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What Going Digital Really Means For Your Supply Chain

Amr El Meleegy

Like the air we breathe, the term “digital” permeates every facet of our lives, so much that it’s become a fact of life that we take for granted. We use digital technology to communicate information, learn new skills, sell goods, shop, and much more. While most find this new way of life revolutionary, others might argue that there is nothing really new about digital. Why? Because they have been doing digital forever.

For decades, supply chains have incorporated digital technologies like programmable logic controllers, radio-frequency ID, EDI, and electronic documents into their processes and operations. If that’s digital transformation, supply chain operators have long-boarded that train before anyone else thought of coming along for the ride. Over the last 25 years, these technologies have optimized and streamlined the function dramatically – evolving rapidly to accelerate processes, squeeze costs, and offer better quality.

So why are we still talking about digitally transforming the supply chain? During the SAP Radio episode Digital Transformation Across the Extended Supply Chain, from the Coffee Break with Game-Changers Future, Rick Imber, national vice president for the Extended Supply Chain Center of Excellence at SAP, stated “The key is going digital with your business processes and eliminate all those manual steps so you can give the customer what they want. That’s what supply chain digital transformation is all about – the customer.”

Redefining the supply chain one digital innovation at a time

When executives say that their supply chain is going through a digital transformation, they are not referring to the traditional model of supply, demand, and fulfillment. They really mean the extended supply chain – a close integration with other lines of business units that impact and are influenced by the supply chain such as product development, manufacturing, sales, and operations to name a few. Most important, that entire network needs to revolve around delivering the best-possible customer experience.

According to Michael Yagdar, principal and America’s SAP leader at Ernst and Young, the demand for instant service in near perfect quality is bringing additional pressure to the supply chain. “Every single day, companies provide excellent service or ultimate flexibility to the customer. But the implications for the business are significant. Just look at how the supply chain needs to evolve to meet that demand. Customer intimacy is now the source of differentiation,” he stated during the panel discussion with Imber.

Take smart vending machines, for example. With this new beverage delivery system, consumers can personalize their drink, choosing different flavors and ingredients by simply pressing a few buttons on a single machine. While this may sound like a great differentiator, this is only half of the story. By linking the kiosk to a supplier network, enterprises can provide insights to their suppliers into what consumers prefer and how much they pour at a single visit. Not only will suppliers understand which products are selling and need to be replenished, but they can also pinpoint an opportunity to offer a new flavor on store shelves.

Another great digital technology that is evolving the supply chain is 3D printing. For Barilla, this technology is revolutionizing its pasta production and realigning its entire supply chain. The brand can now offer more than just five varieties of pasta to restaurants, retailers, and wholesalers, giving them a choice of ingredients (vegan!), flavors (Mediterranean tomato!), and shapes (soccer balls to celebrate my favorite team’s win!). By putting a 3D printer in its customers’ facilities, Barilla’s supply chain must anticipate and fulfill every possible configuration. The whole notion of demand anticipation and fulfillment and replenishment is completely flipped. Instead, the supply chain needs to think about arriving at the customer site to service this piece of equipment.

Powering the supply chain of the future

In such a dynamic environment, supply chains – as well as the rest of the business – need a new digital core that can provide full, immediate access to accurate, real-time information about their customers, supplier network, and competitors. Having the right information can make a difference when producing and distributing custom products with shorter lead times and smaller runs to meet customer demand while keeping costs under control, minimizing inventory buffers, and driving productivity to peak levels.

With a new digital core any change in supply and demand can be quickly detected and resolved throughout the supply chain. A large order needs to be suddenly shipped overnight? No problem. The digital core can identify any production gaps efficiently, send an alert about the demand-and-supply imbalance, and provide various options to fix it. Now, the supply-chain process happens in real time with increased visibility and decision support

No matter how efficient your processes, the supply chain is only as good as the supplier network. By integrating the digital core into your suppliers’ network, companies can help ensure that they are using the right and best suppliers.

The supply chain of the future: networked, connected, with a brand-new operational model that keep customers coming back for more.

