Technology As Enabler Of 2016 HR Trends: Personalized Learning And Transparency

Michael Moon

Recently I published an article on some of the major disruptions happening in the workplace and the role that technology has played (and is playing) in enabling or inspiring innovative HR programs. This article serves as an extension (or part 2) to that piece: Technology: The Enabling Force Awakening HR as a Strategic Partner In 2016.

After publishing that post, a healthy conversation ensued on Twitter about whether I was advocating that technology is what will enable HR to become more strategic. While I could see how one might come away with that interpretation, I want to make it clear that I see technology always as an “enabler,” never the answer to a solution or problem.

Let’s take continuous feedback as an example. Continuous feedback is feedback given to an employee by his/her manager (or peers) on their performance on a regular and frequent basis. This feedback is used to provide employee coaching and development continuously rather than only at the end of the year. Now, if a manager has 12 direct reports, one can easily imagine that providing real-time meaningful feedback to each of those reports could become quite difficult and time-consuming without the aid of technology.

The point I was trying to make was that innovations in HR technology have “enabled” these processes to exist that might never have been possible through manual intervention and definitely not with the rigid HR systems so many organizations have been saddled with for far too long.

Here are the remaining two concepts/trends in HR I believe HR technology will have a considerable hand in supporting in 2016: personalized learning and development, and transparency as the new norm.

Personalized learning and development

Personalization is fast becoming a must-have in today’s workplace. No longer can employers afford to roll out cookie-cutter programs to meet the needs of every generation or type of employee. From creating flexible benefits programs that provide employees with choices to career development and learning, personalization is the name of the game.

We’ve all heard about the needs of today’s learners. They want a learning experience that fits their personal needs, learning speed, preferred learning style, and most importantly, their learning pathway – learning personalized for them. But what most people don’t know is that this approach to learning is not new. In fact, noted adult learning theorist Eduard Lindeman laid out five key assumptions about adult learners that may sound very familiar to many of us (excerpted from Lindeman’s 1926 book, The Meaning of Education):

  1. Adults are motivated to learn as the experience needs and interests that learning will satisfy
  2. Adults orientation to learning is life-centered
  3. Experience is the richest source for adults learning
  4. Adults have a deep need to be self-directing
  5. Individual differences among people increase with age – therefore, provision should be made for differences in style, time, place, and pace of learning.

As adults, we have always craved a different style of learning. In fact, learning theories have existed for quite some time now that classify learning into two approaches: pedagogical and andragogical. Pedagogy is the discipline that study and practice of how best to teach. Andragogy, on the other hand, is the method and practice of teaching adult learners. Andragogy works best in practice when learning is adapted to fit the uniqueness of the learners and the learning situation. Somehow modern -day trainers and training departments have either forgotten this, or never been made aware that adults have a different style of learning that requires different approaches.

Learning has moved beyond the classroom, and experience – one of the three components of the 70:20:10 model – should no longer be seen simply as what occurs within the four walls of the traditional workspace. Learning is social and is the result of interactions with others as well as with content. That content may be formally generated by the organization and disseminated to employees, it can be employee-generated and shared through peer networks, or it may be content that an employee interacts with online and off-hours. The point is, we are all in a continuous state of learning, and traditional learning management systems are not yet capable of capturing the multitude of learning experiences that each and every employee encounters on a weekly or even daily basis.

This is where vendors like Degreed have stepped up. Capitalizing on xAPI, Degreed’s platform can capture meaningful information relating to a wide range of learning experiences and behaviors. This type of technology plays an important part in creating a more personalized learning environment, empowering learners to achieve their goals and creating self-awareness of the micro-learning moments that might otherwise go unnoticed (think meta-cognitive).

Transparency as the new norm

We have entered a millennium where workplaces are filled with four generations of workers (five, if you ask Bill Kutik). We live in a global environment where businesses must continually adjust to keep up with the accelerating pace of change that is fueled by technology. Many consider technology one of the primary drivers behind the globalization of economies, and its power to accelerate change of all kinds cannot be ignored. Social, mobile, video, and self-service capabilities provide opportunities for greater visibility into the behavior of individuals or groups, making how work gets done more transparent to the masses.

