The Future Of Mobile Commerce Is Paved With Progressive Web Apps

Randy Kohl

It’s no secret that mobile devices are shaping the present and future of commerce. From showrooming to research, this technology plays a huge part in the wave of digital channels that are influencing 70% of all purchase decisions – and that number is expected to climb and plateau above 90% over the next few years.

While mobile commerce is changing the dynamic of consumer shopping habits, brands and retailers are still almost inclusively falling short. According to a recent Business Insider report, mobile shoppers can get so frustrated with the buying experience that they are far more likely to abandon their cart. For example, in the second quarter of 2015, U.S. adults spent 59% of their time on a mobile device and 41% on a desktop; however, only 15% of sales were generated on mobile devices, while 85% were realized through desktop transactions.

The app Catch-22

To drive mobile engagement, many brands and retailers have turned to native apps as a solution, even though they require significant and ongoing investment. However, only one retailer has managed to crack the Top 25 last year in top app downloads and use, and we all know who that is.

 (Source: Survey Monkey)

If we take a look at our own mobile devices, it’s not that hard to see why many retail apps are rarely downloaded and used. Approximately 94% of apps used are devoted to social engagement, entertainment, and information. And for most mobile users, only five apps account for 85% of overall app activities.

For the majority of retailers, driving initial and repeat use of branded native apps is a struggle. The majority of downloaded apps are accessed less than five times – and after 30 days, retention is on average below 10%. The problem is that most sellers cannot drive a high level of engagement and purchase frequency to justify investments in apps across multiple mobile platforms. Maybe there’s a better way to connect with prospects and customers on mobile.

The rise of progressive web apps

There’s a new approach to mobile engagement that blends the ubiquity of the mobile web with the intuitive form and function of native apps: progressive web apps. The progressive web is simply part of the overall evolution of digital commerce, enabled by faster wi-fi and cellular connections and the maturation of mobile development frameworks. For a number of retailing scenarios, the progressive web offers the opportunity to build from their existing e-commerce platform to present their customers with an elegant, app-like experience.

Some of the keystone benefits of progressive web apps include:

  • App-like user interface and fluid interactions

  • Push notifications that are similar to native apps

  • Creation of home-screen launch icons

  • Access to native phone functionality

  • Improved speed of the mobile site, which is a critical factor for customer engagement

  • Cross-platform (iOS and Android) and cross-browser functionality

  • Optimized content that leverages the same URL structure as the desktop site, eliminating the need for deep-linking into apps as endorsed by Google

  • Simplified user experience after the initial progressive build

All of these capabilities add up to a compelling case for leveraging progressive web apps for mobile commerce. Leading Asian merchants like Alibaba and Flipkart have already jumped on board, but adoption in North America is still in its infancy. Like any potential solution, however, each retailer needs to evaluate how this approach fits into their overall digital commerce and engagement strategies.

In my opinion, progressive web apps make the most sense for retailers with complex category structures and large portfolios of product offerings. For brands with a smaller product mix or brand-centric and content-driven experiences, responsive and adaptive design can still be a viable answer. Regardless of direction, currently available enterprise e-commerce platforms, such as SAP Hybris solutions, provide the flexibility needed to readily adapt to existing and emerging mobile engagement paradigms. So the sky’s the limit!

For more insight on what makes a great mobile app, see Engaging Digital Experiences: The Key To App Adoption.

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Transforming Your Business Through A Digital Supply Chain Of One

Richard Howells

A recent infographic published by IDC highlights the importance of digital transformation and the need for companies to enable a digital supply chain of one to stay competitive.

One finding from the infographic is quite striking: By 2019 “3rd Platform” technologies such as mobile, cloud, Big Data, and social will account for nearly 75% of IT spend – growing at twice the rate of the total market.

Much of the increase in IT spend will be attributed to “innovation accelerators” – a category that includes technologies such as analytics, blockchain, Internet of Things (IoT), 3D printing, and robotics. Through 2020, innovation accelerators will grow at 17% CAGR.

Of course, given the competitive pressure to innovate, perhaps these numbers aren’t so surprising after all. Across industries, companies are launching profound digital transformation initiatives as they struggle against digitally savvy competitors who use new technologies to deliver better customer outcomes. Now, this drive to digitalize is showing up in the numbers.

