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Why Finance Must Meet The Demands Of A Digital Economy

Judy Cubiss

Digital transformation is a top-of-mind issue for many executives, including finance. This was highlighted at the Davos Conference in January 2016, where digital was a key theme. During the conference, business leaders such as Pierre Nanterme, CEO of Accenture, argued that digital disruption has only just begun. Nanterme believes digital will be much more than just a commercial opportunity. He predicts that saving lives, creating jobs, and better stewardship of the environment will also be direct outcomes.

In another Davos session, Dominic Barton, global managing director of McKinsey & Company, asked “How can companies catch the digital wave?” He pointed out that disruptive new players are having a massive impact on markets, and technology is enabling disruption by lowering the cost of entry. Thack Brown, general manager and global head for SAP’s line of business finance, and Henner Schliebs, SAP VP and head of finance audience marketing, agreed. “We are at the outset of a once-in-a-generation wave of innovation and transformation,” they wrote in an SAPinsider article. “Enterprises at the forefront of the digital revolution are reimagining traditional processes and beliefs about the role of the finance organization.”

273919_h_srgb_s_gl.jpgTechnology innovation has removed barriers

So how will the digital economy impact finance organizations? Finance is the backbone of every process, yet still has a large number of manual processes.  to How will the digital economy impact finance organizations? If finance is not limited by technology, processes can be reimagined to better meet business needs. This means finance processes can be designed to meet business needs, not just accommodate what the technology allows. This could be a daily soft close, weekly or continuous planning processes, or touchless invoices.

Let’s not overlook the fact that existing processes can be automated right now. Leveraging business networks will help remove media breaks and many manual tasks. Recent McKinsey research states that in most jobs, not only finance, 30% of current tasks could be automated. Increasing the level of automation will help finance organizations focus on innovation and delivering insight. I discussed this in more detail previously in an earlier blog: 5 Strategies Being Used to Reimagine Finance.

Don’t forget the people

Yet the digital revolution is not only about technology; it also about people and skills. Bruno Berthon, managing director, Digital Strategy, Accenture Strategy, raised this point in a re/code article. He stated that it is a myth that all that is needed is greater technology investment. To realize all potential benefits, there has to be focus on the skills needed to apply the technology. This is particularly relevant in finance organizations. Finance professionals are looking to be more strategic and expand responsibilities. Business partners are asking them for more detailed analysis and insight. This requires the technology to provide real-time data, but also for them to be able to analyze, present options, and influence decisions.

273914_l_srgb_s_gl.jpgThe digital journey

All this is happening at an unprecedented rate. Cloud solutions, business networks, and platforms mean that implementations are happening faster than ever and at lower cost, and this is set to continue. However, there are many resources such as the SAP S/4HANA Finance Journey Map, which outlines how to manage finance transformation and how to drive quick time to value. Brown and Schliebs concluded in the SAPinsider article, “With more than 2,000 customers choosing SAP S/4HANA Finance, it is the fastest-growing product in SAP’s history and the platform of choice for finance organizations around the world looking to transform themselves for the digital economy.”

So it will be no surprise to hear that digital transformation will be front and center at the SAPinsider Financials 2016 and GRC 2016. Join us to discuss how finance can meet the demands of the digital economy and how you can help your company’s people, processes, and systems be ready. The co-located events will take place March 15-18 at the MGM Grand in Las Vegas.

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Judy Cubiss

About Judy Cubiss

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

The Future Of Supplier Collaboration: 9 Things CPOs Want Their Managers To Know Now

Sundar Kamak

As a sourcing or procurement manager, you may think there’s nothing new about supplier collaboration. Your chief procurement officer (CPO) most likely disagrees.
Forward-thinking CPOs acknowledge the benefit of supplier partnerships. They not only value collaboration, but require a revolution in how their buying organization conducts its business and operations. “Procurement must start looking to suppliers for inspiration and new capability, stop prescribing specifications and start tapping into the expertise of suppliers,” writes David Rae in Procurement Leaders. The CEO expects it of your CPO, and your CPO expects it of you. For sourcing managers, this can be a lot of pressure.

