9 Content Marketing Tips For Highly Regulated Industries

Michael Brenner

Whether you are working for a company in health care, pharmaceuticals, finance, insurance, or alcoholic beverages, developing a successful content marketing program within a highly regulated industry is hard. But it’s not impossible.

While there may be more stringent rules to follow in order to secure legal approvals, there are many best practices you can implement to expedite the content creation and approval process while remaining compliant with industry regulations.

Here are 9 tips to help you create and execute an effective content marketing program that will improve your brand awareness, drive quality leads, and ultimately convert into sales for your business.

1. Get leadership buy-in

Before you create any content, you need to first get your leadership team to understand and support your content marketing program. Talk about the business challenges your content marketing efforts can help solve for your company. Show how your content marketing program will contribute to the bottom line in terms of cost and revenue.

Make sure you’ve done your research so you can back up your proposal with good data and metrics. Think through potential questions and concerns your leadership team may have. Cover those topics throughout your proposal and presentation, and prepare well-thought-out answers to convince and get them on board with your content marketing program.

2. Document your content marketing strategy

The latest B2B Content Marketing: Benchmarks, Budgets, and Trends research from Content Marketing Institute (CMI) and MarketingProfs found that 61% of the most effective marketers have a documented content marketing strategy.

Those marketers enjoy higher content marketing ROI and results compared to their peers who don’t have a documented content marketing strategy.

Your content marketing strategy is your roadmap to achieving the goals you and your leadership team have agreed to. It ensures that every piece of content you create and distribute is relevant and valuable to your target audience, and supports your content marketing goals.

What your content marketing strategy needs to include are a couple of things: your content marketing objectives, target audience and existing content gaps, content types and formats, editorial calendar, promotion and distribution plan, and lastly the KPIs and metrics you’ll use to measure performance.

Here’s a step-by-step guide that goes through each of these topics in detail, which you can use to create your content marketing strategy.

3. Partner with legal team

Your legal team is not an obstacle or roadblock to your content marketing efforts, but should be seen as a strategic partner and resource for your team.

According to this Harvard Business Review article, the marketing team at the financial services company BPV Capital Management worked with their legal team to come up with creative solutions to speed up their content review process, allowing them to get legal approvals in as fast as an hour.

Sit down with your legal team and walk them through your content ideas. Rather than accepting “no” answers, work together to find alternatives that both teams can agree or compromise on. And lastly, discuss what you absolutely cannot write about and any other specific guidelines you need to comply with.

4. Meet with your team regularly

The same study from CMI and MarketingProfs last year found that 61% of the most effective content marketers meet with their teams on a daily or weekly basis. Effectiveness is greater among teams who meet more regularly and frequently to discuss their content marketing efforts.

You’ll want to go beyond your content marketing and social media team here, and meet with other stakeholders who are also involved in executing your content marketing strategy and those could support your efforts, such as your sales department.

A great idea is creating a working group or committee with representatives from each team you work with, so everyone can share progress and updates, discuss questions and challenges, and brainstorm ideas together.

5. Establish and optimize processes

Working with your internal teams or the working group you have set up, map out how the entire process looks like, from ideation to production, review, approval and publishing. Brainstorm ideas on how you can streamline and expedite these workflow processes.

One example is creating a “compliance checklist” that covers all your editorial do’s and don’ts, as well as any other brand guidelines, which have been approved by your legal team. This helps anyone who is creating content to stay compliant with all your legal regulations and editorial guidelines right from the very beginning, so you don’t waste time and resources going back and forth on content review and editing.

Another example is building out your editorial calendar in advance, which is actually a good practice regardless of the industry you’re in. If you can plan out your content ideas for the next three to six months, you can review and get approval by your internal teams or working committee ahead of time.  This will save you tons of time down the road when you start creating your content. Having a planned editorial calendar also ensures that you’re publishing content regularly, which is key to growing and engaging your audience.

6. Find your key differentiator

In industries like pharmaceuticals or alcoholic beverages, there are regulations in place that may prohibit you from explicitly promoting the benefits of your products or services.

But that shouldn’t stop you from publishing content. You just need to get a little creative with how you communicate your key messaging, in a way that resonates and adds value to your target audience.

