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Procurement 2016: The Supply Chain Goes Digital

Emily Rakowski

The world today is a different place. There are officially more mobile devices than people. And with increasing frequency, we use these devices to manage our lives. To shop. To pay for things. To find restaurants and hail cabs. To network with our friends and family. Many of these same technologies have made their way into the enterprise. And they are transforming the way we work. Business networks, for instance, are changing the way we discover, connect, and collaborate with our trading partners. They are giving us access to insights and intelligence that allow us to make better, more informed decisions. They are, in essence, transforming procurement as we know it.

So what does the future hold? Here are five trends to watch:

1. Supply chains will go digital

Technology has driven a new wave of productivity by digitizing key financial and business processes and enabling collaboration across the organization. This trend will continue as best-in-class organizations leverage business networks to create a digital community of partners executing coordinated processes in a more organized and informed way than in the past.

2. Collaboration will increase – and fuel innovation

Many companies have taken steps to improve the efficiency and effectiveness of their supply chain operations by automating key processes such as procurement, orders, invoicing, and payment. And with good reason. Research shows that companies who have embraced digital strategies are seeing real value, boosting revenue more than nine percent, market valuation more than 12%, and profitability by over 26%.

Led by procurement, many of these companies will take things to the next level and enable new processes that drive more collaborative, intelligent, and transparent ways of operating. Processes like dynamic discounting that allow them to secure discounts that can be reinvested in research and development and funding to expand their business. Contingent workforce management through which they can identify and manage highly specialized resources needed to develop that next-generation product. Or joint solution development where they get innovations that enhance their products, and their partners get something they can market to others in the industry.

3. Business will run simpler

Personal networks from Facebook to Twitter have made it simple for consumers to shop, share, and consume in new and more informed ways. Business networks provide an equally easy and scalable way for companies to discover, connect, and collaborate with the trading partners and resources they need to operate in today’s dynamic world. Procurement will tap into these networks to create a simple, consumer-like experience where, with just a few clicks, they can shop for goods and services, place and manage orders and pay for them electronically, and view and manage spend across all major categories through a single, connected platform. With network-based spot buying they can also improve the purchasing process for low-value, non-sourced items and eliminate maverick buying.

4. Lines will blur

Fueled by digital technologies, procurement will take the lead in integrating business processes and collaborating across functions in entirely new ways that drive value. Chief procurement officers (CPOs) will, for instance, engage in helping to manage the financial supply chain, turning payables into a profit center because they have real-time visibility into whether an invoice is okay to pay and whether it has been matched against purchase orders and contracts. Or extending days payable outstanding to improve the overall balance sheet while at the same time offering early payment discounts to suppliers to mitigate both financial and supply risk. According to Future of Procurement, a recent survey conducted by Oxford Economics, 54% of executives say that procurement managing accounts payable is significantly changing the way the function operates.

5. Procurement will get smarter

Like their social counterparts, business networks house incredible amounts of insights and data. Procurement will unleash the power of this information to optimize their supply chain decisions and accelerate innovation and growth. They may, for instance, access performance ratings on potential trading partners along with recommendations from the community to determine who to do business with. Or detect risk across the multi-tier supply chain based on world events and geo-political risk factors. They might combine in-the-moment demand data with historic trends to predict stock outages before they happen and direct replenishment. Or gain real-time insights into invoice approval status to more efficiently manage cash.

In today’s global and connected economy, digital supply chains are the on ramp to innovation and success. And if you want to be among the winners, you need to get on the highway and go fast. Start today by re-imagining your supply chain. Develop digital strategies that allow you to proactively evolve ahead of the competition. Employ comprehensive solutions that support the entire source-to-settle process and create value for all parties involved in it.

Don’t just think about the future, see it and shape it to your advantage.

Emily Rakowski is Global Vice President for Ariba, an SAP Company.

For more on the future direction of sourcing and procurement, see The Future of Procurement, a series of reports by Oxford Economics.