Here are nine things your CPO wants you to know about how supplier collaboration is changing – and why it matters to your company’s future and your own future.

1. The need for supplier collaboration in procurement is greater than ever

Over half (65%) of procurement practitioners say procurement at their company is becoming more collaborative with suppliers, according to The Future of Procurement, Making Collaboration Pay Off, by Oxford Economics. Why? Because the pace of business has increased exponentially, and businesses must be able to respond to new market demands with agility and innovation. In this climate, buyers are relying on suppliers more than ever before. And buyers aren’t collaborating with suppliers merely as providers of materials and goods, but as strategic partners that can help create products that are competitive differentiators.

Supplier collaboration itself isn’t new. What’s new is that it’s taken on a much greater urgency and importance.

2. You’re probably not realizing the full collective power of your supplier relationships

Supplier collaboration has always been a function of maintaining a delicate balance between demand and supply. For the most part, the primary focus of the supplier relationship is ensuring the right materials are available at the right time and location. However, sourcing managers with a narrow focus on delivery are missing out on one of the greatest advantages of forging collaborative supplier partnerships: an opportunity to drive synergies that are otherwise perceived as impossible within the confines of the business. The game-changer is when you drive those synergies with thousands, not hundreds of suppliers. Look at the Apple Store as a prime example of collaboration en masse. Without the apps, the iPhone is just another ordinary phone!

3. Collaboration comes in more than one flavor

Suppliers don’t just collaborate with you to provide a critical component or service. They also work with your engineers to help ensure costs are optimized from the buyer’s perspective as well as the supplier’s side. They may even take over the provisioning of an entire end-to-end solution. Or co-design with your R&D team through joint research and development. These forms of collaboration aren’t new, but they are becoming more common and more critical. And they are becoming more impactful, because once you start extending any of these collaboration models to more and more suppliers, your capabilities as a business increase by orders of magnitude. If one good supplier can enable your company to build its brand, expand its reach, and establish its position as a market leader – imagine what’s possible when you work collaboratively with hundreds or thousands of suppliers.

4. Keeping product sustainability top of mind pays off

Facing increasing demand for sustainable products and production, companies are relying on suppliers to answer this new market requirement.

As a sourcing manager, you may need to go outside your comfort zone to think about new, innovative ways to collaborate for achieving sustainability. Recently, I heard from an acquaintance who is a CPO of a leading services company. His organization is currently collaborating with one of the largest suppliers in the world to adhere to regulatory mandates and consumer demand for “lean and green” lightbulbs. Although this approach was interesting to me, what really struck me was his observation on how this co-innovation with the supplier is spawning cost and resource optimization and the delivery of competitive products. As reported by Andrew Winston in The Harvard Business Review, Target and Walmart partnered to launch the Personal Care Sustainability Summit last year. So even competitors are collaborating with each other and with their suppliers in the name of sustainability.

5. Co-marketing is a win-win

Look at your list of suppliers. Does anyone have a brand that is bigger than your company’s? Believe it or not, almost all of us do. So why not seize the opportunity to raise your and your supplier’s brand profile in the marketplace?

Take Intel, for example. The laptop you’re working on right now may very well have an “Intel inside” sticker on it. That’s co-marketing at work. Consistently ranked as one of the world’s top 100 most valuable brands by Millward Brown Optimor, this largest supplier of microprocessors is world-renowned for its technology and innovation. For many companies that buy supplies from Intel, the decision to co-market is a strategic approach to convey that the product is reliable and provides real value for their computing needs.

6. Suppliers get to choose their customers, too

Increased competition for high-performing suppliers is changing the way procurement operates, say 58% of procurement executives in the Oxford Economics study. Buyers have a responsibility to the supplier – and to their CEO – to be a customer of choice. When the economy is going well, you might be able to dictate the supplier’s goods and services – and sometimes even the service delivery model. When times get tough (and they can very quickly), suppliers will typically reevaluate your organization’s needs to see whether they can continue service in a fiscally responsible manner. To secure suppliers’ attention in favorable and challenging economic conditions, your organization should establish collaborative and mutually productive partnerships with them.

