Heroes, History, And Marketing: A Game Plan For A Winning Hockey Fan Experience

Fred Isbell

SAP NiemiAs I recently wrote in Episode II: The Hockey Fan Experience Reawakens, the hockey fan experience is more than just a fan’s in-person experience at a game. Take my recent trip to the 2016 NHL Winter Classic, for example. During the matchup between my hometown Boston Bruins and the Montreal Canadians (the Habs), I saw many dimensions of the fan experience first-hand – from the actual game to sponsorships, branding, in-arena multimedia visuals, coverage, and broadcasting.

As a marketer, this made think: What defines a hockey fan and how is it changing and evolving?

Fan loyalty and the hockey experience

Without a doubt, knowing how to play hockey improves the fan experience. Although I had a non-traditional introduction to the game, I have learned so much about hockey that I can now teach and explain the sport with second-nature ease. After nearly 45 years, I appreciate the game a hundred-fold more having watched, learned, coached, and played it. I also am far more aware of the nuances of the sport as well as the business, its marketing aspects, and more.

From my perspective, a hockey team is very similar to a services organization. Teams draft, acquire, and develop players based on their roles and team needs and engage in a season schedule that consists of individual projects and engagements. As our services practices and teams deliver projects with clients, their ultimate win is customer satisfaction and the impact of a truly collaborative group effort. So it’s not surprising that sports and hockey teams – like service engagement teams – have invested so much in analytics to measure and optimize their talent investments.

Fans follow their favorite players, purchase and wear their favorite players’ and teams’ jerseys, and track their favorite players’ success with statistics across a truly digital experience. Fans are loyal based on location and geography; the overall brand, history, and imagery; and specific players that comprise a team’s lineup.

At the same time, there are interesting variations that are fueled by technology and digital disruption.

The fan experience goes beyond borders…

Ask any sports fan what the most iconic trophy in all of sports is. Europeans would likely name the World Cup for soccer, but many sports fans in North America cite the Stanley Cup. In its own right, the Stanley Cup is a rock star and has its very own brand persona. Phil Pritchard and his colleagues from the Hockey Hall of Fame in Toronto accompany the cup wherever it travels, and it even gets its own airplane seat.

I had the chance to meet Phil when the Stanley Cup and a collection of the NHL trophies were displayed in Boston for the 2016 NHL Winter Classic and came north to FMI Cup Trophiesthe Manchester Monarchs Trophy Night. The Mark Messier Leadership, Conn Smyth playoff MVP, the Calder AHL trophy the Monarchs had just won, and many others were also there – along with three Boston Red Sox MLB championship trophies to round out this incredible fan experience. When it was time to post the photos of the Monarchs fans with the cup, it was done through the cloud. No trees were killed to print anything, and smartphone pictures made it onto social media far quicker.

This experience is confirmation that we are living in an era of real-time everything for sports. Approximately 70% of fan communication with key sources of information and commerce is done with a mobile device, which is absolutely amazing.

…and it’s going digital

I was reminded of this magic not too long ago when our SAP New York office did a “fantasy skate” event at Madison Square Garden with the New York Rangers. As a sponsor of the first-level SAP Concourse, we were given a tour FMI NYR MSG January 2016of the renovated facility – from the main concourse to the suites and ultra-modern press area high above the ice. As proof that sports and entertainment are becoming digital, the experience at Madison Square Gardens featured a video kiosk powered by SAP HANA and a press box with multimedia networking hookups and more.

What does this have to do with marketing? Everything. The NHL fields a product: hockey games with teams comprised of hockey players. They play under a team brand as well as the NHL master brand while chasing after an iconic award with a brand of its own. Each player has their own personal brand, and all of them are inextricably tied to the overall brand of both the team and the NHL.

But there’s much more here. Maintaining team historical information, the NHL statistics Web site powered by SAP HANA is expanding to include all information dating back to the inception of the league – available on demand anytime, anywhere, and on any device.