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Emily Rakowski

About Emily Rakowski

Emily Rakowski is the Global Vice President, Audience Marketing and Demand Management, SAP Ariba. She is an entrepreneurial and passionate marketing and demand management executive with 20+ years leadership experience in the software and consulting industries.

Why Small Construction Companies Must Consolidate

Michael Quadt

In today’s construction industry, more than 90 percent of companies have fewer than 100 employees. This is about to dramatically change.

The construction industry is at an inflection point, analogous to the move from landline telephones to cellular technology. Digital technologies are disrupting the industry, providing new opportunities to address the challenges of poor profitability/productivity, project performance, skilled labor shortages, and sustainability concerns. But smaller companies simply cannot afford to make this digital transformation. They also cannot afford to fall further behind. The result: consolidation is sweeping through the construction industry.

Already consolidation has impacted the industrial and civil segments, leaving only a few large players remaining in each region. In commercial construction, new contracting models and partnerships (e.g., public-private partnerships) are increasing the amount of work a group can perform, causing non-innovators to lose market share. Although residential construction yet to experience significant disruption, urban population growth will drive change here as well.

Over the next decade, Construction Today predicts that 50 percent or more privately held businesses will consolidate. It is not enough to simply understand the trends driving consolidation. It is essential that businesses understanding the new opportunities created by consolidation– and how companies can harness these changes for dynamic growth.

How digital disruption is driving construction company consolidation

Digital disruption is upon us. 3D printing and robotics, for example, requires 30 to 60 percent less building materials and products can be completed 50 to 80 percent faster. The market for portable and modular buildings is growing as digital technology powers faster completion rates. Portakabin, a UK-based construction company building, uses 3D building information modeling (BIM) and a factory-like setting to construct portable and modular buildings 50 percent faster than conventional buildings. This allows Portakabin to obtain a higher level of precision, delivering construction on time and within budget.

The Internet of Things (IoT) is powering new efficiencies and smarter asset utilization. For example, CCC, a large Middle Eastern contractor, faced weak demand in 2008. The company had two choices: become more efficient or go out of business. Today, CCC uses IoT to monitor and improve the utilization of its assets, saving approximately $15 million per year.

From supply chain to workforce planning, there are tremendous opportunities to streamline business processes in construction. Lean processes, perfected in the industrial industry, provided a framework for optimization and reduced waste. Today’s business networks power seamless communication of information on a global scale. The World Economic Forum estimates that lean principles and methods could reduce completion times by 30 percent and cut costs by 15 percent.

Adapting business models to these technologies, however, is a costly process and one that smaller construction companies simply cannot afford. The result: Companies must look towards consolidation, mergers and acquisitions in order to remain competitive in the current marketplace.

Consolidation benefits: reimagining business processes & workflow

Consolidation should not be viewed solely as a strategic move for survival. It is also an opportunity for companies to shed antiquated processes and reimagine their business models. Entire categories of work can be eliminated through automation. Advances in computing power, connectivity, and sensor technology are opening doors to eliminate ever more complex tasks, such as quantity takeoffs, scheduling, and forecasting. Improved accuracy and lower costs from automated processes provide a competitive advantage for early adopters.

Consolidated companies can leverage mobile and IoT technologies to automate productivity reporting and profitability analysis in near real time. Instant feedback allows workers to understand how they are performing and enables competition through gamification.

Digitization is also enabling the emergence of an open talent economy that connects people and jobs in a borderless workplace. For example, contractors will be able to scale operations rapidly by filing talent gaps from trade workers to management through a virtual talent network. Acting as a virtual union hall, the talent network will maintain training and certification records to validate the qualifications of the candidates. Resourcing processes will need to reflect this paradigm change, allowing resource managers to tap into not only the company’s on-payroll talent, but also identify best-of-breed contractors, alumni, freelancers, and open source talent, map them against demand, contact them, and engage them anywhere in the world, anytime.

Next steps: embracing a digital future

The digital future is here. Businesses that consolidate must be prepared to continue evolving. To harness new opportunities for growth, every firm needs a clear digital strategy and innovation framework. SAP works with construction companies to power their digital transformation through strategy alignment, opportunity assessment, solution roadmap, value realization, and governance.