Goal planning

Openly communicating goals within an organization is a step toward driving efficiencies through information transparency. A benefit of transparent goals and the linkage between them within an organization is to drive collaboration between employees directly, rather than exclusively through direct managers. Another potential benefit is to drive efficiency through reducing redundant work efforts that might not otherwise be known. With greater transparency, individual performance and contributions to the organization become more evident. Transparent goals are critical for an employee to understand how his or her goals and performance relate to those of other employees.

Here are a few vendors that are making goal transparency possible:

  • iDoneThis – productivity software that allows employees to reflect at the end of each day on what they have accomplished. The next morning an email digest is distributed, showing everyone’s accomplishments from the previous day and employees can share thanks and celebrate the achievements, helping create a culture of openness (transparency) and gratitude.
  • Betterworks – an enterprise goal software platform that utilizes OKRs to create and align goals beyond the traditional horizontal approach seen in most MBO and other goal management approaches. This software facilitates the collaboration of goal creation and goal tracking across the enterprise, and encourages open, frequent monitoring and cross-functional alignment of goals.
  • Atiim – (pronounced A-team) – a goal (OKR) and team performance management platform that offers a continuous real-time and closed-loop feedback process to improve alignment and transparency for managers and their teams.

Enterprise social networks (ESNs)

Transparency also means encouraging open communication across the organization and soliciting feedback from employees (and even customers) in making decisions. Being transparent in communications builds trust ‒ an essential component in building a strong culture. But even more importantly, transparency requires trust. Trust is the foundation for building a strong culture—trust in leadership, trust in teams, and trust in individuals.

Being transparent also influences employee support and acceptance of change, and also provides a sense of safety for employees to allow creativity and innovation to be stimulated, accepted, and promoted.

Blogs delivered on enterprise social networks (ESNs) are a natural way for leaders to openly communicate with their followers and are a great forum for leaders to share their thinking around business decisions, as well as a means to build trust.

Platforms like Jive, Tibbr and Facebook at Work, whose aim is to create a connected workplace that is more productive, are prime examples of ESNs that can be used to encourage leaders and employees to share ideas, collaborate on projects, and create opportunities for greater visibility across the enterprise.

Additional resources:

Cross, R., Borgatti, S. P., & Parker, A. (2002). Making invisible work visible: Using social network analysis to support strategic collaboration. California management review, 44(2), 25-46. Chicago

Knowles, M. S., Holton III, E. F., & Swanson, R. A. (2014). The adult learner: The definitive classic in adult education and human resource development. Routledge.

The post Technology as Enabler of 2016 HR Trends: Personalized Learning and Transparency appeared first on TalentCulture.

Photo Credit: loyale99 via Compfight cc

Can Business Be Alive?  


City Of Cambridge Proves ‘Smart City’ Doesn’t Always Mean Glitz And Glamour

Katie Fischer

Whether it’s taking part in Waterloo Region’s Smart City Challenge or being joined by the likes of Buenos Aires, Dubai, and Los Angeles to serve as a United Nations data hub, the City of Cambridge in Ontario has never been shy about its aspirations to become a smart city.

But behind the glitz and glamour often associated with smart city projects and global data initiatives lies a humbler story; one of a city using digital technology to improve access to financial information that serves better-informed decision-making.

The benefits of bringing an enterprise resource planning (ERP) system into the digital age must not go underestimated. Governments especially need to remain proactive and understand that a tidier ship means better service for citizens and a more productive city.

The City of Cambridge recently completed its transition to a next-generation ERP system referred to in-house as cityONE. Our previous solution had become outdated and demanded a level of manual work that seemed at odds with what is possible in a time of automation and app wizardry. We recognized that we were being severely limited in what we could do, and we were at serious risk of being left behind.

The new system came with an overall business process redesign built around giving public servants better access to information so they can make better decisions and cutting out manual work that was weighing them down.

