Keep It Simple And Innovate: Digital Transformation Challenges Discussed

Chris Finnamore

At SAP Hybris LIVE: Digital Summit, a panel of digital transformation veterans shared their experiences of implementing commerce solutions. Coming from industries as diverse as diesel engines, online groceries, and nutritional supplements, the five companies drew on their experience to provide some valuable insights.

The first hurdle was winning over the cynics. For Philip Murphy, head of digital center of excellence at Glanbia, a particular challenge was getting the rest of the company to buy into what could be major changes to the business. “It takes a bit to get people on board due to the high cost of investment, the big timelines, and [the fact that] a lot of senior stakeholders… don’t understand the complexity of what you’re doing. You’ve got to show them a vision of what the future could look like for the organization.” You also need to show what the commercial benefits of transformation will be – Glanbia’s CEO is a former finance director and wants to see a return on investment, after all.

Helle Pedersen Georgakis, senior project manager at MAN Diesel & Turbo, made the point that it’s important to not to sell the product, but the benefits, “What’s in it for me?” Her team also made great efforts to involve end users in the deployment of the new solution. “They were in it from the beginning,” said Georgakis, “and could see and help IT with what they should focus on. It was not an IT tool that was rolled out – it was a business tool.”

Panelists also shared their stories about what went well, and what didn’t, when they finally went live with their new commerce systems. For Erik Lindqvist, solution architect and project manager for e-business at Alfa Laval, the go-live date went without a hitch – it was the 18 months leading up to it that were hard. In fact, the journey leading up to deployment led to the final product being overly complex.

According to Lindqvist, “I think we may have listened too hard to all the nitty-gritty business demands that came to us from different directions. It led to that we customized the solution quite heavily and we still suffer from that… we should have started more simply, with fewer features.”

Of course, as Frank Niemann, vice president, software, at Pierre Audoin Consultants, said, “The notion ‘go live’ is a term from the past.” Digital transformation is about continuous innovation but, as Ulf Bonfert showed, it’s not easy to innovate while staying on top of your business.

The panelists were willing to share their experiences with this balancing act. Eberhardt Weber, founder and CEO of SAAS AG and Lieferladen.de, has a particular advantage. He runs a company that sells groceries online, as well as the software other groceries need to become an online business.

This puts his company in a position where it can try out new solutions on its own supermarket, then feed those that work back into the software side of the business. Weber is aware that this gives his company an unusual advantage: “I know it’s not so easy if you run a big enterprise, you cannot just try stuff out, but if you have the opportunity I would recommend to everybody… just do it.”

And the parting advice from the panelists to those companies about to undertake a digital transformation? “Start small, think big.” “No matter how well prepared you are, it’s never enough.” “Try things out! Make mistakes.” “It’s not going to be easy. Be resilient when things go wrong.” And finally, “There are more opportunities than threats.”

Leverage your Data – The Hidden Treasure Inside Your Business.

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Automotive: The Age Of The Mobility Ecosystem

Dean Afzal

Ask any automotive executive the following question: “Which part of your car generates the most power?” Their answer will likely influence your purchase decision significantly. If that person answers, “the engine” or “the powertrain,” you’ll know you are dealing with someone at least 10 years behind the times.

The part of a car that generates the most power is the smartphone. It is the centerpiece of everything that happens between the car, its owner, and its manufacturer. It is its intelligence, its security system, its entertainment, communications, and commerce hub. Increasingly, as car-hailing apps like Lyft and Uber have shown, it is also the device that gets cars and people together, in innovative and versatile ways.

This is a revolution for the automotive industry. It is an age unlike any that has come before. For the past 100 years, improvements have been made to all the physical components of a vehicle, from tires to roof, and from fuel economy to safety. But throughout all of this, a consumer’s vehicle has remained a mechanical possession, generally owned by one person at a time, remaining parked and idle for most of its life, and generating revenue for the manufacturer through sales, maintenance, and repair.

The advent of the smartphone, with its app for everything and its universal accessibility, has changed the relationship on all three sides of the consumer-vehicle-manufacturer triangle. This is now the “post-ownership future.” The commercial tenure of a vehicle has grown exponentially and has crossed borders into other areas of consumers’ lives. Automotive companies are recognizing this, but it remains to be seen just how well their reactions can keep pace.

