The Impact Of HR On Customer Delight

Patrick Willer

What is the purpose of Human Resource Management?

Is it to administrate brains, send them letters, and pay them? Or is it to connect brains, drive innovation, and delight customers?

The answer is both. The real question is: Why are so many HR departments stuck in operations and close to useless as enablers of change? Time to wake up. It’s 2016. Let’s embrace the possibilities of technology to make HR a profit center. Make HR the soulful heart that pulsates the organization forward.

From the past to today’s reality

The only reason for HR’s passive, inert behavior is because they have always done it like that. Following legislation and making sure that people are administrated and paid correctly. For hundreds of years HR was about administrating brains. And that is deep in their DNA.

In was in the beginning of this century that HRM was relabeled to HCM, Human Capital Management. We discovered that a company’s most valuable asset weights 1.5 kilograms: the human brain. We began to focus on the right person on the right job on the right timeWe were optimizing brains: Talent Management.

And while many organizations still struggle with Talent Management, we are already in another era. Social, mobile, cloud, and Big Data are omnipresent. Consumers know all there is to know about products and services on their mobile devices with social opinions from the entire world. Hyperconnectivity. But only a fraction of organizations are able to hyper connect their own employees in order to create better products, services, and customer experiences. The few that do are changing industries. They disrupt. They are connecting brainpower.

The impact on customer satisfaction

What is the impact of these three HR phases on customer satisfaction?

Administrating brains does not have any impact on customer satisfaction. Of course you have to pay people, otherwise they leave. Improving the administration of brains is done by continuously reducing (administrative) time and money spent by employees, managers, HR, and IT, usually via automation. And thus the benefit of administrating brains is only about lowering cost.

The moment you start to administrate and optimize brains is the moment HR comes to life and has an impact on people engagement and business execution. The benefit is then lowering cost and increasing revenue.

But that’s not enough to survive in this highly competitive marketplace, because only connected brains can tap into unmet customer needs and generate innovation needed to stay ahead of the curve. The combination of administrating, optimizing, and connecting brains all together has the biggest benefits: lowering cost, increasing productivity, and – most important – driving innovation!

Let’s put this to the test

Visualize your best/ideal employee.

Now visualize your HR department only administrating his/her pay scale, working hours, expenses, and contract. How does that help your company perform better?

Now visualize the same super employee placed in the best, most suitable job in the company. Imagine you can scale up with more of your employees being put in the right places, getting engaged, and using their full potential. Wow, that is adding value right?

By the way… Who is determining who is talented in the company?
Right. It’s usually a manager and/or an HR employee.

Now imagine it’s no longer one or two people who determine who’s talented. It’s the community that determines who is talented. Then the entire organization knows who’s talented because that is transparent. Your customers know it too. And imagine what will happen if those talented people are continuously connected, generating idea on idea, being engaged by it, and driving your proposition of tomorrow. Now that not only has an impact on revenue generation today, but on customer satisfaction! And thus on revenue generation tomorrow.

What does the future hold for human resources?

Companies like SAP are automating core HR like robots are taking over repetitive work at a conveyor belt. But one thing will not be automated so quickly: the creativity of people. It is humans that innovate and thus it’s the human resources department that has the unique potential to transform the business. I predict that in the near future, the administration of HR will be close to being completely automated. And then there is only one role for HR that remains: improving productivity and driving innovation.

It’s time for many HR folks to ask the why question. I don’t see a prosperous future for employment in the administrative side of HR. It’s time for HR as a profit center. Full stop. Human resources as a key differentiator in empowering, engaging, and connecting the community. Making sure there are platforms in place and guidance to optimize communication, creativity, and innovation.

For expert insight on employee engagement and talent development, see Managing Your Talent Ecosystem: Best Practices.


About Patrick Willer

Patrick Willer is a Workforce Innovation Consultant at SAP, responsible for helping organisations to maximize the effect of their workforce. In practice this comes down to discussing the clients strategy and evaluate together how technology can help the total workforce to execute the companies strategy.

Digital Transformation: Embracing The Art Of The Possible

John Graham

The 19th-century German statesman Otto von Bismarck said, “Politics is the art of the possible, the attainable — the art of the next best.” His term “art of the possible” survives to this day and is applicable to fields other than politics. The idea behind it is to avoid perfectionism in favour of making progress, rather than becoming completely paralyzed and resistant to change.

