3 Simple Ways To Ensure Project Success

Rick Knowles

In today’s digital economy, organizations must rely on their ability to execute plans and projects quickly and accurately. No matter what industry you’re in, project management and execution need to be faster, more agile, and more transparent than ever before, as the speed of business quickens, technology advances, and diverse project teams span the globe.

Constant disruption has become the norm, so project teams need to be agile enough to change direction mid-course and still meet deadlines on time and on budget. This may seem like an impossible task, but corporate executives and project leaders must tackle the challenge head on by focusing on the following three factors:

Three keys to successful project execution

  1. Organizational strategy: Have a clear, transparent corporate strategy that accounts for current industry trends and digital disruption
  1. Streamlined goals: Align all projects to your corporate strategy and have clear goals from the start with streamlined business objectives
  1. Project management tools: Use appropriate project management solutions (software/mobile apps)

All three of the above factors are closely linked, and some statistics from recent reports demonstrate the connection. According to the Project Management Institute (PMI), 46% of projects are canceled or delayed, and only 44% of projects are highly aligned to organizational strategy. At the same time, 44% of project managers don’t use project management software, according to a report by PWC. Although the numbers come from different sources, the similarities are undeniable. Almost the same percentage of projects that are not aligned to corporate strategy fail, and the same percentage of project managers don’t use appropriate project management software. Pure coincidence? Probably not.

1. Organizational strategy: Why should projects be aligned to the corporate strategy?

Projects that are aligned with the organizational strategy are more likely to succeed. PMI’s most recent Global Project Management Survey shows that when projects are aligned to the corporate strategy, 38% more projects meet their original goals, and 33% fewer projects are deemed failures.

The survey states that organizations waste an average of $97 million for every $1 billion invested due to poor project management and execution. That’s a staggering amount that most companies can’t afford to waste. The bottom line is that the cost of canceled or delayed projects can significantly impact your company’s bottom line, so the goal should be to increase the number of successfully completed projects and reduce the amount of money wasted.

To increase your project success rate, project goals should be aligned to your corporate strategy.

2. Streamlined goals: Are your goals on time and on budget?

Too often, “on time and on budget” are mistakenly thought of as the main measurements of a successful project. But what about the business outcomes? Projects need to meet the right corporate objectives and goals, such as increasing productivity, improving efficiency, or enhancing the overall work experience.

If a project reaches the goal of being on time and on budget, but it doesn’t fulfill its intended purpose, it can’t be considered a success. For example, if you create a software solution on time and on budget, but it makes people’s jobs more difficult, then there will be limited adoption, which will result in reduced productivity and efficiency. Would it still be considered successful if it didn’t fulfill its intended purpose? Probably not.

For the best results, be sure to set goals with clear business outcomes aligned to the corporate strategy.

3. Project management tools: Make project execution easier

Managing and executing a project can be overwhelming. Most projects have many tasks being executed simultaneously by various team members, so it can be challenging to have all of the up-to-date information you need in one place. Communication and collaboration are key to achieving everything that needs to be accomplished, so having the right project software solution is essential for completing projects successfully in today’s digital era.

One of the easiest ways to keep everything in one place and everyone on the project team connected is to use a project companion app. These types of professional services apps give project managers, consultants, and project team members a competitive advantage because they have crucial information at their fingertips to help execute projects:

  • Mobile accessibility: Instant access to project status overview or detailed project information anywhere, anytime
  • Easy collaboration: Team members can use the app for all project-related communication
  • Transparency: Information is available to all members of the project team

The biggest competitive advantage: Corporate connection

The challenge with most project management apps is that they don’t have the ability to access or connect to corporate data through a backend enterprise system.

Recent developments, such as innovations from Apple and SAP, have made enterprise compatibility more accessible with project companion apps that can connect to corporate systems via a cloud platform so users have access to all of the corporate data they need to execute and complete projects more efficiently.

Some of the biggest benefits to using an app that’s connected to your backend system include:

  • Access to key project data, relevant documents, and archived meeting notes
  • Real-time creation of action items, documents, written notes, or images instantly connected to existing contextual project information
  • Easy collaboration between project team members
  • High-level overview of key milestones

Despite the constant industry disruption these days, you can gain a competitive advantage and see more of your projects succeed. Simply make sure you have a clear corporate strategy, then align your project goals to that strategy, and make sure you have the right project companion app to give you the competitive advantage to reach your goals. It’s a simple formula to ensure project success.

Discover how the Apple and SAP partnership is revolutionizing mobile apps for the enterprise.

Learn more about the SAP Project Companion Apps for iOS.