To get a personalized digital core business scenario recommendations report visit https://www.s4hana.com.

For an in-depth look at the digital supply chain and other influences affecting business in the digital age, download the SAP eBook, The Digital Economy: Reinventing the Business World.

Discover the multiple factors driving digital transformation in the SAP eBook, Digital Disruption: How Digital Technology is Transforming Our World.

This article originally appeared in SAP Business Trends. It was modified for Digitalist Magazine.

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Amr El Meleegy

About Amr El Meleegy

Amr El Meleegy is a senior director of Product Marketing at SAP. He is currently responsible for our next-generation suite of business applications, SAP S/4HANA.

Innovator Or Follower? Reimagined Processes Keep Distributors In The Lead

Karen Lynch

The world is moving ever faster. Customers demand a wider variety of products and services with shorter delivery times. Competitive markets demand that wholesale distributors become more efficient.

To survive in this environment, distributors must rethink their business processes. Leading companies are using digital technology to optimize business outcomes. They are implementing bold initiatives to automate core administrative business processes. They are changing the way they operate by changing or eliminating fundamental business processes. They are moving from being reactive and slow to agile, proactive, and insight-driven.

Distribution companies are taking a fresh look at their key processes. They often find that any process can be more modern or digitized. To stay ahead of competition, the time to plan and execute is now.

Here are some ways distributors are approaching this challenge.

Become easier to do business with

The customer experience today is a lifecycle, not just an individual interaction. Customers expect a consistent experience during every touch point with your organization. Leading distributors provide a variety of ordering channels. These include call centers, websites, text messages, and in-person interaction. The goal is to deliver the exact products and services customers need at the time they need them.

Establish detail-driven customer engagement

Distributors are becoming more efficient by focusing on their best customers. They are gathering information through segmentation and stratification of their customer base. These details can help transform marketing activities, personalize user experiences, and grow customer loyalty. Companies can then nurture the most profitable customers. And they can take insight-driven action to improve relationships with the least profitable customers.

Enable predictive analytics

Companies should use data should to forecast and predict, not to reminisce. Imagine being able to tell your customers which products they will need and when they will need them. Companies use predictive analytics and up-to-the-minute insight to react to trends in real time.

Address operational efficiency and bottom-line results

With an eye toward higher efficiency, distributors are reimagining their operations as well. They negotiate the best deals with suppliers to improve margins, pricing, and inventory levels. They use solutions for integrated strategic sourcing and supplier management to achieve 8–14% savings. Companies use optimized operations for complex, high-volume financial processing. This can be valuable for their own company or as a service for business partners. For many companies, rebate and chargeback processes are still manual. This can leave significant revenue on the table. But digital solutions can automate these processes, identifying every opportunity to collect.

Leverage business networks

Distributors are leveraging the value of business networks. They can automatically order and pay for goods and services, both direct and indirect. Pre-defining suppliers, pricing, safety stock and reorder points enables touch-less and automated processing. Automation of these manual processes gives employees time to focus on customer-centric activities. This helps improve loyalty and increase sales.

Innovator or follower?  The choice is yours

In today’s digital economy, wholesale distributors must reimagine business processes to remain competitive and best serve customers. Distributors with vision are leading the way for the rest of the industry.

To learn more about digital transformation for wholesale, click here.

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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.

Top Tech Partnerships Transforming The IT Industry

Kevin Ichhpurani

The recent unprecedented partnership announcement between SAP and Apple is just the latest in a string of game-changing partnerships and mergers in the tech industry. Driven by the relentless pace of innovation, the technology sector is only one of numerous industries that are moving quickly to ensure they stay relevant.

For example, leading healthcare companies are partnering with technology goliaths like Google to create life-changing innovations that will transform our world, such as surgical robots for non-invasive surgery. Industries ranging from automotive and academia to insurance, banking, and beyond are feeling the impact of digital disruption, competing through new digital ecosystems, and responding in ways that will reinvent how we live and work.

Let’s take a closer look at some of the latest key technology partnerships.

