Is GDPR The New SOX?

Jerome Pugnet

For those who, like me, have long been involved in governance, risk, and compliance (GRC) – like since the early 2000s – doesn’t this whole GDPR (General Data Protection Regulation) “drama” feel like déjà vu? We’re seeing a new strict regulation imposed on all types and sizes of companies, with tough deadlines and hefty fine risks. And as a result, we’re also seeing among a large majority of companies high anxiety and deep concerns that the requirements can’t be met in time. Familiar?

Quite symmetrically to the Sarbanes–Oxley Act of 2002 (SOX) in America, the GDPR is imposed unilaterally for application in the EU only, but due to the size of the market, it impacts companies all over the world, as so many have operations in the EU. And being less familiar with data privacy practices prevailing in Europe, non-EU companies find it maybe even more concerning, as shown by the current multiplication of conferences on the topic in the U.S. alone.

In parallel, CFOs are concerned more than ever with the costs that go with the processes and resources in place to respond to compliance requirements. Containing the cost of compliance ever since the “SOX wave” has proven very challenging, and reactive approaches to compliance and scattered responses to the diverse impositions of the legislation have particularly contributed to pushing these costs. No wonder they’re dreading a similar scenario with the advent of GDPR.

Improved technologies are making a difference

Luckily, technologies have moved a long way since the early days of SOX. Many of us certainly remember (from those glorious early days) the “joy” of documenting and manipulating masses of spreadsheets, Word documents, and other files, and the headaches of consolidating all this information to produce the reports and go through process walk-through, certifications, and sign-offs.

GDPR is also very much about documenting, making sure that the needed policies, controls, and procedures are in place, and being able to demonstrate this to the authorities. So, on the governance side of things, companies can capitalize on the experience from all these years (learned the hard way), which should allow for a more efficient and effective path to compliance – hopefully with less trauma and cost.

This naturally applies to the supporting technologies that are available to manage such compliance requirements, which involve in particular:

  • A robust control framework
  • Complete policy lifecycle management
  • Control evaluation and monitoring capabilities
  • Comprehensive reporting features

A number of vendors have emerged since the early 2000s to respond to these requirements at a diverse level of depth, which helped companies reduce the burden of financial compliance to a degree. At SAP, we’ve consistently developed best-of-breed capabilities through software implemented by hundreds of our customers to automate their compliance management. They also benefit from best practices coming from the breadth of experience from a large community of users and the broad SAP ecosystem of partners.

Choosing the right solution to help with compliance

So unlike the situation found in the early days of SOX, companies have good options for technologies they can use to govern their GDPR compliance. However, before choosing a solution, they should consider the degree of automation provided, the range of capabilities, and the flexibility of tools available. For example, to support the assessments and surveys the GDPR requires on data privacy risks and impacts and for the evaluation of processes and controls.

They may also want to ensure that the chosen solutions can fit into a three-lines-of-defense set, notably to take advantage of integrated audit management capabilities that can help deliver robust assurance on the effectiveness of their GDPR program.

On an ongoing basis – and since GDPR is here to stay – the automation and integration brought by the right GRC technology can also help monitor GDPR compliance more effectively and continuously, and make it a sustainable program while keeping costs under control.

Govern and operationalize GDPR compliance

Other technologies beyond GRC are also critical to “operationalize” GDPR compliance, which involves managing the complete data lifecycle on a day-to-day basis:

  • Privacy impact assessments
  • Secure storage of active data
  • Data access governance
  • Data breach notification and resolution
  • Archiving and deleting

All these capabilities are available from major technology providers and already widely used, but there again, the right solution choices are important to ensure that the requirements of the regulation can be met for all aspects of the management of personal data. And it is also critical that the chosen data management tools can operate harmoniously with the GRC solution that governs the overall GDPR program. Concretely, this signifies that controls can be plugged in at each step of the data management cycle to verify these processes are operating compliantly.

Govern and operationalize GDPR compliance

Despite the anxiety and pressure created by the arrival of the GDPR, companies have good options in terms of GRC and data management technology (unlike in the early days of SOX). They can also leverage the capital of experience accumulated throughout the years and best practices that consulting firms provide to get on the right path to GDPR compliance.