Attend customer sessions to learn more about the Apple and SAP partnership at the upcoming SAPPHIRE NOW event, May 16-18, 2017, in Orlando, Florida.


Rick Knowles

About Rick Knowles

Rick Knowles is senior vice president (SVP) and general manager (GM) of the partnership between SAP SE and Apple, Inc. In this role, he oversees the strategic roadmap in building state-of-the-art applications for some of the most complex business systems in the world. Rick has been with SAP for close to 20 years, where he has held executive positions such as SVP and chief of staff, GM of One Customer Experience, and SVP and chief operating officer for SAP Americas, the company’s largest geographic market. You can follow him on Twitter @RickKnowlesSAP.

The Evolution Of Today's Next-Generation Sharing Economy Businesses

Jennifer Horowitz

The approach to building successful “sharing economy” businesses is shifting. Today’s next-generation platforms are following a different path from successful companies such as Uber, eBay, and Airbnb. The way that such newly found businesses are evolving is now considered one of the most prominent aspects of robustly growing the world economy.

Consider how much has changed from the beginning of the 21st century. In 2014, the sharing economy was still new. “Analog-type” best practices were part of the initial market trend. This involved consumers having access to social media, smartphones, and broadband Internet, all of which played a key role in the growth areas of the sharing economy at that time.

Fast-forward to today. Again, technology evolution in this space is happening rapidly.

You are probably pondering the pressing question: What is this new formula for sharing economy business success? With the competitiveness and increase in platforms in the marketplace offering similar products, customers are thirsty for key differentiators. Essentially, sharing-economy business success boils down to two main factors:

Building loyalty

Loyalty on such platforms creates high-growth opportunities. By focusing on the consumer end, suppliers are also satisfied, and vice versa. It is crucial to build trust initiatives in the technologies. A business can gain consumers’ and suppliers’ trust and best interests through innovation of their offerings in unique ways.

YourParkingSpace is a leading online parking marketplace for finding parking spaces, driveways, and garages for rent throughout the UK. The company regularly engages parking space owners by offering incentives for feedback and personalized advice to help them get the most from the platform, which ultimately builds loyalty.

“More traditional companies such as Amazon have driven a hard bargain with suppliers, driving prices ever lower. With a sharing economy, company suppliers are your customers, looking after them is an essential part of having a thriving service to offer your buyers,” according to Harrison Woods and Charles Cridland, co-founders of YourParkingSpace.

Developing loyal consumers is also an integral part of profoundly shaping behaviors worldwide. Recently, Uber suspended its self-driving vehicles following the tragic news that one of the ride-share company’s self-driving cars had killed an Arizona pedestrian. The sharing economy has a powerful influence on consumer trust.

Build loyalty, trust, and transparency instead of fear and doubt.

Curation

A wonderful way to win attention in the marketplace is to curate. Gone are the days of the one-size-fits-all approach. According to YourParkingSpace, “The one-size-fits-all approach of some of the larger, established online companies is no longer always the solution that customers want.” Curation is not a one-size-fits-all method.

Discerning buyers in the marketplace are causing platforms to develop even more personalized experiences. In a sharing economy model, safety and quality are high-risk. Make curation consistent and make it have a feeling of safety. Implementing curation develops stronger connections with your customers.

Every curation strategy for a business is unique. Your businesses offline experience should have a high level of curation to satisfy your customers. “People want unique experiences and products, something that’s a little out of the ordinary,” Woods and Cridland point out.

Today’s sharing economy evolution

The “sharing economy” movement has certainly been maturing. According to Juniper Research, the industry is expected to grow to double its current value by 2021. In the United States, the sharing economy industry currently serves over 44 million individuals in various strata and is expected to rise to above 89.5 million people by 2021. The sharing economy will reach $40.2B in 2022, in terms of platform provider revenues, up from $18.6B in 2017.”

The biggest players in the marketplace are Uber and Lyft, currently accounting for up to nearly 30 percent returns per “journey.” The rise of sharing businesses have grown significantly. Competitiveness has risen among newer start-ups that have been able to dominate and gain traction, and ultimately market share over existing companies.

There are plenty of opportunities to capitalize on within the shared economy space.

As more and more markets open up, suppliers will surely join in. Enterprise and businesses are considered a high-growth sector, and yet still somewhat under the radar. The disruption is creating a hotbed for all types of innovation.

Welcome to the sharing economy. Are you ready?

For more on business in the sharing economy, see Customer Experience: Catalyst Or Beneficiary Of Digital Transformation?


