Sections

How To Win With The Right People In Your Digital Supply Chain

Richard Howells

A digital supply chain (DSC) focused on customers can have a tremendous impact on an organization’s financial performance, helping to cut costs and boost revenue, according to a report last year from The Center for Global Enterprise (CGE). Improved DSCs can reduce total procured costs by 20 percent and increase revenue by 10 percent.

A true DSC is “a customer-centric platform model that captures and maximizes utilization of real-time data coming from a variety of sources,” the CGE report stated. “It enables demand stimulation, matching, sensing and management to optimize performance and minimize risk.”

Some of the most critical and difficult factors in the DSC transformation include technology, demand management and risk, according to the CGE report. But the single most critical and difficult factor for most companies is their people.

Transformation is not a shrink-wrapped solution

There are several fundamental skills missing from the current workforce. In fact, 78 percent of companies surveyed by CGE reported they were short on the right kind of people needed to execute the DSC in their company.

And there is no DSC package to buy that will make it happen. That’s why it’s critical to get the right people, with the right skills, organized and focused on enabling an effective and capable DSC, the most important core process for the majority of companies today.

“We need different skill sets — more data scientists and IT professionals conversant with Big Data, analytics, and tools to interface with data available from the web,” said Keith Miears, VP of global supply chain at Dell, and one of the 24 senior executives involved with the DSC initiative. “And we need people who understand the opportunities and risks our business faces and can figure out what data we need.”

What can companies do?

Back-end business tasks remain essential, such as minimizing inventory, utilizing low-cost/high-quality suppliers, optimizing shipping and logistics, and getting the right product to the right place at the right time. But advances in technology and social buying patterns make a back-end focus insufficient.

Most companies the lack front side-facing skills necessary to reduce costs even further and to actually grow revenue as a result of the DSC. As new people are hired, organizations must increase the efficiency and function of their back-end activities with less help from HR.

We need to develop a roadmap for recruiting people with the right skills at the right time. And staffing the DSC must include new categories of hire, such as:

  • Data scientists and data stewards who know how to collect, maintain and analyze high-quality Big Data in a business context
  • Maintenance technicians who serve as the new face of customer service as we move to service subscription and usage-based relationships where uptime is critical
  • People who have deep expertise in technologies like blockchain, 3D printing and driverless vehicles/drones

Focus to achieve better people management

There are two requirements for managing people well. Clarity of intent means being clear about what you want from the DSC, why it is important, and when it has to happen. And accountability requires each person on the DSC team to know precisely what they are accountable for and how their results will be measured.

The DSC requires a new scorecard that communicates what is wanted, who is accountable, and how rewards and punishments will be administered. It should make clear exactly how the DSC will drive revenue growth, how much growth, who is accountable, and how progress will be tracked and incentivized.

The scorecard requires careful thought so it keeps people’s eyes on the back end while optimizing the front side. (This may sound like common sense, but it’s rarely ever done this way.) And better metrics are required in order to encourage the collaboration with a purpose mentioned previously.

A new route to the top

The DSC leader is frequently a corporate center job with direct-line authority over business group supply chain executives. The DSC head in one company has also taken on the ownership of the USA P&L, according to CGE, and in another case, the DSC transformation is managed by an individual with a strong marketing background.

It is becoming clear that being the senior executive running the DSC is great training for the CEO position. In fact, incumbency in DSC leadership is a new route to the top.

DSCs could be the most important transformation for companies over the next five years. Company leaders who recognize the importance of the people involved in this transformation will open doors for opportunity and growth.

For more on this topic, see Supply Chain Leaders Boost Value With Digital Transformation.

Comments

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.

BlockShow Europe 2017: A Look At Top Use Cases For Blockchain Technology

Jacqueline Prause

With people now looking beyond the banking industry for promising use cases built on blockchain technology, BlockShow Europe 2017 could not have come at a better time.

Held April 6-7 at the Alte Kongresshalle in Munich, Germany, the event attracted more than 560 people and featured 26 speakers, making it the largest international blockchain event in Europe to date. Organized by Cointelegraph in partnership with Nexussquared and BlockPay, BlockShow Europe provided ample opportunity for networking, knowledge sharing, and education.

The event attracted a mostly young, entrepreneurial crowd, many of whom were already working in established Bitcoin and blockchain startups. Innovation experts from the corporate sector were also on hand, as well as “explorers” who were just getting familiar with the technology. According to Cointelegraph, more than 200 individual networking meetings took place during the event.

Notable and quotable

Moderator Elizabeth Lumely, a leading expert on fintech solutions and managing director of Rainmaking, guided the program in a constructive exchange that offered information useful to both Bitcoin and blockchain people alike. She shared the results of a recent survey by Cointelegraph that asked: What is necessary for blockchain in the enterprise? Fifty-seven percent of respondents answered “security first for Bitcoin,” while 43% answered “smart contract Ethereum.”