The mobility ecosystem

In the post-ownership future, consumers, dealers, and manufacturers alike are learning how to exist in a mobility ecosystem. Those are powerful words. Mobility connotes far more than mere car ownership. It includes ride sharing, car sharing, usage by the hour, and using alternate forms of transport as needed. It can also include not moving at all, but arriving virtually through tools like Skype and Facetime from the front seat of your parked vehicle.

“Ecosystem” brings to mind a remarkably connected and symbiotic existence, where a driver’s music or podcast collection hands off effortlessly to the onboard entertainment system, where turn-by-turn directions and real-time parking space information arrives just when it is needed, where car and owner communicate via smartphone, and where car and manufacturer communicate via the house WiFi.

The mobility ecosystem demands an experience

The 20th century model of ownership is fading away in all areas of commerce, not just automotive. Consumers are now looking for experiences. They expect to rent and consume products based on their preferences. They arrive well prepared and turn to their smartphone for reviews, comparative data, and options. This means automotive companies, as well as all other types of vendors, must evolve from product sellers to purveyors of value and experience.

This transition towards experience extends beyond the smartphone, of course, but still orbits around it. While the customer uses her smartphone to learn and decide, so, too, the vendor can use the same medium to contact individual consumers, build a direct, personalized relationship, and collect vital data along the way. Some examples of this new automotive marketplace include:

  • Ford’s spin-off company, Ford Smart Mobility, dedicated to including innovations like advance booking of parking spaces in cities and at airports. This provides an added service to the car usage experience, while allowing Ford to expand into and monetize hitherto untapped aftermarkets, in this case, the $7 billion/year parking industry.
  • GM and Toyota, which each are offering car-sharing programs based on the Zipcar model.
  • Ford, which is testing an Airbnb-style car sharing program, leasing a single vehicle to a group of people rather than to one person.
  • Cadillac, offering a $1,500 per month subscription service, giving members access to a variety of models to fit their daily needs. They have seen just how big a bite ride sharing has taken out of the market, and they want it back.

This transition is the reason why dealerships are being retooled to become the face of the brand experience. Since shoppers can now go online to do all the research they need about models and warranties, they are cutting back on dealership visits substantially, turning instead to online brokers, many of whom represent more than one brand. This demands more tailored relationships, proactive customer service, and improved financing options to win back trust and convert visits to sales.

In the mobility ecosystem, automotive manufacturers may not ever have to provide every service themselves, rather they will be the proactive hub where industry partners, distributors, and consumers mingle and coexist. Manufacturers must move to the front lines, rather than residing as the anchor at the back. They can and must deliver the immediacy and interactivity demanded by their customers. By doing so, they will own and control the customer data and the end-to-end customer experience, which in turn will fuel their future prosperity.

Own your automotive marketplace

In the automotive industry, a vehicle is becoming just one part of a new marketplace for mobility – one that focuses on service, personalized shopping experiences, and real-time communication.

With the help of technology solutions, automotive companies can:

  • Interact directly with customers and own the experience
  • Harness customer data
  • Fulfill orders through channel partners, avoiding channel conflict
  • Meet customer expectations for B2C-style experiences

Want to learn more about selling directly and creating a bigger value pie for all? Check out the latest Forrester Custom Technology Adoption Profile, commissioned by Mirakl and SAP Hybris.

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Thrilling Changes Are On The Horizon, But Are Automakers Ready?

Judy Cubiss and Ginger Shimp

Germany’s Autobahn highway system is associated worldwide with speed. It’s also an apt metaphor for the automotive industry’s ongoing transformation, due to the digital economy, which is accelerating at a breathtaking rate.

Long known for its massive value chain – involving product innovation, car manufacturing, supplier and dealer relationships, as well as marketing and advertising – the process has delivered consistent profits for decades. The resulting evolution has necessarily been incremental.

Those days are over. New technology is disrupting the traditional automotive industry model and forcing car makers to totally rethink their approach, not only for the physical cars themselves, but also for the services connected to the car.

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (Social, Mobile, Analytics, Cloud) Technology Podcast, caught up with Uli Muench, global vice president, automotive at SAP SE, on an episode of an extraordinary series titled Digital Industries, which examines how digital transformation is affecting 16 different industries.

