How The Biggest Trends Of 2015 Have Impacted HR And Recruitment

Meghan M. Biro

It’s safe to say that 2015 truly became “the year of digital technology.” Yes, we’ve seen a rapid evolution in technology over the last decade or so, but 2015 was definitely the year where those advancements made a huge impact on the workforce, especially when it comes to HR and recruitment.

According to the latest Pew Research Center analysis of U.S. Census Bureau data, the millennial workforce (adults ages 18 to 34) is close to 54 million strong and rising, surpassing the boomers in 2014, and this year toppling Gen X as the biggest cohort in our modern labor force. This unique—and massive—generation and the influence they wield is something that can’t be ignored, and had a massive impact on how businesses adjusted their strategies and employment practices in 2015.

Of course, technology as a whole has crept into every part of our daily lives. Mobile devices, wearables, Everything as a Service (EaaS), the Internet of Things—no matter where we turn or what we do, technology plays a role. It’s only natural of course, that technology has had—and will continue to have—an impact on the workforce and, by extension, HR and recruitment. Let’s take a look at the changes we saw in 2015, and what we can expect for the future.

Baby boomers heading out, millennials stepping in

Once the backbone of the nation’s workforce at about 66 million employees, the youngest Boomer today is 51 years old, while the oldest are approaching age 70. With more Boomers retiring every year, the size of this particular workforce will continue to shrink. Millennials’ ranks have swelled to fill the gap, with Gen Z (those born between 1995 and 2010), soon entering the workforce as well. As Millennials and Gen Z become the major players in today’s working society, businesses of all sizes are finding it necessary to modify many aspects of their HR and recruitment practices to adapt and adjust. A recent article shared some interesting stats, on Millennials in particular, and how they see their work worlds:

  • 64 percent of this group say it’s a priority for them to make the world a better place.
  • The definition of “boss” has changed. In fact, 72 percent of Millennials would like to be their own boss. But if they do have to work for a boss, 79 percent prefer that boss to act more as a coach or mentor.
  • 88 percent would choose a collaborative work-culture rather than a one based on competition.
  • 74 percent want flexible work schedules—including the option to work from home.
  • And scratch the concept of “work-life balance.” As technology has allowed work and life to blend seamlessly these days, today’s up-and-comers, a full 88 percent, expect “work-life integration” to be a natural part of their employment experience.

These represent some big changes in the world of work, and the companies who understand, embrace this new mindset, and adapt accordingly, will be well positioned to not only attract, but also retain, this new workforce demographic.

Social media’s impact on HR and recruitment

The entire recruitment marketing game has changed. Listing a position on Monster.com, Craigslist, or some other online job search site doesn’t cut it anymore. Instead, social media has become an outlet for nearly everything HR and recruitment related: Sourcing new talent, promoting your company and its culture, sharing job opportunities, and also keeping an eye on what competitors are up to. Nearly 80 percent of job seekers now use social media when sourcing opportunities. And those younger generations? Almost 90 percent of them see social job searching as the new normal. Social media can also help small- to medium-sized businesses compete with larger, enterprise-level peers, allowing them to reach the same large pools of potential candidates, speed up the recruitment process, and reduce overall recruitment costs.

Millennials also have a completely different idea of what a career means, and understanding what they want directly affects our ability to retain them as employees. Millennials are talented and confident and, as the stats above clearly demonstrate, they are highly collaborative and value relationships—even with their managers. As a natural progression, social media, by its very nature, is about relationships. Being active online and using social for your HR and recruitment efforts helps build relationships with potential candidates. This helps not only attract potential candidates, both active and passive, but can also facilitate the hiring process as well.

The benefits for the company who aces social media recruitment are myriad: Increased candidate diversity, higher employee retention, higher candidate volume and, because you’ve already been transparent online about your company and what it is you have to offer, and you’ve been actively building social relationships with potential candidates, it can also result in a lower cost per hire. All in all, a win all the way around.

Honesty is the biggest and best policy

Honesty, or what many call transparency, has become tremendously important to the workforce. Employees are becoming less tolerant of companies run in secrecy and policies made behind closed doors. A great corporate culture has become as important as good wages. In many instances, culture trumps compensation—and this doesn’t seem likely to change. Millennials in particular want to feel like a part of the company culture; it motivates them to do good work. But to feel like part of the team, they want to know about their workplace, and again, they’re not afraid to ask.