Top drivers

But what exactly are these competitive pressures? One is customer demand for individualized products. Part of what it means to deliver better customer outcomes in the digital economy is to deliver exactly what customers want. In practice, this often means personalization – the ability to manufacture to the lot size of one. Personalization requires processes that are highly responsive to individual needs and desires. Audi, for example, has revamped the assembly line in favor of a modular assembly approach. This approach skirts the issue of assembly line downtime – like when only a few vehicles on the line need to get fitted with optional extras.

Another driver is increasingly complex products. In this world, few companies have neither the capabilities nor the business justifications to fill out the end-to-end value chain. This is why companies partner up – leading to expanding partner ecosystems. Auto manufacturers, to stick with an example, need to partner up with software companies to deliver the onboard tech that customers want today. And as things change, these manufacturers need flexible collaboration platforms to quickly bring in new partners as needed.

Companies are also looking to improve outcomes for customers after the sale. With IoT, for example, companies can track KPIs and monitor performance for the products they produce and sell. Cars, again, are a perfect use case. Take Tesla, for instance. The company continuously collects data on its cars (self-driving and otherwise), analyzes it for insight, and proactively pushes out improvements to the cars in its network. Ever hear companies talk about knowing what customers want before the customers know it themselves? This is what they’re talking about.

The digital innovation platform

To thrive in the digital economy, IDC believes that “product innovation, supply chain, and manufacturing must be connected through a digital innovation platform powered by key technologies such as cloud, analytics, IoT, machine learning, and blockchain.”

As discussed in a previous blog, companies can use such platforms to mix these technologies in creative ways. IoT sensor data can be transmitted and stored in the cloud. Machine learning can then be used to make processes smarter. Artificial intelligence can help automate processes – and blockchain can help ensure the processes remain traceable and secure.

Yet, there’s a long way to go. According to IDC, only nine percent of manufacturers use an innovation platform for extended collaboration, only nine percent have digitally transformed their supply chains, and a full 67% still consider themselves “Digital Explorers” or “Digital Players” – meaning they’re at the early stages of digital transformation.

Yes, you can get there from here

The good news is that companies can actually move forward. IDC recommends adopting cloud-based platforms and enhancing them with the intelligent technologies we’ve already discussed – such as AI, machine learning, and analytics. This can help accelerate product innovation, increase supply chain visibility, improve manufacturing, and drive revenue growth.

IDC also touts the advantages of a network of digital twins. A digital twin is a simply a live digital representation of a physical thing – say a forklift in one of your warehouses or a heating/cooling unit deployed at a customer site. A network of these digital twins can provide the insight needed to achieve a digital supply chain of one. It can also help you track performance, usage, and service demand for deployed units or sold items – allowing you to monetize connected products.

The bottom line is that the supply chain is now front and center for companies competing in the digital economy. With a digital supply chain of one supported by emerging technologies for greater visibility, predictability, and agility, your company can deliver the personalized products and experiences that customers value. Good luck out there.

Customers want individualized products with shorter delivery and new payment options. View this infographic to understand how a digital supply chain to serve the segment of one can deliver customer centricity by enabling predictive business and smart automation for total supply chain visibility. 

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About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.

How Can Life Sciences Leverage Augmented Reality?

Michelle Schooff

When it comes to augmented reality and life sciences, many people think of the 144 billion steps taken by Pokemon Go players, leading to better health. But augmented reality is starting to play a much larger role in life sciences than you might be aware. From expanding children’s experience of science in the classroom to using technology to improve patient outcomes, augmented reality is already playing a key role in life sciences. Here’s a quick overview of some of the areas it’s impacting.

Augmented reality in the science classroom

Whether your life science classroom focuses on biology, health, or chemistry, augmented reality can help bring those topics to life. A wide range of options helps students better understand scientific principles and existing structures. Three-dimensional models of the human body enable students to explore anatomy without an anatomy lab.

Technology has many applications beyond anatomy. Are you trying to explain more complex portions of organic chemistry to pharmaceutical students? Virtual reality allows them to explore complex compounds in ways never imagined. Augmented reality apps allow students to combine compounds to see what potential issues may arise. It also allows them to observe microbiology interactions on a scale that would otherwise require complex microscope work.