New cloud-based technologies and engineering software will play a critical role in supporting construction companies as they consolidate, reimagine business processes, and embrace a digital future.

For more insight on this new digital age of construction, see Building a Sustainable World, How to survive and thrive in a digital construction economy.

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Michael Quadt

About Michael Quadt

Michael Quadt is responsible for providing a high level of expertise for the Engineering, Construction, & Operations Industry Business Unit at SAP Central Europe, France, United Kingdom and Benelux. Michael is a Civil Engineer with more than 30 years of experience in the construction and real estate industries. Prior to SAP, he held a variety of positions at a big player in the IT business.

Winning The Gold Medal In Wholesale Distribution

Karen Lynch

Digital predator or digital prey, disrupt or be disrupted, adapt or die …

We’ve all heard these terms as it relates to the wholesale distribution industry, and they should be cause for every one of us to stand up and take notice. You’ve seen and heard about a variety of methods to digitize your organization in order to better compete in today’s changing world. However, what we don’t hear much about is what’s at the heart of all these initiatives. The heart (and soul, if you will) of every organization is the people who work for it.

Yes, folks, it’s our people who will help us achieve a Gold Medal in all aspects of wholesale distribution, whether it’s customer service, procurement, finance, supply chain, or warehouse management. And, our industry is currently in the midst of a people crisis. The vast majority of employees are of the baby boomer generation, and studies show that 10,000 baby boomers are turning 65 each and every day. Think about it: the number is absolutely mind-boggling. What does that mean for most distributors? Your tribal knowledge, your most loyal employees, those who have deep knowledge and expertise of what you do and how you do it are (or soon will be) walking out the door and turning off their cellphones – not for an extended vacation, but forever.

Bonus: Learn more about the solutions we can provide to help you execute on this important initiative.

Does this sound like a dire warning? Good, it’s meant to. The time to act is now, as there is hope on the horizon for a bright future. That hope lies in the multitudes of young talent eager to work for companies where they can contribute to making the world a better place. And, what an opportunity wholesale distributors can provide! The industry is the central nervous system of our economy – the majority of products that end up in a consumer’s home, office, or automobile can only arrive there by the services a distributor provides. The services provided by a wholesale distributor are, quite frankly, the lynchpin of our economy. The sad fact is that most recent, or soon to be, college graduates are oblivious to this fact.

How do we help the next generation of our workforce understand just how key distributors are to our economic survival, particularly since most graduates have never heard of your company, much less understand the services you perform day in and day out? It won’t be easy, and it will take a mind shift in most organizations, but here’s some food for thought: Begin to fully utilize social media to incite interest and excitement. Build brand awareness by “advertising” on LinkedIn, Facebook, and Twitter. Tie that in to your internal HR tools so you can capture and captivate the individuals who are showing interest. Start face-to-face recruiting/education efforts at universities and think about local radio advertising. The goal is to help future employees understand that wholesale distribution is an exciting and hot industry.

Once you’ve captured their attention and brought them onboard, make sure you have the right solutions in place to help this fresh, young talent stay engaged through a seamless onboarding process followed by easy to access and interesting training so they can be successful in their initial roles. Then, follow it up with continuous feedback and development opportunities. Ideally, these development opportunities and feedback will be architected by those in your organization with deep knowledge and expertise.

By taking action now can you ensure that you have an educated, engaged, and vibrant workforce that will help you grow and thrive for decades to come, and win the Gold Medal!

This article originally appeared on SAP Community Network.

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Karen Lynch

About Karen Lynch

Karen Lynch is the Vice President, Global Wholesale Distribution Industry Business Unit at SAP. She sets the vision and direction and execute the go to market plan to address the needs of Wholesale Distributors across the globe by using SAP solutions.

Customer Experience: OmniChannel. OmniNow. OmniWow.