Bonus: See how the NHL uses SAP Customer Engagement and Commerce (CEC) solutions for marketing, including SAP hybris and SAP HANA Enterprise Cloud.  

Digitalization and digital transformation are sweeping through all sports and hockey, and the NHL is but one example. We are in the midst of a revolution that will make everything more fun and our memories even more vivid. What an exciting time to be a hockey fan!

Learn more about NHL.com statistics powered by SAP and SAP HANA. Read Phasing into Analytics: The NHL and SAP Innovate their Statistical Database.

Explore exciting new developments in sports marketing. check out the Center of Business Insight brief The Future of Sports Marketing: Play Locally, Think Globally, Drive Loyalty.

FMI MSG SAPFred Isbell is the senior marketing director and head of thought leadership Service & Support Marketing at SAP.

Join Fred online: TwitterFacebookLinkedInsap.com, and SAP Services Hub

 

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About Fred Isbell

Fred Isbell is the Senior Director of SAP Digital Business Services Marketing at SAP. He is an experienced, results- and goal-oriented senior marketing executive with broad and extensive experience & expertise in high technology and marketing. He has a BA from Yale and an MBA from the Duke Fuqua School of Business.

How To Humanize Marketing In The Age Of Artificial Intelligence

Rushenka Perera

Marketing is not something you do at people. It’s something you do for people. More importantly, it’s something you must do for the individual instead of the masses.

Automation and AI help us market with a more focused view of the individual, and at scale, as everyone is NOT the same. Subsequently, marketing should serve us as individuals instead of cookie-cutter consumers.

To this end, how can we leverage AI to humanize our marketing? Below are five ways to respect individuality using robots.

Make it resonate with our human side

This comes first because it should guide every aspect of our marketing. The best advice for this is: “Don’t tell me about your grass seed, talk to me about my lawn.” In other words, don’t use AI to inundate consumers with statistics about your stellar company. Instead, use it to start an honest conversation about what they value in life. So how do you start that conversation?

Start development with human skills

I’ve written before about the growing personalization of artificial intelligence. As technologies like conversational AI become more important, you must ensure your development team understands human interaction. And yes, marketing needs to talk to IT! You simply cannot survive with IT experts that don’t interact with their audience. To succeed, you must educate your IT and marketing workforce in skills such as active listening, empathy, and imagination.

Learn exactly who you’re talking to

According to media analyst Brian Solis, people use their phones 1,500 times a week. Why wouldn’t they? Mobile media makes us feel connected and empowered. It’s the perfect medium for personalized marketing. With the mountains of data mobile devices create, you have no excuse to not understand your consumers. What are their goals? Where are they going? How is their lawn looking?

Of course, it can be difficult to pull the profile of a person from that pile of data. However, machine learning can draw insights from this information. By integrating machine learning with marketing personalization, you can increase engagement enormously.

Provide personalized services

Marketing is about starting a conversation, so speak to your customer as an individual. To achieve this, invest in conversational AI assistants. As more individuals access services through assistants like Siri, you must secure your brand voice in this space.

Use the data we mentioned above to make your “voice” appealing to your customer. This is much easier when your developers have social conversational skills.

Above all, ensure your consumers can access your offerings without repeating themselves. After that, you must recommend further products and services using the language they’re most likely to respond to.

Engage with communities

As you connect individuals to your organization, they’ll seek out others your brand aligns with. Though you should market to individuals, you must remember that we’re all social creatures. This means you must cater to communities that form around your company.

To grow your communities, use social media monitoring to uncover influencers that can recruit more members. From there, assign AI to engage members and incentivize their participation. Finally, deploy machine learning to manage your growing community.

As you can see, artificial intelligence is an (ironically) effective way to bring humanity back to your marketing.

Visit SAP marketing to learn how SAP technologies can help you engage customers in every interaction across digital marketing channels.

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Rushenka Perera

About Rushenka Perera

Rushenka is Head of Marketing at SAP ANZ.