At SAP’s “Art of the Possible” event in Toronto, the focus was on digital transformation and how businesses can get started with actionable steps that take them beyond both complacency and the often seemingly insurmountable complexity of the modern enterprise. A recently released IDC and SAP Canada research report has given deeper relevance to the event’s name by revealing that only 17% of Canadian businesses have a solid digital plan in place, despite 96% acknowledging that they need one.

That doesn’t seem to make much sense, does it? That’s maybe because the reasons executives are putting their business’s survival at stake, be it knowingly or unknowingly, are many and complicated. For example, many medium-sized businesses may feel they don’t have the skills or necessary resources in-house to keep up with digital innovation, and would rather wait to see how it plays out. Larger businesses could be lacking the agility of a startup to make digital change happen across the organization. Or, with 67% of those surveyed reporting that they don’t see the digital economy having an immediate impact on their business, it could be the perceived lack of a competitive threat or any change in market share that lulls a business into technological stagnation.

Whatever the reason, “art of the possible” in this instance means businesses should begin to think practically about what digital means for them. They should question the key areas in which digital can bring the most tangible benefits or force a positive change in the business – whether it’s in core processes, customers, suppliers, employees, assets – rather than always approaching digital with the purely high-level mentality. Too often, that approach restricts digital adoption to a yes or no answer, and according to IDC, the decision in Canada up to now has overwhelmingly been no.

The aforementioned SAP event in Toronto was refreshing in that it featured guest speakers from companies that emphatically are embracing digital transformation. Let’s start with Under Armour, the sports apparel company set on creating the ultimate customer-first experience for athletes and health and fitness devotees through Internet of Things innovation.

It’s perhaps a sign of this sheer focus on delighting customers—taking the fusion of clothing and digital technology to a whole new place—that analytics and Big Data chief Phil Kim only once made reference to the manufacturer’s conventional product range. He preferred instead to explain how Under Armour has joined the likes of Google, Amazon, and Facebook as one of the major “math house” communities, with 165 million people around the world connected by billions of data points.

This is enabling the company to build data-based, personalized relationships with customers, be it through shirts and shoes connected to the cloud, fitness wristbands, or sleep-monitoring applications. Kim says this data must be used to drive value back to the customer, by figuring out what they want and need and ultimately making sure they are satisfied. He left the audience with the warning that Canadian businesses must embrace digital disruption to avoid being left behind, giving a few examples of where it’s already happened and expressing confidence that it will keep happening.

Perhaps more modest than what Under Armour is doing, but equally as innovative and relevant, is the story from McInnis Cement, the Montreal cement maker. With the young company still in startup phase and harbouring ambitions to become one of Canada’s leading cement companies, it needs to offer great value and service, reliable delivery, and consistent supply. Cement is nothing new, so those are the key factors of differentiation.

To get ahead, the company is using real-time information to monitor all aspects of supply chain and logistics, as well as focusing on running an airtight billing process. The goal is to remain super-lean, pushing systems design and management out to partners and vendors and letting them do the heavy lifting to save time and cut operating costs.

Under Armour and McInnis Cement may have very different versions of their own art of the possible, but both are approaching digital innovation with that mindset. It’s time all businesses do the same.

For more on how to help your business embrace digital innovation, see How To Answer The Question: “What Is Our Digital Strategy?”


The Digitalized Insurance Value Chain

Geoffrey Weiss

The insurance industry is traditionally slow to innovate, and that’s a problem today. Today, more than half of all consumers research insurance brands online, especially using social media, before determining which one to contact for a quote. Yet 57% of all insurance companies have operating models that do not facilitate digital connectivity, and the majority of companies want to meet the needs of digital consumers but are not doing so right now. The key is in innovation of the insurance value chain.

How is digitization impacting every component of the insurance value chain?

Every aspect of the insurance value chain is impacted by digitization, from interactions with customers to underwriting and claims management. Those insurance companies already embracing digitization are finding outstanding success in many areas. They are seeing a more consistent and customized omnichannel experience delivered to customers. They are using social networks as tools for sourcing information and are able to offer real-time solutions including micro-insurance offers to meet specialized needs.