A user experience application allows workers who aren’t hands-on with data and technology to more easily manage budgets, automate tasks such as expense reimbursements, and access financial information by providing them with user-friendly tools and a consumer-grade dashboard.  Staff from all levels of the organization appreciate the app-like user interface, graphical display of financial information, and drill-down to attachments at their fingertips.

Not only is information more visual and easier to access, it’s also available in real-time, so workers can be quick on their feet when making decisions and reacting to the wishes of citizens more efficiently.

The move to cityONE is part of the City of Cambridge’s wider range of digital transformation work, redefining the way we do business in the digital age. By collecting data and using tools to analyze trends, we’re able to make more informed decisions, listen to the feedback of the community, and deliver more effectively on what they want now and in the future. It may not be glamorous, but it’s certainly smart.

Join the City of Cambridge alongside leaders and technologists from cities around the world at the SAP Smart Cities Forum in Toronto on April 23.


Katie Fischer

About Katie Fischer

Katie Fischer is the Manager of Finance for the City of Cambridge in Ontario, Canada.

Transportation Industry: 'Ripe For Change'

Paul Pessutti

A recent S.M.A.C. Talk Technology Podcast looks at the urgencies facing the commercial transportation industry. Hosted by Brian Fanzo and Daniel Newman, the 12-minute audio interviews expert Paul Pessutti, global vice president and general manager of Travel, Transportation and Hospitality Industries at SAP. Pessutti, who spent 25 years with cargo logistics, discusses why the transportation industry is “ripe for change.”

Ocean shipping, rail, and trucking industry must embrace a generational shift

As Pessutti points out, the cargo industry faces disruption from today’s millennial-leaning transportation innovators. Think in terms of what modernized companies are bringing to the table. They offer tech-based transportation coupled with expanding services. For example, unlike many traditional trucking outfits, customers can click on electronic devices and enjoy real-time benefits.

“Companies that are able to not only provide the actual logistic services but value-added services on top of that to create an amazing customer experience,” Pessutti says . “That is what I think is what’s keeping a lot of shipping executives up at night, is not only how do they reduce their costs and maintain those expensive assets, but how do they innovate and provide a better experience to the customer.”

Many long-haul and regional transportation organizations have the competitive technology at their disposal. However, they tend to be hamstrung by an older workforce who are unsteady about embracing multi-level technology.

“I mean, that’s a big problem that we have in the industry, is that we have, in many cases, an aging workforce within these companies,” Pessutti says. “Whether it’s trucking, ocean shipping, the rail business, and they’re used to doing things a certain way. The whole concept of change management and doing things with technology can be a little bit scary for that group.”

Along with a workforce nearing retirement, the trucking industry also has a youth shortfall. Although artificial intelligence-functioning vehicles are on the drawing board, the trucking industry faces massive driver shortages in the United States.

Bob Costello, chief economist for the American Trucking Associations, concluded that the trucking industry could see its driver shortage grow to upwards of 174,000 by 2026 due to growth and attrition.

“This means that even as the shortage numbers fluctuate, it remains a serious concern for our industry, for the supply chain and for the economy at large,” Costello stated in an industry report.

SAP transportation expert Pessutti agrees with the chief economist’s conclusions.

“In addition, they’re having the challenge of attracting younger millennial talent that has the technology skills and know-how to be able to come in and help them innovate and make a change within their organization,” he says. “They’re having a hard time attracting the new talent because they’re not seen as innovators when it comes to technology. So, it’s something that we’re keeping our eye on and advising them to look at and find ways to take advantage of some of these new technologies.”

Bridging the gap between an aging workforce accustomed to traditional methods and engaging in millennial-styled outreach may be the pathway to resolving the growing workforce shortage. Costello concurs and has pointed to ideas such as lifestyle management and other industry modifications to attract a younger workforce.

Beyond making a shift that meets the ideas of tech-savvy drivers, the sector is tasked with maximizing its administrative and customer service technologies.