What We Will See In Wholesale Distribution's Growth

Michelle Schooff

Where is wholesale distribution going? It’s a question of concern to many in the industry as disruption changes how business is done. Hosts Brian Fanzo and Daniel Newman discussed this topic in a recent episode of the S.M.A.C. Talk Technology Podcast. Their guest was Karen Lynch, SAP’s global wholesale distribution industry business unit lead. Is B2B moving towards B2C? How can existing wholesale distributors change to meet customer expectations? Here’s a quick overview of what was discussed.

An industry in transition

It wasn’t very long ago that a wholesale customer would call a distributor’s customer service rep looking for an unusual part. The customer couldn’t figure out what the right part should be. After spending a long while on the phone describing the part, the distributor’s customer service rep would come up with what they hoped was the right part. But for today’s digital customer, the old ways seem antiquated.

Today’s customer wants faster, more accurate results. With mobile technology, customers can snap a picture to send to the customer service rep. The distributor’s digital core, paired with machine learning, can automatically identify potential matches to the pictured part. The customer receives an immediate reply identifying the part’s stock number and how to order it.

Situations like this illustrate how machine learning helps a wholesale distributor improve productivity and customer relations. Instead of spending time trying to keep clients, the digitized wholesale distributor can instantly solve the problem and go on to other issues at hand. It allows them to compete on equal footing with digitally native distribution giants.

Disruption in the wholesale distribution industry

Lynch sums up the industry’s past very succinctly: “Wholesalers, for many, many years, had survived on their ability to effectively process sales orders, and it was coupled with these great customer relationships that they had for many decades. Most wholesale distributors are smaller, family-run operations, so there were handshake agreements that go back years and years.” However, she also notes that in the face of disruptive companies such as Amazon and Alibaba, those old relationships aren’t enough to keep customers loyal.

Wholesale distributors are having to transform their businesses in ways that had not been conceived of only a couple decades ago. Smaller distributors are having to differentiate themselves through value-added services or other unique ways. It has to go beyond simply providing opportunities to place fast orders online. It must extend to creating a unique customer experience that builds loyalty.

Changes and innovations in fulfillment

Today’s wholesale distribution customer has changed as well. The push for a better customer experience in B2C sales has changed the expectation in B2B transactions. There’s an expectation that their order will arrive very quickly. Many wholesale customers have come to expect next day/second day delivery, and they expect these efficiencies in business-related transactions as well. One way those expectations are being managed is through smart vending. As an Internet of Things fulfillment option, smart vending places a vending machine filled with commonly used items at the customer’s location. It’s the equivalent of having a sales rep on hand 24-7 in the customer’s location.

When the customer needs an item, they can swipe their badge at the vending machine to access that item. It’s instantly available with no waiting for fulfillment. The machine automatically charges the item to the correct cost center. This helps automate the customer’s accounting system and improve back-office efficiency. If the customer wishes, automatic replenishment can be set up to make the process seamless. The distributor can use advanced analytics to optimize the product mix in each customer’s smart vending machine.

Adopting B2C customer-centricity within B2B

Lynch adds, “[B2B customers] want to feel the distributor understands who they are, what they want, even to the point of sometimes trying to anticipate what they will need before they even need it.” B2B customers still expect a fast, seamless ordering experience while at work. They don’t want to deal with difficult interfaces or wait until business hours to get their order placed. They want to add minimal input to get the job done.

One area where Lynch sees wholesale distribution changing is the shift from efficiencies to better service and unique value. Whether it’s a vending machine or photo part recognition, today’s customer wants automation and ease of process. If they’re ordering temperature-sensitive material, they want automatic notification if the temperature falls outside of their requirement; this is now possible through Internet of Things sensors. The capability of the wholesale distributor to provide more convenience to the customer is paramount to future success in the industry.

Improving ordering, fulfillment, and shipping of goods will become crucial ingredients to wholesalers’ digital transformation. To hear the full conversation with Karen Lynch listen to the S.M.A.C. Talk Technology Podcast episode. At under 15 minutes, it’s perfect to squeeze a little innovation into your coffee break.

Hear the full podcast episode here. Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Consumer Industries. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?