A key way to reduce costs is to automate the claims management sector of any insurance business. Moving toward a no-touch claim method minimizes costs while also offering better predictive and preventative tools. It also aids in reducing fraud and allows risk managers to better engage with customers instead of spending time behind paperwork.

Another impact is on underwriting. Insurers that successfully use digitization are seeing more speed, better accuracy, improved risk evaluation, and more refined risk segmentation. In short, it gets the job done faster and more effectively. Designing products is more efficient as well. In fact, companies can make better use of connected objects, new services, and fraud management tools. Then they can embed and test them with users. This allows for a streamlined approach to developing new products.

Real-time access is powerful: It allows companies to create a “fail early, fail often” strategy, lets them better find and access competitors, provides the ability to scale, and outlines threats.

Every sector of the insurance industry can benefit. More insurance companies are realizing the impact it can offer. But how?

Re-imagining business models and processes enables digitization

Your customers want to submit claims online. They want to compare policies online. Marketing, claims management, agency management, and much more can all be managed more efficiently using digital methods. How can your business move from its current state into the digital economy?

It takes a focused effort on changing existing business models and processes to achieve this goal. A key concern for many insurance companies is the changing digital economy. Customer demand is changing. New technologies are influencing the way businesses operate. New entrants in the market already making an impression digitally are playing a role. How can your business compete?

New, enhanced business models also play a role. Here are several examples: A digital lifestyle insurer is one that offers a customer-centric business model, putting the customer first. It offers customer profiling for better marketing. It enables omnichannel connectivity to link the business to its customers. And it allows for micro-segmentation, allowing the business to offer customized products based on individual needs.

Becoming a connected insurer will enable you to build a business that provides for your company’s needs across all devices. In today’s networked economy, offering this type of connectivity of services across all customer and corporate platforms is essential. A data-driven insurer is also a powerful business model as your organization collects and interprets data to better leverage risk. It transforms your business, shifting it from risk protection to risk prevention.

Selecting the right business model (or models) is essential. However, as your business incorporates these new business models, it becomes necessary to manage business processes. In short, you need to evolve many of the older, less efficient processes that are now being used. Engaging in new solutions spreads the benefits and value across the business.

Changing business processes

The potential changes are many. From digital customer management to risk management insurance, it’s easy to see the impact. Now, consider how to modernize processes.

With digitization, changes happen right away, including research and development. Insurers can adjust how they research and develop insurance products. For example, they have access to data on driverless cars. They can incorporate fitness-based health insurance programs. Insurers can offer products designed to meet individual needs. “Pay-as-you-behave” products are possible.

Customer engagement is another essential process change, perhaps because of the “Amazon Factor.” (In short, companies like Amazon set the bar high by creating outstanding engagement opportunities.) Other organizations like Uber and Netflix understand and implement this, but insurers consistently do not. However, customers expect similar access. They want personalized interactions. And they need easy-to-use tools. Digitization enables you to offer these things.

Part of effective customer engagement is offering a consistent user experience across all connection points. Customer interaction online and over the phone should be equal. Consumers want support on their smartphones. Another business process change lies in automation. Claims management is an excellent solution. It reduces costs and improves accuracy. Automation in underwriting can also meet customer needs for faster service. By automating services, insurers embrace the technology already at their fingertips.

What else can digitization do?

Digitization improves every component of the insurance industry: It improves customer retention. It aids in improving employee satisfaction. It reduces costs. It provides better insight. Across all aspects of the value chain, digitization becomes a powerful and highly effective tool. In a digital economy, insurance companies have access to powerful digitization tools.

Download our insurance white paper How Insurers Can Prepare for the Digital Revolution today to see what SAP has to offer. We will work with you to develop an insurance business that’s ready to meet the needs of the digital world.


Geoffrey Weiss

About Geoffrey Weiss

Geoffrey Weiss is the insurance North America lead at SAP, providing industry thought leadership, strategic solution advice, and expert consultation to support customer co-innovation, enterprise transformation, and business process performance improvement programs. His background includes over 20 years of financial services experience spanning insurance, banking, and investments, building and delivering economic value add (EVA) transformational programs. He is active in market research and new industry trend research, and is based in Columbus, Ohio.

