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Your Social Role In The Shifting Relationship Economy

Tamara McCleary

The term, Web 2.0 was coined by Darcy DiNucci back in 1999 and what seemed revolutionary at the old-fashioned radiotime… the shift from a static website to technologies that allowed an interactive model of communication.  Over 15 years ago the focus on the internet began to shift to user collaboration, sharing of user-generated content, and social networking.  With Web 2.0 came the ability of companies to actually entertain a conversation with their customers and prospects.  Web 2.0 began a dialogue began between producer and consumer creating a dramatic shift in the economy.

In the early 2000’s, around the time Web 2.0 was coined, technology analyst and visionary Jerry Michalski coined an additional term, The Relationship Economy.  Michalski shares, “Smart companies are building authentic relationships with their customers, no longer treating them as consumers. Smart governments are figuring out how to trust their citizens by opening their data and their budgeting processes, among other ways.”1  The Relationship economy is about a trusting, give-and-take process that brings producers and consumers into a much more symbiotic and communicative relationship than previous economic models.

The relationship economy is about a trusting, give-and-take process that brings producers and consumers into a much more symbiotic and communicative relationship than previous economic models.

The early 2000’s were also an important time in my life as I began to take a deeper journey into sharing my study and experiences in the relationship field when I coined and trademarked RelationShift®.  RelationShift at its core is the process of creating a more transparent relationship of integrity with all of the people, organizations and businesses in your life.  I share this thought not as a plug for my method, but as an example of how many have begun to see and understand the importance of a more transparent and open universal communication process.

A recent 2013 article in The Guardian entitled, Marketing Revolution: the Rise of the Relationship Economy stated, “When a person decides to buy a product for its social attributes, they’re making a statement about what they believe a good relationship is.”  The writer, Tom LaForge, went on to share most importantly, “These are values-based statements. And values are rock solid foundations upon which brand loyalty can reside for a long, long time.”2

RelationShift at its core is the process of creating a more transparent relationship of integrity with all of the people, organizations and businesses in your life.

Interestingly enough, even with the technology to support two-way communication and discussions on the relationship economy we still observe many companies and entrepreneurs who are using the outdated mode of one-way communication called broadcasting.  For example, how many have seen on social media channels a robotic, automated approach to sharing information?

I’m amazed by the automated broadcast methods employed on social media.  I highly doubt that the sales conversions are high utilizing such outdated techniques.  In fact, one only has to observe the very low number of retweets and favoriting that goes on with these types of campaigns.  A brand may have a million plus followers but if no one is tuning in because there is no true relationship or interaction, there is little worth to this type of campaign.

Values are rock solid foundations upon which brand loyalty can reside for a long, long time.

The oldest, most effective marketing and sales strategy is as powerful and potent today as it ever was, real relationships.  Relationships sell, broadcasts don’t.  Broadcasting is impersonal while relationships bring in connection, and human acknowledgement.  Broadcasting is a one-sided vehicle of communication.

Relationships are not a one-sided communication but rather they create a dialogue. The countless automated Twitter, Facebook and LinkedIn accounts repeating the same message over and over ad nauseum without any engagement takes the Social out of Social Media.  A small amount of automation can be highly effective, particularly if it makes your work more efficient, however, efficiency at the expense of relationship is virtually always a losing proposition.  It is critical to augment automation with unique, personal communication.

Even with the technology to support two-way communication and discussions on the relationship economy we still observe many companies and entrepreneurs who are using the outdated mode of one-way communication called broadcasting.

A May 2013 research study by Google and Forrester Research found that “engaged social followers follow a four-phase customer life cycle in which they 1) discover your company and products; 2) explore whether what you offer is right for them; 3) buy your products and services; and 4) engage with you, and with their friends and peers, after their purchase. At each stage they turn to social media. The sales funnel of the past was linear, starting with awareness and ending with a purchase. But today the consumer journey is cyclical — and offers huge opportunities for brands.”3

The key phrase in the research above?  Engaged.  Shifted, engaged relationships translate into increased sales conversions and creative marketing techniques using this style of communication.  Build true relationships, not just one-sided affairs and watch as your sales skyrocket.

A brand may have a million plus followers but if no one is tuning in because there is no true relationship or interaction, there is little worth to this type of campaign.