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Michelle Schooff

About Michelle Schooff

Michelle Schooff is a global marketing director in the retail and wholesale distribution industries for SAP. She is responsible for the marketing strategy, messaging and positioning for SAP solutions in the global marketplace. With over 20 years experience in technology and marketing, Michelle builds strategic marketing plans that drive growth, innovation and revenue.

Hack the CIO

By Thomas Saueressig, Timo Elliott, Sam Yen, and Bennett Voyles

For nerds, the weeks right before finals are a Cinderella moment. Suddenly they’re stars. Pocket protectors are fashionable; people find their jokes a whole lot funnier; Dungeons & Dragons sounds cool.

Many CIOs are enjoying this kind of moment now, as companies everywhere face the business equivalent of a final exam for a vital class they have managed to mostly avoid so far: digital transformation.

But as always, there is a limit to nerdy magic. No matter how helpful CIOs try to be, their classmates still won’t pass if they don’t learn the material. With IT increasingly central to every business—from the customer experience to the offering to the business model itself—we all need to start thinking like CIOs.

Pass the digital transformation exam, and you probably have a bright future ahead. A recent SAP-Oxford Economics study of 3,100 organizations in a variety of industries across 17 countries found that the companies that have taken the lead in digital transformation earn higher profits and revenues and have more competitive differentiation than their peers. They also expect 23% more revenue growth from their digital initiatives over the next two years—an estimate 2.5 to 4 times larger than the average company’s.

But the market is grading on a steep curve: this same SAP-Oxford study found that only 3% have completed some degree of digital transformation across their organization. Other surveys also suggest that most companies won’t be graduating anytime soon: in one recent survey of 450 heads of digital transformation for enterprises in the United States, United Kingdom, France, and Germany by technology company Couchbase, 90% agreed that most digital projects fail to meet expectations and deliver only incremental improvements. Worse: over half (54%) believe that organizations that don’t succeed with their transformation project will fail or be absorbed by a savvier competitor within four years.

Companies that are making the grade understand that unlike earlier technical advances, digital transformation doesn’t just support the business, it’s the future of the business. That’s why 60% of digital leading companies have entrusted the leadership of their transformation to their CIO, and that’s why experts say businesspeople must do more than have a vague understanding of the technology. They must also master a way of thinking and looking at business challenges that is unfamiliar to most people outside the IT department.

In other words, if you don’t think like a CIO yet, now is a very good time to learn.

However, given that you probably don’t have a spare 15 years to learn what your CIO knows, we asked the experts what makes CIO thinking distinctive. Here are the top eight mind hacks.

1. Think in Systems

A lot of businesspeople are used to seeing their organization as a series of loosely joined silos. But in the world of digital business, everything is part of a larger system.

CIOs have known for a long time that smart processes win. Whether they were installing enterprise resource planning systems or working with the business to imagine the customer’s journey, they always had to think in holistic ways that crossed traditional departmental, functional, and operational boundaries.

Unlike other business leaders, CIOs spend their careers looking across systems. Why did our supply chain go down? How can we support this new business initiative beyond a single department or function? Now supported by end-to-end process methodologies such as design thinking, good CIOs have developed a way of looking at the company that can lead to radical simplifications that can reduce cost and improve performance at the same time.

They are also used to thinking beyond temporal boundaries. “This idea that the power of technology doubles every two years means that as you’re planning ahead you can’t think in terms of a linear process, you have to think in terms of huge jumps,” says Jay Ferro, CIO of TransPerfect, a New York–based global translation firm.

No wonder the SAP-Oxford transformation study found that one of the values transformational leaders shared was a tendency to look beyond silos and view the digital transformation as a company-wide initiative.

This will come in handy because in digital transformation, not only do business processes evolve but the company’s entire value proposition changes, says Jeanne Ross, principal research scientist at the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT). “It either already has or it’s going to, because digital technologies make things possible that weren’t possible before,” she explains.

