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Use Behavioral Data To Supercharge Your Email Marketing

Mike Canarelli

While most people understand the power of email marketing when it comes to growing a business, few companies actually do it right. One way to supercharge your email marketing is to do what the bigger companies do and let customer behavior habits drive your campaigns.

Despite research demonstrating that well-executed email marketing can bring investment returns of up to 4,400% (that’s $44 for every $1 spent, in case you’re wondering), smaller companies are still reluctant to spend the money. They believe that because they don’t have the financial resources of Amazon.com or OkCupid or Twitter, they can’t afford to target customers and prospects properly.

They couldn’t be more wrong.

While it’s true that the bigger companies have much more sophisticated and proprietary methods of collecting and deploying behavioral data, there are simpler and less expensive ways to reach similar results.

Believe it or not, you probably use behavioral data all the time. If you’ve ever reached out to a customer or client you haven’t seen in awhile to get them back to your store or office, you’ve engaged in behavioral marketing. Identifying inactive customers and targeting them based on their lack of activity is one of the most important components of behavioral marketing.

Collecting behavioral data doesn’t have to be complex. Simply coming up with a list of former customers or clients is one way to do it. Installing a tracking plugin on your website is another. Tracking software isn’t expensive, and it usually pays for itself before very long.

Once you’ve collected and analyzed the data, you can start segmenting it and targeting those areas of your market individually.

For example, if someone created an account on your site but never bought anything, your email to them will revolve around new products or services. If they put something in their cart, but abandoned it, you can send them a reminder email with that product and others.

For those who purchased products a year or two years ago, you can increase repeat purchases by cross-selling and upselling. If a customer purchased a coffee maker last year, you may want to email them images and prices of newer versions of the product. Or you can send them discount codes for ancillary items such as paper cups, swizzle sticks or different blends of coffee.

To start using behavior data to jump start your email conversions, you’ll need the right tools. The basics include:

  • Online tracking tools
  • Landing pages
  • Product recommendation engines
  • An email marketing platform

Given the ROI, investing in these tools is not costly.

When it comes to putting everything together, no other company in the world uses behavioral data in its email campaigns quite as effectively as Amazon.com. Not only has the e-commerce giant changed the way most people shop online, it has also forever changed the way marketers look at email campaigns. Here’s how they do it:

1. Tracking

It’s easy to see how tuned in to your buying patterns Amazon is simply by navigating to your Amazon.com homepage. Comparing it to that of another online seller will reveal vastly different content, but you’ll get an idea of how other online retailers incorporate buying patterns into their marketing. While it may not be possible to duplicate Amazon’s efforts precisely, the lesson here is to gauge some semblance of your user’s behavior and target your emails accordingly.

2. Urgency

Each year around Christmas, Amazon creates urgency in their emails by sending you reminder emails alerting you to expiring promotions, dwindling stock, or purchasing delivery deadlines. Amazon knows that consumers tend to respond to urgency. This type of dedication to data is what will drive sales if you incorporate these same devices into your email marketing initiatives.

3. Personalization and segmentation

Amazon is the master at personalization and segmentation. Emails from Amazon always address consumers by name, and are so ingeniously segmented that one often feels that Amazon is reading your mind. Amazon, like your business, should be constantly using A/B testing to see what works and what doesn’t so you can fine tune your offerings to existing and potential customers.

4. Mobile optimization

The importance of being optimized for mobile cannot be underestimated. Making your e-commerce site mobile friendly can increase your email conversions by up to 53%! If you send out an interest-generating email and your consumers have to tweak and resize your site on their phone, you will lose sales due to the inconvenience.

Using behavioral data to jump start your email marketing efforts doesn’t have to be expensive. Using the right tools the right way can help you mitigate your investment and maximize your returns.

Get more insight on optimizing your mobile site, and other ways to drive online and in-store sales, in Our Digital Planet: See It, Click It, Touch It, Buy It.