Training the next generation of healers

Virtual reality has been used in surgical suites for the past decade. Combined with video conferencing capabilities, surgeons in remote areas can consult with experts across the country or around the world. A brain tumor patient in a remote area, for example, can have it removed close to home. As the surgery progresses, experts are available should any issues arise. MRI markers help determine the best path and approach to remove the tumor.

With 360-degree video, medical students and surgeons who want to expand their skills can use augmented reality to observe surgery, learning the process from a patient and expert surgeon who may be down the hall or across the globe. This type of training is also being used to help improve emergency response. A student can follow the actions of an emergency room doctor treating a patient. They can choose their actions and observe the potential benefits or drawbacks. When seconds count, this type of training can literally make the difference between life and death. Such training techniques are also being developed for emergency responders at the scene of an incident or accident.

Improving patient outcomes

Many of us have experienced a blood draw with multiple failed attempts. For patients who are nervous about needles, a new approach combining infrared and augmented reality helps improve success rates. The blood stands out on infrared, which is overlaid with the image of the patient’s skin. This makes it much easier to hit the vein the first time.

AR can also help reduce patient pain and anxiety levels without additional medication. Simple surgical procedures often require general anesthesia to reduce blood pressure levels related to anxiety. Some hospitals are experimenting with using virtual reality to “transport” patients to other locations, distracting them from the procedure taking place and reducing the need for anesthesia and pain medications. At the same time, surgeons can experiment with which approach will work best for a particularly complex surgery before they even touch a scalpel. Virtual reality combined with CT or MRI scans creates a virtual surgical environment, allowing surgeons to try the surgery several times to find the best possible solution for the patient.

Giving patients a new perspective on their health

It’s one thing to show a patient dry, dull statistics on their recent cardio tests. With patient medication adherence falling by half within a year of being prescribed, better tools are needed to convey the severity of a patient’s condition. One way to achieve this is by providing images of the effects certain actions can have on an individual.

Some augmented reality programs in development help patients see the physical results of specific medical decisions and procedures. Originally developed for doctors to see the results of calcium-based kidney medications on the heart, this technology has potential in many other areas. For example, it could enable smokers to see an image of current and future lung damage.

With the many areas augmented reality can be used in life sciences, it’s easy to see the advantages of this technology. Where can augmented reality take your company or organization?

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

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Michelle Schooff

About Michelle Schooff

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

The Blockchain Solution

By Gil Perez, Tom Raftery, Hans Thalbauer, Dan Wellers, and Fawn Fitter

In 2013, several UK supermarket chains discovered that products they were selling as beef were actually made at least partly—and in some cases, entirely—from horsemeat. The resulting uproar led to a series of product recalls, prompted stricter food testing, and spurred the European food industry to take a closer look at how unlabeled or mislabeled ingredients were finding their way into the food chain.

By 2020, a scandal like this will be eminently preventable.

The separation between bovine and equine will become immutable with Internet of Things (IoT) sensors, which will track the provenance and identity of every animal from stall to store, adding the data to a blockchain that anyone can check but no one can alter.

Food processing companies will be able to use that blockchain to confirm and label the contents of their products accordingly—down to the specific farms and animals represented in every individual package. That level of detail may be too much information for shoppers, but they will at least be able to trust that their meatballs come from the appropriate species.

The Spine of Digitalization

Keeping food safer and more traceable is just the beginning, however. Improvements in the supply chain, which have been incremental for decades despite billions of dollars of technology investments, are about to go exponential. Emerging technologies are converging to transform the supply chain from tactical to strategic, from an easily replicable commodity to a new source of competitive differentiation.

You may already be thinking about how to take advantage of blockchain technology, which makes data and transactions immutable, transparent, and verifiable (see “What Is Blockchain and How Does It Work?”). That will be a powerful tool to boost supply chain speed and efficiency—always a worthy goal, but hardly a disruptive one.

However, if you think of blockchain as the spine of digitalization and technologies such as AI, the IoT, 3D printing, autonomous vehicles, and drones as the limbs, you have a powerful supply chain body that can leapfrog ahead of its competition.

What Is Blockchain and How Does It Work?

Here’s why blockchain technology is critical to transforming the supply chain.

Blockchain is essentially a sequential, distributed ledger of transactions that is constantly updated on a global network of computers. The ownership and history of a transaction is embedded in the blockchain at the transaction’s earliest stages and verified at every subsequent stage.