The future of travel — and what that means for the automotive business

electric carLike hovercrafts or virtual reality, for years electric car technology has seemed to be right around the corner without ever gaining mainstream traction. Today any impediments to its success are largely gone. Battery technology has matured and grown, which in turn has helped make electric cars more marketable. On the one hand, modern batteries let consumers drive further between charges, while on the other hand they enable car makers to simplify the manufacturing process, as creating an electric engine is much easier than building a classic internal combustion engine. As a bonus, electric engines are far cleaner and greener thereby reducing pollution.

These developments are one reason why investors have shown so much enthusiasm for Tesla, despite that company’s relatively modest sales numbers in comparison to legacy automakers. Further, electric car fever has gone global; California is no longer the only electric car hub. A significant amount of electric engine manufacturing capacity has been added in China, a place equally bullish on the future of electric mobility.

Muench calls Chinese interest in electric cars huge. “Mass production (of electric cars) is going to occur in China,” he says, adding that he believes a Chinese electric car, mass produced at an attractive price point, is a mere five years away.

hyperconnected carThe shift from combustion engines to electric engines is an exciting development. Yet the move toward fully connected and autonomous vehicles is perhaps even more intriguing. A future where vehicles are connected to other cars on the road – and to the cloud – offers myriad possibilities. One example that Muench discussed was around a concept vehicle with new software allowing today’s vehicles to use sensors to pick up information about changing roadside conditions. This information is then displayed across the entire dashboard in augmented reality form.

The possibilities for networked vehicles don’t stop inside the car. In the future, software will enable not only fully autonomous vehicles, but also automated parking, fueling, and other services. Even more exciting, these developments may be realized even sooner than most believe. Recent projections show that by 2030, 95% of all road miles will not be driven by humans.

“The experience of getting from point A to point B is going to be a completely different one compared to today,” Muench enthused.  Listen to a short clip from the podcast:

SMAC podcast

How automakers are adapting

So what does this mean for legacy automakers and their massive production and supply chains? As you might expect, the industry is well aware of the situation and is working furiously to adapt. Ford has created a standalone business unit, Ford Smart Mobility, dedicated to developing the latest technologies. BMW, meanwhile, is notable for its car-sharing and parking services. Other legacy automakers, such as GM and Volkswagen, are also making serious investments in mobility services as well as other cutting-edge technologies.

The benefits of this shift will be staggering. Enormous efficiency gains will be realized when people no longer have to waste time during commutes. The role of human error will be minimized, leading in turn to fewer accidents and injuries. Those collisions or injuries that do occur will be backed up by large amounts of generated data. This information will make the process of assigning liability or criminal responsibility much easier.

Muench foresees a future in which humans enjoy the experience of driving, but only recreationally, a  development that would undoubtedly be great news for companies such as Ferrari or Harley-Davidson. It’s also something that will forever change our relationship with travel.

Ultimately, the emergence of autonomous cars, ride-sharing, connected vehicles, and other looming technologies will lead to a transformation of the automotive industry on a scale never before envisioned. Technology will free us from the time-wasting drudgery of most commutes, leading to productivity gains. Opportunities for personal enrichment will spring forth. The use of electric engines will ease the strain on the environment. All these changes will create a safer and cleaner planet.

Car manufacturers are working furiously to be at the vanguard of this transformation. They are being supported by software firms, who create the underlying technology to make these advancements possible. This is a relationship that will only grow in importance, as Muench pointed out during his recent appearance on S.M.A.C. Talk.

“Today, a typical car contains more software than you’ll find in Microsoft Office,” he said.

85 percent of automakers believe the digital ecosystem will generate higher revenue than the hardware of the car

KPMG Global Automotive Executive Survey 2017,” KPMG, January 2017.

The takeaway

Every business operating today is a technology business. The most successful automakers understand that thriving in the digital economy requires nothing less than a reimagining of their business models and processes, as well as the way in which we work. This means a focus on elements such mobility, smart vehicles and plants, digitally connected supply chains, and other key technologies.

By following these strategies and building a robust digital core, today’s automakers will be able to keep pace with the dizzying speed of the digital revolution.

Transforming into a truly digital business is so much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission-critical business processes inside your “four walls,” and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.

To listen this episode of Digital Industries for the automotive industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here. For more on how SAP can help you drive your own digital transformation in the automotive industry, visit us online.

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Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Jenny Dearborn: Soft Skills Will Be Essential for Future Careers

Jenny Dearborn

The Japanese culture has always shown a special reverence for its elderly. That’s why, in 1963, the government began a tradition of giving a silver dish, called a sakazuki, to each citizen who reached the age of 100 by Keiro no Hi (Respect for the Elders Day), which is celebrated on the third Monday of each September.