Bitcoin entrepreneur Charlie Shrem presented the opening keynote, “The Current State of the Blockchain.” During his address, Shrem, founder of the Bitcoin Foundation and currently responsible for business development for cryptocurrency exchange Changelly, compared blockchain technology with the power of the printing press for its potential to remove corruption, power, and control from the hands of the few and put it back into the hands of the people. Shrem said, “The printing press gave people the ability to publish their own information very cheaply across borders around the world and distribute it in a decentralized way. Bitcoin is the printing press of our time. And blockchain technology is what’s powering that.”

Trust: the decisive factor

Panel discussions took on provocative hot topics like the challenges of blockchain implementation and initial coin offerings (ICOs) of cryptocurrencies. Panel experts agreed that blockchain technology is good for solving issues of trust, which they said seems to be the best measure for evaluating the promise of use cases. The blockchain community, however, is faced with challenges common to new technologies: lack of standardization; fee structure; interoperability between different blockchains; and absence of relevant legislation. One hurdle for new users of the technology may be a willingness to accept full responsibility for their data and use of the technology. As one panelist noted, there is no blockchain help line, for example, in the event that you lose your privacy key.

The banking industry was represented with a keynote from Daniel Drummer, vice president at JP Morgan, describing the blockchain-related projects underway at his company. In another keynote that resonated well with the audience, Milan Sallaba, partner at Deloitte, shared his organization’s insights and advice on how entrepreneurs can move from blockchain use cases to scalable production.

Use cases showcase breadth of new technology

Throughout the day, startups took to the main stage to present their blockchain use cases and business models. Here is a sampling of just a few.

  • Energy: The aim of SolarChange is to incentivize people and even developing nations to produce solar energy and sell it back into the grid. The blockchain billing mechanism allows people to track how much energy they are feeding into the grid.
  • Content distribution: DECENT provides a peer-to-peer content distribution network, without the absorbent fees associated with traditional publishing houses. Content on the network includes books, blogs, music, and video provided directly from the artist or author. DECENT’s Caesar testnet launched in March, and it plans to launch its mainnet in June.
  • Supply chain: Kouvala Innovation Oy, based in Finland, is using blockchain technology to enable an information backbone for the movement of goods Europe-wide – or the “Internet for Logistics” – so that every logistics company on the network can benefit from a new level of transparency into shipping activities. Test results with live data are expected at end of June.
  • Intellectual property: Bernstein.io is using blockchain-based, secured digital certificates to create a trail of record for inventors’ creations. Digital certificates can also be attached to non-disclosure confidentiality agreements to establish the existence of a creation and record who knew of it. Legal acceptance of blockchain certificates is developing rapidly because they provide reliable documentation for clients.
  • Fine art: Verisart is a startup that is using blockchain technology to provide verification of authenticity for fine art.

Blockchain Oscars: more use cases!

The event also featured a Blockchain Oscar Competition to select the most promising startups working with blockchain technology. The winner for “Most Innovative Blockchain Startup” was Etherisc, a German startup specializing in providing a blockchain solution for the insurance industry that uses smart contracts. The prize in this category was €5,000 worth of Bitcoins.  The winner for “Startup with the Biggest Potential for Betterment of Humanity” was SolarChange. The prize in this category was €5,000 worth of tokens from Humaniq, a next-generation bank offering solutions for the unbanked.

To learn more about blockchain, read the Forbes Insights Briefing Report: Transforming Transaction Processing for the Digital Economy.

Comments

About Jacqueline Prause

Jacqueline Prause is the Senior Managing Editor of Media Channels at SAP. She writes, edits, and coordinates journalistic content for SAP.info, SAP's global online news magazine for customers, partners, and business influencers .

Blockchain: A Rose By Any Other Name

John Bertrand

The question of what exactly blockchain is came to the fore in March with the publication of the eBook Blockchain Meets Supply Chain: Rewiring Business Operations for the Digital Age, which acknowledged “blockchain is difficult to pin down … it is a class of software composed of other technologies.” The eBook aims to clear that up a bit, as I’ll try to do here.

The blockchain is a secure, transparent, layered container. The container is distributed and made available across the Internet or cloud, with any changes reported back to all parties in the specified group. This process is referred to as distributed ledger technology (DLT).

The DLT is available to either a public or private group. Financial services activities will predominately be in private groups, for example “syndicated loans.”

The key features in the transparent container include:

  • Consensus – algorithms that confirm and accept the information as it arrives and make sure that information is distributed
  • Shared ledger – the record of information that is available to all parties
  • Immutability – cryptographic technology that ensures that records cannot be tampered with

Who says blockchain is hip and modern? The Byzantine Army in 330 AD needed to manage the diversity of loyalty in its generals through coded, distributed, hand-delivered messages. Today we use mathematicians and technology to ensure the shared ledger is robust and staying true to the course, as did the Byzantine generals.