Millennials know they can simply take their talent elsewhere, and they will if they feel unfulfilled or deceived by management. A survey that spanned 20 countries found that 29 percent of Millennials feel that it would be easy to find another job if they weren’t happy—and that same number feel they don’t understand how their work impacts the company they work for. That’s a wake-up call for employers; staff members who have no clue why what they do what they do results in one thing: Poor performance.

Employees need clear goals set out for them, both short and long term, and they need to know the direct path they must take to achieve those goals. If your company is still holding its strategic cards close to the vest instead of being open and honest about your team’s future, consider making changes.

Learn from companies on the cutting edge of HR trends

I mentioned above how being active on social media can help you keep a close eye on your competition, especially when it comes to HR and recruitment. Watch for the true innovators, and learn from what they are doing when it comes to highlighting their company culture, benefits, and perks.

Zappos is a perfect example of a company always pushing the envelope, with a new twist on recruiting strategy. Recently, Zappos ditched posting jobs on their career site in favor of corporate transparency and building long-term relationships. When you land on their main page, you are introduced to Zappos team members. You can then choose a team that is most aligned with your personal skill set, and upload your resume through LinkedIn or Facebook (hello social media!) before being asked a few casual and engaging questions.

Southwest Airlines (a company that receives more applicants per position than Harvard) uses something called “scenario-simulation” to separate the wheat from the chaff. These exercises use problem solving, creative thinking, and collaboration skills similar to what may later be required on the job and while in-flight.

At Whole Foods, after completing their probationary periods, candidates’ coworkers vote to determine whether they should be hired permanently. That might sound slightly “Lord of the Flies-esque,” but if you’re looking to build a solid “fit-based” culture when it comes to hiring, who better to be the judge than a candidate’s fellow team members? Definitely worth considering.

Use company culture as a perk

Ok, so you’ve adjusted your HR and recruitment processes for 2016 or at least have some things to think about and experiment with. You’ve now got a heavy focus on social media and transparency. You use Facebook, LinkedIn, and Twitter to complement your career site, which, of course, has a comprehensive list of benefits and corporate policies, as well as an honest depiction of your company’s core values. You’ve created a seamless digital trail of access and information for potential hires looking to peek behind the curtains of your company.

But does it work? The answer is a resounding yes. In fact, Zappos’ “digital and technology-focused” hiring strategies, which incorporates everything mentioned here and much more, has landed the company on Fortune Magazine’s prestigious 100 Best Companies to Work For list. Their HR and recruitment strategies accurately measure exactly what Zappos hires for—50 percent talent and 50 percent ability to mesh with company culture.

In the information and technology age, it’s all about, well…information and technology. Workplace demographics have changed dramatically over the last decade, and will continue to change at an even more rapid rate during the next decade. Younger, more flexible thinking is required for every business to succeed in these new tech and digital driven waters, and that all starts on the ground floor, with hiring.

You don’t have to be a Zappos or Whole Foods, but you do have to keep your eye on changes that are happening in HR and recruitment, and make adjustments to your view on the entire recruitment, hiring, and retention processes. The future of the workplace is one that is culture-driven and thrives off of the honesty and happiness of its employees. I think that’s a good thing.

What do you think? Have you incorporated some of these strategies into your HR and recruitment processes? What have you discovered that you didn’t expect? What challenges did you face along the way? What do you see as the biggest hurdles to companies moving forward? I’d love to hear your thoughts.

For more insight on how technology continues to influence HR, see 2016 HR Trends: Personalized Learning And Transparency.

The post How the Biggest Trends of 2015 Have Impacted HR and Recruitment appeared first on TalentCulture.

Image : StockSnap.io

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About Meghan M. Biro

Meghan Biro is talent management and HR tech brand strategist, analyst, digital catalyst, author and speaker. I am the founder and CEO of TalentCulture and host of the #WorkTrends live podcast and Twitter Chat. Over my career, I have worked with early-stage ventures and global brands like Microsoft, IBM and Google, helping them recruit and empower stellar talent. I have been a guest on numerous radio shows and online forums, and has been a featured speaker at global conferences. I am the co-author of The Character-Based Leader: Instigating a Revolution of Leadership One Person at a Time, and a regular contributor at Forbes, Huffington Post, Entrepreneur and several other media outlets. I also serve on advisory boards for leading HR and technology brands.

Saadia Zahidi: Advancing Gender Equality

Jane Lu

Saadia Zahidi, head of education, gender and work at the World Economic Forum, joins Michelle King, a leader in UN women’s gender innovation work, to discuss the unique skills women can contribute to the changing world of work, and offer insight on how leaders can help close the global gender gap.