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Copyright: stokkete / 123RF Stock Photo

1. Michalski, Jerry. “What Is the Relationship Economy?” Rex. N.p., n.d. Web. <>

2. LaForge, Tom. “Marketing Revolution: The Rise of the Relationship Economy.” Theguardian.com. Guardian News and Media, 09 Oct. 2013. Web. 26 July 2014.

3. Haller, Megan. “To Buy or Not to Buy? Perhaps Social Engagement Is the Question â Think with Google.” To Buy or Not to Buy? Perhaps Social Engagement Is the Question a Think with Google. THINK Newsletter, Oct. 2013. Web. 26 July 2014.

 

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Transform Or Die: What Will You Do In The Digital Economy?

Scott Feldman and Puneet Suppal

By now, most executives are keenly aware that the digital economy can be either an opportunity or a threat. The question is not whether they should engage their business in it. Rather, it’s how to unleash the power of digital technology while maintaining a healthy business, leveraging existing IT investments, and innovating without disrupting themselves.

Yet most of those executives are shying away Businesspeople in a Meeting --- Image by © Monalyn Gracia/Corbisfrom such a challenge. According to a recent study by MIT Sloan and Capgemini, only 15% of CEOs are executing a digital strategy, even though 90% agree that the digital economy will impact their industry. As these businesses ignore this reality, early adopters of digital transformation are achieving 9% higher revenue creation, 26% greater impact on profitability, and 12% more market valuation.

Why aren’t more leaders willing to transform their business and seize the opportunity of our hyperconnected world? The answer is as simple as human nature. Innately, humans are uncomfortable with the notion of change. We even find comfort in stability and predictability. Unfortunately, the digital economy is none of these – it’s fast and always evolving.

Digital transformation is no longer an option – it’s the imperative

At this moment, we are witnessing an explosion of connections, data, and innovations. And even though this hyperconnectivity has changed the game, customers are radically changing the rules – demanding simple, seamless, and personalized experiences at every touch point.

Billions of people are using social and digital communities to provide services, share insights, and engage in commerce. All the while, new channels for engaging with customers are created, and new ways for making better use of resources are emerging. It is these communities that allow companies to not only give customers what they want, but also align efforts across the business network to maximize value potential.

To seize the opportunities ahead, businesses must go beyond sensors, Big Data, analytics, and social media. More important, they need to reinvent themselves in a manner that is compatible with an increasingly digital world and its inhabitants (a.k.a. your consumers).

Here are a few companies that understand the importance of digital transformation – and are reaping the rewards:

  1. Under Armour:  No longer is this widely popular athletic brand just selling shoes and apparel. They are connecting 38 million people on a digital platform. By focusing on this services side of the business, Under Armour is poised to become a lifestyle advisor and health consultant, using his product side as the enabler.
  1. Port of Hamburg: Europe’s second-largest port is keeping carrier trucks and ships productive around the clock. By fusing facility, weather, and traffic conditions with vehicle availability and shipment schedules, the Port increased container handling capacity by 178% without expanding its physical space.
  1. Haier Asia: This top-ranking multinational consumer electronics and home appliances company decided to disrupt itself before someone else did. The company used a two-prong approach to digital transformation to create a service-based model to seize the potential of changing consumer behaviors and accelerate product development. 
  1. Uber: This startup darling is more than just a taxi service. It is transforming how urban logistics operates through a technology trifecta: Big Data, cloud, and mobile.
  1. American Society of Clinical Oncologists (ASCO): Even nonprofits can benefit from digital transformation. ASCO is transforming care for cancer patients worldwide by consolidating patient information with its CancerLinQ. By unlocking knowledge and value from the 97% of cancer patients who are not involved in clinical trials, healthcare providers can drive better, more data-driven decision making and outcomes.

It’s time to take action 

During the SAP Executive Technology Summit at SAP TechEd on October 19–20, an elite group of CIOs, CTOs, and corporate executives will gather to discuss the challenges of digital transformation and how they can solve them. With the freedom of open, candid, and interactive discussions led by SAP Board Members and senior technology leadership, delegates will exchange ideas on how to get on the right path while leveraging their existing technology infrastructure.

Stay tuned for exclusive insights from this invitation-only event in our next blog!
Scott Feldman is Global Head of the SAP HANA Customer Community at SAP. Connect with him on Twitter @sfeldman0.