That first year, there were 153 recipients, according to The Japan Times. By 2016, the number had swelled to more than 65,000, and the dishes cost the already cash-strapped government more than US$2 million, Business Insider reports. Despite the country’s continued devotion to its seniors, the article continues, the government felt obliged to downgrade the finish of the dishes to silver plating to save money.

What tends to get lost in discussions about automation taking over jobs and Millennials taking over the workplace is the impact of increased longevity. In the future, people will need to be in the workforce much longer than they are today. Half of the people born in Japan today, for example, are predicted to live to 107, making their ancestors seem fragile, according to Lynda Gratton and Andrew Scott, professors at the London Business School and authors of The 100-Year Life: Living and Working in an Age of Longevity.

The End of the Three-Stage Career

Assuming that advances in healthcare continue, future generations in wealthier societies could be looking at careers lasting 65 or more years, rather than at the roughly 40 years for today’s 70-year-olds, write Gratton and Scott. The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

It will be replaced by a new model in which people continually learn new skills and shed old ones. Consider that today’s most in-demand occupations and specialties did not exist 10 years ago, according to The Future of Jobs, a report from the World Economic Forum.

And the pace of change is only going to accelerate. Sixty-five percent of children entering primary school today will ultimately end up working in jobs that don’t yet exist, the report notes.

Our current educational systems are not equipped to cope with this degree of change. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is outdated by the time students graduate, the report continues.

Skills That Transcend the Job Market

Instead of treating post-secondary education as a jumping-off point for a specific career path, we may see a switch to a shorter school career that focuses more on skills that transcend a constantly shifting job market. Today, some of these skills, such as complex problem solving and critical thinking, are taught mostly in the context of broader disciplines, such as math or the humanities.

Other competencies that will become critically important in the future are currently treated as if they come naturally or over time with maturity or experience. We receive little, if any, formal training, for example, in creativity and innovation, empathy, emotional intelligence, cross-cultural awareness, persuasion, active listening, and acceptance of change. (No wonder the self-help marketplace continues to thrive!)

The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

These skills, which today are heaped together under the dismissive “soft” rubric, are going to harden up to become indispensable. They will become more important, thanks to artificial intelligence and machine learning, which will usher in an era of infinite information, rendering the concept of an expert in most of today’s job disciplines a quaint relic. As our ability to know more than those around us decreases, our need to be able to collaborate well (with both humans and machines) will help define our success in the future.

Individuals and organizations alike will have to learn how to become more flexible and ready to give up set-in-stone ideas about how businesses and careers are supposed to operate. Given the rapid advances in knowledge and attendant skills that the future will bring, we must be willing to say, repeatedly, that whatever we’ve learned to that point doesn’t apply anymore.

Careers will become more like life itself: a series of unpredictable, fluid experiences rather than a tightly scripted narrative. We need to think about the way forward and be more willing to accept change at the individual and organizational levels.

Rethink Employee Training

One way that organizations can help employees manage this shift is by rethinking training. Today, overworked and overwhelmed employees devote just 1% of their workweek to learning, according to a study by consultancy Bersin by Deloitte. Meanwhile, top business leaders such as Bill Gates and Nike founder Phil Knight spend about five hours a week reading, thinking, and experimenting, according to an article in Inc. magazine.

If organizations are to avoid high turnover costs in a world where the need for new skills is shifting constantly, they must give employees more time for learning and make training courses more relevant to the future needs of organizations and individuals, not just to their current needs.

The amount of learning required will vary by role. That’s why at SAP we’re creating learning personas for specific roles in the company and determining how many hours will be required for each. We’re also dividing up training hours into distinct topics:

  • Law: 10%. This is training required by law, such as training to prevent sexual harassment in the workplace.

  • Company: 20%. Company training includes internal policies and systems.

  • Business: 30%. Employees learn skills required for their current roles in their business units.

  • Future: 40%. This is internal, external, and employee-driven training to close critical skill gaps for jobs of the future.

In the future, we will always need to learn, grow, read, seek out knowledge and truth, and better ourselves with new skills. With the support of employers and educators, we will transform our hardwired fear of change into excitement for change.

We must be able to say to ourselves, “I’m excited to learn something new that I never thought I could do or that never seemed possible before.” D!

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