Three Misconceptions About Advanced Analytics

Henner Schliebs

As the role of the finance function continues to become more complex, proactive CFOs are recognizing that obtaining a real-time view of all business operations is no longer “nice to have,” but imperative. Gone are the days of living and dying by the spreadsheet and waiting for monthly or even yearly figures to make financial projections and operational course corrections.

To act as a strategic business partner within the C-suite, finance needs advanced, robust data and analytics capabilities. In fact, a recent survey by Oxford Economics found that having a strong influence beyond the finance function and improving efficiency with automation were paramount in boosting performance. When using the right tools, finance executives can measure overall performance, shape strategy, and look for opportunities to grow.

While the importance of data intelligence is felt, many CFOs and finance teams still hold common misconceptions about what advanced analytics really is. When speaking with customers and CFOs, there are three misconceptions that seem to be most prominent:

  1. Advanced analytics is expensive
  2. Advanced analytics takes a long time to deploy
  3. Advanced analytics is complex

Misconception 1: Advanced analytics is expensive

Most business are sitting on a gold mine of data but have yet to uncover its transformative value. This is because many financial leaders think investing in analytics is too costly. Advanced analytics however, does not have to be expensive. Finance teams just beginning their digital transformation journey have a ton of reliable, inexpensive, and free options available. Modern ERP platforms can connect freely to statistical libraries, so finance executives do not have to “reinvent the wheel.” The best solutions provide the functionality needed to embed advanced analytics on raw data levels, which improves accuracy of the models used to predict revenue forecasts and profitability of customers/products.

Once implemented, the benefits quickly outweigh the initial costs, as advanced technologies can replace timely tasks to optimize time, value, and money by standardizing some aspects of financial reporting. Cash forecasting is one such example – leveraging insights to look at trends to identify slow and fast payers and address and improve receivables management. With less time spent reviewing spreadsheets and more time spent leveraging insights, finance teams can become more cost effective. Also, this is the base for an effective and efficient use of machine learning technologies to drive performance.

Misconception 2: Advanced analytics takes a long time to deploy

For most analytics tools, implementation is typically quite fast – a matter of weeks, in most cases, regardless of the existing IT infrastructure. Once deployed correctly – on a transactional level within ERP and not as a separate data mart on higher levels – the benefits are rapidly evident:

  • Advanced analytics can group customers and products to see what makes them profitable and define what drives their growth. With this, finance can analyze and identify outliers.
  • Predictive analytics can help finance professionals forecast mid-period to avoid surprising events, which is especially crucial amid today’s global economic volatility.
  • Advanced analytics can optimize receivables processes and collect overdue amounts faster by setting alerts when customers deviate from past payment patterns.

Misconception 3: Advanced analytics are complex

While the backend technology that powers advanced analytics is sophisticated, complexity in use would defeat its purpose. The goal is to put data at a CFO’s and controller’s fingertips and make assessing information easier than ever.

Technology companies want to ensure that their customers get the most out of their technology investments, which is why they build dedicated teams responsible for preparing, developing, and deploying solutions in close collaboration with the customers’ finance teams. These teams, typically composed of finance experts, technology experts, and data scientists, help each customer streamline the process of solution deployment and user adoption. They are available to teach executives how to use the new solution and to answer questions as they arise. Deployment teams take the complexity out of the technology to ensure that their customers are optimizing its value.

The biggest benefit of advanced analytics is that CFOs no longer have to live and die by the spreadsheet. Truly successful CFOs are embracing their position as strategic thinkers and understand that insights and foresights needed for making high-level decisions cannot be realized without advanced analytics. It’s time finance leaders move beyond traditional misconceptions. Armed with previously untapped insights, the CFO can provide unmatched strategy and insight to support informed business decisions, and ultimately help sustain and grow the company.

This article originally appeared in FEI Daily and is republished by permission.