According to “The Global Gender Gap Report 2017“, between 2016 and 2017, the average gender gap increased from 31.7% to 32% worldwide: The report examines the gap between men and women in four fundamental categories (subindexes): economic participation and opportunity, educational attainment, health and survival, and political empowerment. The gaps between men and women on economic participation and political empowerment faces a second year of reversed progress in 2017, led by the world’s largest economies—China, India, and the United States. Meanwhile, France, Canada, and the Nordic countries represent “bright spots” for gender equality, offering targeted policies and more opportunities for women in the workforce.

Zahidi points out the need for gender parity in the labor force to prepare for an increasingly innovation-driven economic future. While women have long been a largely untapped resource in STEM fields, this could soon change: Over the past few decades, women outnumber men in college enrollment.

How can leaders help close the gender gap?

Zahidi believes “out-of-the-box” thinking will become increasingly important in the future and that diversity is critical for innovation. She cites three trends that will impact gender parity in the workplace:

  • The number of STEM positions in engineering fields, which tend to have a smaller pipeline of women, will increase. This means a widening gender gap in high-growth, high-pay jobs.
  • The next wave of digital disruption will greatly reduce the number of service and administrative positions, which have historically attracted more female workers.
  • While more women are employed in education and healthcare professions, they remain underrepresented in leadership roles.

These trends could become opportunities to “hardwire” gender parity into the future of work. Businesses need to start thinking differently when they look for talent to fill emerging roles. To address stereotypes and ensure a diverse pool of candidates, for example, companies could partner with schools and training programs. This would help broaden talent pipelines and encourage more females to seek careers in STEM fields.

To help advance gender equality in the workplace, Zahidi recommends that business leaders aim for three “levels:”

  • Commit to gender equality goals, because the tone for pursuing change is set by leaders.
  • Embed diversity initiatives into your organization’s hiring practices and workplace culture. Conducting a baseline analysis can help determine which issues your organization should tackle. One aspect of embedding is ensuring a level playing field for women and men—for example, offering the same opportunities for promotion and career advancement.
  • Scale your gender equality advancement strategies to extend beyond your own workforce, through participation in CSR initiatives and support of young entrepreneurs.

Honing your “human skills”

“A lot of traditional thinking around the fourth industrial revolution would say that if there’s a lot more technology embedded in what we do, we all need to be learning a lot more about technology,” Zahidi says. While adoption of digital tools is certainly increasing, she does not believe that means everyone should become a coder: “We did a survey…on the future of jobs…skills with greater premiums are human skills.”

Emphasizing the importance of diversity in today’s world, Zahidi recommends developing both digital and human skills, such as creativity, collaboration, and critical thinking, for anyone looking to get ahead of the curve. For women, she adds, offering fresh, creative ideas with confidence is key to building a stronger presence in STEM fields.

As workplaces become more diverse. companies must implement solutions that can adapt to change and that harness the value women bring to the workplace.

Listen to Saadia Zahidi’s interview on the SHE Innovates podcast.

SHE Innovates is a podcast that shares the stories, challenges, and triumphs of women in innovation, technology, and entrepreneurship. Listen to all our podcasts on PodBean.

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Jane Lu

About Jane Lu

Jane is a writer and marketing intern at SAP. She is pursuing a Bachelor of Arts degree majoring in English at the University of Waterloo. While Jane is currently studying in Waterloo, she is originally from Toronto.

How Left-Handed People Hold Phones, And Why It Matters To Your Business

Susan Galer

Being a left-handed person, I immediately understood the point Anka Wittenberg, chief diversity officer at SAP, was making about diversity during an intriguing breakout session at the recent SAP Ariba Live event. She told the story of a company (not hers) that asked people to record short videos and upload them online as part of a major branding investment. Fifteen percent of the videos were upside down because the project owners neglected to consider how left-handed people hold their mobile phones.

“We need to reflect the diversity of our customers and suppliers in order to truly understand their needs,” said Wittenberg. You need an inclusive cultural awareness in everything you do to drive business in a sustainable way.”