However, in their technology choices, it’s important to verify that the chosen solutions can help them both govern and operationalize GDPR compliance with both:

  1. Strong policy management and control automation capabilities on the governance side, and
  1. Comprehensive data management features to support the complete data lifecycle in accordance to the requirements of the regulation, on the operational side.

Finally, they should ensure that those GRC and data management solutions can interact seamlessly and integrate with their existing business applications where the personal data that so needs to be protected is the most widely used.

This will help make the GDPR journey much less painful and allow them to implement a sustainable GDPR program, where costs can be kept well under control.

Learn more

Visit and the GRC Tuesdays site, and read other GDPR-related blogs on this topic:

Learn how organizations are gaining instant financial insights and using them to make better decisions – both now and in the future. Register now for the 2017 Financial Excellence Forum, Oct. 10-11 in New York City

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Jerome Pugnet

About Jerome Pugnet

Jérôme Pugnet is a senior director of GRC Product Marketing at SAP SE, based in London, and has over 12 years of experience in risk and compliance management, business process control, IT governance, fraud and audit management domains, in particular in the financial services industry. He has over 16 years of previous experience on financial software and ERP, in implementation engagements and pre-sales advisory roles.

Companies Can’t Quit The Budget

Bill Meyers

A new AFP member survey finds that that corporate America seems to treat budgets the way Mark Twain famously saw people treating the weather: Everybody talks about it, but nobody does anything about it.

More than three-quarters of member respondents agreed that budgets are a valuable tool, but a full 55% said their companies had a rigid budget process—11% of respondents viewed their budget as “ironclad” and another 44% thought their budget was “tight.”

“Ironclad” was defined as “minimal flexibility with the amount planned for an outlay.” “Tight” was defined as compensation being “tied to budget numbers at various levels of the organization.”

Nonetheless, the survey did find that “the corporate world is responding to a main criticism” of budgeting—namely, that it keeps organizations from being agile in an increasingly volatile world.

Thirty percent of respondents said their budgeting was “loose”—that is, that the budget is merely “the first forecast of the year, and only the division and organization top and/or bottom-line numbers matter”—while another 14% of respondents said their budgets were “non-binding”—that is, the company relied on rolling forecasts and no budgeting process at all.

The latter developments might surely have been welcomed by Nevine White, a former executive in a midsize telco who helped her company abandon budgeting for rolling forecasts more than two decades ago. Now an executive-in-residence at the Beyond Budgeting Roundtable North America, White spoke about her experiences at AFP’s annual conference in San Diego, in October.

The big advantage of a rolling forecast, she told a packed conference room, is that it shifts questions to “Where is the resource needed?” For instance, a decline in sales might mean that a company needs more salespeople. But it could also mean that the current sales staff just need new, better, or different training.

Telecom, White recalled, was “capital-intensive.” Her company literally dug up streets to lay fiberoptic cables; it had a $400 million annual capital budget. But it also had no way of knowing, year-to-year, where that money was going to be spent.

“You can’t tell in advance where your customers are going to be,” she said.

That doesn’t mean that implementing a rolling forecast is easy. White and her co-presenter, Steve Player, offered several cautious notes about how to structure a rolling forecast in their presentation. Among them:

  • Focusing on “accuracy” instead of “reliability”: “Will the price of oil be higher in six months or lower?” Player asked his audience. The audience, for its part, chuckled and responded, “Yes.” His point was that it’s unreasonable to expect a forecast to predict singular outcomes; the goal is to have it offer a range of outcomes.
  • Excessive detail: The goal, Player argued, is to find a business’ key drivers and to focus on them narrowly. Too many data points disrupts the ability to gather data quickly, avoid detailed calculations, and save time for careful analysis and planning—which is the whole point of rolling forecasts in the first place.
  • Relying on “probability-based” forecasting: Here, again, Player went for humor, using a cartoon showing an analyst saying, that “it’s strongly improbably that anything should ever happen anytime, anywhere.” Some questions, Player said, are zero-sum.