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About Mike Canarelli

Mike Canarelli is the CEO and Co-Founder of Web Talent Marketing, a full-service digital marketing agency based in Lancaster, Pennsylvania. As the force behind Web Talent, Mike lays the foundation for his clients’ success by applying his experience, expertise, and passion for excellence to every account. His mission, and the mission of the agency, is to partner with clients to deliver exceptional results. Mike’s leadership and resolve has driven Web Talent to the upper echelons of the Internet marketing industry. His commitment to fair and honest principles has ensured Web Talent remains focused on scalable long-term solutions for its clients, rather than quick fixes and short-lived remedies. Mike holds a B.S. from Temple University’s Fox School of Business and Management where he studied Entrepreneurship and Management Information Systems. After six years as a freelance designer/developer he founded Axis Creative Group in 2006 and later merged with Web Talent SEO in late 2010. Although the business occupies much of his time and energy, Mike still finds time to enjoy an active lifestyle with his wife, Natalya, and their dog, Chester.

Data Analysts And Scientists More Important Than Ever For The Enterprise

Daniel Newman

The business world is now firmly in the age of data. Not that data wasn’t relevant before; it was just nowhere close to the speed and volume that’s available to us today. Businesses are buckling under the deluge of petabytes, exabytes, and zettabytes. Within these bytes lie valuable information on customer behavior, key business insights, and revenue generation. However, all that data is practically useless for businesses without the ability to identify the right data. Plus, if they don’t have the talent and resources to capture the right data, organize it, dissect it, draw actionable insights from it and, finally, deliver those insights in a meaningful way, their data initiatives will fail.

Rise of the CDO

Companies of all sizes can easily find themselves drowning in data generated from websites, landing pages, social streams, emails, text messages, and many other sources. Additionally, there is data in their own repositories. With so much data at their disposal, companies are under mounting pressure to utilize it to generate insights. These insights are critical because they can (and should) drive the overall business strategy and help companies make better business decisions. To leverage the power of data analytics, businesses need more “top-management muscle” specialized in the field of data science. This specialized field has lead to the creation of roles like Chief Data Officer (CDO).

In addition, with more companies undertaking digital transformations, there’s greater impetus for the C-suite to make data-driven decisions. The CDO helps make data-driven decisions and also develops a digital business strategy around those decisions. As data grows at an unstoppable rate, becoming an inseparable part of key business functions, we will see the CDO act as a bridge between other C-suite execs.

Data skills an emerging business necessity

So far, only large enterprises with bigger data mining and management needs maintain in-house solutions. These in-house teams and technologies handle the growing sets of diverse and dispersed data. Others work with third-party service providers to develop and execute their big data strategies.

As the amount of data grows, the need to mine it for insights becomes a key business requirement. For both large and small businesses, data-centric roles will experience endless upward mobility. These roles include data anlysts and scientists. There is going to be a huge opportunity for critical thinkers to turn their analytical skills into rapidly growing roles in the field of data science. In fact, data skills are now a prized qualification for titles like IT project managers and computer systems analysts.

Forbes cited the McKinsey Global Institute’s prediction that by 2018 there could be a massive shortage of data-skilled professionals. This indicates a disruption at the demand-supply level with the needs for data skills at an all-time high. With an increasing number of companies adopting big data strategies, salaries for data jobs are going through the roof. This is turning the position into a highly coveted one.

According to Harvard Professor Gary King, “There is a big data revolution. The big data revolution is that now we can do something with the data.” The big problem is that most enterprises don’t know what to do with data. Data professionals are helping businesses figure that out. So if you’re casting about for where to apply your skills and want to take advantage of one of the best career paths in the job market today, focus on data science.

I’m compensated by University of Phoenix for this blog. As always, all thoughts and opinions are my own.

For more insight on our increasingly connected future, see The $19 Trillion Question: Are You Undervaluing The Internet Of Things?

The post Data Analysts and Scientists More Important Than Ever For the Enterprise appeared first on Millennial CEO.