For example, numerous research and studies have shown the health risks associated with the consumption of energy drinks like Red Bull. So how does Red Bull still manage to create its $1.6 billion market share worldwide?

The powerful content marketing strategy behind Red Bull’s success is effective storytelling. Red Bull tells the stories of extreme sports and adventures. By doing so, Red Bull effectively creates a lifestyle brand that differentiates its product from other energy drinks in the market.

Red Bull sells the lifestyle of extraordinary people who live extreme lives, appealing to the daredevil and rebel that lives within people and the desire to lead the kind of extraordinary lifestyle Red Bull sells.

So how do you find and tap into your key differentiator to create the kind of brand value that Red Bull enjoys? Seek out and listen to your most loyal customers and fans. Find out what their needs are and what content they’re looking for to help solve those needs. From there, you can create content that taps into those customer needs, publishing in the formats and distributing to the channels your target audience prefers to consume content.

7. License content

Successful content marketers not only create original content, but they also curate and share credible third-party content that is relevant and valuable to their target audience.

Licensing high quality content from established publishers, such as The New York Times and Forbes, helps your brand build authority, expertise and credibility as a trusted source for information, which in turn earns your customers’ trust and improves your engagement with them.

Licensed content is also legally licensed, protecting you against copyright infringement issues if any arises, unlike aggregated, unlicensed content.

8. Take advantage of technology

There are many technologies you can leverage to automate and speed up your content creation and approval process.

For example, content monitoring technology can help you review and highlight any compliance issues or risks so you can maintain compliance without spending weeks on legal audits.

There are also many collaboration tools out there that you can use to help speed up the content brainstorming, review and publishing as well as social posting process, by allowing marketing and legal to communicate and provide feedback in real time.

9. Become an industry expert

For heavily regulated industries, it’s sometimes not possible to share or give specific recommendations as to what their customers should do like in other industries.

For example, financial services companies might not be able to write blog posts that directly advise their readers on which stocks they should sell and buy. But what you can do instead is offering recommendations on how people can diversify their investments or monitor the stock market to improve their long-term investment success.

Another way to establish yourself as an expert on your industry is sharing your knowledge and writing about emerging or current trends, regulations and changes in your space that may affect your target customers.

By offering valuable and relevant insights that your customers are looking for, you’re effectively building your authority and credibility as a trusted advisor and partner to them. And the trust you’ve built is what ultimately will set your brand apart from your competition and convert customers into sales and revenue for your business.

I hope these 9 tips will help you create an effective content marketing program for your business within a highly regulated industry. If you have any other tips, please share your ideas below!

Are you interested in engaging and converting new customers for your business? Contact me here and let’s talk about how we can help. Or follow me on LinkedInTwitter, or Facebook and if you like what you see, subscribe here for regular updates.

Photo Source: flickr

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About Michael Brenner

Michael Brenner is a globally-recognized keynote speaker, author of  The Content Formula and the CEO of Marketing Insider GroupHe has worked in leadership positions in sales and marketing for global brands like SAP and Nielsen, as well as for thriving startups. Today, Michael shares his passion on leadership and marketing strategies that deliver customer value and business impact. He is recognized by the Huffington Post as a Top Business Keynote Speaker and   a top  CMO influencer by Forbes.

How To Conquer The Future Of Aerospace

Danielle Homer

In our recent episode of S.M.A.C. Talk Technology Podcast, Brian Fanzo and Daniel Newman discussed the future development and potential of the aerospace industry. Their guest, Torsten Welte, is a leader in SAP’s aerospace defense industry business unit. He works with a wide range of satellite, spacecraft, aircraft, and defense companies. Here’s an overview of what they discussed.

Unifying diversity

The aerospace industry unifies a very diverse range of interests. These range from the customer-focused needs of commercial aerospace, to the high levels of precision required in spacecraft, to the solid reliability required of defense systems. One aspect where these diverse interests are unified is in supply chain transparency.