“I think the biggest pitfall that people run into is not being crisp about the definitions,” White said. “If you don’t have clear definition and they get thrown around interchangeably in the language of your business, then that makes it very difficult to have good conversations and to actually get the process moving and to keep people to buy into the process.”

White also suggested that soft skills—such as effective communication—might really help in convincing the bosses to break with the budget cycle.

“You’re definitely going to meet some resistance,” she said. “But in the context of the benefits you reap for flexibility, for making people actually, truly manage, and making them empowered and accountable—it’s just such an uplift for an organization.”

So where does your budget fall on the spectrum? Find out this and more with the AFP FP&A Survey: Is Your Budget Relevant?


Bill Meyers

About Bill Meyers

Bill Myers covers FP&A issues for the Association for Financial Professionals and leads the association’s FP&A Advisory Council, helping corporate practitioners and thought leaders stay ahead of trends in their profession. He can be reached at

The Critical And Evolving Role Of Contract Management In Digital Transformations

Annie Vaseekaran

Like everything in our professional lives, business contracts are changing and being transformed by digitalization. And like many other technology advances, this transformation is enriching the role of legal, finance, procurement, and sales operations in designing, preparing, negotiating, and managing contracts.

Recent research from the International Association for Contract and Commercial Management (IACCM) discusses how technology is changing the way people interact with contracts and enabling greater knowledge application, commercial innovation, business judgment, and behavioral economics. The IACCM study also notes that contracts will be less about cost in the future, and more about relationships. Ultimately, contracts will increasingly be recognized and treated as a critical business asset over the next five years.

The new, dynamic role of contract management

The IACCM report discusses how the management of contracts is evolving into a sophisticated and scientific discipline based on fact. No longer is contract management merely an administrative task. It now has a dynamic role that orchestrates change and makes sense of market volatility, driving performance- and outcome-based agreements and payment for results as it integrates processes across the enterprise and beyond.

So what does this look like in the everyday enterprise? Most organizations already have contract management tools, but they are largely used as repositories for storing contracts. The most innovative companies, however, know that contract management solutions are much more powerful and their legal, finance, procurement, and sales operations experts are taking full advantage of them. These companies can now use contract management technology to:

  • Build strategic relationships and achieve greater contract collaboration
  • Improve supplier performance and negotiation efficiency
  • Standardize contract processes and approvals
  • Lower administrative and legal costs
  • Automate all phases of contract management from contract request, contract authoring, to contract execution workflows using electronic signatures.
  • Strengthen operational, contractual, and regulatory compliance and reduce risk

Insights into the power of contract management

With contract management technology, companies can achieve process harmonization, increase transparency and visibility, and gain business performance support. And the results speak for themselves.

For instance, a major international airline recently used technology to improve its overall operating efficiencies, including the management of its contracts. The company introduced efficiencies by standardizing and streamlining the contracting process from initiation to delivery, consolidating disparate processes for over 3,000 suppliers and reducing the management costs and cycle times for over 7,500 contracts. The airline facilitated transparency on $7 billion in annual contracted spend through a new closed-loop process, increasing productivity and visibility while lowering costs.

A large technology company involved in drilling, production, and processing solutions in the oil and gas industry was experiencing similar issues. It had inefficient, inconsistent procurement and sourcing practices that led to a lack of visibility and compliance, as well as a duplication of effort between contracting teams. Moving from completely manual processes, the company implemented technology to automate and standardize its workflows, reduce administrative work, increase its responsiveness, and improve negotiations. Through a common enterprise-wide robust system, the company achieved a 91% improvement in its contract processes, reducing the cycle from six days to half a day, in a way that is convenient, fast, easy, and seamless. The company achieved greater efficiency, higher productivity, and reduced risk exposure.

Take the management of contracts to the next level

Contract management is now considered an integral part of the procurement process to help stop leakage and aid in gaining compliance around spend and visibility into suppliers.

To learn more about how companies are bringing contracts into the process to gain visibility with the supplier and manage compliant spend, download the full IACCM white paper The Future of Contract and Commercial Management.