How Much Will Digital Cannibalization Eat into Your Business?

Fawn Fitter

Former Cisco CEO John Chambers predicts that 40% of companies will crumble when they fail to complete a successful digital transformation.

These legacy companies may be trying to keep up with insurgent companies that are introducing disruptive technologies, but they’re being held back by the ease of doing business the way they always have – or by how vehemently their customers object to change.

Most organizations today know that they have to embrace innovation. The question is whether they can put a digital business model in place without damaging their existing business so badly that they don’t survive the transition. We gathered a panel of experts to discuss the fine line between disruption and destruction.


qa_qIn 2011, when Netflix hiked prices and tried to split its streaming and DVD-bymail services, it lost 3.25% of its customer base and 75% of its market capitalization.²︐³ What can we learn from that?

Scott Anthony: That debacle shows that sometimes you can get ahead of your customers. The key is to manage things at the pace of the market, not at your internal speed. You need to know what your customers are looking for and what they’re willing to tolerate. Sometimes companies forget what their customers want and care about, and they try to push things on them before they’re ready.

R. “Ray” Wang: You need to be able to split your traditional business and your growth business so that you can focus on big shifts instead of moving the needle 2%. Netflix was responding to its customers – by deciding not to define its brand too narrowly.

qa_qDoes disruption always involve cannibalizing your own business?

Wang: You can’t design new experiences in existing systems. But you have to make sure you manage the revenue stream on the way down in the old business model while managing the growth of the new one.

Merijn Helle: Traditional brick-and-mortar stores are putting a lot of capital into digital initiatives that aren’t paying enough back yet in the form of online sales, and they’re cannibalizing their profits so they can deliver a single authentic experience. Customers don’t see channels, they see brands; and they want to interact with brands seamlessly in real time, regardless of channel or format.

Lars Bastian: In manufacturing, new technologies aren’t about disrupting your business model as much as they are about expanding it. Think about predictive maintenance, the ability to warn customers when the product they’ve purchased will need service. You’re not going to lose customers by introducing new processes. You have to add these digitized services to remain competitive.

qa_qIs cannibalizing your own business better or worse than losing market share to a more innovative competitor?

Michael Liebhold: You have to create that digital business and mandate it to grow. If you cannibalize the existing business, that’s just the price you have to pay.

Wang: Companies that cannibalize their own businesses are the ones that survive. If you don’t do it, someone else will. What we’re really talking about is “Why do you exist? Why does anyone want to buy from you?”

Anthony: I’m not sure that’s the right question. The fundamental question is what you’re using disruption to do. How do you use it to strengthen what you’re doing today, and what new things does it enable? I think you can get so consumed with all the changes that reconfigure what you’re doing today that you do only that. And if you do only that, your business becomes smaller, less significant, and less interesting.

qa_qSo how should companies think about smart disruption?

Anthony: Leaders have to reconfigure today and imagine tomorrow at the same time. It’s not either/or. Every disruptive threat has an equal, if not greater, opportunity. When disruption strikes, it’s a mistake only to feel the threat to your legacy business. It’s an opportunity to expand into a different marke.

SAP_Disruption_QA_images2400x1600_4Liebhold: It starts at the top. You can’t ask a CEO for an eight-figure budget to upgrade a cloud analytics system if the C-suite doesn’t understand the power of integrating data from across all the legacy systems. So the first task is to educate the senior team so it can approve the budgets.

Scott Underwood: Some of the most interesting questions are internal organizational questions, keeping people from feeling that their livelihoods are in danger or introducing ways to keep them engaged.

Leon Segal: Absolutely. If you want to enter a new market or introduce a new product, there’s a whole chain of stakeholders – including your own employees and the distribution chain. Their experiences are also new. Once you start looking for things that affect their experience, you can’t help doing it. You walk around the office and say, “That doesn’t look right, they don’t look happy. Maybe we should change that around.”

Fawn Fitter is a freelance writer specializing in business and technology. 

To learn more about how to disrupt your business without destroying it, read the in-depth report Digital Disruption: When to Cook the Golden Goose.

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