1. Apple and SAP

The recently announced SAP and Apple partnership is a revolutionary breakthrough for business. It will combine native apps for iPhone and iPad with the enterprise capabilities of the SAP HANA Cloud Platform. It allows developers, partners, and customers to build iOS apps tailored to their business needs in order to manage critical business operations.

The business capabilities for apps enabled by this partnership are endless. Imagine having a virtual assistant who not only responds to your requests, but also proactively reaches out to let you know when there are situations you need to be aware of. In fact, some of the first apps will contain functionality, referred to as co-pilot, which is touted as the first true digital assistant in the enterprise.

Here’s an example of how co-pilot functionality works. A machine in the production line is overheating. A sensor flags the issue to the inspector bot and to your app. The app with co-pilot functionality notifies you – in natural human language via text, action, or voice – and provides relevant information on the issue and suggestions on the best course of action to take. The app monitors the situation and helps you to quickly solve the problem by facilitating the proper service procedures and ensuring that you are kept abreast of the resolution. Importantly, the app will learn from behavioral data to improve its recommended actions in the future.

Tim Cook, Apple’s CEO stated, “This partnership will transform how iPhone and iPad are used in enterprise by bringing together the innovation and security of iOS with SAP’s deep expertise in business software. As the leader in enterprise software and with 76% of business transactions touching an SAP system, SAP is the ideal partner to help us truly transform how businesses around the world are run on iPhone and iPad.”  

2. Cisco and Ericsson

“In a world driven by mobility, cloud, and digitalization, the networks of the future will require new design principles to ensure they are agile, autonomous, and highly secure.” So said technology giants Cisco and Ericsson when they announced a sweeping strategic partnership to create the “networks of the future”.

The multifaceted partnership touches virtually all aspects of both companies, from sharing patents and intellectual property rights to joint development and creation of new products to collaborating on global services capabilities including consulting, integration, and support.

Together, the companies plan to offer the best of both companies – routing, data center, networking, cloud, mobility, management and control, and services – across network architectures from devices and sensors to access and core networks to the enterprise IT cloud.

Cisco and Ericsson are dramatically reinventing themselves to meet the realities of the digital economy, and enabling their customers to accelerate their own business transformations. By delivering an end-to-end product and services portfolio and joint innovation, they plan to provide the mobile enterprise experience of the future and speed the platforms and services needed to digitize countries and create the Internet of Things ecosystem.

Customers will not be the only beneficiaries of this partnership. The companies expect an incremental revenue opportunity of $1 billion or more for each company by calendar year 2018. Plus, in February 2016, the partners expanded their agreement to include Intel and Verizon, with the goal to develop a 5G router for business and residential service, and accelerate 5G innovations. (Apple, Nokia, and Qualcomm are also members of a Verizon-led initiative to develop and test 5G wireless technologies.)

Cisco CEO Chuck Robbins commented on the need for partnerships these days, saying, “In today’s fast-paced world, next-generation strategic partnerships allow us to innovate and move with greater speed.”

3. Dell and EMC

This is a merger as opposed to a partnership. But I had to mention it because it is one of the largest tech mergers to date, and it will have a widespread impact on the IT industry and beyond.

At the EMC World event this month, Dell Chairman and CEO, Michael Dell, said the merger will create a next-breed technology company that strategically covers the “customers’ entire infrastructure, from hardware to software services, from the edge to the core to the cloud.”

The $67 billion Dell and EMC deal also directly involves several well-known companies that they refer to as the ‘family of companies’ currently owned by one of the two tech giants, including VMware, Pivotal, SecureWorks, RSA, and Virtustream. The merger still has some hurdles to cross, but if it closes as expected by October, the combined company will have close to 170,000 employees.

The ripple effect across industries

These significant deals are part of a larger global trend of partnerships, alliances, and consolidations. The impact of some of these major technology partnerships and mergers is expected to cause a ripple effect across multiple sectors and the global business landscape.

This is only the beginning; I’m eager to see where these technology partnerships can take us.

Learn more about the Apple and SAP partnership to revolutionize work on iPhone and iPad.