It is the right choreographing of the different technologies that is most important, says the eBook. Given the correct combination, blockchain/DLT should appear sooner than currently anticipated.

Gone are the days banks when banks build their own technology. Most banks now only care that the technology works, with the caveat that the tech supplier is approved by the bank. To meet regulatory requirements, bank technology suppliers must be low risk, which is not the profile of most fintech companies!

The eBook suggests that more caution is needed in implementing blockchain; that is probably correct, but the banks’ situation is urgent. The long and ongoing low interest rate environment has made it very difficult for banks to generate revenue growth. The Swiss Central Bank now charges fees for money on deposit – so times really are getting hard. Banks also have very high internal cost infrastructures. Banks need to start charging for their services, cut costs, or both.

Blockchain/DLT offers efficiency, better security, and one source of the truth. As the eBook points out, the digital supply chain reduces procurement costs by 20% and halves supply chain costs, enabling controlled activity instead of caution.

The eBook’s focus on the digitalization of assets and the provenance of them, rather than crypto currency, is refreshing. I recently noticed on CoinDesk that one of the crypto currencies dropped 31% in 24 hours. That’s a Zimbabwean dollar-like fall. Maybe, like the Zim dollar, crypto currency will be officially abandoned and the U.S. dollar used instead.

One final question to ponder: What should we call the stack of technology that forms the blockchain and DLT? Every stack could be different. How about Rose? After all, U.S. hurricanes are given human names, and I believe blockchain/DLT/Rose will bring the force of the hurricane to banking. Blockchain Meets Supply Chain: Rewiring Business Operations for the Digital Age represents the calm before the storm.

To learn more about blockchain, read the Forbes Insights Briefing Report: Transforming Transaction Processing for the Digital Economy.

Comments

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


Comments

Tags:

How Digital Transformation Is Rewriting Business Models

Ginger Shimp

Everybody knows someone who has a stack of 3½-inch floppies in a desk drawer “just in case we may need them someday.” While that might be amusing, the truth is that relatively few people are confident that they’re making satisfactory progress on their digital journey. The boundaries between the digital and physical worlds continue to blur — with profound implications for the way we do business. Virtually every industry and every enterprise feels the effects of this ongoing digital transformation, whether from its own initiative or due to pressure from competitors.

What is digital transformation? It’s the wholesale reimagining and reinvention of how businesses operate, enabled by today’s advanced technology. Businesses have always changed with the times, but the confluence of technologies such as mobile, cloud, social, and Big Data analytics has accelerated the pace at which today’s businesses are evolving — and the degree to which they transform the way they innovate, operate, and serve customers.

The process of digital transformation began decades ago. Think back to how word processing fundamentally changed the way we write, or how email transformed the way we communicate. However, the scale of transformation currently underway is drastically more significant, with dramatically higher stakes. For some businesses, digital transformation is a disruptive force that leaves them playing catch-up. For others, it opens to door to unparalleled opportunities.

Upending traditional business models

To understand how the businesses that embrace digital transformation can ultimately benefit, it helps to look at the changes in business models currently in process.

Some of the more prominent examples include:

  • A focus on outcome-based models — Open the door to business value to customers as determined by the outcome or impact on the customer’s business.
  • Expansion into new industries and markets — Extend the business’ reach virtually anywhere — beyond strictly defined customer demographics, physical locations, and traditional market segments.
  • Pervasive digitization of products and services — Accelerate the way products and services are conceived, designed, and delivered with no barriers between customers and the businesses that serve them.
  • Ecosystem competition — Create a more compelling value proposition in new markets through connections with other companies to enhance the value available to the customer.
  • Access a shared economy — Realize more value from underutilized sources by extending access to other business entities and customers — with the ability to access the resources of others.
  • Realize value from digital platforms — Monetize the inherent, previously untapped value of customer relationships to improve customer experiences, collaborate more effectively with partners, and drive ongoing innovation in products and services,

In other words, the time-tested assumptions about how to identify customers, develop and market products and services, and manage organizations may no longer apply. Every aspect of business operations — from forecasting demand to sourcing materials to recruiting and training staff to balancing the books — is subject to this wave of reinvention.

The question is not if, but when

These new models aren’t predictions of what could happen. They’re already realities for innovative, fast-moving companies across the globe. In this environment, playing the role of late adopter can put a business at a serious disadvantage. Ready or not, digital transformation is coming — and it’s coming fast.

Is your company ready for this sea of change in business models? At SAP, we’ve helped thousands of organizations embrace digital transformation — and turn the threat of disruption into new opportunities for innovation and growth. We’d relish the opportunity to do the same for you. Our Digital Readiness Assessment can help you see where you are in the journey and map out the next steps you’ll need to take.

Up next I’ll discuss the impact of digital transformation on processes and work. Until then, you can read more on how digital transformation is impacting your industry.

Comments

About Ginger Shimp

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