Jamie Anderson, Volker Hildebrand, Lori Mitchell-Keller, and Stephanie Overby

The lines between the digital and physical customer experience today are largely artificial. Customers shop in retail stores with their devices at the ready. They expect online-like personalization and recommendations in the aisles. They’re looking for instant gratification and better sensory experiences from digital channels. It’s an omnichannel world and companies must figure out how to live in it: delivering a superior customer experience regardless of the entry point.

Luxury fashion brand Rebecca Minkoff, for example, opened its first three retail stores with the intent of taking customers’ best online experiences and bringing them to life. “In the past, you had this brick-and-mortar experience, and you had the online experience,” says company president Uri Minkoff. “There were such great advantages and efficiencies that emerged with shopping online. You could get recommendations, see how something should be styled, create wish lists, access user-generated content. In the store, it was still just you and the product, and maybe a sales associate. But [unlike online] you had all five of your senses.”

Rebecca Minkoff’s new stores still stimulate those senses while incorporating some of the intelligence that online channels typically bring to bear. Each store features a large interactive screen at the entrance, where customers can browse products or order a beverage. Shoppers can interact with salespeople or they can make purchases on a mobile app without ever talking to a soul. Inside a fitting room, RFID-tagged merchandise is displayed on an interactive mirror, where customers can request new sizes or the designer’s recommended coordinates (a real-life recommendation engine).

The company has found that 30% of women ask for additional items based on the recommendations. It has also sold three times more of its new ready-to-wear line than it anticipated. “We were an accessories-dominant brand,” says Minkoff. “But we’ve been able to build this direct relationship with our customers, helping them with outfit completers and also getting a better sense of what they want based on what’s actually happening in our fitting rooms.”

Each piece of technology adds to the experience while capturing the details. Rebecca Minkoff’s integrated systems can remember a customer’s previous visits and preferred colors and sizes, and can enable associates to set up a fitting room with appropriate garments. On the back end, the company gets the kind of visibility into in-store conversions once possible only in digital transactions. “The technology gives us the ability to create the kind of experience each customer wants. She can shop anonymously or be treated like a VIP,” says Minkoff.

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Build Around a Big Idea

Rebecca Minkoff’s approach is a bellwether. It’s not enough simply to provide continuity or consistency from one channel to another. Customers don’t think in terms of channels, and neither should companies. Rather, it’s about defining the overarching experience you want to deliver to customers and then building the appropriate offline and online elements to achieve that intended outcome.

As more goods and even services are commoditized, companies must compete on the experiences they create (see The ROI of Customer Experience). That means coming up with a big idea that drives the design of the customer experience. “Every great experience needs to have a theme,” says Joe Pine, consultant and coauthor of The Experience Economy and Infinite Possibility: Creating Customer Value on the Digital Frontier. “That’s the organizing principle of the experience. It’s how you decide what’s in and what’s out.”

For example, Rebecca Minkoff serves as an image consultant to its Millennial customers, who expect personalization, recognition, and tech innovation, using a mix of online and offline techniques. To stand apart, companies must come up with their own unifying idea and then integrate data and systems, rework organizational models, and rethink key strategic metrics and employee incentives in order to integrate the physical and digital worlds around that idea.

Here are some examples of companies that have created a theme-driven experience using online and offline elements.

Nespresso: Imparting a Sense of Luxury

At the most basic level, Nespresso is a manufacturer of coffee and coffee machines. But the company has successfully turned what it sells and how it sells it into a very specific type of experience. Nespresso strives to impart a feeling of quality, exclusivity, even luxury in a host of ways.

sap_Q316_digital_double_feature3_images2The company has created the Nespresso Club, which maintains direct relationships with thousands of customers. Its customer service centers are staffed by 1,000 highly trained coffee experts who don’t just push products but offer advice and guidance as a sommelier might do with wine. Its 450 retail stores (up from just one Parisian in 2000) are called boutiques; the largely inventory-free showrooms are built around tasting and learning.