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About Henner Schliebs

Henner Schliebs is global vice president Audience Marketing for SAP S/4HANA and Finance at SAP. He is a progressive sales/marketing executive with 15+ years of experience in business software solutions focused on corporate functions. He has strong marketing and go-to-market skills and a proven track record in enterprise software solutions, along with significant experience in solution management and customer engagement.

How Finance Is Thriving In A Digital World: 17 Experts Share Their 2018 Predictions

Judy Cubiss

Change is the new normal. The rate of change due to digitalization and technology continues at a breakneck pace. Technologies that were nascent last year are becoming mainstream. Businesses and organizations need to be agile to keep ahead of the competition. An Oxford Economics survey showed clearly that finance organizations that are taking advantage of digitalization are reaping the benefits. Automation allows finance organizations to focus on strategic and value-added topics. What does all this change mean for the finance professional in 2018?

We asked finance thought leaders to share their 2018 predictions for finance in this new digital world. Their insights include a sharp focus on automation, providing immediate insights, agility to support change and new regulations, reskilling the workforce for all these new technologies, and more.

Review the predictions from 2017 and see how they have evolved for 2018.

  1. Sebastian Behrendt, SAP, Regional CFO, Middle and Eastern Europe
    Artificial intelligence (AI) as an academic discipline has been around for 60 years. In recent years, computer power has increased massively, and machine learning became available for everyone. At the same time, algorithms for the business community left the labs and become mainstream. In 2018 and beyond, we will see the benefits on a broader scale for the finance department, which supports self-driving end-to-end processes with a very high degree of automation like automated intercompany reconciliation and processing. The same applies for distributed ledgers (blockchain). We will see more productive scenarios and introduce reality checks against the hype. Besides all the new technologies, we should not forget to do our homework – to invest in training and upskill our finance colleagues. They need to gain knowledge about new technologies and not only about accounting rules. In addition, we need investments in data governance to ensure data consistency and reliability.
  1. Alex Bennell, Capgemini, SAP Finance Transformation Practice Lead, @Capgemini
    Cloud burst! Public cloud is now a genuinely disruptive option for finance organizations in large enterprises, offering agile solutions for rapidly growing business units or new group acquisitions, deployed in a two-tier landscape. The public sector will consider cloud to replace overly complex and expensive on-premise ERP, the overwhelming majority of which they don’t use, with something standardized yet powerful, robust yet frequently updated. Simpler; more agile; CapEx to OpEx.
  1. Joel Bernstein, SAP, CFO Global Operations
    2018 requires maintained focus on the redesign and automation of processes, continued focused on customer service, gained experience with embedded business outcomes, and ongoing compliance adherence. We need to shed the burden of legacy data, processes, and systems, which will allow us to spend our time on innovation and the future.
  1. Thack Brown, SAP, GM Finance Audience, @thackbrown / @SAPFinance
    The digital revolution in corporate finance has been underway for a solid 3 years now. With a solid foundation of first-movers now achieving material improvements, 2018 will be the year that established best practices using digital tools will go mainstream. At the same time, artificial intelligence and predictive analytics for automating processes and delivering insight from data will become standard operating procedure. Just to show that digital is a journey, and not a destination, blockchain will emerge with its first enterprise-scale applications, offering fuel for more improvement in the future.
  1. Tammy Coley, BlackLine, Chief Strategy Officer, @BlackLine
    Under pressure to increase efficiencies and productivity and ever fearful of competitors gaining an advantage, businesses in all sectors are taking a serious look at new technologies, such as AI and robotics. Many businesses are already dipping their toes in the water. And it’s happening throughout organizations — including finance and accounting. A recent survey commissioned by BlackLine revealed that the role automation is playing in F&A is gaining prevalence. Nearly half (46%) of those surveyed said that AI plays a role in their organization today, and 30% currently are investigating its use. This certainly won’t make accountants irrelevant, nor does it mean they’ll lose jobs. It does mean, however, that they need to evolve along with the technology. Every challenge is an opportunity: in this case, upping their game to add an even higher level of value.