For an in-depth look at how technology is changing the business landscape, download the SAP eBook, The Digital Economy: Reinventing the Business World.

To learn more about the multiple factors driving digital transformation, download the SAP eBook, Digital Disruption: How Digital Technology is Transforming Our World.

Discover how the Mobile Industry is Now Simpler Then Ever.

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Kevin Ichhpurani

About Kevin Ichhpurani

Kevin Ichhpurani is EVP of Strategic Business Development at SAP.

Live Businesses Deliver a Personal Customer Experience Without Losing Trust

Lori Mitchell-Keller, Brian Walker, Johann Wrede, Polly Traylor, and Stephanie Overby

Trust is the foundation of customer relationships. People who don’t trust your business are not likely to become or remain customers.

The trust relationship has taken some big hits lately. Beloved brands like Chipotle and Toyota have seen customer trust ebb due to public perception of their roles in safety issues. Consumers continue to experience occasional data breaches from large brands.

Yet these traditional threats have short half-lives. The latest threat could last forever.

Most customers claim they want personalization across all the channels in which they interact with companies. Such personalization should create long-term loyalty by creating a new level of intimacy in the relationship.

sap_Q216_digital_double_feature3_images2But that intimacy comes at a high price. For personalization to work, brands need to gather unprecedented amounts of personal information about customers and continue to do so over the course of the relationship. Customers are already wary: 80% of consumers have updated their privacy settings recently, according to an article in VentureBeat.

Companies must get personalization right. If they do, customers are more likely to purchase again and less likely to switch to a competitor. Personalization is also an important step toward the holy grail of digital transformation: becoming a Live Business, capable of meeting customers with relevant and customized offers, products, and services in real time or in the moments of customers’ choosing.

When done wrong, personalization can cause customers to feel that they’ve been deceived and that their privacy has been violated. It can also turn into an uncomfortable headline. When Target used its database of customer purchases to send coupons for diapers to the home of an expectant teen before her father knew about the pregnancy, its action backfired. The incident became the centerpiece of a New York Times story on Target’s consumer intelligence gathering practices and privacy.

Straddling the Line of Trust

Customers can’t define the line between helpful and creepy, but they know it when they see it.

Research conducted by RichRelevance in 2015 made something abundantly clear: what marketers think is cool may be seen as creepy by consumers. For example, facial-recognition technology that identifies age and gender to target advertisements on digital screens is considered creepy by 73% of people surveyed. Yet consumers were happy about scanning a product on their mobile device to see product reviews and recommendations for other items they might like, the survey revealed. Here’s what else resonates as creepy or cool when it comes to digital engagement with consumers, courtesy of RichRelevance and Edelman Berland (now called Edelman).

Creepy

  • Shoppers are put off when salespeople greet them by name because of mobile phone signals or know their spending habits because of facial-recognition software.
  • Dynamic pricing, such as a digital display showing a lower price “just for you,” also puts shoppers off.
  • When brands collect data on consumers without their knowledge, 83% of people consider it an invasion of privacy, according to RichRelevance’s research, and 65% feel the same way about ads that follow them from Web site to Web site (retargeting).

Cool

  • Shoppers like mobile apps with interactive maps that efficiently guide them to products in the store.
  • They also like when their in-store location triggers a coupon or other promotion for a product nearby.
  • When a Web site reminds the consumer of past purchases, a majority of shoppers like it.

There are no hard-and-fast rules about which personalization tactics are creepy and which are cool, but trust is particularly threatened in face-to-face interactions. Nobody minds much if Amazon sends product recommendations through a computer, but when salespeople approach customers like a long-lost friend based on information collected without the customer’s knowledge or permission, the violation of trust feels much more personal and emotional. The stage is set for an angry, embarrassed customer to walk out  the door, forever.

sap_Q216_digital_double_feature3_images3It doesn’t help that the limits of trust shift constantly as social media tempts us to reveal more and more about ourselves and as companies’ data collection techniques continue to improve. It’s easy to cross the line from helpful to creepy or annoying (see Straddling the Line of Trust).