New companies are bringing a wide range of new technology to the cockpit and cabin. These new products are also deepening the divide between the different sectors of the aerospace industry by increasing the specialization in each sector. However, the use of common standards and platforms are making it easier for these diverse systems to interconnect and work together for a common good. There’s been an increased interest in the industry. Nations are discussing manned missions to Mars, added flights to more points in Asia, and the need for higher security in defense.

Increased use of blockchain

One unifying theme is the use of blockchain to improve security and transparency in the system. As new technologies have come into the market, there’s been a related increase in the use of blockchain. Of the diverse areas within aerospace, the defense industry has especially embraced the security technology. This is because blockchain allows only authorized users to view the information and prevents sensitive information leaks to the outside world. But blockchain also has its place in commercial aerospace as new technologies and products need to be authenticated. This helps prevent fraud issues for export or shipping documentation.

Technologies such as blockchain are helping improve security. There is strong demand for pilots, mechanics, and other workers necessary to the flight line. Increased demand for smaller planes is hitting the supply chain hard and causing shortages. At the same time, there’s been an increased need for security measures in the nearly 17 years following the 9/11 attacks. Blockchain helps transcend these often opposing demands of maintaining security while increasing production to create a better overall commercial aerospace industry.

Rapid ramp-up of small-plane demand

But why has blockchain become so popular for supply chain transparency? The industry has seen a general downturn on the production of larger planes. At the same time, there’s incredible demand for smaller planes, especially in Asia. Torsten says, “a couple years ago, Boeing and Airbus, 737 or A320, created somewhere around 30 a month … And jumping now to a target of 60 a month.”

This growing market has created a demand for accountability and transparency. As new companies enter the market, they’re introducing new technology that may have its own issues. Blockchain can act as an authentication point to help prevent fraud. This helps ensure that the entire system works together securely. It covers everything from the supply chain to operations. The challenge is having these diverse systems work together in a unified system.

Long-term aerospace changes

Even as the industry has grown more diverse, common goals have brought it closer together. The expectation of a manned mission to Mars over the next few decades is driving long-term change in the industry. There was a push for space flight and a moon landing in the 1950s and 1960s. That same excitement over the possibilities of space exploration is driving improvement and change.

New programs, research, effort, and vision are focusing not only national aerospace efforts but international efforts as well. The advent of digitization is making it possible for people from around the world to contribute to the overall mission. This effort is creating changes closer to home. International experts can now communicate effectively. The industry as a whole is emerging with improvements. This is leading to improved flight technology, overall quality, and similar areas of interest to the entire industry.

The impact of customer experience

Customer experience has become a serious driver for many industries over the past few years. As digitization has marched forward, unspoken customer expectations have increased. The experience across multiple carriers and systems should be seamless – if your last flight had certain amenities, you should be able to enjoy those same amenities on the connecting flight. It doesn’t matter whether it’s the same carrier or a completely different service.

Changes in technology are providing differences in lighting, communications, and many other areas. Other sectors of the travel industry, such as cruise lines, are using Big Data to create an artificial-intelligence-like digital environment. This could be implemented in commercial aerospace to determine a customer’s preferences and past purchasing history, allowing available options to be customized to that individual. In turn, the interface provides the customer with a superior experience that meets or exceeds their needs. With these tools to create a better overall experience, compensation payments and outright refunds are reduced dramatically.

The aerospace industry has been at the cutting edge of technology for the past several decades. At the same time, it is currently scrambling to keep up with the demands of digitization. Internet of Things technology, Big Data, connectivity, supercomputing, and artificial intelligence are changing the way the industry operates. And as Torsten states in the podcast, “technology is the enabler.” New options and customized possibilities are providing a better user experience. Technologies such as blockchain enable better accountability and security for your business. But how do you combine these new technologies into a single cohesive system? Discover more in the S.M.A.C. Talk Technology Podcast.

Hear the full episode here. Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Discrete Manufacturers: Automotive, Aerospace and Defense, High Tech, and Industrial Machinery. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?

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Danielle Homer

About Danielle Homer

Danielle Homer is a Solution and Product Marketing Specialist at SAP. After receiving her master’s degree in Innovation Management and Entrepreneurship, her affinity for innovation has led her to the exciting industries of A&D and High Tech to help customers transform and expand their business.