Or, learn about the SAP Ariba Contracts solution and how it helps SAP customers take advantage of innovative contract management technology. You’ll see how SAP is helping companies achieve enterprise-wide management of contract functions, improve negotiation efficiency, identify revenue opportunities, and realize cost savings while lowering administrative and legal costs.

Follow SAP Finance online: @SAPFinance (Twitter)  | LinkedIn | FacebookYouTube



Annie Vaseekaran

About Annie Vaseekaran

As a product marketing manager on the SAP Ariba Integrated Marketing team, Annie Vaseekaran handles product marketing for the SAP Ariba Spend Analysis and SAP Ariba Contracts Management solution. She has over 9 years of experience in the IT products and services industry. Prior to SAP Ariba, she was with Oracle in marketing and business development roles. Annie holds an engineering degree in Industrial Engineering and Management from Visvesvaraya Technological University, and an MBA in Marketing and Human Resource from Mount Carmel Institute of Management, India.

Why Strategic Plans Need Multiple Futures

By Dan Wellers, Kai Goerlich, and Stephanie Overby , Kai Goerlich and Stephanie Overby

When members of Lowe’s Innovation Labs first began talking with the home improvement retailer’s senior executives about how disruptive technologies would affect the future, the presentations were well received but nothing stuck.

“We’d give a really great presentation and everyone would say, ‘Great job,’ but nothing would really happen,” says Amanda Manna, head of narratives and partnerships for the lab.

The team realized that it needed to ditch the PowerPoints and try something radical. The team’s leader, Kyle Nel, is a behavioral scientist by training. He knows people are wired to receive new information best through stories. Sharing far-future concepts through narrative, he surmised, could unlock hidden potential to drive meaningful change.

So Nel hired science fiction writers to pen the future in comic book format, with characters and a narrative arc revealed pane by pane.

The first storyline, written several years before Oculus Rift became a household name, told the tale of a couple envisioning their kitchen renovation using virtual reality headsets. The comic might have been fun and fanciful, but its intent was deadly serious. It was a vision of a future in which Lowe’s might solve one of its long-standing struggles: the approximately US$70 billion left on the table when people are unable to start a home improvement project because they can’t envision what it will look like.

When the lab presented leaders with the first comic, “it was like a light bulb went on,” says Manna. “Not only did they immediately understand the value of the concept, they were convinced that if we didn’t build it, someone else would.”

Today, Lowe’s customers in select stores can use the HoloRoom How To virtual reality tool to learn basic DIY skills in an interactive and immersive environment.

Other comics followed and were greeted with similar enthusiasm—and investment, where possible. One tells the story of robots that help customers navigate stores. That comic spawned the LoweBot, which roamed the aisles of several Lowe’s stores during a pilot program in California and is being evaluated to determine next steps.

And the comic about tools that can be 3D-printed in space? Last year, Lowe’s partnered with Made in Space, which specializes in making 3D printers that can operate in zero gravity, to install the first commercial 3D printer in the International Space Station, where it was used to make tools and parts for astronauts.

The comics are the result of sending writers out on an open-ended assignment, armed with trends, market research, and other input, to envision what home improvement planning might look like in the future or what the experience of shopping will be in 10 years. The writers come back with several potential story ideas in a given area and work collaboratively with lab team members to refine it over time.

The process of working with writers and business partners to develop the comics helps the future strategy team at Lowe’s, working under chief development officer Richard D. Maltsbarger, to inhabit that future. They can imagine how it might play out, what obstacles might surface, and what steps the company would need to take to bring that future to life.

Once the final vision hits the page, the lab team can clearly envision how to work backward to enable the innovation. Importantly, the narrative is shared not only within the company but also out in the world. It serves as a kind of “bat signal” to potential technology partners with capabilities that might be required to make it happen, says Manna. “It’s all part of our strategy for staking a claim in the future.”

Planning must become completely oriented toward—and sourced from—the future.

Companies like Lowe’s are realizing that standard ways of planning for the future won’t get them where they need to go. The problem with traditional strategic planning is that the approach, which dates back to the 1950s and has remained largely unchanged since then, is based on the company’s existing mission, resources, core competencies, and competitors.