Blockchain innovation appears promising

When thinking about transportation in a comprehensive sense, it includes the movement of materials, manufacturing, air and sea travel, port arrivals, and warehousing. Trucking simply makes up one of the last legs of an intricate process. At each stage, stakeholders rely on traditional communication, cumbersome documents and sometimes just blind trust. The condition and timeliness of a product’s arrival are too often best guesses. Pessutti believes blockchain offers solutions.

“When you think about an indent shipment from the time an order gets placed to when it gets delivered to a customer, there’s probably 35 to 40 documents that you have to exchange in that process,” Pessutti says. “If we can get to a place where you’re able to look at those documents and actually get visibility and transparency into what’s happening as well as then trust that information, we’re going to do really well with blockchain in this industry.”

And, the SAP expert is far from alone in his assessment that blockchain can help revolutionize the transportation industry. Jillian Farrington argues in her article, “3 Ways Blockchain Technology Can Improve the Logistics Industry,” that it provides these key benefits: transparency, security, and cost-effectiveness. She makes these points.

  • Transparency: “Every time a product is handled, the transaction can be documented. The technology can enable everyone in the process of shipping to experience better visibility and connectivity.”
  • Security: “With blockchain, a copy of the essential shipping data can be stored on a decentralized network on individual nodes, so even if the network is hacked, the data remains safe.”
  • Increased efficiency and reduced costs: “The efficiencies created by this technology will get orders filled and delivered faster. It can record the transfer of raw materials and goods as they move through the supply chain as well as track purchase orders, shipment notifications, and receipts.”

Although blockchain can be a primary mover in terms of leveraging transportation industry data, the SAP expert recognizes the value of bringing a full complement of technological innovations to bear.

“I think what we’re able to do, and what we’ve proven out so far in this industry, is giving a lot of comfort to these shipping companies by connecting and integrating the digital core of what they’re running their business,” Pessutti says. “Whether it’s transportation management or an ERP environment, and then connecting them to these different capabilities around analytics and blockchain, (and) IOT.”

Transportation industry insiders appear to agree that the future of the sector faces a significant technological shift.

Take 12 minutes to get intellectually stimulated about the future of the transportation industry by listening to this S.M.A.C. Talk Technology Podcast featuring SAP expert Paul Pessutti.

Hear the full podcast episode here. Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading Accelerating Digital Transformation in Transportation.


Paul Pessutti

About Paul Pessutti

Paul Pessutti is Senior Vice President and General Manager of the Travel, Transportation, and Hospitality Industry Unit at SAP. Applying over 20 years of experience in this area, Paul is responsible for establishing and maintaining key customer relationships, ensuring customer success, enhancing the solution portfolio, growing the partner ecosystem, and acting as the brand ambassador worldwide. The industry consists of nine industry segments including airlines, airports, passenger transport, hospitality, travel service providers, freight forwarding and third parties, rail cargo, liner shipping, and trucking.

Hack the CIO

By Thomas Saueressig, Timo Elliott, Sam Yen, and Bennett Voyles

For nerds, the weeks right before finals are a Cinderella moment. Suddenly they’re stars. Pocket protectors are fashionable; people find their jokes a whole lot funnier; Dungeons & Dragons sounds cool.

Many CIOs are enjoying this kind of moment now, as companies everywhere face the business equivalent of a final exam for a vital class they have managed to mostly avoid so far: digital transformation.

But as always, there is a limit to nerdy magic. No matter how helpful CIOs try to be, their classmates still won’t pass if they don’t learn the material. With IT increasingly central to every business—from the customer experience to the offering to the business model itself—we all need to start thinking like CIOs.

Pass the digital transformation exam, and you probably have a bright future ahead. A recent SAP-Oxford Economics study of 3,100 organizations in a variety of industries across 17 countries found that the companies that have taken the lead in digital transformation earn higher profits and revenues and have more competitive differentiation than their peers. They also expect 23% more revenue growth from their digital initiatives over the next two years—an estimate 2.5 to 4 times larger than the average company’s.