A blockchain network uses vast amounts of computing power to encrypt the ledger as it’s being written. This makes it possible for every computer in the network to verify the transactions safely and transparently. The more organizations that participate in the ledger, the more complex and secure the encryption becomes, making it increasingly tamperproof.

Why does blockchain matter for the supply chain?

  • It enables the safe exchange of value without a central verifying partner, which makes transactions faster and less expensive.
  • It dramatically simplifies recordkeeping by establishing a single, authoritative view of the truth across all parties.
  • It builds a secure, immutable history and chain of custody as different parties handle the items being shipped, and it updates the relevant documentation.
  • By doing these things, blockchain allows companies to create smart contracts based on programmable business logic, which can execute themselves autonomously and thereby save time and money by reducing friction and intermediaries.

Hints of the Future

In the mid-1990s, when the World Wide Web was in its infancy, we had no idea that the internet would become so large and pervasive, nor that we’d find a way to carry it all in our pockets on small slabs of glass.

But we could tell that it had vast potential.

Today, with the combination of emerging technologies that promise to turbocharge digital transformation, we’re just beginning to see how we might turn the supply chain into a source of competitive advantage (see “What’s the Magic Combination?”).

What’s the Magic Combination?

Those who focus on blockchain in isolation will miss out on a much bigger supply chain opportunity.

Many experts believe emerging technologies will work with blockchain to digitalize the supply chain and create new business models:

  • Blockchain will provide the foundation of automated trust for all parties in the supply chain.
  • The IoT will link objects—from tiny devices to large machines—and generate data about status, locations, and transactions that will be recorded on the blockchain.
  • 3D printing will extend the supply chain to the customer’s doorstep with hyperlocal manufacturing of parts and products with IoT sensors built into the items and/or their packaging. Every manufactured object will be smart, connected, and able to communicate so that it can be tracked and traced as needed.
  • Big Data management tools will process all the information streaming in around the clock from IoT sensors.
  • AI and machine learning will analyze this enormous amount of data to reveal patterns and enable true predictability in every area of the supply chain.

Combining these technologies with powerful analytics tools to predict trends will make lack of visibility into the supply chain a thing of the past. Organizations will be able to examine a single machine across its entire lifecycle and identify areas where they can improve performance and increase return on investment. They’ll be able to follow and monitor every component of a product, from design through delivery and service. They’ll be able to trigger and track automated actions between and among partners and customers to provide customized transactions in real time based on real data.

After decades of talk about markets of one, companies will finally have the power to create them—at scale and profitably.

Amazon, for example, is becoming as much a logistics company as a retailer. Its ordering and delivery systems are so streamlined that its customers can launch and complete a same-day transaction with a push of a single IP-enabled button or a word to its ever-attentive AI device, Alexa. And this level of experimentation and innovation is bubbling up across industries.

Consider manufacturing, where the IoT is transforming automation inside already highly automated factories. Machine-to-machine communication is enabling robots to set up, provision, and unload equipment quickly and accurately with minimal human intervention. Meanwhile, sensors across the factory floor are already capable of gathering such information as how often each machine needs maintenance or how much raw material to order given current production trends.

Once they harvest enough data, businesses will be able to feed it through machine learning algorithms to identify trends that forecast future outcomes. At that point, the supply chain will start to become both automated and predictive. We’ll begin to see business models that include proactively scheduling maintenance, replacing parts just before they’re likely to break, and automatically ordering materials and initiating customer shipments.

Italian train operator Trenitalia, for example, has put IoT sensors on its locomotives and passenger cars and is using analytics and in-memory computing to gauge the health of its trains in real time, according to an article in Computer Weekly. “It is now possible to affordably collect huge amounts of data from hundreds of sensors in a single train, analyse that data in real time and detect problems before they actually happen,” Trenitalia’s CIO Danilo Gismondi told Computer Weekly.

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials.

The project, which is scheduled to be completed in 2018, will change Trenitalia’s business model, allowing it to schedule more trips and make each one more profitable. The railway company will be able to better plan parts inventories and determine which lines are consistently performing poorly and need upgrades. The new system will save €100 million a year, according to ARC Advisory Group.

New business models continue to evolve as 3D printers become more sophisticated and affordable, making it possible to move the end of the supply chain closer to the customer. Companies can design parts and products in materials ranging from carbon fiber to chocolate and then print those items in their warehouse, at a conveniently located third-party vendor, or even on the client’s premises.