Puneet Suppal drives Solution Strategy and Adoption (Customer Innovation & IoT) at SAP Labs. Connect with him on Twitter @puneetsuppal.

 

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About Scott Feldman and Puneet Suppal

Scott Feldman is the Head of SAP HANA International Customer Community. Puneet Suppal is the Customer Co-Innovation & Solution Adoption Executive at SAP.

What Is Digital Transformation?

Andreas Schmitz

Achieving quantum leaps through disruption and using data in new contexts, in ways designed for more than just Generation Y — indeed, the digital transformation affects us all. It’s time for a detailed look at its key aspects.

Data finding its way into new settings

Archiving all of a company’s internal information until the end of time is generally a good idea, as it gives the boss the security that nothing will be lost. Meanwhile, enabling him or her to create bar graphs and pie charts based on sales trends – preferably in real time, of course – is even better.

But the best scenario of all is when the boss can incorporate data from external sources. All of a sudden, information on factors as seemingly mundane as the weather start helping to improve interpretations of fluctuations in sales and to make precise modifications to the company’s offerings. When the gusts of autumn begin to blow, for example, energy providers scale back solar production and crank up their windmills. Here, external data provides a foundation for processes and decisions that were previously unattainable.

Quantum leaps possible through disruption

While these advancements involve changes in existing workflows, there are also much more radical approaches that eschew conventional structures entirely.

“The aggressive use of data is transforming business models, facilitating new products and services, creating new processes, generating greater utility, and ushering in a new culture of management,” states Professor Walter Brenner of the University of St. Gallen in Switzerland, regarding the effects of digitalization.

Harnessing these benefits requires the application of innovative information and communication technology, especially the kind termed “disruptive.” A complete departure from existing structures may not necessarily be the actual goal, but it can occur as a consequence of this process.

Having had to contend with “only” one new technology at a time in the past, be it PCs, SAP software, SQL databases, or the Internet itself, companies are now facing an array of concurrent topics, such as the Internet of Things, social media, third-generation e-business, and tablets and smartphones. Professor Brenner thus believes that every good — and perhaps disruptive — idea can result in a “quantum leap in terms of data.”

Products and services shaped by customers

It has already been nearly seven years since the release of an app that enables customers to order and pay for taxis. Initially introduced in Berlin, Germany, mytaxi makes it possible to avoid waiting on hold for the next phone representative and pay by credit card while giving drivers greater independence from taxi dispatch centers. In addition, analyses of user data can lead to the creation of new services, such as for people who consistently order taxis at around the same time of day.

“Successful models focus on providing utility to the customer,” Professor Brenner explains. “In the beginning, at least, everything else is secondary.”

In this regard, the private taxi agency Uber is a fair bit more radical. It bypasses the entire taxi industry and hires private individuals interested in making themselves and their vehicles available for rides on the Uber platform. Similarly, Airbnb runs a platform travelers can use to book private accommodations instead of hotel rooms.

Long-established companies are also undergoing profound changes. The German publishing house Axel Springer SE, for instance, has acquired a number of startups, launched an online dating platform, and released an app with which users can collect points at retail. Chairman and CEO Matthias Döpfner also has an interest in getting the company’s newspapers and other periodicals back into the black based on payment models, of course, but these endeavors are somewhat at odds with the traditional notion of publishing houses being involved solely in publishing.

The impact of digitalization transcends Generation Y

Digitalization is effecting changes in nearly every industry. Retailers will likely have no choice but to integrate their sales channels into an omnichannel approach. Seeking to make their data services as attractive as possible, BMW, Mercedes, and Audi have joined forces to purchase the digital map service HERE. Mechanical engineering companies are outfitting their equipment with sensors to reduce downtime and achieve further product improvements.

“The specific potential and risks at hand determine how and by what means each individual company approaches the subject of digitalization,” Professor Brenner reveals. The resulting services will ultimately benefit every customer – not just those belonging to Generation Y, who present a certain basic affinity for digital methods.

“Think of cars that notify the service center when their brakes or drive belts need to be replaced, offer parking assistance, or even handle parking for you,” Brenner offers. “This can be a big help to elderly people in particular.”