Online, customers are similarly choosy about personalization. For example, when online shoppers are simply looking at a product category, ads that matched their prior Web-browsing interests are ineffective, an MIT study reports. Yet after consumers have visited a review site to seek out information and are closer to a purchase, personalized content is more effective than generic ads.

Personalization Requires a Live Business

Yet the limits of trust are definitely shifting toward more personalization, not less. Customers already enjoy frictionless personalized experiences with digital-native companies like Uber, and they are applying those heightened expectations to all companies. For example, 91% of customers want to pick up where they left off when they switch between channels, according to Aspect research. And personalization is helpful when you receive recommendations for products that you would like based on previous in-store or online purchases.

sap_Q216_digital_double_feature3_images-0004Customers also want their interactions to be live—or in the moment they choose. Fulfilling that need means that companies must become Live Businesses, capable of creating a technological infrastructure that allows real-time interactions and that allows the entire organization—its structure, people, and processes—to respond to customers in all the moments that matter.

Coordinating across channels and meeting customers in the right moments with personalized interactions will become critical as the digital economy matures and customer expectations rise. For instance, when customers air complaints about a brand on social media, 72% expect a response within an hour, according to consulting firm Bain & Company. Meanwhile, an Accenture survey found that nearly 60% of consumers want real-time promotions; 48% like online reminders to order items that they might have run out of; and 51% like the idea of a one-click checkout, where they can skip payment method or shipping forms because the retailer has saved their preferences. Those types of services build trust, showing that companies care enough to understand their customers and send offers or information that save them time, money, or both.

So while trust is difficult to earn, once you’ve earned it and figured out how to maintain it, you can have customers for life—as long as you respect the shifting boundaries.

“Do customers think the company is truly acting with their best interests at heart, or is it just trying to feed the quarterly earnings beast?” asks Donna Peeples, a customer experience expert and the former chief customer experience officer at AIG. “Customer data should be accurate and timely, the company should be transparent about how the data is being used, and it should give customers control over data collection.”

sap_Q216_digital_double_feature3_images-0005How to Earn Trust for a Live Business

Despite spending US$600 billion on online purchases, U.S. consumers are concerned with transaction privacy, the 2015 Consumer Trust Survey from CA Security Council reveals. These concerns will become acute as Live Businesses make personalization across channels a reality.

Here are some ways to improve trust while moving forward with omnichannel personalization.

  • Determine the value of trust. Customers want to know what value they are getting in exchange for their data. An Accenture study found that the majority of consumers in the United States and the United Kingdom are willing to have trusted retailers use some of their personal data in order to present personalized and targeted products, services, recommendations, and offers.
    “If customers get substantial discounts or offers that are appealing to them, they are often more than willing to make that trade-off,” says Tom Davenport, author of Big Data at Work: Dispelling the Myths, Uncovering the Opportunities. “But a lot of companies are cheap. They use the information but don’t give anything back. They make offers that aren’t particularly relevant or useful. They don’t give discounts for loyalty. They’re just trying to sell more.”
  • Let customers make the first move. Customers who voluntarily give up data are more likely to trust personalization across the channels where they do business. Mobile apps are a great way to invite customers to share more data in a more intimate relationship that they control. By entering the data they choose into the app, customers won’t be annoyed by personalization that’s built around it.
    For example, a leading luxury retailer’s sales associates may offer customers their favorite beverages based on information they entered into the app about their interests and preferences.
  • Simplify data collection and usage policies. Slapping a dense data- use policy written in legalese on the corporate website does little to earn customers’ trust. Instead, companies should think about the customer data transaction, such as what information the customer is giving them, how they’re using it, and what the result will be, and describe it as simply as possible.
    “Try to describe it in words so simple that your grandmother can understand it. And then ask your grandmother if it’s reasonable,” suggests Elea McDonnell Feit, assistant professor of marketing at Drexel University’s LeBow College of Business. “If your grandmother can’t understand what’s happening, you’ve got a problem.”
    The use of data should be totally transparent in the interaction itself, adds Feit. “When a company uses data to customize a service or offering to a customer, the customer should be able to figure out where the company got the data and immediately see how the company is providing added value to the customers by using the data,” Feit says.
  • Create trust through education. Yes, bombarding customers with generic offers and pushing those offers across the different Web sites they visit may boost profits over the short term, but customers will eventually become weary and mistrustful. To create trust that lasts and that supports personalization, educate the customers.