7. Suppliers can help simplify operations

Cost optimization will always be one of your performance metrics; however, that is only one small part of the entire puzzle. What will help your organization get noticed is leveraging the supplier relationship to innovate new and better ways of managing the product line and operating the business while balancing risk and cost optimization. Ask yourself: Which functions are no longer needed? Can they be outsourced to a supplier that can perform them better? What can be automated?

8. Suppliers have a better grasp of your sourcing categories than you do

Understand your category like never before so that your organization can realize the full potential of its supplier investments while delivering products that are consistent and of high quality. How? By leveraging the wisdom of your suppliers. To be blunt: they know more than you do. Tap into that knowledge to gain a solid understanding of the product, market category, suppliers’ capabilities, and shifting dynamics in the industry, If a buyer does not understand these areas deeply, no amount of collaboration will empower a supplier to help your company innovate as well as optimize costs and resources.

9. Remember that there’s something in it for you as well

All of us want to do strategic, impactful work. Sourcing managers with aspirations of becoming CPOs should move beyond writing contracts and pushing PO requests by building strategic procurement skill sets. For example, a working knowledge in analytics allows you to choose suppliers that can shape the market and help a product succeed – and can catch the eye of the senior leadership team.

Sundar Kamak is global vice president of solutions marketing at Ariba, an SAP company.

For more on supplier collaboration, read Making Collaboration Pay Off, part of a series on the Future of Procurement, by Oxford Economics.

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Sundar Kamak

About Sundar Kamak

Sundar Kamak is the Vice President of Products & Innovation at SAP Ariba. He is an accomplished Solutions Marketing and Product Management Execuive with 15 + year's broad experience in product strategy, positioning, SaaS, Freemium offering, go-to-market planning and execution.

The CFO Role In 2020

Estelle Lagorce

African American businessman looking out office window --- Image by © Mark Edward Atkinson/Blend Images/CorbisThe role of the CFO is undergoing a serious transformation, and CFOs can expect their role to continue to evolve, according to a recent CFO.com article by Deloitte COO and CFO Frank Friedman.

In the futurist article, Friedman says one of the biggest factors that will contribute to the CFO’s significant change over the next five years is technology.

Digital technology is obviously expected to drive change in high-tech companies, but Friedman says it’s industries outside of the tech sectors that are of particular interest, as they struggle to understand how to grasp and harness the digital capabilities available to them.

Working with high tech in low-tech industries

Five years from now, a finance team may be defined by how well it uses technology and innovative business tools, regardless of what industry it’s in. The article outlines some examples of ways that digital technology will increasingly be used by CFOs in “non-tech” sectors:

  • Predictive analytics: CFOs in manufacturing companies can forecast results and produce revenue predictions based on customer-experience profiles and current demand, instead of comparing to previous years as most companies still do today.
  • Social media and crowdsourcing: You may not think CFOs spend a lot of time on social media or crowdsourcing sites, but these methods can actually expedite finance processes, such as month-end responsibilities of the finance organization.
  • Big Data: CFOs already have a lot of data at their fingertips, but in 2020 they will have even more. CFOs in both tech and non-tech sectors who understand how to use that data to make valuable, informed decisions, can strategically guide their company and industry in a more digitally oriented world.

To do this, Friedman says CFOs can lead the way by addressing some critical areas:

  1. Know the issues: Gather the key questions that leaders expect Big Data analytics to answer.
  1. Make data easily accessible: Collect data that is manageable and easy to access.
  1. Broaden skills: The finance team needs people with the skills to understand and strategically interpret the data available to them.

The tech-savvy CFO

The role of today’s CFO has already expanded to include strategic corporate growth advice as well as managing the bottom line. In 2020, Friedman says expectations placed on the CFO are presumed to be even greater, and CFOs will likely need a much more diverse, multidisciplinary skill set to meet those demands.

The article details several traits and skills that CFOs will need in order to keep up with the pace of digital change in their role.