Top five global leadership qualities

I was among the many people applauding heartily during the session that was part of the event’s Diversity and Leadership Forum track.  The “Leadership of the Future in Procurement – Get Ready!” panel discussion was led by Gustavo Amorim, global marketing vice president at SAP Ariba. He played a short video featuring leadership coach Marshall Goldsmith, who shared the five top qualities of global leaders of the future: global thinking, cross-cultural appreciation, technological savvy, building alliances and partnerships, and shared leadership. While traits like vision and integrity are mainstays for leaders, these five qualities reflect what it takes to stand out in a significantly changed business world. The workplace is increasingly diverse, technology underpins just about everything, collaboration inside and outside corporate walls is paramount to good business, and leaders are managing knowledge workers who know more than they do.

A symbiotic relationship between buyers and sellers

A 34-year veteran in supplier diversity, Reginald Williams, consultant of supplier diversity at procurement resources, saw cross-cultural appreciation as both problem and challenge ‒ and a significant business advantage.

“There is no better way to expand your customer base than to do business with them,” said Williams. “Supplier diversity is a demonstrable way to reach out and do business with those who provide companies with revenues. We must become an extension of our customers that have a broad, diverse culture base. Our responsibility is to support the customers of our customers with leadership that provides tools, resources, and education to do this.”

Inclusive leadership multiples innovation sixfold

Wittenberg said that developing an inclusive leadership culture at SAP has been imperative for growth in an organization with over 320,000 customers in more than 150 countries.

“It’s everyone’s responsibility to be leaders by listening, asking and learning,” she said. “Our research has found that companies with inclusive leadership are six times likelier to innovate, able to cope with change and to be agile. Leaders need confidence in themselves and to be curious about the future. We have training available for our nearly 90,000 employees to prepare them for an environment with lots of change.”

Collaboration equals shared ownership

Williams called for the development of an internal advisory council including people from every business unit fostering collaborative engagement.

“You can move the needle with continuous feedback and continuous participation being driven as a shared process,” he said. “There’s no more top-down leadership when people take ownership in what they’re doing. Collaboration results in shared ownership, commitment and results. The problem with diversity is that white guys think it’s got nothing to do with me. You must incorporate everyone into the solution driving the change.”

He saw supplier diversity as two-pronged with diverse suppliers on one side, and the application of standards of excellence for vendors on the other. The key to inclusion is that standards of excellence represent everyone. “We have a woman-owned supplier who returned $1.2 million in savings. She operates one of largest minority companies in the IT staffing industry. But if we hadn’t made sure she was in the pool, we wouldn’t have had that kind of diversity.”

Tech drives diversity

Leaders have a tremendous responsibility to make sure their companies are using technology to meet corporate diversity and inclusion commitments, and procurement is one way to do that.

“You can make a conscious decision on where you buy supplies and who you have in your supply chain. I believe technology is the catalyst for change, and to drive this change in an exponential way leaders need an understanding of technology,” said Wittenberg.

This blog was originally published on Medium: SAP Innovation Spotlight.

Follow me on TwitterSAP Business Trends, or Facebook. Read all of my Forbes articles here.

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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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Cloud Computing: Separating Myth From Reality

Misa Rawlins and Krishnakant Dave

Across industries, many enterprise leaders believe and understand that cloud computing is here to stay. Globally, public cloud services market revenue is projected to reach US$411 billion by 2020, compared with $260 billion in 2017, according to research firm Gartner, Inc. Cloud technology in all its forms—software, platform, or infrastructure as a service—is rapidly becoming essential to the needs of business today. With cloud computing, organizations can simplify IT, save costs, scale rapidly, drive standardization and user adoption, and start getting ahead of tomorrow’s needs when it comes to customer engagement, the supply chain, the workforce, a simplified finance function, and more.

Despite the short- and long-term advantages, some executives remain uncertain about the next steps or have lingering questions about the benefits of moving to the cloud. For many leaders, separating the cloud myths from the facts can prove daunting. Start here, with these insights that can help you bust big myths about the cloud and start moving confidently toward a cloud-enabled transformation of your organization.

Myth No. 1: Moving to the cloud is too costly. “Costly” is a relative term. The cloud can be costly – but costs should be weighed against benefit and return once requirements and migration plans are in place. Rapidly evolving business demands, for example, can dramatically alter cloud-related requirements. Meanwhile, new technologies are dramatically redefining the art of the possible with the cloud. Because migrating to the cloud is not a true “plug-and-play” proposition, and many enterprise leaders underestimate what a migration or implementation involves, some organizations can be surprised by the costs of a cloud transformation. Without a clear understanding of the potential benefits—without a clear business case for moving to the cloud—the focus on costs can overshadow the return on investment. Knowing the value that cloud solutions can bring—not just the costs—can help manage expectations.