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About Daniel Newman

Daniel Newman serves as the Co-Founder and CEO of EC3, a quickly growing hosted IT and Communication service provider. Prior to this role Daniel has held several prominent leadership roles including serving as CEO of United Visual. Parent company to United Visual Systems, United Visual Productions, and United GlobalComm; a family of companies focused on Visual Communications and Audio Visual Technologies. Daniel is also widely published and active in the Social Media Community. He is the Author of Amazon Best Selling Business Book "The Millennial CEO." Daniel also Co-Founded the Global online Community 12 Most and was recognized by the Huffington Post as one of the 100 Business and Leadership Accounts to Follow on Twitter. Newman is an Adjunct Professor of Management at North Central College. He attained his undergraduate degree in Marketing at Northern Illinois University and an Executive MBA from North Central College in Naperville, IL. Newman currently resides in Aurora, Illinois with his wife (Lisa) and his two daughters (Hailey 9, Avery 5). A Chicago native all of his life, Newman is an avid golfer, a fitness fan, and a classically trained pianist

When Good Is Good Enough: Guiding Business Users On BI Practices

Ina Felsheim

Image_part2-300x200In Part One of this blog series, I talked about changing your IT culture to better support self-service BI and data discovery. Absolutely essential. However, your work is not done!

Self-service BI and data discovery will drive the number of users using the BI solutions to rapidly expand. Yet all of these more casual users will not be well versed in BI and visualization best practices.

When your user base rapidly expands to more casual users, you need to help educate them on what is important. For example, one IT manager told me that his casual BI users were making visualizations with very difficult-to-read charts and customizing color palettes to incredible degrees.

I had a similar experience when I was a technical writer. One of our lead writers was so concerned with readability of every sentence that he was going through the 300+ page manuals (yes, they were printed then) and manually adjusting all of the line breaks and page breaks. (!) Yes, readability was incrementally improved. But now any number of changes–technical capabilities, edits, inserting larger graphics—required re-adjusting all of those manual “optimizations.” The time it took just to do the additional optimization was incredible, much less the maintenance of these optimizations! Meanwhile, the technical writing team was falling behind on new deliverables.

The same scenario applies to your new casual BI users. This new group needs guidance to help them focus on the highest value practices:

  • Customization of color and appearance of visualizations: When is this customization necessary for a management deliverable, versus indulging an OCD tendency? I too have to stop myself from obsessing about the font, line spacing, and that a certain blue is just a bit different than another shade of blue. Yes, these options do matter. But help these casual users determine when that time is well spent.
  • Proper visualizations: When is a spinning 3D pie chart necessary to grab someone’s attention? BI professionals would firmly say “NEVER!” But these casual users do not have a lot of depth on BI best practices. Give them a few simple guidelines as to when “flash” needs to subsume understanding. Consider offering a monthly one-hour Lunch and Learn that shows them how to create impactful, polished visuals. Understanding if their visualizations are going to be viewed casually on the way to a meeting, or dissected at a laptop, also helps determine how much time to spend optimizing a visualization. No, you can’t just mandate that they all read Tufte.
  • Predictive: Provide advanced analytics capabilities like forecasting and regression directly in their casual BI tools. Using these capabilities will really help them wow their audience with substance instead of flash.
  • Feature requests: Make sure you understand the motivation and business value behind some of the casual users’ requests. These casual users are less likely to understand the implications of supporting specific requests across an enterprise, so make sure you are collaborating on use cases and priorities for substantive requests.

By working with your casual BI users on the above points, you will be able to collectively understand when the absolute exact request is critical (and supports good visualization practices), and when it is an “optimization” that may impact productivity. In many cases, “good” is good enough for the fast turnaround of data discovery.

Next week, I’ll wrap this series up with hints on getting your casual users to embrace the “we” not “me” mentality.

Read Part One of this series: Changing The IT Culture For Self-Service BI Success.

Follow me on Twitter: @InaSAP

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Everything You Know About Leadership Is Wrong

Michael Rander, Karie Willyerd, David Ludlow, Kerry Brown, and Randy B. Hecht

Companies that begin life digitally operate differently from the incumbents they threaten and unseat. Employees at digital companies don’t waste time gathering and analyzing information; they use live data to make decisions. They don’t need to wade through organizational hierarchies to get permission to act; their leaders explain business goals and then empower them to use their best judgment.