2. Work in Diverse Teams

When it comes to large projects, CIOs have always needed input from a diverse collection of businesspeople to be successful. The best have developed ways to convince and cajole reluctant participants to come to the table. They seek out technology enthusiasts in the business and those who are respected by their peers to help build passion and commitment among the halfhearted.

Digital transformation amps up the urgency for building diverse teams even further. “A small, focused group simply won’t have the same breadth of perspective as a team that includes a salesperson and a service person and a development person, as well as an IT person,” says Ross.

At Lenovo, the global technology giant, many of these cross-functional teams become so used to working together that it’s hard to tell where each member originally belonged: “You can’t tell who is business or IT; you can’t tell who is product, IT, or design,” says the company’s CIO, Arthur Hu.

One interesting corollary of this trend toward broader teamwork is that talent is a priority among digital leaders: they spend more on training their employees and partners than ordinary companies, as well as on hiring the people they need, according to the SAP-Oxford Economics survey. They’re also already being rewarded for their faith in their teams: 71% of leaders say that their successful digital transformation has made it easier for them to attract and retain talent, and 64% say that their employees are now more engaged than they were before the transformation.

3. Become a Consultant

Good CIOs have long needed to be internal consultants to the business. Ever since technology moved out of the glasshouse and onto employees’ desks, CIOs have not only needed a deep understanding of the goals of a given project but also to make sure that the project didn’t stray from those goals, even after the businesspeople who had ordered the project went back to their day jobs. “Businesspeople didn’t really need to get into the details of what IT was really doing,” recalls Ferro. “They just had a set of demands and said, ‘Hey, IT, go do that.’”

Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants.

But that was then. Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants. “If you’re building a house, you don’t just disappear for six months and come back and go, ‘Oh, it looks pretty good,’” says Ferro. “You’re on that work site constantly and all of a sudden you’re looking at something, going, ‘Well, that looked really good on the blueprint, not sure it makes sense in reality. Let’s move that over six feet.’ Or, ‘I don’t know if I like that anymore.’ It’s really not much different in application development or for IT or technical projects, where on paper it looked really good and three weeks in, in that second sprint, you’re going, ‘Oh, now that I look at it, that’s really stupid.’”

4. Learn Horizontal Leadership

CIOs have always needed the ability to educate and influence other leaders that they don’t directly control. For major IT projects to be successful, they need other leaders to contribute budget, time, and resources from multiple areas of the business.

It’s a kind of horizontal leadership that will become critical for businesspeople to acquire in digital transformation. “The leadership role becomes one much more of coaching others across the organization—encouraging people to be creative, making sure everybody knows how to use data well,” Ross says.

In this team-based environment, having all the answers becomes less important. “It used to be that the best business executives and leaders had the best answers. Today that is no longer the case,” observes Gary Cokins, a technology consultant who focuses on analytics-based performance management. “Increasingly, it’s the executives and leaders who ask the best questions. There is too much volatility and uncertainty for them to rely on their intuition or past experiences.”

Many experts expect this trend to continue as the confluence of automation and data keeps chipping away at the organizational pyramid. “Hierarchical, command-and-control leadership will become obsolete,” says Edward Hess, professor of business administration and Batten executive-in-residence at the Darden School of Business at the University of Virginia. “Flatter, distributive leadership via teams will become the dominant structure.”

5. Understand Process Design

When business processes were simpler, IT could analyze the process and improve it without input from the business. But today many processes are triggered on the fly by the customer, making a seamless customer experience more difficult to build without the benefit of a larger, multifunctional team. In a highly digitalized organization like Amazon, which releases thousands of new software programs each year, IT can no longer do it all.

While businesspeople aren’t expected to start coding, their involvement in process design is crucial. One of the techniques that many organizations have adopted to help IT and businesspeople visualize business processes together is design thinking (for more on design thinking techniques, see “A Cult of Creation“).

Customers aren’t the only ones who benefit from better processes. Among the 100 companies the SAP-Oxford Economics researchers have identified as digital leaders, two-thirds say that they are making their employees’ lives easier by eliminating process roadblocks that interfere with their ability to do their jobs. Ninety percent of leaders surveyed expect to see value from these projects in the next two years alone.