In addition to minimizing their shipping expenses and reducing fulfillment time, companies will be able to offer more personalized or customized items affordably in small quantities. For example, clothing retailer Ministry of Supply recently installed a 3D printer at its Boston store that enables it to make an article of clothing to a customer’s specifications in under 90 minutes, according to an article in Forbes.

This kind of highly distributed manufacturing has potential across many industries. It could even create a market for secure manufacturing for highly regulated sectors, allowing a manufacturer to transmit encrypted templates to printers in tightly protected locations, for example.

Meanwhile, organizations are investigating ways of using blockchain technology to authenticate, track and trace, automate, and otherwise manage transactions and interactions, both internally and within their vendor and customer networks. The ability to collect data, record it on the blockchain for immediate verification, and make that trustworthy data available for any application delivers indisputable value in any business context. The supply chain will be no exception.

Blockchain Is the Change Driver

The supply chain is configured as we know it today because it’s impossible to create a contract that accounts for every possible contingency. Consider cross-border financial transfers, which are so complex and must meet so many regulations that they require a tremendous number of intermediaries to plug the gaps: lawyers, accountants, customer service reps, warehouse operators, bankers, and more. By reducing that complexity, blockchain technology makes intermediaries less necessary—a transformation that is revolutionary even when measured only in cost savings.

“If you’re selling 100 items a minute, 24 hours a day, reducing the cost of the supply chain by just $1 per item saves you more than $52.5 million a year,” notes Dirk Lonser, SAP go-to-market leader at DXC Technology, an IT services company. “By replacing manual processes and multiple peer-to-peer connections through fax or e-mail with a single medium where everyone can exchange verified information instantaneously, blockchain will boost profit margins exponentially without raising prices or even increasing individual productivity.”

But the potential for blockchain extends far beyond cost cutting and streamlining, says Irfan Khan, CEO of supply chain management consulting and systems integration firm Bristlecone, a Mahindra Group company. It will give companies ways to differentiate.

“Blockchain will let enterprises more accurately trace faulty parts or products from end users back to factories for recalls,” Khan says. “It will streamline supplier onboarding, contracting, and management by creating an integrated platform that the company’s entire network can access in real time. It will give vendors secure, transparent visibility into inventory 24×7. And at a time when counterfeiting is a real concern in multiple industries, it will make it easy for both retailers and customers to check product authenticity.”

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials. Although the key parts of the process remain the same as in today’s analog supply chain, performing them electronically with blockchain technology shortens each stage from hours or days to seconds while eliminating reams of wasteful paperwork. With goods moving that quickly, companies have ample room for designing new business models around manufacturing, service, and delivery.

Challenges on the Path to Adoption

For all this to work, however, the data on the blockchain must be correct from the beginning. The pills, produce, or parts on the delivery truck need to be the same as the items listed on the manifest at the loading dock. Every use case assumes that the data is accurate—and that will only happen when everything that’s manufactured is smart, connected, and able to self-verify automatically with the help of machine learning tuned to detect errors and potential fraud.

Companies are already seeing the possibilities of applying this bundle of emerging technologies to the supply chain. IDC projects that by 2021, at least 25% of Forbes Global 2000 (G2000) companies will use blockchain services as a foundation for digital trust at scale; 30% of top global manufacturers and retailers will do so by 2020. IDC also predicts that by 2020, up to 10% of pilot and production blockchain-distributed ledgers will incorporate data from IoT sensors.

Despite IDC’s optimism, though, the biggest barrier to adoption is the early stage level of enterprise use cases, particularly around blockchain. Currently, the sole significant enterprise blockchain production system is the virtual currency Bitcoin, which has unfortunately been tainted by its associations with speculation, dubious financial transactions, and the so-called dark web.

The technology is still in a sufficiently early stage that there’s significant uncertainty about its ability to handle the massive amounts of data a global enterprise supply chain generates daily. Never mind that it’s completely unregulated, with no global standard. There’s also a critical global shortage of experts who can explain emerging technologies like blockchain, the IoT, and machine learning to nontechnology industries and educate organizations in how the technologies can improve their supply chain processes. Finally, there is concern about how blockchain’s complex algorithms gobble computing power—and electricity (see “Blockchain Blackouts”).