To compete, incumbent companies have to transform not only decision-making processes and hierarchies that have hardened over decades but also the nature of leadership itself. The leadership strategies and behaviors that drove success in the knowledge economy aren’t sufficient to navigate a successful transition to the digital economy.

sap_q416_digital_double_feature3_images5Two-thirds of Global 2000 CEOs will center their business strategies on digital transformation by the end of 2017, according to IDC. But few business executives today have the leadership mindset or skills necessary for these strategies to succeed, according to the Leaders 2020 study conducted recently by SAP, Oxford Economics, and McChrystal Group. The study found that only 16% of executives are ready to lead their companies through this transformation.

Leaders must lead differently if their companies are to transition to the digital economy and reap its rewards. In 10 years, for example, 75% of the companies that were listed on the S&P 500 Index in 2012 will have been replaced, according to a study by Innosight. Meanwhile, global competition is heating up. Rising disposable income in emerging economies has sparked the advent of new rivals—and in a survey by consulting firm Accenture, 70% of marketers in those economies expressed confidence in their ability to execute a digital business transformation. In mature economies, the figure was just 38%.

But it’s not too late to learn the essentials of digital leadership.

Communicate the Digital Mission

Fostering an organization whose employees have the skills, tools, authority, and information they need to make decisions in the moment begins with leaders who can formulate and communicate the digital mission. Randall Stephenson, chairman and CEO of AT&T, understands the forces driving digital transformation. Under his guidance, AT&T’s lines of business have expanded—both organically and through acquisitions—to include extensive digital operations, like DirecTV and potentially, as of press time, Time Warner, according to The New York Times. So even as AT&T continues to compete for market share against established and startup telecommunications providers, the company is going head-to-head against digitally based companies like Amazon and Google.

Every business must become digital and work in the cloud, but the change doesn’t merely mean making acquisitions, buying new technology, and rewriting org charts. A new digital workforce is needed as well to meet the transformation challenge. And like the companies they serve, the members of this new workforce will have to develop new abilities and prepare to take on new roles.

That reality is the impetus for Stephenson’s ambitious initiative to transform his company by transforming his team. Through a program launched nearly three years ago, AT&T is underwriting education and professional development opportunities for employees who are willing to pursue the studies on their own time. Those who take advantage of the offer can learn new computing skills that align with the company’s blueprint for digital transformation.

AT&T’s education plan shows the extent to which data is driving a profound change in employees’ daily tasks, functions, and core value to the company. Until recently, businesses sought knowledge workers who were capable of reviewing, assessing, analyzing, and disseminating data in support of decision making. But in the digital economy, companies must be able to respond in the moment to customer, market, and competitive changes. Reviewing masses of data and following traditional hierarchical decision-making processes defeats that goal. To succeed and, in truth, to survive, companies must have that data available when they need it and make a decision in the right moment.

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Invest in Understanding How Work Gets Done

With that in mind, digital leaders must invest in understanding how work gets done and then commit to adjusting processes, deploying the right technology to support those processes, and measuring what adds value for customers and, therefore, to the bottom line. Yet only half of the executives surveyed by Oxford Economics rated their companies’ senior leaders as highly proficient in using the technology necessary for transformation.

 

Digital Leadership in Hard Numbers

Executives who have already established themselves as digital leaders demonstrate the value of their initiatives in hard numbers, according to the Oxford Economics study Leaders 2020. For example, their companies are much more likely to sustain top financial performance in terms of both revenue and profitability. Where leadership has embraced digital, companies:

  • Are 38% more likely to report strong revenue and profit growth
  • Have more mature strategies and programs for hiring skilled talent
  • Report one and a half times more effective collaboration, which contributes to productivity
  • Achieve 87% employee satisfaction and significantly higher levels of employee loyalty
  • Are better equipped for succession planning
  • Listen to Millennial executives, whose advice may provide shortcuts to digital transformation

 

What’s more, becoming digitally savvy isn’t enough. Leaders’ aptitude for cultivating teams and work environments that can make good use of technology is also essential. Indeed, nearly 80% of the companies considered farthest along in digital maturity make data-driven decisions, according to the Oxford Economics study (see Digital Leadership in Hard Numbers). Meanwhile, 53% of respondents were found to be clinging to old-school decision-making styles and failing to map decisions to strategy. As a result, only 46% qualified as equipped to make decisions in real time.