  1. Peter David, SAP, Regional CFO Europe Middle East and Africa (EMEA)
    With enhanced capabilities in machine learning and artificial intelligence, we will see further automatization on standard finance processes and improved predictive analytics, increasing the relevance of the finance function for future business success. It’s important for finance professionals to realize that they own the data, not only to analyze the past, but much more importantly, to deliver insights to improve business in the future, dig for new opportunities, and propose new business models. Finance departments need to be prepared for much faster and shorter innovation cycles using state-of-the-art finance systems and setting up the finance organization for success.
  1. Nilly Essaides, The Hackett Group, Senior Research Director of Finance/EPM Advisory
    The Hackett Group research reveals that finance’s main objective in 2018 is to support the enterprise with better analytics. Faster and better insight gives management the intelligence it needs to make decisions about capital allocation, investment and assess strategic objectives. Digital technologies are a core part of finance’s ability to deliver insight and drive business value. Increasingly, finance will leverage predictive analytics tools and AI to create more robust forecasting and business analysis capabilities. By automating and augmenting finance’s decision-support abilities, new digital technologies will enable finance to build better business partnerships and support senior management in the assessment and development of business strategy.
  1. Joe Harpaz, Thomson Reuters, Managing Director@joeharpaz
    In 2018, U.S. tax reform (Tax Cuts & Jobs act), new sales and value-added tax regulations abroad, (notably in Middle East and India), and new OECD reporting requirements will introduce the biggest disruption that U.S. corporate tax departments have faced in over 30 years. To meet increasingly stringent compliance requirements and deadlines, tax departments will have to streamline and automate quickly, and effectively utilize its enterprise resource planning (ERP) technology and tax compliance solutions. Those who are heavily dependent on spreadsheets and manual processes will struggle, given the rapid and compressed timeframes to adjust their processes.
  1. Drew Hofler, SAP Ariba, Senior Director, Financial Solutions Marketing, @dhofler
    2018 is a year when finance will build upon the foundation of networked finance and peer-to-peer (P2P) data, combining visibility into data at all points in the P2P process with robust, collaborative tools to yield new insights and respond nimbly to changing market dynamics and business goals. Through a connected business network, finance will have the visibility and the tools to collaborate with suppliers to increase free cash flow, improve working capital, and increase yield on cash to improve their bottom lines while concurrently reducing supply chain risk. With the application of AI to sort through the massive amounts of transactional data, finance will be able to make smarter decisions faster, and execute on available opportunities in a more timely manner.
  1. Brian Kalish, Kalish Consulting, Principal, @FpandaBTK
    The trend of using increasingly sophisticated tools and technologies that we have witnessed over the past several years will only accelerate in 2018. That will enable today’s FP&A professionals to break free of mundane and low-value data-focused activities, and focus on providing business partners and organizations with the insights and foresights to make those better, smarter decisions faster, which is needed to support the strategies designed to make the organization thrive in the years ahead. There will also be a higher premium placed on the ability to communicate findings and insights to greater and more diversified audiences, both inside and outside the organization.
  1. Tony Klimas, EY LLP, Partner, Global Finance Practice Leader, @tonyklimas / @EY_Alliances