Procter & Gamble’s (P&G’s) Mean Stinks campaign for Secret deodorant encourages girl-to-girl anti-bullying posts on Twitter, Facebook, and Instagram. The pages let participants send apologies to those they have bullied; view videos; and share tips, tools, and challenges with their peers.

P&G has said that participation in Mean Stinks has helped drive market share increases for the core Secret brand as well as the specific line of deodorant promoted by the effort. Offering education without pushing products or services creates a sense that companies are putting customers’ interests before their own, which is one of the bedrock elements of trust. Opting in to personalization seems less risky to customers if they perceive that companies have built up a reserve of value and trust.

“Companies that do personalization well demonstrate that they care, respect customers’ time, know and understand their customers and their needs and interests,” says Peeples. “It also reinforces that interactions are not merely transactions but opportunities to build a long-term relationship with that customer.”

Laying the Foundation for Live, Personalized Omnichannel Processes

sap_Q216_digital_double_feature3_images-0006Creating a personalized omnichannel strategy that balances trust and business goals starts with knowing the customer. This can happen only when multiple aspects of your business are coordinated in a live fashion. But marketers today struggle to collect the kind of data that could drive more meaningful connections with customers. In an Infogroup survey of more than 500 marketers, only 21% said they are “very confident in the accuracy and completeness of their customer profiles.” A little over half of respondents said they aren’t collecting enough data overall.

Collecting enough of the right types of data requires more holistic data-collection techniques:

  • Take advantage of the lower costs for processing and storing terabytes of data, and develop a data strategy that combines and crunches all the customer data points needed to drive relevant interactions. This includes transactional, mobile, sensor, and  Web data.
  • Social media analytics is also a central tactic. Social profiles and activity are rich sources of data about behavior and character, merging what people buy or look for with their interests, for instance. Such data can feed predictive analytics and personalization campaigns.
  • Experiment with commercial tools that can filter and mine the data of customers and prospects in real time. This is a significant step beyond basic demographic data collections of the past.

sap_Q216_digital_double_feature3_images-0007Once the necessary data is available, companies need the technology, processes, and people to make sensible use of it in an omnichannel personalization strategy. Only when a company is organized as a Live Business can that happen. Here’s how your company can move toward being a Live Business:
Be live across channels. Having a consistent customer journey map across channels is core to omnichannel personalization. It requires integration across multiple systems and organizational silos to enable core capabilities, such as inventory visibility and purchase/pickup/return across channels. This integration also constitutes a major chunk of the transition to becoming a company that can act in the moments that matter most to customers. If all channels can sync in real time, customers can get what they want in the moment they want it.

Free the data scientists. Marketing rarely has full control over the omnichannel experience, but it is the undisputed leader in understanding customer behavior. While data science is part of that understanding, it has traditionally played a background role. Marketers need to bring the data scientists into efforts to sort through the different options for digitizing the omnichannel experience. The right data scientists understand not only how to use the tools but also how to apply the data to make accurate decisions and follow customers from channel to channel with personalized offers.

Walgreens’ Technology Approach to Personalization

Walgreens is a leader in building the kind of technology base that can enable real-time, omnichannel personalization. Its digital transformation is 16 years in the making, according to Jason Fei, senior director of architecture for digital engineering at Walgreens. At the heart of its infrastructure is a Big Data engine that feeds many customer interaction and omnichannel processes, including customer segmentation. The company adds third-party systems in areas such as predictive analytics and marketing software. Walgreens has a cloud-first strategy for all new applications, such as its image-processing and print-ordering applications. Other elements of the drugstore chain’s technology platform include:

  • Application programming interface (API)-driven architecture. Walgreens’ APIs enable more than 50 partners to connect with its apps and systems to drive customer-facing processes, including integrations with consumer wearables to drive reward points for healthy habits, as well as content partnerships with companies such as WebMD. “With APIs we can be an extensible business, allowing other companies to connect to us easily and help in the digital enablement of our physical stores,” Fei says.
  • Responsive Web sites. The company’s Web site is built using responsive and adaptive design practices so that the site automatically adapts to the consumer’s device, whether that is a mobile phone, tablet, or desktop computer. “We have a single code base that runs anywhere and delivers a consistent, optimized experience to all of our customers,” Fei says.

Making the Most of the Technology Base

This technology foundation has allowed Walgreens to push forward in personalization. For example, according to Fei the company uses sophisticated segmentation and personalization engines to drive outbound e-mail and text campaigns to customers based on their purchase history and profile. “We don’t blast out messages to customers; we use our personalization recommendations to be relevant,” says Fei.

The next phase of this strategy is to develop live inbound personalization tactics, such as recognizing customers when they come back to the Web site and tailoring their experience accordingly. These highly automated, self-learning systems improve over time, becoming more relevant at the moment a customer logs back in.

“When you search for a product, the Web site will take a good guess of what you might actually want. If you always print greeting cards at the same time of year, for example, the system would automatically deliver content around that,” Fei explains. “Everyone comes to Walgreens with a mission, so we can be very targeted with our communications.”

Walgreens’ mobile app combines real-time personalization with convenience. You can scan a pill bottle to refill a prescription, access coupons, send photos from your phone to print in the store, track rewards, and find the exact location of a product on the shelf.

Walgreens also recently deployed a new integrated interactive voice-response system that includes a personalization engine that recognizes the individual, says Troy Mills, vice president of customer care at Walgreens. The system can then predict the most probable reason for the customer’s call and quickly get them to the right individual for further help.

How to Get Started with Live Customer Experiences

sap_Q216_digital_double_feature3_images-0008As Fei can attest, getting Walgreens’ omnichannel and personalization infrastructure to this point has involved a lot of work, with much more to come. For companies just now embarking on this journey, especially midsize and large companies, getting started will mean overhauling an outdated and ineffective technology infrastructure where duplicate systems and processes for managing customer data, marketing programs, and transactions are common.

A bad internal user experience often transcends into a bad customer-facing experience, says Peeples. “We can’t afford the distractions of the latest app or social ‘shiny penny’ without addressing the root causes of our systems’ issues.”

Live Business Requires Striking the Right Balance

The boundaries of trust are a moving target. Sales tactics that used to be acceptable decades ago, such as the door-to-door salesperson, are unwelcome today to most homeowners. And consumers’ expectations are unpredictable. At the dawn of social media, many people were anxious about their photos unexpectedly showing up online. Now our identities are tagged and our posts and photos distributed and commented on regularly.

But while consumers are getting more comfortable with online technology and its trade-offs, they won’t put up with personalization efforts that make use of their data without their knowledge or permission. That data has value, and customers want to decide for themselves when it’s worth giving it away. Marketers need to strike the right balance between personalization and a healthy respect for the unique needs and concerns of individuals. D!

 

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Lori Mitchell-Keller

About Lori Mitchell-Keller

Lori Mitchell-Keller is the Executive Vice President and Global General Manager Consumer Industries at SAP. She leads the Retail, Wholesale Distribution, Consumer Products, and Life Sciences Industries with a strong focus on helping our customers transform their business and derive value while getting closer to their customers.

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How To Design Your Company’s Digital Transformation

Sam Yen

The September issue of the Harvard Business Review features a cover story on design thinking’s coming of age. We have been applying design thinking within SAP for the past 10 years, and I’ve witnessed the growth of this human-centered approach to innovation first hand.

Design thinking is, as the HBR piece points out, “the best tool we have for … developing a responsive, flexible organizational culture.”

This means businesses are doing more to learn about their customers by interacting directly with them. We’re seeing this change in our work on d.forum — a community of design thinking champions and “disruptors” from across industries.