How Manufacturers Can Personalize At Scale

Anurag Gupta

A decade ago, I was a design engineer at a truck manufacturer. The company’s USP (unique selling point) was its customer-centricity rather than being the lowest cost manufacturer. At that time, an order was secured to supply twelve customized trucks to the mining industry – more power, and ruggedness and a thermal shield in the underbody. There was about a month-long negotiation with the customer and internal feasibility check to ensure that commitment could definitely be delivered while meeting target margins.

A talented design engineer, though a slight introvert, led the personalization project from the front, realizing the value to all stakeholders. He personally drove close collaboration with procurement and manufacturing. For the next two months, he became integral to the assembly line and was seen moving along with each work-in-progress truck, continuously guiding the workers on modified parts and manufacturing steps. For about a year, he was the go-to person for any service issues or guidance on similar orders. Then he, along with his accumulated knowledge, left for a bigger role. After that, every such decision led to long cross-department meetings. The value, as well as the effort of delivering personalized products, was immense.

Returning to the present, customers (and people in general) are becoming more mindful of their needs and aspirations and what completes them. They are ready to spend a little more to get these things, but they want the same responsiveness and ordering experience as they experience with mass products. They also want guidance to create their own version with real-time compatibility and compliance checks. The personalization fulfillment is slowly leading to machine learning-driven intelligent configuration and Industry 4.0-driven on-demand production, sometimes using manufacturing-as-a-service or 3D printing.

This is not just the way to the customer’s heart but also their wallet. There are typically three steps to a personalized-products-at-scale business model:

  1. Design management of a personalized product by R&D and synchronization with downstream activities
  1. Customize products online with intelligent suggestions, compliance checks, and price quotes
  1. Manufacturing of the product with minimal human intervention and adding to downstream communication

In this first blog of the series, I will cover the first topic in detail, using the example of a motorbike (the same principles apply to more complex products).

To enable personalization, R&D, in collaboration with other departments, creates an intelligent super BOM or master BOM with these key features:

  1. Consolidate all options: Create a single multidisciplinary product definition encompassing mechanical, electrical, electronic, and software aspects of the product. All parts and software across all the supported variants are listed in the super BOM.
  1. Restrict personalization levels: For each part, assembly, and software, precise values of various parameters are mentioned to provide a selection threshold to the customer—e.g., diameter of the tires, width of the handle, etc. Compatibility between parts, products, ecosystems, and software is included in the super BOM.
  1. Check compliance: Run a real-time check for the material, product, and market.
  1. Estimate price: Pricing of various features, considering part costs, assembly costs, product lifecycle stage, markup, current response, etc.
  1. Commit lead times: Strategic sourcing agreements with vendors for supply of customized parts, along with their price, quality, and lead time.
  1. Guide manufacturing: Production engineering for all possible variants is available for all possible variants with the ability to manufacture via Industry 4.0 processes. Production engineering includes manufacturing steps and routings (workstation and assembly line allocations). Assembly steps and lines for different product types may differ.
  1. Design for 3D printing: In cases where 3D manufacturing is used for complex shapes, the ability to control mechanical, electrical and other properties at each point of the part and merge multiple parts will simplify assembly. This is where machine learning-based real-time simulations and recommendations can help deliver better products.
  1. Maintain digital twin for service/continuous product improvement: Leverage end-to-end traceable and complete data of every personalized product (as designed, built, delivered, maintained, etc.), genealogy (source, quality, lot, etc.), usage (ambient conditions, work hours), break down data, performance data, etc., to generate patterns and improve service and product design.
Transform Research and Development with SAP_2018

Embark on your personalization journey

Has your R&D organization created a road map to support personalization? Start a discussion with your team about the current and desired state of R&D processes using the framework with this white paper.

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About Anurag Gupta, Global Industry Value Engineering, SAP

Anurag Gupta is a principal consultant at SAP. As part of the Digital Transformation Office, Anurag helps business executives design their digital transformation journey to generate strategic value. His expertize lies in manufacturing, R&D, and engineering lines of business and the discrete manufacturing industry.

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

@DeloitteSAP

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.