Online, the focus is on efficiency and service. Customers who prefer digital interactions can order through the web site or mobile app, which offers the option of courier delivery within a two-hour window. The company also recently introduced a Bluetooth-enabled coffee machine, which when paired with a smartphone app, can track a customer’s usage, simplify machine maintenance, and as Wired pointed out, enable remote brewing.

Success didn’t happen overnight, but today Nespresso is one of Nestlé’s fastest growing and most profitable brands, according to Bloomberg.

QVC: Using Online to Complement the Experience

The theme that has driven television-shopping giant QVC’s customer experience for decades has been “inspiration and entertainment.” Traditionally that was delivered through the joy of spontaneous discovery while watching the channel.

Matching that experience online has been difficult, however. At a digital retail conference in 2015, QVC’s CEO explained that in the past the company had failed to deliver the same rich interactions online that it had developed with its TV audiences, according to Total Retail. So the company decided to rethink its use of digital tools to focus on complementing the experience it delivers through TV screens, according to RetailWire.

For example, after enticing TV viewers with products, QVC introduces the next step in the buying journey—“impulse to buy”—in which viewers are spurred on with televised countdown clocks or limited merchandise availability. Online, the company has been experimenting with second-screen content (for instance, recipes that compliment a cooking product being sold on TV) to further propel purchases. The QVC app features the same item that is on-air along with a prompt that reveals all the items featured on TV in recent hours. On Apple devices equipped with Touch ID, customers can check out in less than 10 seconds with the fingerprint-enabled “speed buy” button. The third phase—“purchase and receive”—is complemented by a simple and reliable online browsing and purchasing platform. The last stage—“own and enjoy”—is accompanied by follow-on e-mail communication with tips on how to use products.

Last year, the company reported that 44% of total QVC sales came from online channels (up from 40% in 2014), and nearly half of those were completed on a mobile device. In fact, QVC is currently the tenth largest mobile commerce retailer in the United States, according to Internet Retailer.

Domino’s: Focusing on Speed and Convenience

sap_Q316_digital_double_feature3_images3Domino’s Pizza built a fast-food empire not necessarily on the quality of its pies but instead on the experience of getting hot food delivered quickly. What started out as a promise to deliver a pizza within 30 minutes to customers who phoned in their order is now a themed experience of efficient food delivery that can be fulfilled a number of ways. Domino’s AnyWare project enables customers to order pizzas from their TV, their Twitter account, their smartwatch, or their connected car, for starters. The Domino’s app features zero-click ordering functionality: Domino’s will start fulfilling the usual order for customers who opt in 10 seconds after opening the app.

Domino’s Australian stores are piloting GPS tracking whereby employees begin working on an order only when the customer enters the “cook zone”—a dynamically updated area around a given store that results in the customer arriving to a just-prepared order. The tool builds upon previously developed GPS-based technology for tracking delivery drivers, according to ZDNet. And the company that came up with the corrugated pizza box and the Heatwave Bag to keep pies warm is now building the DXP—a delivery car with a built-in warming oven. All in the name of the fast- and hot-food delivery experience.

Mohawk Industries: Using Social to Streamline Customer Interactions

Mohawk Industries grew to become a US$8 billion flooring manufacturer by relying on customers to visit its dealers’ retail locations to see, touch, and feel the carpet, hardwood, laminate, or tile they planned to purchase.

sap_Q316_digital_double_feature3_images4Today, instead of waiting for customers to find Mohawk, it has redesigned its experience to find them. It has adopted new technology and reworked its sales processes to reflect that new focus. The company’s 1,200 sales representatives have access to a 360-degree view of each customer, complete with analytics and sales tools on their tablets, enabling them to capture and follow through on leads generated through social media engagement.

By analyzing online discussions in real time, representatives can jump into the conversation and help customers find the product they may be searching for and direct the consumer to a retailer to finish the sale. In one episode, a woman was posting about her interest in a particular leopard rug on Twitter. Mohawk’s team surfaced the tweet, passed it on to a channel partner who contacted the woman and closed the sale within two minutes. Today, the company boasts an 80% close rate on sales started and guided in social media and has made $8 million on 14,000 such social leads. Mohawk Industries expects an increase of $25 million in sales year-over-year, thanks to its new customer-centric approach.