    As traditional finance and accounting objectives around controls and reporting are fully met, the ability to see value where no one else does will continue to become an important capability that sets apart world-class finance organizations from others. The cloud will play a big role in making unstructured data something everyone is focused on, with the best finance organizations figuring out how to leverage this date to create value. A focus on the human capital agenda, from career paths to competency models, will become even more critical, and the best finance organizations will inspire their teams to innovate and lead despite all the uncertainty that exists today. Disrupted career paths and automation technologies will make simulation- and scenario-based training more important than ever. The concepts around blockchain and distributed encrypted ledgers will start to move from theory to practice at an accelerating pace.
  1. Richard McLean, SAP, Regional CFO, Asia-Pacific and Japan
    2018 will see finance leaders accelerate the adoption of digital and innovative technologies to drive continued finance transformation in three main areas. The first is core process automation, with technologies such as machine learning and robotic process automation (RPA) becoming more mainstream to drive even higher levels of efficiency. Second will be Big Data management and powerful analytics to bring increased transparency to key business metrics and enable better data-driven decision making at all levels. Third, we will see finance leaders increase their investment in training and upskilling their people with the essential “soft” skills to play a more influential and collaborative role and to drive improved business performance.
  1. Phuong Nguyen, Principal and Central Finance Lead, SAP Center of Excellence, Capgemini, @phuongnguyen_1
    2018 will position finance as an important piece in the digital transformation strategy. The triangulation of unified reporting-cum-distributed ledger technology, machine learning, and cloud will tackle complexities of back-end reporting processes and infrastructure scalability and security. Finance will sit snugly with supply chain and procurement initiatives like Integrated business planning (IBP) and robotics, creating a need of a redefined ERP play within the organization.
  1. Rob Ried, Deloitte Consulting LLP, Senior Manager, @Rob_Ried
    Automation everywhere. Automation will blossom from niche solutions to a pervasive solution juggernaut. Maybe you have heard about it? That little automation proof of concept that showed some promise has now proven its mettle. 2018 will be the year of the bot. Digital transformation will emphasize automation as a prime enabler for change. We will see a surge in white-collar automation; organizations big and small will deploy bots and quickly redeploy their human resources. Organizations that embrace automation will take the lead within their industry.
  1. Henner Schliebs, SAP Global Marketing, Head of CFO Marketing, @hschliebs
    CFOs will start managing big-ticket items as part of their finance transformation initiatives. They will start to optimize their working capital to fund sustainable growth initiatives and gain better insights into their corporate spend via connecting their financials to the value chain. This will enable the capture of employee-related costs like salaries, contingent workforce, employee-initiated cost, direct and indirect spend in the supply chain, as well as sales, marketing, and all other costs that affect profitability. The connected finance department will focus on the use of modern automation capabilities such as machine learning, advanced predictions, and connected platforms to continue to feed the need for insights and decision-making support. As the CFOs are leading the strategic aspects of their companies, they will be the natural drivers to tie the strategy to operational guidance to optimize the company’s performance.
  1. Joan Warner, Oxford Economics Group, Thought Leadership Managing Editor and Senior Analyst for Finance, @OxfordEconomics
    This year, CFOs will work more closely than ever with their tech colleagues in the C-suite—as signaled in the Oxford Economics/SAP 2017 research study, How Finance Leadership Pays Off: Six Ways CFOs Stay Ahead of the Pack. The finance mandate and the technology mandate will intersect in three ways: firstly, as CFOs evaluate tech investments to improve enterprise competitiveness in the digital economy; secondly, as cybersecurity is recognized as a grave business risk in every industry sector; and thirdly, as CFOs improve finance-function effectiveness with automation and AI.
  1. David Williams, SAP, VP, Global Product Marketing, Analytics (EPM & GRC) @daveswilliams
    Financial applications are about to get much more intelligent. Whether it be in the form of embedded compliance to reduce risk, automated routine processes to improve efficiency/reduce errors, guided machine discovery with prescriptive actions to make better decisions, or natural language processing to simplify search for answers, in 2018 it gets real. Modern financial apps will have these capabilities woven in, in a way that finance teams can actually use without having to rely on IT.