Meanwhile, technology is making it possible to know exponentially more about a customer. Businesses can now make increasingly accurate predictions about customers’ needs well into the future. The businesses best able to access and pull insights from this growing volume of data will win. That requires a fundamental change for our own industry; it necessitates a digital transformation.

So, how do we design this digital transformation?

It starts with the customer and an application of design thinking throughout an organization – blending business, technology and human values to generate innovation. Business is already incorporating design thinking, as the HBR cover story shows. We in technology need to do the same.

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Design thinking plays an important role because it helps articulate what the end customer’s experience is going to be like. It helps focus all aspects of the business on understanding and articulating that future experience.

Once an organization is able to do that, the insights from that consumer experience need to be drawn down into the business, with the central question becoming: What does this future customer experience mean for us as an organization? What barriers do we need to remove? Do we need to organize ourselves differently? Does our process need to change – if it does, how? What kind of new technology do we need?

Then an organization must look carefully at roles within itself. What does this knowledge of the end customer’s future experience mean for an individual in human resources, for example, or finance? Those roles can then be viewed as end experiences unto themselves, with organizations applying design thinking to learn about the needs inherent to those roles. They can then change roles to better meet the end customer’s future needs. This end customer-centered approach is what drives change.

This also means design thinking is more important than ever for IT organizations.

We, in the IT industry, have been charged with being responsive to business, using technology to solve the problems business presents. Unfortunately, business sometimes views IT as the organization keeping the lights on. If we make the analogy of a store: business is responsible for the front office, focused on growing the business where consumers directly interact with products and marketing; while the perception is that IT focuses on the back office, keeping servers running and the distribution system humming. The key is to have business and IT align to meet the needs of the front office together.

Remember what I said about the growing availability of consumer data? The business best able to access and learn from that data will win. Those of us in IT organizations have the technology to make that win possible, but the way we are seen and our very nature needs to change if we want to remain relevant to business and participate in crafting the winning strategy.

We need to become more front office and less back office, proving to business that we are innovation partners in technology.

This means, in order to communicate with businesses today, we need to take a design thinking approach. We in IT need to show we have an understanding of the end consumer’s needs and experience, and we must align that knowledge and understanding with technological solutions. When this works — when the front office and back office come together in this way — it can lead to solutions that a company could otherwise never have realized.

There’s different qualities, of course, between front office and back office requirements. The back office is the foundation of a company and requires robustness, stability, and reliability. The front office, on the other hand, moves much more quickly. It is always changing with new product offerings and marketing campaigns. Technology must also show agility, flexibility, and speed. The business needs both functions to survive. This is a challenge for IT organizations, but it is not an impossible shift for us to make.

Here’s the breakdown of our challenge.

1. We need to better understand the real needs of the business.

This means learning more about the experience and needs of the end customer and then translating that information into technological solutions.

2. We need to be involved in more of the strategic discussions of the business.

Use the regular invitations to meetings with business as an opportunity to surface the deeper learning about the end consumer and the technology solutions that business may otherwise not know to ask for or how to implement.

The IT industry overall may not have a track record of operating in this way, but if we are not involved in the strategic direction of companies and shedding light on the future path, we risk not being considered innovation partners for the business.

We must collaborate with business, understand the strategic direction and highlight the technical challenges and opportunities. When we do, IT will become a hybrid organization – able to maintain the back office while capitalizing on the front office’s growing technical needs. We will highlight solutions that business could otherwise have missed, ushering in a digital transformation.

Digital transformation goes beyond just technology; it requires a mindset. See What It Really Means To Be A Digital Organization.

This story originally appeared on SAP Business Trends.

Top image via Shutterstock

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Sam Yen

About Sam Yen

Sam Yen is the Chief Design Officer for SAP and the Managing Director of SAP Labs Silicon Valley. He is focused on driving a renewed commitment to design and user experience at SAP. Under his leadership, SAP further strengthens its mission of listening to customers´ needs leading to tangible results, including SAP Fiori, SAP Screen Personas and SAP´s UX design services.