Customer Experience Design: Where to Begin

Developing a unique, valuable, and relevant customer experience that combines the best of offline and online capabilities is a huge undertaking. All corporate functions, including marketing, customer service, sales, operations, finance, and HR as well as product or business lines—all of which typically have competing metrics and agendas—must buy into the experience and collaborate to make it happen. And the ideal mix of digital and physical components will vary by company. But there are some best practices to get companies started on their own journeys.

Start at the Top

Without leadership buy-in, changes will not happen. “Customer experience is not a feature, it’s not a shiny button. It’s a concept that sometimes is tough to grasp. But we believe that if done right, it will keep customers loyal. And so we put a lot of effort into it,” says Kevin Scanlon, director of total customer experience at tech company EMC. “That’s why having that top-down support is paramount. If you don’t have it, you’re spinning your wheels. It’s going to give you the resources, the focus, and the attention that you need to design that consistent experience.”

To demonstrate its commitment, every VP and above at EMC has a customer experience metric as part of their quarterly goal.

Begin with the End in Mind

Companies can take a page from the design-thinking approach to product development, starting with the experience they want customers to have with their company and then putting in place the people, processes, and systems to make that happen across various touchpoints. Uber didn’t start by buying 1,000 cars. It started with a completely new customer experience it wanted to deliver—straddling the digital and physical—and then built the organization around that. Uber ultimately leveraged people, process, and technology to bring that to life, but it started with a unique customer journey.

Design for the Customer, Not the Company

sap_Q316_digital_double_feature3_images5To date, most corporate processes have been designed for internal efficiency or cost savings with little consideration for the impact on the customer. Companies that want to design for consistent experiences have to reexamine those business processes from the customer perspective. In order to deliver a standout and consistent experience, enterprises must bring together an assortment of data from a variety of systems—including POS transactions, mobile purchases, call center activity, notes from sales calls, and social media.

The average retailer has customer data in more than a dozen different systems. But it’s not just the front-end customer-facing systems that need orchestrating; back office systems and processes, from your supply chain to fulfillment to customer service, must be designed to deliver the intended experience. For example, Nespresso has to orchestrate a number of back-end and front-end systems to offer customers premium courier delivery within two-hour windows.

Put Someone in Charge

Companies that are truly invested in creating integrated, standout customer experiences often create a centralized function that can bring together the people, processes, and technology to bring them to life. Sometimes there is a chief customer officer or head of customer experience. But unless these people are really empowered, they’re toothless.

EMC’s Scanlon is empowered. He heads up a function that has been transformed from focusing on product quality into a centralized customer experience center of excellence staffed with 60 full-time professionals. The center has translated into “more focus, more energy, more insight to our customers,” says Scanlon. “And we can deliver that insight to our internal stakeholders, which trickles down to our account teams and lets them have more meaningful conversations that benefit our customers—and benefit the company over time.”

Centralize Customer Data

Even if there is no central customer experience function, there needs to be a central data repository and analytics system: a digital foundation that everyone can use to improve their piece of that experience. EMC’s customer experience group has a data governance function that maintains a single source of customer truth. “They’re able to pull all relevant data sources into one location and get past the typical customer data challenges,” says Scanlon.

Invest in People

Companies that care about the customer experience invest in the people who deliver it. Human beings are the clearest signposts on the customer journey. Companies must hire the best, train for desired outcomes, and reward based on experience metrics: for being brand ambassadors and for going above and beyond on behalf of the customer.

sap_Q316_digital_double_feature3_images6Rethink Metrics and Incentives

One major bank was having trouble driving adoption of its online banking tools. The customers that used the tools loved them, but the tools weren’t getting traction. The problem? The branch managers had no interest in promoting digital banking. They wanted to drive as much traffic as possible to their physical branches because this was one of their key performance metrics.