Yet the future rarely looks like the past. What’s more, digital technology is now driving change at exponential rates. Companies must be able to analyze and assess the potential impacts of the many variables at play, determine the possible futures they want to pursue, and develop the agility to pivot as conditions change along the way.

This is why planning must become completely oriented toward—and sourced from—the future, rather than from the past or the present. “Every winning strategy is based on a compelling insight, but most strategic planning originates in today’s marketplace, which means the resulting plans are constrained to incremental innovation,” says Bob Johansen, distinguished fellow at the Institute for the Future. “Most corporate strategists and CEOs are just inching their way to the future.” (Read more from Bob Johansen in the Thinkers story, “Fear Factor.”)

Inching forward won’t cut it anymore. Half of the S&P 500 organizations will be replaced over the next decade, according to research company Innosight. The reason? They can’t see the portfolio of possible futures, they can’t act on them, or both. Indeed, when SAP conducts future planning workshops with clients, we find that they usually struggle to look beyond current models and assumptions and lack clear ideas about how to work toward radically different futures.

Companies that want to increase their chances of long-term survival are incorporating three steps: envisioning, planning for, and executing on possible futures. And doing so all while the actual future is unfolding in expected and unexpected ways.

Those that pull it off are rewarded. A 2017 benchmarking report from the Strategic Foresight Research Network (SFRN) revealed that vigilant companies (those with the most mature processes for identifying, interpreting, and responding to factors that induce change) achieved 200% greater market capitalization growth and 33% higher profitability than the average, while the least mature companies experienced negative market-cap growth and had 44% lower profitability.

Looking Outside the Margins

“Most organizations lack sufficient capacity to detect, interpret, and act on the critically important but weak and ambiguous signals of fresh threats or new opportunities that emerge on the periphery of their usual business environment,” write George S. Day and Paul J. H. Schoemaker in their book Peripheral Vision.

But that’s exactly where effective future planning begins: examining what is happening outside the margins of day-to-day business as usual in order to peer into the future.

Business leaders who take this approach understand that despite the uncertainties of the future there are drivers of change that can be identified and studied and actions that can be taken to better prepare for—and influence—how events unfold.

That starts with developing foresight, typically a decade out. Ten years, most future planners agree, is the sweet spot. “It is far enough out that it gives you a bit more latitude to come up with a broader way to the future, allowing for disruption and innovation,” says Brian David Johnson, former chief futurist for Intel and current futurist in residence at Arizona State University’s Center for Science and the Imagination. “But you can still see the light from it.”

The process involves gathering information about the factors and forces—technological, business, sociological, and industry or ecosystem trends—that are effecting change to envision a range of potential impacts.

Seeing New Worlds

Intel, for example, looks beyond its own industry boundaries to envision possible future developments in adjacent businesses in the larger ecosystem it operates in. In 2008, the Intel Labs team, led by anthropologist Genevieve Bell, determined that the introduction of flexible glass displays would open up a whole new category of foldable consumer electronic devices.

To take advantage of that advance, Intel would need to be able to make silicon small enough to fit into some imagined device of the future. By the time glass manufacturer Corning unveiled its ultra-slim, flexible glass surface for mobile devices, laptops, televisions, and other displays of the future in 2012, Intel had already created design prototypes and kicked its development into higher gear. “Because we had done the future casting, we were already imagining how people might use flexible glass to create consumer devices,” says Johnson.

Because future planning relies so heavily on the quality of the input it receives, bringing in experts can elevate the practice. They can come from inside an organization, but the most influential insight may come from the outside and span a wide range of disciplines, says Steve Brown, a futurist, consultant, and CEO of who worked for Intel Labs from 2007 to 2016.

Companies may look to sociologists or behaviorists who have insight into the needs and wants of people and how that influences their actions. Some organizations bring in an applied futurist, skilled at scanning many different forces and factors likely to coalesce in important ways (see Do You Need a Futurist?).

Do You Need a Futurist?

Most organizations need an outsider to help envision their future. Futurists are good at looking beyond the big picture to the biggest picture.