Blockchain Blackouts

Blockchain is a power glutton. Can technology mediate the issue?

A major concern today is the enormous carbon footprint of the networks creating and solving the algorithmic problems that keep blockchains secure. Although virtual currency enthusiasts claim the problem is overstated, Michael Reed, head of blockchain technology for Intel, has been widely quoted as saying that the energy demands of blockchains are a significant drain on the world’s electricity resources.

Indeed, Wired magazine has estimated that by July 2019, the Bitcoin network alone will require more energy than the entire United States currently uses and that by February 2020 it will use as much electricity as the entire world does today.

Still, computing power is becoming more energy efficient by the day and sticking with paperwork will become too slow, so experts—Intel’s Reed among them—consider this a solvable problem.

“We don’t know yet what the market will adopt. In a decade, it might be status quo or best practice, or it could be the next Betamax, a great technology for which there was no demand,” Lonser says. “Even highly regulated industries that need greater transparency in the entire supply chain are moving fairly slowly.”

Blockchain will require acceptance by a critical mass of companies, governments, and other organizations before it displaces paper documentation. It’s a chicken-and-egg issue: multiple companies need to adopt these technologies at the same time so they can build a blockchain to exchange information, yet getting multiple companies to do anything simultaneously is a challenge. Some early initiatives are already underway, though:

  • A London-based startup called Everledger is using blockchain and IoT technology to track the provenance, ownership, and lifecycles of valuable assets. The company began by tracking diamonds from mine to jewelry using roughly 200 different characteristics, with a goal of stopping both the demand for and the supply of “conflict diamonds”—diamonds mined in war zones and sold to finance insurgencies. It has since expanded to cover wine, artwork, and other high-value items to prevent fraud and verify authenticity.
  • In September 2017, SAP announced the creation of its SAP Leonardo Blockchain Co-Innovation program, a group of 27 enterprise customers interested in co-innovating around blockchain and creating business buy-in. The diverse group of participants includes management and technology services companies Capgemini and Deloitte, cosmetics company Natura Cosméticos S.A., and Moog Inc., a manufacturer of precision motion control systems.
  • Two of Europe’s largest shipping ports—Rotterdam and Antwerp—are working on blockchain projects to streamline interaction with port customers. The Antwerp terminal authority says eliminating paperwork could cut the costs of container transport by as much as 50%.
  • The Chinese online shopping behemoth Alibaba is experimenting with blockchain to verify the authenticity of food products and catch counterfeits before they endanger people’s health and lives.
  • Technology and transportation executives have teamed up to create the Blockchain in Transport Alliance (BiTA), a forum for developing blockchain standards and education for the freight industry.

It’s likely that the first blockchain-based enterprise supply chain use case will emerge in the next year among companies that see it as an opportunity to bolster their legal compliance and improve business processes. Once that happens, expect others to follow.

Customers Will Expect Change

It’s only a matter of time before the supply chain becomes a competitive driver. The question for today’s enterprises is how to prepare for the shift. Customers are going to expect constant, granular visibility into their transactions and faster, more customized service every step of the way. Organizations will need to be ready to meet those expectations.

If organizations have manual business processes that could never be automated before, now is the time to see if it’s possible. Organizations that have made initial investments in emerging technologies are looking at how their pilot projects are paying off and where they might extend to the supply chain. They are starting to think creatively about how to combine technologies to offer a product, service, or business model not possible before.

A manufacturer will load a self-driving truck with a 3D printer capable of creating a customer’s ordered item en route to delivering it. A vendor will capture the market for a socially responsible product by allowing its customers to track the product’s production and verify that none of its subcontractors use slave labor. And a supermarket chain will win over customers by persuading them that their choice of supermarket is also a choice between being certain of what’s in their food and simply hoping that what’s on the label matches what’s inside.

At that point, a smart supply chain won’t just be a competitive edge. It will become a competitive necessity. D!


About the Authors

Gil Perez is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Tom Raftery is Global Vice President, Futurist, and Internet of Things Evangelist, at SAP.

Hans Thalbauer is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Dan Wellers is Global Lead, Digital Futures, at SAP.

Fawn Fitter is a freelance writer specializing in business and technology.