6. Learn to Keep Learning

The ability to learn and keep learning has been a part of IT from the start. Since the first mainframes in the 1950s, technologists have understood that they need to keep reinventing themselves and their skills to adapt to the changes around them.

Now that’s starting to become part of other job descriptions too. Many companies are investing in teaching their employees new digital skills. One South American auto products company, for example, has created a custom-education institute that trained 20,000 employees and partner-employees in 2016. In addition to training current staff, many leading digital companies are also hiring new employees and creating new roles, such as a chief robotics officer, to support their digital transformation efforts.

Nicolas van Zeebroeck, professor of information systems and digital business innovation at the Solvay Brussels School of Economics and Management at the Free University of Brussels, says that he expects the ability to learn quickly will remain crucial. “If I had to think of one critical skill,” he explains, “I would have to say it’s the ability to learn and keep learning—the ability to challenge the status quo and question what you take for granted.”

7. Fail Smarter

Traditionally, CIOs tended to be good at thinking through tests that would allow the company to experiment with new technology without risking the entire network.

This is another unfamiliar skill that smart managers are trying to pick up. “There’s a lot of trial and error in the best companies right now,” notes MIT’s Ross. But there’s a catch, she adds. “Most companies aren’t designed for trial and error—they’re trying to avoid an error,” she says.

To learn how to do it better, take your lead from IT, where many people have already learned to work in small, innovative teams that use agile development principles, advises Ross.

For example, business managers must learn how to think in terms of a minimum viable product: build a simple version of what you have in mind, test it, and if it works start building. You don’t build the whole thing at once anymore.… It’s really important to build things incrementally,” Ross says.

Flexibility and the ability to capitalize on accidental discoveries during experimentation are more important than having a concrete project plan, says Ross. At Spotify, the music service, and CarMax, the used-car retailer, change is driven not from the center but from small teams that have developed something new. “The thing you have to get comfortable with is not having the formalized plan that we would have traditionally relied on, because as soon as you insist on that, you limit your ability to keep learning,” Ross warns.

8. Understand the True Cost—and Speed—of Data

Gut instincts have never had much to do with being a CIO; now they should have less to do with being an ordinary manager as well, as data becomes more important.

As part of that calculation, businesspeople must have the ability to analyze the value of the data that they seek. “You’ll need to apply a pinch of knowledge salt to your data,” advises Solvay’s van Zeebroeck. “What really matters is the ability not just to tap into data but to see what is behind the data. Is it a fair representation? Is it impartial?”

Increasingly, businesspeople will need to do their analysis in real time, just as CIOs have always had to manage live systems and processes. Moving toward real-time reports and away from paper-based decisions increases accuracy and effectiveness—and leaves less time for long meetings and PowerPoint presentations (let us all rejoice).

Not Every CIO Is Ready

Of course, not all CIOs are ready for these changes. Just as high school has a lot of false positives—genius nerds who turn out to be merely nearsighted—so there are many CIOs who aren’t good role models for transformation.

Success as a CIO these days requires more than delivering near-perfect uptime, says Lenovo’s Hu. You need to be able to understand the business as well. Some CIOs simply don’t have all the business skills that are needed to succeed in the transformation. Others lack the internal clout: a 2016 KPMG study found that only 34% of CIOs report directly to the CEO.

This lack of a strategic perspective is holding back digital transformation at many organizations. They approach digital transformation as a cool, one-off project: we’re going to put this new mobile app in place and we’re done. But that’s not a systematic approach; it’s an island of innovation that doesn’t join up with the other islands of innovation. In the longer term, this kind of development creates more problems than it fixes.

Such organizations are not building in the capacity for change; they’re trying to get away with just doing it once rather than thinking about how they’re going to use digitalization as a means to constantly experiment and become a better company over the long term.