But the market is grading on a steep curve: this same SAP-Oxford study found that only 3% have completed some degree of digital transformation across their organization. Other surveys also suggest that most companies won’t be graduating anytime soon: in one recent survey of 450 heads of digital transformation for enterprises in the United States, United Kingdom, France, and Germany by technology company Couchbase, 90% agreed that most digital projects fail to meet expectations and deliver only incremental improvements. Worse: over half (54%) believe that organizations that don’t succeed with their transformation project will fail or be absorbed by a savvier competitor within four years.

Companies that are making the grade understand that unlike earlier technical advances, digital transformation doesn’t just support the business, it’s the future of the business. That’s why 60% of digital leading companies have entrusted the leadership of their transformation to their CIO, and that’s why experts say businesspeople must do more than have a vague understanding of the technology. They must also master a way of thinking and looking at business challenges that is unfamiliar to most people outside the IT department.

In other words, if you don’t think like a CIO yet, now is a very good time to learn.

However, given that you probably don’t have a spare 15 years to learn what your CIO knows, we asked the experts what makes CIO thinking distinctive. Here are the top eight mind hacks.

1. Think in Systems

A lot of businesspeople are used to seeing their organization as a series of loosely joined silos. But in the world of digital business, everything is part of a larger system.

CIOs have known for a long time that smart processes win. Whether they were installing enterprise resource planning systems or working with the business to imagine the customer’s journey, they always had to think in holistic ways that crossed traditional departmental, functional, and operational boundaries.

Unlike other business leaders, CIOs spend their careers looking across systems. Why did our supply chain go down? How can we support this new business initiative beyond a single department or function? Now supported by end-to-end process methodologies such as design thinking, good CIOs have developed a way of looking at the company that can lead to radical simplifications that can reduce cost and improve performance at the same time.

They are also used to thinking beyond temporal boundaries. “This idea that the power of technology doubles every two years means that as you’re planning ahead you can’t think in terms of a linear process, you have to think in terms of huge jumps,” says Jay Ferro, CIO of TransPerfect, a New York–based global translation firm.

No wonder the SAP-Oxford transformation study found that one of the values transformational leaders shared was a tendency to look beyond silos and view the digital transformation as a company-wide initiative.

This will come in handy because in digital transformation, not only do business processes evolve but the company’s entire value proposition changes, says Jeanne Ross, principal research scientist at the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT). “It either already has or it’s going to, because digital technologies make things possible that weren’t possible before,” she explains.

2. Work in Diverse Teams

When it comes to large projects, CIOs have always needed input from a diverse collection of businesspeople to be successful. The best have developed ways to convince and cajole reluctant participants to come to the table. They seek out technology enthusiasts in the business and those who are respected by their peers to help build passion and commitment among the halfhearted.

Digital transformation amps up the urgency for building diverse teams even further. “A small, focused group simply won’t have the same breadth of perspective as a team that includes a salesperson and a service person and a development person, as well as an IT person,” says Ross.

At Lenovo, the global technology giant, many of these cross-functional teams become so used to working together that it’s hard to tell where each member originally belonged: “You can’t tell who is business or IT; you can’t tell who is product, IT, or design,” says the company’s CIO, Arthur Hu.

One interesting corollary of this trend toward broader teamwork is that talent is a priority among digital leaders: they spend more on training their employees and partners than ordinary companies, as well as on hiring the people they need, according to the SAP-Oxford Economics survey. They’re also already being rewarded for their faith in their teams: 71% of leaders say that their successful digital transformation has made it easier for them to attract and retain talent, and 64% say that their employees are now more engaged than they were before the transformation.

3. Become a Consultant

Good CIOs have long needed to be internal consultants to the business. Ever since technology moved out of the glasshouse and onto employees’ desks, CIOs have not only needed a deep understanding of the goals of a given project but also to make sure that the project didn’t stray from those goals, even after the businesspeople who had ordered the project went back to their day jobs. “Businesspeople didn’t really need to get into the details of what IT was really doing,” recalls Ferro. “They just had a set of demands and said, ‘Hey, IT, go do that.’”

Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants.