Lead by Simplifying

Digital leaders make it a priority to continually simplify processes and decision-making procedures to reduce institutionalized complexity and bureaucracy. These impediments take a real toll. A study by the Economist Intelligence Unit found that organizational complexity costs businesses up to 10% of profits. Flattening organizational hierarchies and encouraging transparency and organization-wide inclusivity in the decision-making process can help erase such losses, according to the Oxford Economics study.

Achieving these goals doesn’t require a committee. Empowering people at lower levels to make business-critical decisions based on available data has a natural flattening effect on the hierarchy. And as individuals and the enterprise as a whole become accustomed to having access to real-time data that speeds responsiveness, decision making becomes distributed across the organization.

That doesn’t automatically mean that the organizational pyramid is dead. Rather, it empowers employees, the organization, and leadership by placing responsibility for individual responses and actions in the hands of the people best equipped to carry them out, take ownership of the results, and ensure their success. This key characteristic distinguishes digital workers from knowledge workers: they have access to the data necessary to drive the right decisions at the right time, regardless of where they appear on the organizational chart. This not only empowers people at lower levels but also eases the bureaucratic burden on upper management, which is then freer to focus its time and energy on leading the organization forward instead of directing its day-to-day and even minute-by-minute activities.

Lead by Getting Ahead of the Customer

Creating an organization that’s capable of capturing data and making decisions in the moment can transform customer relationships. Besides responding to immediate customer needs, digitally transformed organizations can also predict emerging requirements, even before the customer is fully conscious of them.

To achieve this, digital leaders must be able to view digital in terms of its ability to support innovation: to make it possible for the business to deliver an array of services and advantages that it wasn’t possible to deliver before.

“The challenge is to not ask the question, ‘How does this affect my business?’ That’s inherently a defensive, firm-centric question,” says David Rogers, author of The Digital Transformation Playbook and a member of the faculty at Columbia Business School. “Instead, firms need to look at every new technology and digital capability and ask, ‘How might this allow us to offer new forms of value to our customers that we could not have done in the past?’ And be continuously looking.”

Being plugged into digital’s power to transform customer relationships thus allows an executive to evolve into a digital leader with the vision and the tools necessary to conceive and implement continuous innovation.

Concentrate on Team Dynamics and Employee Engagement

Millennial leadership is well suited to understand the human side of digital transformation. Digital leaders of older generations must recognize the importance of inviting and acting on input from Millennials, which is essential to inspiring them to perform at their best—and to achieving the overall goals of digital transformation.

sap_q416_digital_double_feature3_images2Digital leaders must also understand that encouraging diversity in their workforce isn’t simply a matter of fairness; it’s also a source of competitive advantage. Leaders who build diverse organizations have more engaged, productive employees, as well as higher levels of innovation, according to the Oxford Economics study. This in turn leads to better bottom-line results. Companies that reported higher revenue and profitability growth were more likely to cite the positive impact of diversity on their numbers.

Despite this, the study found that only 60% of companies have adequate programs to ensure that they are developing a digital workforce. The shortfall is hurting companies’ ability to hire and retain talent: only 53% say they are successful in attracting qualified applicants.

This problem will only get worse as Baby Boomers exit the workforce. Digital leaders will be increasingly pressured to maintain stability and continuity in their workforces. The challenge will be especially difficult for companies that lag in meeting the expectations of professionals who have entered the workforce in the era of the gig economy. They expect to make numerous career moves and don’t necessarily see length of tenure as a priority.