  1. Digital knowledge: CFOs must be tech-savvy in order to capitalize on technical innovations that will benefit their company and their industry as a whole.
  1. Data-driven execution: CFOs will need the ability to execute company strategy and operations decisions based on data-driven insights.
  1. Regulatory compliance: Regulations continue to be more stringent globally, so CFOs will need to be proficient at working closely with regulators and compliance systems.
  1. Risk management: With the growing global economy comes increased cyber and geopolitical risks worldwide. The CFOs of 2020, especially those in large multinational organizations, will need to have the expertise to monitor and manage risk in areas that may be unforeseen today.

The future CFO’s well-rounded resume

By 2020, the CFO role will require much more than just an accounting background. According to Deloitte’s Frank Friedman, “CFOs may need to bring a much more multidisciplinary skill set to the job as well as broader career experiences, from working overseas to holding positions in sales and marketing, and even running a business unit.”

So if you’re a current or aspiring CFO, you have five years to round out your resume with the necessary skills to be ready for the digitally driven role of the CFO in 2020.

The above information is based on the CFO.com article What Will the CFO Role Look Like In 2020?” by Deloitte COO & CFO, Frank Friedman – Copyright © 2015 CFO.com.

Want to learn more about best practices for transforming your finance organization? View the SAP/Deloitte Webinar, “Reshaping the Finance Function”.

For an in-depth look at digital technology’s role in business transformation, download the SAP eBook, The Digital Economy: Reinventing the Business World.

To learn more about the business and technology factors driving digital disruption, download the SAP eBook, Digital Disruption: How Digital Technology is Transforming Our World.

To read more CFO insights from a tech industry perspective, read the Wall Street Journal article with SAP CFO Luka Mucic: Driving Insight with In-memory Technology.

Discover 7 Questions CFOs Should Ask Themselves About Cyber Security.

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Estelle Lagorce

About Estelle Lagorce

Estelle Lagorce is the Director, Global Partner Marketing, at SAP. She leads the global planning, successful implementation and business impact of integrated marketing programs with top global Strategic Partner across priority regions and countries (demand generation, thought leadership).

The Robotics Race

Stephanie Overby

As robotic technologies continue to advance, along with related technologies such as speech and image recognition, memory and analytics, and virtual and augmented reality, better, faster, and cheaper robots will emerge. These machines – sophisticated, discerning, and increasingly autonomous – are certain to have an impact on business and society. But will they bring job displacement and danger or create new categories of employment and protect humankind?

We talked to SAP’s Kai Goerlich, along with Doug Stephen of the Institute for Human and Machine Cognition and Brett Kennedy from NASA’s Jet Propulsion Laboratory, about the advances we can expect in robotics, robots’ limitations, and their likely impact on the world.

SAP_Robotics_QA_images2400x16002

qa_qWhat are the biggest drivers of the robot future?

Kai Goerlich: Several trends will come together to drive the robotics market in the next 15 to 20 years. The number of connected things and sensors will grow to the billions and the data universe will likewise explode. We think the speed of analytics will increase, with queries answered in milliseconds. Image and voice recognition – already quite good – will surpass human capabilities. And the virtual and augmented reality businesses will take off. These technologies are all building blocks for a new form of robotics that will vastly expand today’s capabilities in a diversity of forms and applications.

Brett Kennedy: When I was getting out of school, there weren’t that many people working in robotics. Now kids in grade school are exposed to a lot of things that I had to learn on the job, so they come into the workplace with a lot more knowledge and fewer preconceptions about what robots can or can’t do based on their experiences in different industries. That results in a much better-trained workforce in robotics, which I think is the most important thing.

In addition, many of the parts that we need for more sophisticated robots are coming out of other fields. We could never create enough critical mass to develop these technologies specifically for robotics. But we’re getting them from other places. Improvements in battery technology, which enable a robot to function without being plugged in, are being driven by industries such as mobile electronics and automotive, for example. Our RoboSimian has a battery drive originally designed for an electric motorcycle.

qa_qDo you anticipate a limit to the tasks robots will be able to master as these core technologies evolve?

Goerlich: Robots will take over more and more complex functions, but I think the ultimate result will be that new forms of human-machine interactions will emerge. Robots have advantages in crunching numbers, lifting heavy objects, working in dangerous environments, moving with precision, and performing repetitive tasks. However, humans still have advantages in areas such as abstraction, curiosity, creativity, dexterity, fast and multidimensional feedback, self-motivation, goal setting, and empathy. We’re also comparatively lightweight and efficient.