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

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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.

Creating A State-Of-The-Art Office Of Finance From Scratch

Kirit Patel

Bringing your finance function in-house after years of outsourcing and creating a CFO role from scratch does not need to be a daunting task. If you build a fully digital function, making use of the latest technology tools and processes, you are in for a win.

Take the case of UK-based Electra Private Equity, a British investment trust specializing in private equity and part of the FTSE 250 Index. The company’s high-profile stable of investments includes TGI Fridays, Hotter Shoes, and the Photobox Group. In 2016, Electra was preparing to bring its finance function in-house, having previously handled bookkeeping and reporting through a third-party before a change in company direction. That meant building a new office of finance from scratch – an opportunity for Electra’s finance leaders to create something state-of-the-art.

How Electra changed its modus operandi with cloud ERP deployment

Electra needed a system that could produce private equity (PE)­–style reporting, and would in future consolidate monthly results from all its investments and provide visibility of individual and cumulative monthly performance. With a small team and limited IT resources, management requirements for software and hardware needed to be minimized. Expected changes to future reporting requirements needed to be considered. Electra’s new finance team recognized that future-proofing had to be built into any new system.

“Following a strategy review in 2016, we were looking at a change in the way Electra operated,” says Andrew Grimditch, Electra’s group financial controller. “Our management and corporate structure changed. Previously the company had no direct employees, only a board with most management and administrative functions outsourced. We decided to bring functions like finance in-house, creating a CFO role and as a consequence, requiring our own systems for bookkeeping and reporting. Rather than just default to spreadsheets, we saw an opportunity to create a fully digital function using the latest technology tools and processes. We decided on a centrally controlled environment and began the search for a solution that would make month-end close, reporting, and consolidation simple and straightforward to execute.”

The solution – analysis, consolidation, and reporting automation

Electra’s objective was set to automate consolidation, analysis, and reporting – with the aim of producing a consistent version of the truth that would give the board, shareholders, and business partners complete confidence in the new finance team’s numbers, while minimizing the time and resources required to produce them. Key features were speed of implementation, scalability, and obviously something that could be easily configured for the needs of an investment trust. Following a rigorous procurement process, a list of top vendors was whittled down, and Electra ultimately selected a cloud-based enterprise resource planning (ERP) system to manage core finance processes, and second solution for consolidation and planning.

Given the profile of Electra’s finance team, the company was persuaded to opt for the cloud because of easy web access and always updated software. The Electra team was immediately impressed with the cloud ERP package, as it streamlined month-end processes. The cloud solution, which is architected for unlimited scale and meets the most stringent security standards, simplifies management of essential finance processes for the office of finance without reliance on IT support.

The business planning and consolidation solution delivers planning, budgeting, forecasting, and financial consolidation capabilities in a single application. It easily adjusts plans and forecasts, speeds-up budget and closing cycles, and ensures compliance with financial reporting standards. It also supports decision-making based on what-if analyses and scenario planning.

Once the solution was selected, Electra chose EOH UK to handle implementation. “EOH UK was somewhat unique as it included senior people with backgrounds in both accounting and IT. They spoke our language and understood our needs both practically and technically,” says Grimditch.

While a cloud solution eliminates most of the IT management companies need to assume with an on-premise deployment, the philosophy at EOH is to make clients as self-sufficient as possible and ensure a full transfer of knowledge.

Measurable and transparent business impacts

Both solutions were implemented in four months. Electra’s finance team was able to learn the systems with minimal training and start using them in a matter of weeks. The software is delivering as promised, and Electra is now planning ahead to move from reporting as an investment trust to the additional requirements of reporting as a normal UK corporate.

“Cloud deployment means I have access to systems and information wherever our team members are – an excellent system for a small finance team accounting for potentially global investments,” says Andrew Grimditch. “I can see how our companies are performing whenever I want and build in information about why things are happening. From a group accounting point of view in a business like ours, this is a huge benefit.”

The implementation of both the ERP and consolidation solutions has brought many benefits, from scalability to future requirements to ease of integration with other systems and ability to configure and customize. Additionally, users can learn quickly, meaning accelerated time to value.

By creating one repository for financial data, Electra’s new office of finance now has one reliable version of the truth and complete visibility of investments and performance against targets. Grimditch and his team have now greater confidence in reporting and analysis for decision-making and can deliver clear information to executives, the company’s board, and investment partners.