Thus, companies need processes for bringing new staff members up to speed as quickly as possible while optimizing their productivity, encouraging them to make constructive contributions to the business, and motivating them to deliver their best performance. They must also develop programs for continuous learning and job rotations to engage and retain workers who may not otherwise remain with the company as long as they would have in past generations.

Address the Generation Gap

Millennials and Generation Z have different expectations of what it means to be an employee and how to use technology than other generations do. They expect collaboration across the hierarchy, which is important to keeping them engaged with the organization and with their personal passions. Fostering a sense of meaning within the workplace, then, is another element of digital leadership; leaders must make the company a place where employees feel as engaged and rewarded as they can be and can do their best work.

In this respect and many others, most businesses are contending with a generation gap. The Oxford Economics study found that in comparison to older executives, Millennial executives have a much more pessimistic view of their organization’s ability to perform well in such key areas as using technology to achieve competitive advantage, collaborating internally, inspiring employees, and fostering an organizational culture that promotes feedback and reduces bureaucracy. In addition, the Millennials are more conscious of—and place a premium on—diversity and its benefits. Addressing that generational disconnect is key to digital leadership.

When today’s mid- and late-career executives entered the workforce, it was understood that younger workers invested the early years of their professional lives paying their dues. But that model no longer works in a market in which a company’s future depends on an approach to digital transformation that comes most naturally to younger executives. And those executives will not invest themselves and their expertise in companies that fail to recognize and respect Millennial workplace priorities.

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Help Employees Address Future Challenges

Digital transformation isn’t just altering employees’ expectations of their careers. It’s also remaking jobs and what work itself entails. In response to a survey by consulting firm Cap Gemini, 77% of companies reported that they saw digital skill gaps as the chief obstacle to their digital transformation.

Their concerns are well founded. Oxford University examined 702 job descriptions across all job types and found that 47% were likely to be replaced by technology within a decade. Another 19% were moderately likely to be replaced. With that in mind, part of the leadership challenge in digital transformation is anticipating how people will work in this world and how artificial intelligence, robots, and people will be integrated into a new and more efficient workforce. How will people interact with these digital forces in the workplace? What will it mean in human terms?

sap_q416_digital_double_feature3_images1Digital leaders can’t expect employees to keep up with these changes on their own: things are simply moving too quickly. AT&T’s Stephenson recognizes this. The New York Times reported that the company’s digital transformation is projected to make 30% of current jobs obsolete by 2020. That’s why, to get ahead of that challenge, Stephenson ordered the creation of AT&T’s training program, which includes an extensive curriculum of online and classroom courses.

This approach illustrates a key characteristic of digital leaders: the ability to think conscientiously about where their companies are headed, what skills their people will need, and how they can help them develop the skills they’ll need as their roles evolve. Digital leaders are also able to articulately communicate to employees where the world is headed so that they are motivated to get there and be productive now and in the future.

Unleash a New Generation of Executives

Companies can no longer afford to delay recognizing the digital sea change that is transforming decision making and the capacity to respond in real time to challenges and opportunities. Led by Millennial executives, the new digital workforce is ready to spark unprecedented performance improvements in organizations that do not constrain their ability to communicate, collaborate, and contribute. Digital leaders are devising strategies for harnessing their energy, enthusiasm, and innate understanding of digital capacities to achieve higher levels of productivity and profitability. The remaining leaders face a choice: embrace this change or get left behind. D!

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

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About Michael Rander

Michael Rander is the Global Research Director for Future Of Work at SAP. He is an experienced project manager, strategic and competitive market researcher, operations manager as well as an avid photographer, athlete, traveler and entrepreneur. Share your thoughts with Michael on Twitter @michaelrander.

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What Does Blockchain Mean To The CFO?

Matthias Heiden

In my previous blogs, I’ve stated that CFOs need to play a strong, active role as an independent challenger for the business while assessing risks – balancing risk and opportunity for the business. I’ve also covered changes to our role as digitization begins to envelop our organizations. The digital economy will impact many things, that we can be sure of.