Chief digital officers: team members, not miracle workers

Making the transition to the digital future is something that involves not only a CEO or a head of marketing or IT, but the entire company. Though these individuals do play an important role as proponents of digital models, it also takes more than just a chief digital officer alone.

For Professor Brenner, appointing a single person to the board of a DAX company to oversee digitalization is basically absurd. “Unless you’re talking about Da Vinci or Leibnitz born again, nobody could handle such a task,” he states.

In Brenner’s view, this is a topic for each and every department, and responsibilities should be assigned much like on a soccer field: “You’ve got a coach and the players – and the fans, as well, who are more or less what it’s all about.”

Here, the CIO neither competes with the CDO nor assumes an elevated position in the process of digital transformation. Implementing new databases like SAP HANA or Hadoop, leveraging sensor data in both technical and commercially viable ways, these are the tasks CIOs will face going forward.

“There are some fantastic jobs out there,” Brenner affirms.

Want more insight on managing digital transformation? See Three Keys To Winning In A World Of Disruption.

Image via Shutterstock

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Andreas Schmitz

About Andreas Schmitz

Andreas Schmitz is a Freelance Journalist for SAP, covering a wide range of topics from big data to Internet of Things, HR, business innovation and mobile.

How Emotionally Aware Computing Can Bring Happiness to Your Organization

Christopher Koch


Do you feel me?

Just as once-novel voice recognition technology is now a ubiquitous part of human–machine relationships, so too could mood recognition technology (aka “affective computing”) soon pervade digital interactions.

Through the application of machine learning, Big Data inputs, image recognition, sensors, and in some cases robotics, artificially intelligent systems hunt for affective clues: widened eyes, quickened speech, and crossed arms, as well as heart rate or skin changes.




Emotions are big business

The global affective computing market is estimated to grow from just over US$9.3 billion a year in 2015 to more than $42.5 billion by 2020.

Source: “Affective Computing Market 2015 – Technology, Software, Hardware, Vertical, & Regional Forecasts to 2020 for the $42 Billion Industry” (Research and Markets, 2015)

Customer experience is the sweet spot

Forrester found that emotion was the number-one factor in determining customer loyalty in 17 out of the 18 industries it surveyed – far more important than the ease or effectiveness of customers’ interactions with a company.


Source: “You Can’t Afford to Overlook Your Customers’ Emotional Experience” (Forrester, 2015)


Humana gets an emotional clue

Source: “Artificial Intelligence Helps Humana Avoid Call Center Meltdowns” (The Wall Street Journal, October 27, 2016)

Insurer Humana uses artificial intelligence software that can detect conversational cues to guide call-center workers through difficult customer calls. The system recognizes that a steady rise in the pitch of a customer’s voice or instances of agent and customer talking over one another are causes for concern.

The system has led to hard results: Humana says it has seen an 28% improvement in customer satisfaction, a 63% improvement in agent engagement, and a 6% improvement in first-contact resolution.


Spread happiness across the organization

Source: “Happiness and Productivity” (University of Warwick, February 10, 2014)

Employers could monitor employee moods to make organizational adjustments that increase productivity, effectiveness, and satisfaction. Happy employees are around 12% more productive.




Walking on emotional eggshells

Whether customers and employees will be comfortable having their emotions logged and broadcast by companies is an open question. Customers may find some uses of affective computing creepy or, worse, predatory. Be sure to get their permission.


Other limiting factors

The availability of the data required to infer a person’s emotional state is still limited. Further, it can be difficult to capture all the physical cues that may be relevant to an interaction, such as facial expression, tone of voice, or posture.



Get a head start


Discover the data

Companies should determine what inferences about mental states they want the system to make and how accurately those inferences can be made using the inputs available.


Work with IT

Involve IT and engineering groups to figure out the challenges of integrating with existing systems for collecting, assimilating, and analyzing large volumes of emotional data.


Consider the complexity

Some emotions may be more difficult to discern or respond to. Context is also key. An emotionally aware machine would need to respond differently to frustration in a user in an educational setting than to frustration in a user in a vehicle.

 


 

download arrowTo learn more about how affective computing can help your organization, read the feature story Empathy: The Killer App for Artificial Intelligence.


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About Christopher Koch

Christopher Koch is the Editorial Director of the SAP Center for Business Insight. He is an experienced publishing professional, researcher, editor, and writer in business, technology, and B2B marketing. Share your thoughts with Chris on Twitter @Ckochster.