Business leaders who want to be better prepared for an uncertain and disruptive future will build future planning as a strategic capability into their organizations and create an organizational culture that embraces the approach. But working with credible futurists, at least in the beginning, can jump-start the process.

“The present can be so noisy and business leaders are so close to it that it’s helpful to provide a fresh outside-in point of view,” says veteran futurist Bob Johansen.

To put it simply, futurists like Johansen are good at connecting dots—lots of them. They look beyond the boundaries of a single company or even an industry, incorporating into their work social science, technical research, cultural movements, economic data, trends, and the input of other experts.

They can also factor in the cultural history of the specific company with whom they’re working, says Brian David Johnson, futurist in residence at Arizona State University’s Center for Science and the Imagination. “These large corporations have processes and procedures in place—typically for good reasons,” Johnson explains. “But all of those reasons have everything to do with the past and nothing to do with the future. Looking at that is important so you can understand the inertia that you need to overcome.”

One thing the best futurists will say they can’t do: predict the future. That’s not the point. “The future punishes certainty,” Johansen says, “but it rewards clarity.” The methods futurists employ are designed to trigger discussions and considerations of possibilities corporate leaders might not otherwise consider.

You don’t even necessarily have to buy into all the foresight that results, says Johansen. Many leaders don’t. “Every forecast is debatable,” Johansen says. “Foresight is a way to provoke insight, even if you don’t believe it. The value is in letting yourself be provoked.”

External expert input serves several purposes. It brings everyone up to a common level of knowledge. It can stimulate and shift the thinking of participants by introducing them to new information or ideas. And it can challenge the status quo by illustrating how people and organizations in different sectors are harnessing emerging trends.

The goal is not to come up with one definitive future but multiple possibilities—positive and negative—along with a list of the likely obstacles or accelerants that could surface on the road ahead. The result: increased clarity—rather than certainty—in the face of the unknown that enables business decision makers to execute and refine business plans and strategy over time.

Plotting the Steps Along the Way

Coming up with potential trends is an important first step in futuring, but even more critical is figuring out what steps need to be taken along the way: eight years from now, four years from now, two years from now, and now. Considerations include technologies to develop, infrastructure to deploy, talent to hire, partnerships to forge, and acquisitions to make. Without this vital step, says Brown, everybody goes back to their day jobs and the new thinking generated by future planning is wasted. To work, the future steps must be tangible, concrete, and actionable.

Organizations must build a roadmap for the desired future state that anticipates both developments and detours, complete with signals that will let them know if they’re headed in the right direction. Brown works with corporate leaders to set indicator flags to look out for on the way to the anticipated future. “If we see these flagged events occurring in the ecosystem, they help to confirm the strength of our hypothesis that a particular imagined future is likely to occur,” he explains.

For example, one of Brown’s clients envisioned two potential futures: one in which gestural interfaces took hold and another in which voice control dominated. The team set a flag to look out for early examples of the interfaces that emerged in areas such as home appliances and automobiles. “Once you saw not just Amazon Echo but also Google Home and other copycat speakers, it would increase your confidence that you were moving more towards a voice-first era rather than a gesture-first era,” Brown says. “It doesn’t mean that gesture won’t happen, but it’s less likely to be the predominant modality for communication.”

How to Keep Experiments from Being Stifled

Once organizations have a vision for the future, making it a reality requires testing ideas in the marketplace and then scaling them across the enterprise. “There’s a huge change piece involved,”
says Frank Diana, futurist and global consultant with Tata Consultancy Services, “and that’s the place where most
businesses will fall down.”

Many large firms have forgotten what it’s like to experiment in several new markets on a small scale to determine what will stick and what won’t, says René Rohrbeck, professor of strategy at the Aarhus School of Business and Social Sciences. Companies must be able to fail quickly, bring the lessons learned back in, adapt, and try again.

Lowe’s increases its chances of success by creating master narratives across a number of different areas at once, such as robotics, mixed-reality tools, on-demand manufacturing, sustainability, and startup acceleration. The lab maps components of each by expected timelines: short, medium, and long term. “From there, we’ll try to build as many of them as quickly as we can,” says Manna. “And we’re always looking for that next suite of things that we should be working on.” Along the way certain innovations, like the HoloRoom How-To, become developed enough to integrate into the larger business as part of the core strategy.