The solution was to change the compensation approach in order to reward employees for the entire customer experience, including online banking adoption. Branch managers were measured on online and offline customer behavior in their regions. That became a single and critical KPI, and it boosted the desired behaviors and improved overall customer satisfaction.

Create a Single View of the Company

For years, companies have talked about the importance of understanding the customer. And that remains true, particularly when it comes to delivering a valuable customer experience online and off. But successful customer experience design is just as much about giving customers a clear understanding of the company through coordinated experiences that deliver on the brand’s theme and bring it to life in various ways in bricks and mortar, through devices, in online interactions, and everywhere in between. D!

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

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Is The Internet Of Things And Wearable Technology The New Black?

Fred Isbell

The Internet of Things (IoT) is a classic hype cycle phenomenon. Besides forecasts of high growth, it is capturing a large share of interest and overall mindshare.

One thing is clear: The elements of the IoT are here to stay. Once we get past the definition of IoT, which is commonly referred as sensor-based devices and machine-to-machine communications, businesses can open themselves to enormous potential.

When trying to understand new things, I prefer to embrace them as a part of my daily life. When tablets first emerged, I didn’t go anywhere without my trusted iPad. In fact, I sometimes leave my laptop home knowing that I can do most of what I need on this device. And based on that experience, I took my own advice when it came to wearable technology recently – and the results were eye-opening.  I’m now onto my second-generation wearable device, showcasing just how quickly this is all changing.wearable-1

But first let’s jump into the time-travel machine back to February 2015. I was attending the MIT/Sloan School Sports and Analytics conference in Boston, and it seemed that everyone was mentioning wearable technology. The buzz was verified weeks later when I attended the IDC Directions Annual conference, where wearables made the short list of technology ubiquity. A year later, I returned to the MIT/Sloan School Sports and Analytics conference in Boston a little bit wiser. At that point, I invested in a Fitbit and started tracking my own personal statistics for exercise, sleep, and more. Needless to say, the geek in me was in full force as I wore both a Fitbit and a sports watch at the same time. I didn’t want to miss anything, and my middle-aged eyes appreciated the help.

One of the benefits of working for a tech company is the opportunity to adopt new technology in every aspect of my life. My employer, SAP, kicked off a new wellness program, incorporating wearables in how its employees track their health and wellness. I took advantage of this opportunity, replacing my sports watch with a second-generation Fitbit and consolidating two devices into one.

My wearable journey is certainly not complete yet, but it’s become integrated into my life in a very nonintrusive way. Just as my tablet has become an extension of me, so has the wearable device. I even exchange screen shots of my results – such as when I rode my first charity JDRF bike ride over the summer – to friends so we celebrate our achievements.

Very soon, our interactions with the IoT and wearable will become the norm, and we won’t think twice about it. But at the same time, it’s becoming a big business. Market watcher CCS Insight sees this as a US$14 billion market growing to over US$40 billion by 2020. All of these devices will generate even more data, making Big Data bigger than anyone could have predicted.

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All of that data will generate increased demand for applications – especially analytics – to understand, interpret, and use this information. And if you think about it, my Fitbit app on my phone is really a personal business intelligence tool and the ultimate example of the consumerization of IT.

Not surprisingly, tech leaders such as SAP talk about the fusion of business-to-business (B2B) and business- to-consumer (B2B) into what some call “business-to-business-to-consumer” (B2B2C). The proliferation of wearable technology is a great example of this. The market for applications and solutions will increase exponentially – supported by cloud-based delivery and unprecedented demand for the infrastructure to deliver real-time intelligence and much more.

Wearables are indeed the new black as it becomes mainstream and part of society. I’ll come back shortly with a further discussion of how we can apply this technology in sports and analytics. In the interim, I need to head to the gym to get my 10,000 steps and the fitness equivalent to make my Fitbit – and me – happy!

For more on the impact of connected devices, see How Tech Changes Up Health In The Workplace.

Join Fred online: TwitterFacebookLinkedInsap.comSAP Services Hub

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Fred Isbell

About Fred Isbell

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