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Predictive Procurement Gets Real

Marcell Vollmer

The physical and digital worlds have officially collided. In the old days, we’d have the morning paper delivered to our doorsteps and read it on the way to work while sipping coffee we made at home. Today, the news stories we care about are automatically delivered to our mobile devices, and we scan them while enjoying the beverage that was ready and waiting for us at the local coffee shop after we ordered it via mobile app. In years past, we attended events after work to expand our professional networks. Now we link to our peers — and their peers — around the world, online in real time.

Connecting the dots

As a society, we are more connected than ever. Thanks to the Internet of Things (IoT), we can see and be seen like never before. We can learn about the future and use this information to shape it to our advantage.

There are plenty of examples of this in the consumer world—for example, refrigerators that predict when you’re about to run out of milk and automatically order and have it delivered before you even notice, and devices that know you’re on your way home and turn on the lights before you get there.

It’s happening in procurement as well, and transforming the function as we know it. Procurement is complex and involves lots of moving parts, from sourcing and manufacturing to transportation and logistics. It’s an intricate web of systems, processes, and relationships that must be coordinated and managed, both internally and externally, to ensure that goods and services get delivered on budget and on time.

Predicting the future

Over the years, procurement has made great strides, leveraging disruptive forces such as business networks and cloud technologies to evolve from a tactical manual process to a strategic digital one. Paper orders and invoices are all but dead. Electronic payments are taking hold. Buyers and sellers are meeting and collaborating online.

Yet the transformation has only begun. Aided by Big Data and the IoT, procurement is becoming smarter and more predictive than ever.

Data is the lifeblood of any organization. From structured information on production, marketing, sales, HR, finance, facilities, and operations to transaction-level data on suppliers, customers, and partners, it tells the story of a business. For years, companies have been mining data simply to figure out what it all means—essentially, to learn from the past and perform better in the present.

Now they are leveraging advances in technology such as in-memory computing, real-time analytics, and the IoT to create assumptions about what will happen in the future and take actions that drive optimal outcomes.

Eliminating risk

Supply chains are more global than ever, and as a result, fraught with more risk. Many companies are turning to the IoT to anticipate and mitigate this risk before it disrupts their business. Consider the mining industry. Trucks are the critical link to transport raw materials to either further process or sell them on the market. If one of these trucks stands still due to maintenance issues, losses to the company could run into the millions, as they only can sell what they get out of a mine and deliver.

With the help of sensors, companies can continually monitor their fleets and receive notifications on upcoming maintenance needs to prevent breakdowns before they occur. Critical components such as engines and braking systems, for example, can be connected by small IoT sensors that monitor their temperature, hydraulic pressure, container angle, position, and vibrations. The sensors transmit all data to a live dashboard, and if a key parameter such as temperature changes, it will trigger an alert for the radiator. This information is then automatically routed to the procurement system, where a replacement order for radiator hose and radiator cleaner is automatically processed in line with the company’s procedures and policies. Related maintenance service is scheduled with a qualified technician who will arrive as soon as the material arrives and perform the work before a fatal defect of the radiator causes the truck to literally stop in its tracks. Risk avoided.

Delivering value

Supply chains are no doubt complex — and the data within them even more so. But data is the new global currency. And the IoT holds the key to unlocking its value. With the IoT, companies can not only spot patterns and trends in their business but anticipate risk and changes and adapt their businesses to gain advantage.

For more on how data analysis is transforming business, see Living The Live Supply Chain: Why You Need Data Scientists.

The article originally appeared in Spend Matters. It is republished by permission.

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Marcell Vollmer

About Marcell Vollmer

Marcell Vollmer is the Chief Digital Officer for SAP Ariba (SAP). He is responsible for helping customers digitalize their supply chain. Prior to this role, Marcell was the Chief Operating Officer for SAP Ariba, enabling the company to setup a startup within the larger SAP business. He was also the Chief Procurement Officer at SAP SE, where he transformed the global procurement organization towards a strategic, end-to-end driven organization, which runs SAP Ariba and SAP Fieldglass solutions, as well as Concur technologies in the cloud. Marcell has more than 20 years of experience in working in international companies, starting with DHL where he delivered multiple supply chain optimization projects.