One way Lowe’s accelerates the process of deciding what is ready to scale is by being open about its nascent plans with the world. “In the past, Lowe’s would never talk about projects that weren’t at scale,” says Manna. Now the company is sharing its future plans with the media and, as a result, attracting partners that can jump-start their realization.

Seeing a Lowe’s comic about employee exoskeletons, for example, led Virginia Tech engineering professor Alan Asbeck to the retailer. He helped develop a prototype for a three-month pilot with stock employees at a Christiansburg, Virginia, store.

The high-tech suit makes it easier to move heavy objects. Employees trying out the suits are also fitted with an EEG headset that the lab incorporates into all its pilots to gauge unstated, subconscious reactions. That direct feedback on the user experience helps the company refine its innovations over time.

Make the Future Part of the Culture

Regardless of whether all the elements of its master narratives come to pass, Lowe’s has already accomplished something important: It has embedded future thinking into the culture of the company.

Companies like Lowe’s constantly scan the environment for meaningful economic, technology, and cultural changes that could impact its future assessments and plans. “They can regularly draw on future planning to answer challenges,” says Rohrbeck. “This intensive, ongoing, agile strategizing is only possible because they’ve done their homework up front and they keep it updated.”

It’s impossible to predict what’s going to happen in the future, but companies can help to shape it, says Manna of Lowe’s. “It’s really about painting a picture of a preferred future state that we can try to achieve while being flexible and capable of change as we learn things along the way.” D!

About the Authors

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

Kai Goerlich is Chief Futurist at SAP’s Innovation Center Network.

Stephanie Overby is a Boston-based business and technology journalist.

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


Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

About Stephanie Overby


Retail Tomorrow: How Today’s Technology Is Shaping Retail’s Future

Stephen Sparrow

Do you ever think about tomorrow? Many retailers don’t. They’re too concerned with what’s happening in the moment. They’re too wrapped up in managing their daily business operations or maintaining profit margins.

Don’t get me wrong – those things are important. But tomorrow matters more than they know.

With game-changing technologies like the Internet of Things (IoT), virtual reality, and machine learning reshaping the retail landscape, tomorrow can no longer be ignored. If your company wants to stay ahead of the competition – both now and in the future – you need to begin experimenting with these innovations today.

Beer, there, and everywhere: Create an immersive customer experience

Imagine you’re a Brooklyn-based brewery. You craft the most delicious beer anyone’s ever tasted, and Brooklynites are absolutely gaga over your product. But how do you spread the word? How can you make people in Seattle or San Francisco thirst for your beverage?

Virtual reality and IoT tools can help you create a more immersive customer experience – one that gives people an in-depth view into your brewery – so folks across the country can get excited about sampling your suds.

By setting up a 360-degree video camera and implementing virtual reality capabilities, you can invite people all over the world to tour your facility. They can visit the tasting room, check out the outdoor patio, and watch the kettles work their magic in the production area.

IoT sensors, meanwhile, can provide prospective customers with insight around your brewing processes. Attached to the brew kettles, these sensors enable you to share real-time data about each batch of beer, from when the hops reach a boil to when fermentation is complete.

If viewers like what they see, they can order a case of your beer online.

Creating an immersive customer experience, where people get a glance behind the curtain to see how your company operates and how your product is made, is a surefire recipe for retail success.

A passion for fashion: Predict trends so your customers are always dressed to kill

Instagram, the popular image-sharing app, has a global community of more than 800 million users. These users share upwards of 95 million photos and videos per day.

If a woman from the United States is traveling to Tokyo for an upcoming vacation and wants to make sure she looks fashionable while visiting Japan’s capital city, where can she turn?

Instagram, of course.

With a simple keyword search for “fashion” and “Tokyo,” this woman could be knee-deep in results highlighting the top trends from this chic metropolitan hotspot. Now, with a better idea of what the locals are wearing, she can pick up a few new outfits before her trip, and she won’t feel so out of place in her American attire when she visits.