As a result, in some companies, the most interesting tech developments are happening despite IT, not because of it. “There’s an alarming digital divide within many companies. Marketers are developing nimble software to give customers an engaging, personalized experience, while IT departments remain focused on the legacy infrastructure. The front and back ends aren’t working together, resulting in appealing web sites and apps that don’t quite deliver,” writes George Colony, founder, chairman, and CEO of Forrester Research, in the MIT Sloan Management Review.

Thanks to cloud computing and easier development tools, many departments are developing on their own, without IT’s support. These days, anybody with a credit card can do it.

Traditionally, IT departments looked askance at these kinds of do-it-yourself shadow IT programs, but that’s changing. Ferro, for one, says that it’s better to look at those teams not as rogue groups but as people who are trying to help. “It’s less about ‘Hey, something’s escaped,’ and more about ‘No, we just actually grew our capacity and grew our ability to innovate,’” he explains.

“I don’t like the term ‘shadow IT,’” agrees Lenovo’s Hu. “I think it’s an artifact of a very traditional CIO team. If you think of it as shadow IT, you’re out of step with reality,” he says.

The reality today is that a company needs both a strong IT department and strong digital capacities outside its IT department. If the relationship is good, the CIO and IT become valuable allies in helping businesspeople add digital capabilities without disrupting or duplicating existing IT infrastructure.

If a company already has strong digital capacities, it should be able to move forward quickly, according to Ross. But many companies are still playing catch-up and aren’t even ready to begin transforming, as the SAP-Oxford Economics survey shows.

For enterprises where business and IT are unable to get their collective act together, Ross predicts that the next few years will be rough. “I think these companies ought to panic,” she says. D!


About the Authors

Thomas Saueressig is Chief Information Officer at SAP.

Timo Elliott is an Innovation Evangelist at SAP.

Sam Yen is Chief Design Officer at SAP and Managing Director of SAP Labs.

Bennett Voyles is a Berlin-based business writer.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.
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Cloud Computing: Separating Myth From Reality

Misa Rawlins and Krishnakant Dave

Across industries, many enterprise leaders believe and understand that cloud computing is here to stay. Globally, public cloud services market revenue is projected to reach US$411 billion by 2020, compared with $260 billion in 2017, according to research firm Gartner, Inc. Cloud technology in all its forms—software, platform, or infrastructure as a service—is rapidly becoming essential to the needs of business today. With cloud computing, organizations can simplify IT, save costs, scale rapidly, drive standardization and user adoption, and start getting ahead of tomorrow’s needs when it comes to customer engagement, the supply chain, the workforce, a simplified finance function, and more.

Despite the short- and long-term advantages, some executives remain uncertain about the next steps or have lingering questions about the benefits of moving to the cloud. For many leaders, separating the cloud myths from the facts can prove daunting. Start here, with these insights that can help you bust big myths about the cloud and start moving confidently toward a cloud-enabled transformation of your organization.

Myth No. 1: Moving to the cloud is too costly. “Costly” is a relative term. The cloud can be costly – but costs should be weighed against benefit and return once requirements and migration plans are in place. Rapidly evolving business demands, for example, can dramatically alter cloud-related requirements. Meanwhile, new technologies are dramatically redefining the art of the possible with the cloud. Because migrating to the cloud is not a true “plug-and-play” proposition, and many enterprise leaders underestimate what a migration or implementation involves, some organizations can be surprised by the costs of a cloud transformation. Without a clear understanding of the potential benefits—without a clear business case for moving to the cloud—the focus on costs can overshadow the return on investment. Knowing the value that cloud solutions can bring—not just the costs—can help manage expectations.

Myth No. 2: The benefits of the cloud aren’t substantial enough. As vendors adopt a “cloud-first” stance for many solutions and product updates, organizations that move to the cloud may have a competitive advantage—no matter the size of the enterprise. Cloud solutions continue to offer abundant and increasing functionality. And with the help of an end-to-end solution provider, you can configure cloud solutions to the specific needs of your industry and your business. For larger organizations, rapidly deployable cloud solutions can help support growth or the unique needs of certain business units, such as new acquisitions or foreign subsidiaries, for example. For smaller organizations, the cloud can help you position your organization to tap new opportunities and tame growth challenges.