In the digital economy, collaboration is increasingly important, and the task of the CFO is to establish this collaboration role, and someone needs to establish collaborative digital finance processes and safeguard their effectiveness and efficiency. In many cases, CFOs have taken that role. Looking to next year, there’s a huge expectation that the technology known as “blockchain” will gain greater prominence in practical business applications, and I believe CFOs can and should enter the picture of this discussion early on. It’s not the realm of the technologists alone, and many are pointing towards blockchain as an underpinning of a digital economy.

The blockchain movement and its accompanying technological capabilities are incredibly intriguing, and a quick Google search delivers about 416,000 results, underscoring the interest. If we can build use cases and applications, blockchain can radically change the way we do business. As a CFO, I need to be mindful of risks, and some associated with this technology are difficult to comprehend upon first reflection. However, as I wrote previously, this is typical of the CFO in the digital economy. Both on the business and compliance sides, we are able to leverage traditional skill sets and our knowledge while stepping into unknown territory in both areas at the same time.

Singapore has announced the city state’s central bank will explore blockchain by launching a pilot project with the country’s stock exchange and eight local and foreign banks to use the technology for interbank payments. While blockchain technology, which emerged from bitcoin, is expected to draw interest by banks and other centralized institutions, it’s expected that companies like Amazon, Facebook, and Google will be early adopters as well.

Being mindful of risks

Given that a lot of information is shared in a blockchain, I wonder what it would do to the system – beginning with fraud and going onward along the risk chain – if and how someone could break into it.  I’m sure there’s a good answer – maybe hackers could hardly or never access all of information, given its distributed ledgers. But my point here is that the role as a CFO is to assess the risk and benefit. The latter would include an analysis of the energy footprint of blockchain technology. Is the hardware used sufficiently and is it energy efficient? Are the algorithms computationally efficient in this regard?

Blockchain promises a huge benefit because it increases how we do business and the speed at which it can be conducted. It promises to eliminate the intermediaries and bring new life back to some professions. Some of the technology’s early adopters are public audit firms, and their perspective is in the public interest. I saw a presentation from a utilities company, and it was mind boggling what they’re exploring with blockchain. They can see a case extending collaboration and interaction all the way to the customer in a way they’ve been previously unable to achieve.

From the finance perspective, there’s a limit to optimizing processes and the number of people involved. Even with full robotics, oversight is needed, i.e., someone who watches the robot. When we reach those limits, we turn to technology to help increase volumes and transaction processes. I see a lot of potential for blockchain in this regard, with new, associated business models that have potential.

A hot topic in financial services

At I recent forum for financial services, I co-hosted a dinner where blockchain was the topic. It was amazing to see how people had picked up on the topic, and there were a lot of questions. Many had similar questions about exploring the risks and benefits, and I think it’s fair that everyone took away the sense that they need to keep their eyes on and learn more about it.

Consistently, I see a lot of people taking note, especially those close to the financial market or treasury. Predictably, IT departments are keenly curious, but I think CFOs need to step up their game and begin looking more closely, forming points of view to guide their businesses. It ties in with traditional CFO skills like business modeling, risk and compliance, and advising the business. This remains at the core of our role.

A great resource for CFOs is available now at the SAP finance content hub, specifically on topic of Enterprise Risk and Compliance Management.

To continue the discussion on the topic of governance, risk, and compliance (GRC), join the December 8, 2016 Webinar, A Case Study in Going Beyond Three Lines of Defense to Create Stakeholder Value – Embedding Integrated Thinking at Exxaro.

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Matthias Heiden

About Matthias Heiden

Dr. Matthias Heiden, senior vice president, regional CFO, Middle and Eastern Europe (MEE), is responsible for the field finance organization of MEE. In this role, he supports the organization in managing P&L, continuously driving strategic finance transformation initiatives initiated by Corporate Finance together with the other regional CFOs. This team helps improve business-related processes and supports the Market Unit CFOs in their role as business facilitator and transformation agent.