. Her focus is to work with CxOs to reimagine strategy and business practices. She works with senior executives to plan their “AI-first” digital transformation road map enabled by intelligent ERP and public cloud. Notably, Christine is recognized in Computer Weekly’s 2017’s Most Influential Women In IT – Top 100 list.

Why Strategic Plans Need Multiple Futures

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Outside the Margins

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

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

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

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

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

Seeing New Worlds

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

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

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

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

Do You Need a Futurist?

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

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

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

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

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

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

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

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

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

Plotting the Steps Along the Way

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

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

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

How to Keep Experiments from Being Stifled

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

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

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

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

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

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

Make the Future Part of the Culture

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

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

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


About the Authors

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

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

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


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

Comments

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

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The Human Factor In An AI Future

Dan Wellers and Kai Goerlich

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

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

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

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

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

Where does AI leave human?

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

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

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

Honing the human advantage

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

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

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

Lessons in being human

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

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

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

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

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

Read the executive brief Human Skills for the Digital Future.

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


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Dan Wellers

About Dan Wellers

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

Kai Goerlich

About Kai Goerlich

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

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