But that was then. Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants. “If you’re building a house, you don’t just disappear for six months and come back and go, ‘Oh, it looks pretty good,’” says Ferro. “You’re on that work site constantly and all of a sudden you’re looking at something, going, ‘Well, that looked really good on the blueprint, not sure it makes sense in reality. Let’s move that over six feet.’ Or, ‘I don’t know if I like that anymore.’ It’s really not much different in application development or for IT or technical projects, where on paper it looked really good and three weeks in, in that second sprint, you’re going, ‘Oh, now that I look at it, that’s really stupid.’”

4. Learn Horizontal Leadership

CIOs have always needed the ability to educate and influence other leaders that they don’t directly control. For major IT projects to be successful, they need other leaders to contribute budget, time, and resources from multiple areas of the business.

It’s a kind of horizontal leadership that will become critical for businesspeople to acquire in digital transformation. “The leadership role becomes one much more of coaching others across the organization—encouraging people to be creative, making sure everybody knows how to use data well,” Ross says.

In this team-based environment, having all the answers becomes less important. “It used to be that the best business executives and leaders had the best answers. Today that is no longer the case,” observes Gary Cokins, a technology consultant who focuses on analytics-based performance management. “Increasingly, it’s the executives and leaders who ask the best questions. There is too much volatility and uncertainty for them to rely on their intuition or past experiences.”

Many experts expect this trend to continue as the confluence of automation and data keeps chipping away at the organizational pyramid. “Hierarchical, command-and-control leadership will become obsolete,” says Edward Hess, professor of business administration and Batten executive-in-residence at the Darden School of Business at the University of Virginia. “Flatter, distributive leadership via teams will become the dominant structure.”

5. Understand Process Design

When business processes were simpler, IT could analyze the process and improve it without input from the business. But today many processes are triggered on the fly by the customer, making a seamless customer experience more difficult to build without the benefit of a larger, multifunctional team. In a highly digitalized organization like Amazon, which releases thousands of new software programs each year, IT can no longer do it all.

While businesspeople aren’t expected to start coding, their involvement in process design is crucial. One of the techniques that many organizations have adopted to help IT and businesspeople visualize business processes together is design thinking (for more on design thinking techniques, see “A Cult of Creation“).

Customers aren’t the only ones who benefit from better processes. Among the 100 companies the SAP-Oxford Economics researchers have identified as digital leaders, two-thirds say that they are making their employees’ lives easier by eliminating process roadblocks that interfere with their ability to do their jobs. Ninety percent of leaders surveyed expect to see value from these projects in the next two years alone.

6. Learn to Keep Learning

The ability to learn and keep learning has been a part of IT from the start. Since the first mainframes in the 1950s, technologists have understood that they need to keep reinventing themselves and their skills to adapt to the changes around them.

Now that’s starting to become part of other job descriptions too. Many companies are investing in teaching their employees new digital skills. One South American auto products company, for example, has created a custom-education institute that trained 20,000 employees and partner-employees in 2016. In addition to training current staff, many leading digital companies are also hiring new employees and creating new roles, such as a chief robotics officer, to support their digital transformation efforts.

Nicolas van Zeebroeck, professor of information systems and digital business innovation at the Solvay Brussels School of Economics and Management at the Free University of Brussels, says that he expects the ability to learn quickly will remain crucial. “If I had to think of one critical skill,” he explains, “I would have to say it’s the ability to learn and keep learning—the ability to challenge the status quo and question what you take for granted.”

7. Fail Smarter

Traditionally, CIOs tended to be good at thinking through tests that would allow the company to experiment with new technology without risking the entire network.

This is another unfamiliar skill that smart managers are trying to pick up. “There’s a lot of trial and error in the best companies right now,” notes MIT’s Ross. But there’s a catch, she adds. “Most companies aren’t designed for trial and error—they’re trying to avoid an error,” she says.

To learn how to do it better, take your lead from IT, where many people have already learned to work in small, innovative teams that use agile development principles, advises Ross.

For example, business managers must learn how to think in terms of a minimum viable product: build a simple version of what you have in mind, test it, and if it works start building. You don’t build the whole thing at once anymore.… It’s really important to build things incrementally,” Ross says.