Doug Stephen: We’re moving toward a human-machine collaboration approach, which I think will become the norm for more complex tasks for a very long time. Even when we get to the point of creating more-complex and general-purpose robots, they won’t be autonomous. They’ll have a great deal of interaction with some sort of human teammate or operator.

qa_qHow about the Mars Rover? It’s relatively autonomous already.

Kennedy: The Mars Rover is autonomous to a certain degree. It is capable of supervised autonomy because there’s no way to control it at that distance with a joystick. But it’s really just executing the intent of the operator here on the ground.

In 2010, DARPA launched its four-year Autonomous Robotic Manipulator Challenge to create machines capable of carrying out complex tasks with only high-level human involvement. Some robots completed the challenge, but they were incredibly slow. We may get to a point where robots can do these sorts of things on their own. But they’re just not as good as people at this point. I don’t think we’re all going to be coming home to robot butlers anytime soon.

Stephen: It’s extremely difficult to program robots to behave as humans do. When we trip over something, we can recover quickly, but a robot will topple over and damage itself. The problem is that our understanding of our human abilities is limited. We have to figure out how to formally define the processes that human beings or any legged animals use to maintain balance or to walk and then tell a robot how to do it.

You have to be really explicit in the instructions that you give to these machines. Amazon has been working on these problems for a while with its “picking challenge”: How do you teach a robot to pick and pack boxes the way a human does? Right now, it’s a challenge for robots to identify what each item is.

qa_qSo if I’m not coming home to a robot butler in 20 years, what am I coming home to?

Goerlich: We naturally tend to imagine humanoid robots, but I think the emphasis will be on human-controlled robots, not necessarily humanshaped units. Independent robots will make sense in some niches, but they are more complex and expensive. The symbiosis of human and machine is more logical. It will be the most efficient way forward. Robotic suits, exoskeletons, and robotic limbs with all kinds of human support functions will be the norm. The future will be more Iron Man than Terminator.

qa_qWhat will be the impact on the job market as robots become more advanced?

SAP_Robotics_QA_images2400x16004Goerlich: The default fear is of a labor-light economy where robots do most of the work and humans take what’s left over. But that’s lastcentury thinking. Robots won’t simply replace workers on the assembly line. In fact, we may not have centralized factories anymore; 3D printing and the maker movement could change all that. And it is probably not the Terminator scenario either, where humanoid robots take over the world and threaten humankind. The indicators instead point to human-machine coevolution.

There’s no denying that advances in robotics and artificial intelligence will displace some jobs performed by humans today. But for every repetitive job that is lost to automation, it’s possible that a more interesting, creative job will take its place. This will require humans to focus on the skills that robots can’t replicate – and, of course, rethink how we do things and how the economy works.

qa_qWhat can businesses do today to embrace the projected benefits of advanced robotics?

Kennedy: Experiment. The very best things that we’ve been able to produce have come from people having the tools an d then figuring out how they can be used. I don’t think we understand the future well enough to be able to predict exactly how robots are going to be used, but I think we can say that they certainly will be used. Stephanie Overby is an independent writer and editor focused on the intersection of business and technology.

Stephanie Overby  is an independent writer and editor focused on the intersection of business and technology

To learn more about how humans and robots will co-evolve, read the in-depth report Bring Your Robot to Work.

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IoT, Sensors, And All Things Digital: Can We Handle It All?

Kai Goerlich

It seems we are all part of a big experiment. We’re testing our data-driven consciousness and determining how much information we can digest and at what speed. And if we continue at our current pace, we will soon see sensors and ambient computing infuse our personal and professional lives with a myriad of interactive things. Even items such as coffee mugs may be connected.

In such a digital-driven, hyperconnected world, our perceptions will heavily depend on virtual experiences and our biological view. To get a sense of where we are heading, I had the pleasure of sitting down with Dr. Yvonne Förster, professor of philosophy of culture at Leuphana University in Germany, to get her perspective.