Jennifer Horowitz

About Jennifer Horowitz

Jennifer Horowitz is a journalist with over 15 years of experience working in the technology, financial, hospitality, real estate, healthcare, manufacturing, not for profit, and retail sectors. She specializes in the field of analytics, offering management consulting serving global clients from midsize to large-scale organizations. Within the field of analytics, she helps higher-level organizations define their metrics strategies, create concepts, define problems, conduct analysis, problem solve, and execute.

Your Duty Of Care And The Increase In Traveler Concerns

Tina Gunn

The Global Business Travel Association (GBTA) reports that spending on global business travel is growing and is expected to reach $1.6 trillion by 2020. Despite increasing global uncertainty around unforeseen events, organizations show no signs of slowing down business travel. Therefore, the duty of care and travel risk management programs need to be at the forefront of your organization’s security conversations, as outlined in a report produced by the Business Travel News (BTN) group.

Your organization most likely has some level of a duty-of-care solution in place; however, even organizations with a good track record in providing safety and security measurements still have some gaps in providing the right level of duty of care to their travelers and employees – and gaps that may be perceived by the organization as small could be viewed as negligent.

Risks for travelers and employees are on the rise

With the continual increase in business travel – global crises that are hitting the headlines are grabbing the attention of travel decision makers at organizations. The potential risks your travelers could encounter, domestically and internationally, are numerous – including geopolitical, health-related, and environmentally-related incidents. Even historically low-risk areas are reporting catastrophic events that are adding to the growing concerns for traveling employees.

Not only do organizations need to be prepared to fulfill duty-of-care obligations in high-profile incidents; they need to consider the smaller, more common travel risks that can happen when commuting into the office, including pedestrian accidents, car accidents, and incidents on public transportation.

“The broader notion of traveler well-being and duty of care issues are not only linked to emergencies and medical incidents,” notes GBTA’s Corporate Social Responsibility Toolkit. “The stress of business travel caused by delays, lost baggage, less productivity (yet consistently high workload), or the simple fact of being away from friends and family should not be underestimated.”

Travel risk management programs need to incorporate all your employees’ (not just travelers’) safety and security and be prepared to assist with the range of risks and incidents possible.

An ethical responsibility, not just a legal one

Legal obligations concerning insurance, lawsuits, and costs are what typically drive most organizations to implement duty-of-care initiatives. However, the moral obligation to your travelers and employees needs to be a driving factor as well.

“When companies concentrate on the moral part, their actions tend to answer the legal questions as well,” explains Stephen Barth, University of Houston law professor and founder of the Hospitality Lawyer media and information platform. “The companies that we see take the more proactive approach are the ones that don’t view it as a legal obligation, but view it as an ethical corporate responsibility.”

In the U.S., workers’ compensation reaches only so far, covering those who get injured on the job, and within a certain distance of their workplace. However, with growth and expansion increasingly taking business across borders – where an organization’s duty of care responsibilities begin and end are unclear when sending employees abroad.

In recent years, numerous countries around the world have started implementing legal statutes that side with the employee when there is a gross breach of duty-of-care responsibilities resulting in the death of an employee.

A recent traveler survey demonstrates that safety and security is one of the fastest-growing topics of concern for employees traveling on behalf of their organizations. Proactively incorporating an ethical responsibility in your duty-of-care program assists in addressing the increase in employee anxiety about medical and security disruptions while traveling.

Mitigating business risks while protecting your greatest asset: People

A single duty-of-care incident can result in staggering costs to an organization including medical expenses, sick pay, employment litigation, morale and productivity loss, and employee fall out – as well as damage to the organization’s reputation.

To help mitigate liability risks while fulfilling the moral obligation to your employees’ safety and security, industry experts suggest:

  • Consistent travel risk management policy and procedures encompassing all employees
  • Proactive safety training
  • Clear monitoring and communication channels
  • Multi-channel data management for tracking and response coordination
  • Legal and executive management cooperation
  • Incident response reporting and measurement for ongoing improvement

Organizations cannot afford to be negligent with the safety and security of their travelers and employees in today’s global landscape. It’s imperative to implement a travel risk management program or re-evaluate your existing program to determine that you’ll be able to monitor, locate, and communicate to all employees and fulfill your duty-of-care obligation if a crisis arises.

Download the full BTN report, The Travel Risk Management Imperative. Learn more about how to fulfill your duty of care with SAP Concur solutions.


Tina Gunn

About Tina Gunn

Tina Gunn is the content marketing manager for the Enterprise Americas team at SAP Concur. Tina earned her degree in Journalism from the University of Washington and brings her experience in content strategy and digital marketing to SAP Concur. When she’s not creating thought leadership and sales enablement content, Tina writes fiction and screenplays of the horror and sci-fi genres.

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.  

 


Dan Wellers

About Dan Wellers

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

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.