Flexibility and the ability to capitalize on accidental discoveries during experimentation are more important than having a concrete project plan, says Ross. At Spotify, the music service, and CarMax, the used-car retailer, change is driven not from the center but from small teams that have developed something new. “The thing you have to get comfortable with is not having the formalized plan that we would have traditionally relied on, because as soon as you insist on that, you limit your ability to keep learning,” Ross warns.

8. Understand the True Cost—and Speed—of Data

Gut instincts have never had much to do with being a CIO; now they should have less to do with being an ordinary manager as well, as data becomes more important.

As part of that calculation, businesspeople must have the ability to analyze the value of the data that they seek. “You’ll need to apply a pinch of knowledge salt to your data,” advises Solvay’s van Zeebroeck. “What really matters is the ability not just to tap into data but to see what is behind the data. Is it a fair representation? Is it impartial?”

Increasingly, businesspeople will need to do their analysis in real time, just as CIOs have always had to manage live systems and processes. Moving toward real-time reports and away from paper-based decisions increases accuracy and effectiveness—and leaves less time for long meetings and PowerPoint presentations (let us all rejoice).

Not Every CIO Is Ready

Of course, not all CIOs are ready for these changes. Just as high school has a lot of false positives—genius nerds who turn out to be merely nearsighted—so there are many CIOs who aren’t good role models for transformation.

Success as a CIO these days requires more than delivering near-perfect uptime, says Lenovo’s Hu. You need to be able to understand the business as well. Some CIOs simply don’t have all the business skills that are needed to succeed in the transformation. Others lack the internal clout: a 2016 KPMG study found that only 34% of CIOs report directly to the CEO.

This lack of a strategic perspective is holding back digital transformation at many organizations. They approach digital transformation as a cool, one-off project: we’re going to put this new mobile app in place and we’re done. But that’s not a systematic approach; it’s an island of innovation that doesn’t join up with the other islands of innovation. In the longer term, this kind of development creates more problems than it fixes.

Such organizations are not building in the capacity for change; they’re trying to get away with just doing it once rather than thinking about how they’re going to use digitalization as a means to constantly experiment and become a better company over the long term.

As a result, in some companies, the most interesting tech developments are happening despite IT, not because of it. “There’s an alarming digital divide within many companies. Marketers are developing nimble software to give customers an engaging, personalized experience, while IT departments remain focused on the legacy infrastructure. The front and back ends aren’t working together, resulting in appealing web sites and apps that don’t quite deliver,” writes George Colony, founder, chairman, and CEO of Forrester Research, in the MIT Sloan Management Review.

Thanks to cloud computing and easier development tools, many departments are developing on their own, without IT’s support. These days, anybody with a credit card can do it.

Traditionally, IT departments looked askance at these kinds of do-it-yourself shadow IT programs, but that’s changing. Ferro, for one, says that it’s better to look at those teams not as rogue groups but as people who are trying to help. “It’s less about ‘Hey, something’s escaped,’ and more about ‘No, we just actually grew our capacity and grew our ability to innovate,’” he explains.

“I don’t like the term ‘shadow IT,’” agrees Lenovo’s Hu. “I think it’s an artifact of a very traditional CIO team. If you think of it as shadow IT, you’re out of step with reality,” he says.

The reality today is that a company needs both a strong IT department and strong digital capacities outside its IT department. If the relationship is good, the CIO and IT become valuable allies in helping businesspeople add digital capabilities without disrupting or duplicating existing IT infrastructure.

If a company already has strong digital capacities, it should be able to move forward quickly, according to Ross. But many companies are still playing catch-up and aren’t even ready to begin transforming, as the SAP-Oxford Economics survey shows.

For enterprises where business and IT are unable to get their collective act together, Ross predicts that the next few years will be rough. “I think these companies ought to panic,” she says. D!


About the Authors

Thomas Saueressig is Chief Information Officer at SAP.

Timo Elliott is an Innovation Evangelist at SAP.

Sam Yen is Chief Design Officer at SAP and Managing Director of SAP Labs.