For more about cloud adoption in finance, read this blog.

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Kirit Patel

About Kirit Patel

Kirit Patel is regional managing director, UK & Europe, at EOH International.
A seasoned specialist with over 20 years’ experience in providing technology solutions that help organizations run faster, better, and smarter, Kirit is responsible for growing the EOH footprint across Europe. Kirit’s experience encompasses solution advisory and implementation services, consulting, project and people management, and sales and marketing. Prior to EOH, he was senior consultant at Comshare and managing director at Rinedata, where he established a track record for delivering improved business processes, continual customer satisfaction, and revenue generation. He is a keen amateur photographer and a long-standing, active contributor to a number of local not-for-profit causes. Kirit holds a masters degree in Computing and Accounting.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


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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

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How Manufacturers Can Kick-Start The Internet Of Things In 2018

Tanja Rueckert

Part 1 of the “Manufacturing Value from IoT” series

IoT is one of the most dynamic and exciting markets I am involved with at SAP. The possibilities are endless, and that is perhaps where the challenges start. I’ll be sharing a series of blogs based on research into knowledge and use of IoT in manufacturing.

Most manufacturing leaders think that the IoT is the next big thing, alongside analytics, machine learning, and artificial intelligence. They see these technologies dramatically impacting their businesses and business in general over the next five years. Researchers see big things ahead as well; they forecast that IoT products and investments will total hundreds of billions – or even trillions – of dollars in coming decades.

They’re all wrong.

The IoT is THE Big Thing right now – if you know where to look.

Nearly a third (31%) of production processes and equipment and non-production processes and equipment (30%) already incorporate smart device/embedded intelligence. Similar percentages of manufacturers have a company strategy implemented or in place to apply IoT technologies to their processes (34%) or to embed IoT technologies into products (32%).

opportunities to leverage IoTSource:Catch Up with IoT Leaders,” SAP, 2017.

The best process opportunities to leverage the IoT include document management (e.g. real-time updates of process information); shipping and warehousing (e.g. tracking incoming and outgoing goods); and assembly and packaging (e.g. production monitoring). More could be done, but figuring out where and how to implement the IoT is an obstacle for many leaders. Some 44 percent of companies have trouble identifying IoT opportunities and benefits for either internal processes or IoT-enabled products.

Why so much difficulty in figuring out where to use the IoT in processes?

  • No two industries use the IoT in the same way. An energy company might leverage asset-management data to reduce costs; an e-commerce manufacturer might focus on metrics for customer fulfillment; a fabricator’s use of IoT technologies may be driven by a need to meet exacting product variances.
  • Even in the same industry, individual firms will apply and profit from the IoT in unique ways. In some plants and processes, management is intent on getting the most out of fully depreciated equipment. Unfortunately, older equipment usually lacks state-of-the-art controls and sensors. The IoT may be in place somewhere within those facilities, but it’s unlikely to touch legacy processes until new machinery arrive. 

Where could your company leverage the IoT today? Think strategically, operationally, and financially to prioritize opportunities:

  • Can senior leadership and plant management use real-time process data to improve daily decision-making and operations planning? Do they have the skills and tools (e.g., business analytics) to leverage IoT data?
  • Which troublesome processes in the plant or front office erode profits? With real-time data pushed out by the IoT, which could be improved?
  • Of the processes that could be improved, which include equipment that can – in the near-term – accommodate embedded intelligence, and then communicate with plant and enterprise networks?

Answer those questions, and you’ve got an instant list of how and where to profit from the IoT – today.

Stay tuned for more information on how IoT is developing and to learn what it takes to be a manufacturing IoT innovator. In the meantime, download the report “Catch Up with IoT Leaders.”

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Tanja Rueckert

About Tanja Rueckert

Tanja Rueckert is President of the Internet of Things and Digital Supply Chain Business Unit at SAP.