Myth No. 2: The benefits of the cloud aren’t substantial enough. As vendors adopt a “cloud-first” stance for many solutions and product updates, organizations that move to the cloud may have a competitive advantage—no matter the size of the enterprise. Cloud solutions continue to offer abundant and increasing functionality. And with the help of an end-to-end solution provider, you can configure cloud solutions to the specific needs of your industry and your business. For larger organizations, rapidly deployable cloud solutions can help support growth or the unique needs of certain business units, such as new acquisitions or foreign subsidiaries, for example. For smaller organizations, the cloud can help you position your organization to tap new opportunities and tame growth challenges.

Myth No. 3: Cloud is too risky. All digital technologies and all business models come with inherent risk. In a hyperconnected world, no system is immune from cyber attacks, insider threats, data leakage, or related risks. No transformation project is a guaranteed success. Market changes, new competition, regulatory issues, and other factors can require you to change your cloud strategy overnight.

Because the risks are real, take advantage of resources and capabilities that can help reduce risk and ensure that your technology investments align tightly with clear business objectives. The maturity of the software goes a long way toward mitigating risk with cloud projects. You can add an extra layer of capabilities such as managed cloud services to provide active, hands-on oversight of cloud applications and infrastructure—helping you to avoid service interruptions and address issues proactively.

Myth No. 4: Cloud computing is still an immature technology. Like other evolving technologies, cloud is advancing every day. Those who wait for the next generation of cloud offerings may find themselves missing out on tangible benefits as competitors leverage cloud technology to sharpen their edge. Across industries, leading organizations are not waiting. Many view cloud technology as evolving but necessary, and they are leveraging it effectively today. Some, for example, are tightly integrating cloud software solutions to streamline supply chain processes, boost information transparency, and improve decision-making across the board—all the while tapping the cloud benefits of cost savings and scalability. Others are confidently turning to infrastructure solutions delivered and running solutions in a private or hybrid cloud. Still others are turning to cloud platform solutions to extend the power of existing applications, build modern analytics platforms, or support new Internet of Things business models. Turning the cloud to your advantage may depend less on the maturity of the technology and more on the power of your imagination.

Myth No. 5: Moving to the cloud will be easy. Cloud technology can help organizations streamline and simplify their IT landscapes and their business processes, reducing needs around capital expenses and infrastructure while helping to save costs. But migrating to the cloud requires more than simply plugging in technology. It requires an ability to address a host of considerations—data migration, the business-specific capabilities of solutions, change management, governance, systems integration, security, and more.

A cloud transformation is more than a plug-and-play project or a traditional system implementation. It requires progressive thinking and an ability to align technology with your business needs and processes— for today and for the future. Migrating to the cloud is a journey. Moving forward with the cloud will require a vision of your “to be” state—your destination—as well as a strategy for getting you there.

To learn more, and to find out what IDC thinks about the future of the cloud, please read this study that presents a strategic blueprint for enterprises on their digital transformation journey.

For more information on how to simplify innovation with cloud technology, learn more about SAP Cloud Platform.

Ready to reimagine the potential of the cloud? Contact us to get the conversation started.

Contact Krishnakant Dave at kdave@deloitte.com and follow him on Twitter: @kkdave

Contact Misa Rawlins at mrawlins@deloitte.com and follow her on Twitter: @misa_rawlins

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This article originally appeared on Deloitte.com and is republished by permission.

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Misa Rawlins

About Misa Rawlins

As a senior manager and consultant in Deloitte’s SAP practice, Misa Rawlins enjoys helping her clients not only to figure out how to solve their current business problems, but also to envision how a modern cloud platform can transform their organizations moving ahead. Within the practice, she has specifically chosen to take a leadership role around the sales and delivery of SAP S/4HANA Cloud because she considers it the wave of the future. She has made it her mission to deeply understand this technology to better advise clients on what moving to a cloud infrastructure really means.

Krishnakant Dave

About Krishnakant Dave

As a principal in Deloitte’s global SAP practice, KK Dave is a consulting leader for Deloitte’s largest clients; part of the U.S. SAP leadership team where he spearheads Deloitte's cloud offerings; and leader of global go-to-market efforts in the wholesale distribution and manufacturing sector. In these roles, he assists clients in their business transformation journeys using the absolute latest SAP toolset, which presently comprises SAP S/4HANA, SAP Cloud Platform, and SAP S/4HANA Cloud, among other technologies.