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

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CEO Priorities And Challenges In The Digital World

Dr. Chakib Bouhdary

Digital transformation is here, and it is moving fast. Companies are starting to realize the enormous power of digital technologies like artificial intelligence (AI), Internet of things (IoT) and blockchain. These technologies will drive massive opportunities—and threats—for every company, and they will impact all aspects of business, including the business model. In fact, business velocity has never been this fast, yet it will never be this slow again.

To move quickly, companies need to be clear on what they want to achieve through digital transformation and understand the possible roadblocks. Based on my meetings with customer executives across regions and industries, I have learned that CEOs often have the same three priorities and face the same three challenges:

1. Customer experience – No longer defined by omnichannel and personalized marketing.

Not surprisingly, 92 percent of digital leaders focus on customer experience. However, this is no longer just about omnichannel and personalized marketing – it is about the total customer experience. Businesses are realizing that they need to reimagine their value proposition and orchestrate changes across the value chain – from the first point of interaction to manufacturing, to shipment, to service – and be able to deliver the total customer experience. In some cases, it will even be necessary to change the core product or service itself.

2. Step change in productivity – Transform productivity and cost structure through digital technologies.

Businesses have been using technology to achieve growth for decades, but by combining emerging technologies, they can now achieve a significant productivity boost and reduce costs. For this to happen, companies must first identify the scenarios that will drive significant change in productivity, prioritize them based on value, and then determine the right technologies and solutions. Both Mckinsey and Boston Consulting Group expect a 15 to 30 percent improvement in productivity through digital advancements – blowing the doors off business-as-usual and its incremental productivity growth of 1 to 2 percent.

3. Employee engagement – Fostering a culture of innovation should be at the core of any business.

Companies are looking to create an environment that encourages creativity and innovation. Leaders are attracting the needed talent and building the right skill sets. Additionally, they aim for ways to attract a diverse workforce, improve collaborations, and empower employees – because engaged employees are crucial in order to achieve the best results. This Gallup study reveals that approximately 85 percent of employees worldwide are performing below their potential due to engagement issues.

As CEOs work towards achieving these three desired outcomes, they face some critical challenges that they must address. I define the top three challenges as follows: run vs. innovate, corporate cholesterol, and digital transformation roadmap.

1. Run vs. innovate – To be successful you must prioritize the future.

The foremost challenge that CEOs are facing is how they can keep running current profitable businesses while investing in future innovations. Quite often these two conflict as most executives mistakenly prioritize the first and spend much less time on the latter. This must change. CEOs and their management teams need to spend more time thinking about what digital is for them, discuss new ideas, and reimagine the future. According to Gartner, approximately 50 percent of boards are pushing their CEOs to make progress on digital. Although this is a promising sign, digital must become a priority on every CEOs agenda.

2. Corporate cholesterol – Do not let company culture get in the way of change.

The older the company is, the more stuck it likely is with policies, procedures, layers of management, and risk averseness. When a company’s own processes get in the way of change, that is what I call “corporate cholesterol.” CEOs need to change the culture, encourage cross-team collaborations, and bring in more diverse thinking to reduce the cholesterol levels. In fact, both Mckinsey and Capgemini conclude that culture is the number-one obstacle to digital effectiveness.

3. Digital transformation roadmap – Digital transformation is a journey without a destination.

Many CEOs struggle with their digital roadmap. Questions like: Where do I start? Can a CDO or another executive run this innovation for me? What is my three- to five-year roadmap? often come up during the conversations. Most companies think that there is a set roadmap, or a silver bullet, for digital transformation, but that is not the case. Digital transformation is a journey without a destination, and each company must start small, acquire the necessary skills and knowledge, and continue to innovate.

It is time to face the digital reality and make it a priority. According to KPMG, 70 percent to 80 percent of CEOs believe that the next three years are more critical for their company than the last fifty. And there is good reason to worry, as 75 percent of S&P 500 companies from 2012 will be replaced by 2027 at the current disruption rate.

Download this short executive document. 

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Dr. Chakib Bouhdary

About Dr. Chakib Bouhdary

Dr. Chakib Bouhdary is the Digital Transformation Officer at SAP. Chakib spearheads thought leadership for the SAP digital strategy and advises on the SAP business model, having led its transformation in 2010. He also engages with strategic customers and prospects on digital strategy and chairs Executive Digital Exchange (EDX), which is a global community of digital innovation leaders. Follow Chakib on LinkedIn and Twitter