Q: The speed of digital change is just incredible. It’s hard to imagine that we will always be able to keep up. Will humans find a way to cope with the speed of digital change?

A: Without a doubt, algorithms are faster than our conscious thinking. And although our physical reflexes and our intuition are quite fast, they are still slower than the latest computers available right now. From this perspective, we face many challenges.

Much of our future experiences in a digitized world will be powered by technological devices that operate on micro-timescales. The Internet of Things is a term that describes technologically permeated lifeworlds comprising billions of sensors and highly interconnected devices, which measure – or more precisely, sense – various activities in their environment. The interesting question is not so much about coping, but the perspectives and possible futures of human life itself. How will we evolve while changing our lifeworld?

Q: If we cannot operate at the speed of computers, will we experience disruptions between more direct, data-induced experiences?

A: Not necessarily. Disruptions are exactly what modern technology tries to avoid. Smooth operation and flow are ideal in technology and design, allowing applications to be invisible and creating self-learning systems.

Understanding how technology influences our perception today is a subject of aesthetic research. Media artists try the impossible: Make the invisible visible or render the nonexperiential rhythm and speed of algorithms experiential. It would be naïve to think that the exponential growth in exposure to technological devices would leave people unchanged.

Evolution goes on in culture. And nowadays, we are not just passively shaped by adaptive behavior; we can also actively alter our bodies and minds. New digitized environments and our own wish to extend human life will be fundamental forces in the game of evolution, which we should carefully reflect on.

Q: Will we still experience our environment without additional interactions? Will nature become a dull world to us?

A: I don’t think so. The world will be a fascinating place in the next few decades when it comes to technological development. It doesn’t necessarily mean that every device will remove us from our environments like the dystopian world portrayed in movies such as The Matrix or Surrogates. But, we also shouldn’t forget that our experiences in nature and everything else are always mediated by cultural concepts, attitudes, and technological devices.

Just think of the perception of time, which has been interceded through watches of all kinds for centuries now. Some would even hold that human culture is essentially rooted in technology from its very beginning. Still, as long as we preserve nature, our world will never be a dull place. There are just new perspectives to discover.

Q: How will wearables and sensors help us achieve new perspectives?

A: The interesting question here is: How will our lifeworld and behavior change when sensors are present everywhere? With the omnipresence of sensors and devices that sense locations and other types of human agency, we find ourselves in an environment that is not only tracked by living beings, but also by highly interconnected technological devices. You could even one day say that walls, streets, or cars have eyes in the most literal sense possible.

Sensing is not a concept only about living organisms anymore. Rather, it’s a ubiquitous property of our lifeworld. This will deeply change how we act and interact with each other – but more important, it will transform how we engage with objects. Our lifeworld is altered by the Internet of Things as objects sense and communicate among themselves. The impact of this technological development has yet to be estimated and described.

Q: Will everyone become digitized?

A: If we define digitization as a significant part of everyday life that is connected to digital technology, then we are already digitized. However, if we mean that technology will invade our bodies and turn us into cyborgs that are physically connected to the Internet, this is already becoming a reality in laboratories. This idea is strongly connected to enhancing the human body and mind. Still, most people remain skeptical when it comes to technology invading the body.

We can think of a third alternative of digitization: The co-evolution of humans and technology. When our world is deeply permeated by technology, it will present different and new opportunities to humans. We can develop new ways of behavior, creativity, and thinking. Also, we will need to engage with technology and actively reflect on its use.

This approach calls for an understanding of technology as a precondition for handling such innovation critically and creatively. We see these kinds of engagement emerging from artistic and scientific practice. Jennifer Gabrys, for example, works with sensor technology used by citizens in different environments, such as fracking areas, to better understand and build awareness around changing environmental conditions by using do-it-yourself technology.

Q: Will we have a choice in what we do – or do not – want to know?

A: Yes, we certainly have a choice. As biological beings, we are adaptive. The presence of technology is evolving – and will continue to change – our perception and behavior. If we don’t reflect on that process, we will remain passive and eventually feel outrun by technology.

Still, technology is our making, even though it is not entirely predictable and manageable. Given that technology functions according to emerging patterns of artificial intelligence, we should be prepared to engage in new processes of understanding and agency in computed environments.