Retailers, particularly fashion brands, can benefit from how consumers are using apps like Instagram. By analyzing what people are wearing in photos taken in fashion meccas like London, Paris, Tokyo, Milan, or New York, your business can have its finger firmly on the pulse.

Pairing your analysis with machine learning capabilities can enable your retailer to detect and predict the hottest fashion trends. This will help your designers tailor the clothing they create to what’s happening – or what will be happening – in the market.

If more people are wearing floral-print miniskirts, you can design matching leggings. If more people are dressing in denim, you can ramp up production on jean jackets.

Staying up to date on the latest fashion trends can keep your retailer at the top of its game. Predicting the next big thing in fashion using machine learning? That will have your business declaring “game over” to all your competitors.

Not your grandma’s kitchen: Increase customer convenience through greater connectivity

Connected products are invading our homes. We have smart TVs in our living rooms. We have showerheads equipped with Bluetooth speakers in our bathrooms. We have lights that brighten or dim based on our sleeping schedules in our bedrooms.

In the kitchen, though, things are getting really intelligent. From precision cookers that alert you when dinner’s ready to coffee makers you can operate with your smartphone, kitchen appliances are creating a whole new level of convenience for customers.

With a smart refrigerator, customers can create shopping lists using a touch screen on the door. IoT capabilities enable people to add or remove items from their lists using a mobile device. Customers can even submit their grocery orders to a nearby store through their smart fridge, a convenient click-and-collect shopping scenario.

Augmented reality, meanwhile, allows people to peek inside their refrigerators without even opening them. If a woman at work wants to see if she has enough milk for a bowl of cereal tomorrow, she can check using a tablet or smartphone.

Retailers and consumer products companies can leverage this technology to deliver a more engaging product experience. The packaging of a stick of butter, for instance, might have a code on it. When a man peers into his refrigerator using his smartphone, he could click on the code and find out the product’s expiration date. Or perhaps he can learn a few new recipes he could bake using the butter.

By creating a hassle-free shopping experience and enhancing how your buyers engage with your products, you can increase sales and earn your customers’ loyalty.

Home sweet home: Modernize retail like real-estate agents have revolutionized homebuying

Think of how the realty business has changed over the past 25 years. In the early ‘90s, prospective homebuyers had to schedule an appointment with a Realtor or attend an open house to see a home they liked.

In the mid-2000s, house hunting went online, with sites like Trulia and Zillow springing up. Today, homebuyers can snap a photo of an on-the-market house they like using a mobile app and see pictures of the home’s interior, learn the price, find out the square footage, and discover how many bathrooms it has.

Retailers should strive to modernize their industry like the realty business has revolutionized homebuying. Barcode scanning and sensor tracking are just a couple technologies that could help.

If a customer is walking through the aisles of your store, you could offer them the opportunity to scan a tag on a shirt with their mobile device and instantly give them access to outfit ideas or show them accessories that match the top.

Sensors, meanwhile, could track where a shopper is in a store, allowing your retailer to send timely and relevant offers based on their location.

Adding value to your customer experience is the name of the game in retail. And there’s no better way to create a more valuable in-store customer experience than with the latest technology.

Innovation experimentation: Forge your path to a brighter future with revolutionary tech tools

Innovations like IoT, virtual reality, and machine learning are shaping what retail’s future will look like.

Your company’s success – both today and tomorrow – will depend on your willingness to embrace these technologies and experiment with new ways to engage and satisfy your customers.

Join us at the National Retail Forum’s 2018 conference and EXPO at the Jacob K. Javits Convention Center in New York City on January 14–16 to learn how the SAP Leonardo digital innovation system can help your organization bring these exciting technologies to life.


Stephen Sparrow

About Stephen Sparrow

Stephen Sparrow is the Director of Retail Marketing at SAP. He defines, champions and executes marketing strategies to increase penetration and capture of revenue opportunities across SAP's retail enterprise accounts. He also develops industry advancing and perception enhancing programs to drive brand preference for SAP in the retail community.