Myth No. 3: Cloud is too risky. All digital technologies and all business models come with inherent risk. In a hyperconnected world, no system is immune from cyber attacks, insider threats, data leakage, or related risks. No transformation project is a guaranteed success. Market changes, new competition, regulatory issues, and other factors can require you to change your cloud strategy overnight.

Because the risks are real, take advantage of resources and capabilities that can help reduce risk and ensure that your technology investments align tightly with clear business objectives. The maturity of the software goes a long way toward mitigating risk with cloud projects. You can add an extra layer of capabilities such as managed cloud services to provide active, hands-on oversight of cloud applications and infrastructure—helping you to avoid service interruptions and address issues proactively.

Myth No. 4: Cloud computing is still an immature technology. Like other evolving technologies, cloud is advancing every day. Those who wait for the next generation of cloud offerings may find themselves missing out on tangible benefits as competitors leverage cloud technology to sharpen their edge. Across industries, leading organizations are not waiting. Many view cloud technology as evolving but necessary, and they are leveraging it effectively today. Some, for example, are tightly integrating cloud software solutions to streamline supply chain processes, boost information transparency, and improve decision-making across the board—all the while tapping the cloud benefits of cost savings and scalability. Others are confidently turning to infrastructure solutions delivered and running solutions in a private or hybrid cloud. Still others are turning to cloud platform solutions to extend the power of existing applications, build modern analytics platforms, or support new Internet of Things business models. Turning the cloud to your advantage may depend less on the maturity of the technology and more on the power of your imagination.

Myth No. 5: Moving to the cloud will be easy. Cloud technology can help organizations streamline and simplify their IT landscapes and their business processes, reducing needs around capital expenses and infrastructure while helping to save costs. But migrating to the cloud requires more than simply plugging in technology. It requires an ability to address a host of considerations—data migration, the business-specific capabilities of solutions, change management, governance, systems integration, security, and more.

A cloud transformation is more than a plug-and-play project or a traditional system implementation. It requires progressive thinking and an ability to align technology with your business needs and processes— for today and for the future. Migrating to the cloud is a journey. Moving forward with the cloud will require a vision of your “to be” state—your destination—as well as a strategy for getting you there.

To learn more, and to find out what IDC thinks about the future of the cloud, please read this study that presents a strategic blueprint for enterprises on their digital transformation journey.

For more information on how to simplify innovation with cloud technology, learn more about SAP Cloud Platform.

Ready to reimagine the potential of the cloud? Contact us to get the conversation started.

Contact Krishnakant Dave at kdave@deloitte.com and follow him on Twitter: @kkdave

Contact Misa Rawlins at mrawlins@deloitte.com and follow her on Twitter: @misa_rawlins

www.deloitte.com/SAP

SAP@deloitte.com

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This article originally appeared on Deloitte.com and is republished by permission.

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Misa Rawlins

About Misa Rawlins

As a senior manager and consultant in Deloitte’s SAP practice, Misa Rawlins enjoys helping her clients not only to figure out how to solve their current business problems, but also to envision how a modern cloud platform can transform their organizations moving ahead. Within the practice, she has specifically chosen to take a leadership role around the sales and delivery of SAP S/4HANA Cloud because she considers it the wave of the future. She has made it her mission to deeply understand this technology to better advise clients on what moving to a cloud infrastructure really means.

Krishnakant Dave

About Krishnakant Dave

As a principal in Deloitte’s global SAP practice, KK Dave is a consulting leader for Deloitte’s largest clients; part of the U.S. SAP leadership team where he spearheads Deloitte's cloud offerings; and leader of global go-to-market efforts in the wholesale distribution and manufacturing sector. In these roles, he assists clients in their business transformation journeys using the absolute latest SAP toolset, which presently comprises SAP S/4HANA, SAP Cloud Platform, and SAP S/4HANA Cloud, among other technologies.