Bennett Voyles is a Berlin-based business writer.

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

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Survey: Four Ways Machine Learning Will Disrupt Your Business

Dan Wellers and Dirk Jendroska

We are entering the era of the machine learning enterprise, in which this subset of artificial intelligence (AI) capabilities will revolutionize operating models, shake up staffing methods, upend business models, and potentially alter the nature of competition itself. The adoption of machine learning capabilities will be limited only by an organization’s ability to change – but not every company will be willing or able to make such a radical shift.

Very soon, the difference between the haves and the have-nots of machine learning will become clear. “The disruption over the next three to five years will be massive,” says Cliff Justice, principal in KPMG’s Innovation and Enterprise Solutions team. Companies hanging onto their legacy processes will struggle to compete with machine learning enterprises able to compete with a fraction of the resources and entirely new value propositions.

For those seeking to be on the right side of the disruption, a new survey, conducted by SAP and the Economist Intelligence Unit (EIU), offers a closer look at organizations we’ve identified as the Fast Learners of machine learning: those that are already seeing benefits from their implementations.

Machine learning is unlike traditional programmed software. Machine learning software actually gets better – autonomously and continuously – at executing tasks and business processes. This creates opportunities for deeper insight, non-linear growth, and levels of innovation previously unseen.

Given that, it’s not surprising that machine learning has evolved from hype to have-to-have for the enterprise in seemingly record time. According to the SAP/EIU survey, more than two-thirds of respondents (68%) are already experimenting with it. What’s more, many of these organizations are seeing significantly improved performance across the breadth of their operations as a result, and some are aiming to remake their businesses on the back of these singular, new capabilities.

So, what makes machine learning so disruptive? Based on our analysis of the survey data and our own research, we see four primary reasons:

1. It’s probabilistic, not programmed

Machine learning uses sophisticated algorithms to enable computers to “learn” from large amounts of data and take action based on data analysis rather than being explicitly programmed to do something. Put simply, the machine can learn from experience; coded software does not. “It operates more like a human does in terms of how it formulates its conclusions,” says Justice.

That means that machine learning will provide more than just a one-time improvement in process and productivity; those improvements will continue over time, remaking business processes and potentially creating new business models along the way.

2. It creates exponential efficiency

When companies integrate machine learning into business processes, they not only increase efficiency, they are able to scale up without a corresponding increase in overhead. If you get 5,000 loan applications one month and 20,000 the next month, it’s not a problem, says Sudir Jha, head of product management and strategy for Infosys; the machines can handle it.

3. It frees up capital – financial and human

Because machine learning can be used to automate any repetitive task, it enables companies to redeploy resources to areas that make the organization more competitive, says Justice. It also frees up the employees within an organization to perform higher-value, more rewarding work. That leads to reduced turnover and higher employee satisfaction. And studies show that happier employees lead to higher customer satisfaction and better business results.

4. It creates new opportunities

AI and machine learning can offer richer insight, deeper knowledge, and predictions that would not be possible otherwise. Machine learning can enable not only new processes, but entirely new business models or value propositions for customers – “opportunities that would not be possible with just human intelligence,” says Justice. “AI impacts the business model in a much more disruptive way than cloud or any other disruption we’ve seen in our lifetimes.”

Machine learning systems alone, however, will not transform the enterprise. The singular opportunities enabled by these capabilities will only occur for companies that dedicate themselves to making machine learning part of a larger digital transformation strategy. The results of the SAP/EIU survey explain the makeup of the evolving machine learning enterprise. We’ve identified key traits important to the success of these machine-learning leaders that can serve as a template for others as well as an overview of the outcomes they’re already seeing from their efforts.

Learn more and download the full study here.  

 


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.

Dirk Jendroska

About Dirk Jendroska

Dr. Dirk Jendroska is Head of Strategy and Operations Machine Learning at SAP. He supports the vision of SAP Leonardo Machine Learning to enable the intelligent enterprise by making enterprise applications intelligent. He leads a team working on machine learning strategy, marketing and communications.