Q: Will digitization change the way I experience my body?

A: The playful element of digitization will change the way we learn as well as the knowledge space of what can be known. It’s not just transformation of the thinking process or the quality of decisions, but an evolution of the body as well. In gaming, for example, we use evolutionary, yet old and hard-wired, behaviors such as flight-or-fight reflexes. This means digital gaming is less about our culturally and highly rated reflection, but more on gut feeling and our intuitive mode of acting. But, it might also bring about completely new patterns of behavior and action or reaction.

Another aspect of bodily experiences in times of digitization is the measurement of movement and live data such as heartbeat, blood pressure, and more. This is accompanied by an objectification of a bodily experience. We tend to perceive ourselves as numbers, such as the number of steps we have walked or the calories we have eaten. This might be problematic because it can distract us from our actual bodily state, which is not tantamount to a number or chart appearing on a screen.

The flipside of this is the issue of Big Data and control. Where does this information go, and who uses it? Will your insurance company be interested what your everyday habits are? This seems very likely and should be observed carefully.

Q: How will we experience the world in the future? Will it be in the form of data streams?

A: The world around us is getting sense-driven; it will have eyes and ears. I am waiting for the day when my refrigerator starts arguing with me when I grab a piece of steak instead of a salad. But more interesting is the question of what happens when information goes beyond being presented as text, video, or speech to include body temperature, heart rate, and the pitch of our voice. What kind of knowledge will be generated out of this data?

In the movie Ex Machina, such information leads to the first self-conscious android named AVA. But, I am sure that we will not perceive data streams. Data by itself has no value as long as it is not interpreted. Also, our brains are not an information-processing organ. It generates information only through sense-making activities.

Life never deals with raw data. Movement and perception are to be understood as relational activities, which bring about meaningful structures such as me as an individual and you as another person. Similarly, we will conceive technology as part of our environment and, therefore, part of a sense-making process that extends beyond human perception.

Q: If data could be experienced directly one day, where is the border that separates us from it?

A: Current technologies, such as augmented reality and Google glasses, will not change very much. Even if the physical and virtual worlds merge, these technologies will not interfere with our sense of self. The sense of self is already a stretchy category since cultural practices can alter it profoundly. Mediation techniques, for example, can broaden our ability to be compassionate and make the self subside in meditation and agency.

Another interesting development is the use of invasive techniques that substitute or change our perceptual and cognitive abilities. An example is Neil Harbisson, who can hear colors, or Enno Park, who is using a hearing aid with a speech processor that transfers sounds into digital signals that are sent directly to the brain.

Merging human bodies and technology can create new forms of sensing and acting. Even the ontological gap between what is human and what is technology might become blurred. But this is old news. The self has – and never had – any fixed limitations. We become what we are by interacting with each other and our environment. And we are always evolving; no self is ever complete. The moment you meet another person, you undergo a change. This is why we should not be afraid of losing ourselves in the future.

Q: Will we co-evolve with machines, rather than creating a world similar to The Terminator?

Certainly the merging of humans and machines is an interesting idea as it promises to overcome human limitations. It’s part of our human nature to adapt, and I have the impression that we are entering an era of a new form of cultural evolution that combines biological, technological, and cultural practices.

The most important lesson we will learn is that technology will develop in unforeseen, not programmable, ways. This might destroy the myth of the human as a rational being who can understand and predict the reasons and consequences of an action. Humanity is a very creative species, but we have a hard time understanding complex and nonlinear processes. These processes have become ubiquitous since the Internet became our second nature and stock markets are partly controlled by algorithms.

Complex processes also lie at the core of life. The best example is our own brain whose inner workings are highly complex and nonlinear. Still, we lack the cognitive abilities to understand them. This is why we should experiment and reflect on the possibilities of a life form that engages with technology as a complex process and cannot be simply controlled and predicted. Issues of data privacy, information ownership, and governance need to be discussed in light of ecological entanglement with technology.

For more on this topic, see Live Business: The Importance of the Internet of Things.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Idea Director of Thought Leadership at SAP. His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.