CEOs Have To Stop Using Smart Machines To Get Rid Of Workers

Susan Galer

In a digital world of exponential, non-linear change where seemingly impossible stuff ─ 3D printing, machines that learn, self-driving cars ─ is now happening with incredible speed, even the smartest people at leading-edge companies can’t possibly predict what’s next. To find out how we can prepare for a winning future, I reached out to four futurists and authors who will share their perspectives in an upcoming openSAP MOOC entitled, “Reimagining the Future: A Journey through the Looking Glass.” The online course is designed to give business and technology leaders a clearer understanding of the macro forces at play in this next market revolution, and the steps they need to consider for faster adaptability in an unpredictable world.

“The future is moving too fast to predict, but you can rehearse it,” said Frank Diana, futurist at Tata Consultancy Services, who is leading the course. “This drives experimental cultures, not having a problem with failing, and being good at ambiguity and uncertainty. Especially traditional companies have to learn how to be adaptive and flexible enough to shift with the changes that are happening.”

Short-term tactics won’t deliver lasting value

Predicting more change in the next 20 years than the previous 300, Gerd Leonhard, CEO of The Futurist Agency, sees this era as a once in a lifetime opportunity to solve major problems like cancer and global warming – provided companies think bigger about possibilities and embrace collaboration with a wider ecosystem.

“It’s no longer going to be enough to just make money with what you’re selling,” said Leonhard. “For some companies, monetization is creating some ugly realities that may not have been the actual original purpose. Technology is forcing us to move to a future where what matters are three things: people, planet and profit.”

[tweet_quote display=”The future is moving too fast to predict, but you can rehearse it @opensap #MOOCs”]The future is moving too fast to predict, but you can rehearse it[/tweet_quote]

Leonhard cautioned business leaders against treating everything as just a technology issue targeted towards inefficiencies.

“You should not use technology primarily as a tool to just get rid of people,” he said. “Thinking about the immediate bottom line is a very short term exercise. It doesn’t create enough value. In the new digitally-based ecosystem, your neighboring segments are important. If you launch an IoT-based product, you’re also responsible for security, policies and ethics related to that rollout.”

Think big, start small, learn fast

As technology disrupts every part of the business, Chunka Mui, managing director at Devil’s Advocacy Group, places marketing and innovation at the forefront of the challenge. “Technology is fundamentally changing the products we build and how customers learn about and buy them. This is having a horizontal impact across the whole company,” he said. “Facing large disruptions from AI, big data, mobile and IoT, many organizations tend to swing from complacency to panic.”

Instead of waiting until doom is upon the company, Mui advised leaders to have a systematic process for fast, ongoing innovation that “allows us to think big about the possibilities, and consider the upside and downside scenarios before we have to panic. Then you can think about what data is needed to make the critical decisions, and build a learning process that answers the most important questions.”

Staying relevant when everyone is tech-enabled

According to Gray Scott, founder and CEO of SeriousWonder, business leaders need to understand our transformation into a technological species.

“We are entering the age of science fiction, curing cancer through personalized medicine and tracking our metabolism through wristbands,” he said. “But the old narrative of terminator against human no longer works. What’s actually taking place is that technology is getting into the hands of more people, and they’re integrating it into their bodies. This is having a profound effect on our cultures, governments and economies.”

CEOs must figure out how to be relevant and deliver value in a world of decentralized knowledge and innovation. “When a farmer replaces 30 field workers with two work bots, they can over-farm, impacting local and global markets,” he said. “The individual becomes the tech-enabled business entity. Anyone can become the new corporation. If you have an internet connection and the will, you can create pretty much anything you want. Maybe companies become the scaffolding for innovation, providing a service through their architecture.”

Time to face moment of truth

Decision-makers at many businesses haven’t realized how quickly future innovations are becoming reality, along with how to manage the cascading impact. Diana used the insurance industry as an example:

“We have to think about the future in a whole new way beyond standard forecasting or planning,” said Diana. “If self-driving cars stop getting into accidents everything changes, and not just for the insurance industry. Car dealerships disappear, lawyers fighting legal battles around damages are no longer needed for that. Cities that have been built around the car for more than a century totally change.”

Diana is also presenting a sneak preview of the course at the upcoming SAPPHIRE event in Orlando, Florida.

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Artificial Intelligence And Machine Learning Don’t Have To Be Creepy

Tim Clark

Over the past few years I’ve delved into the topic of customer experience, uncovering how new technologies are empowering businesses to know more about their customers than ever before.

While there’s nothing wrong with beer getting smarter at the shelf (and the data that is responsibly collected), it’s obviously not a good idea for businesses to take things too far. No one likes that “close talker” at a cocktail party. They can be downright creepy.

But avoiding the creep factor isn’t easy, especially when powerful capabilities like machine learning and artificial intelligence (AI) are on the guest list—and usually depicted as creepy forces in the world of sci-fi (I’m looking at you Blade Runner and Terminator).

The reality is that AI and machine learning don’t have to be creepy, and they shouldn’t be. It’s what businesses do with their data that matters, and how mutual value and trust are created with customers.

Dealing with doomsday scenarios

So what to make of recent comments from Elon Musk who believes the “global race for A.I. will most likely be the cause of World War III?” Or the notion that Musk has embarked on a “billion dollar crusade to stop the AI apocalypse?” No doubt about it, these are bleak, doomsday predictions of the highest order, coming from a modern-day visionary with access to bleeding-edge info, and they should be taken seriously.

As for machine learning, well, it doesn’t fare much better. Google’s AI chief John Giannandrea recently said he isn’t worried so much about Musk’s warmongering bots, but he is very concerned about “the danger that may be lurking inside the machine-learning algorithms used to make millions of decisions every minute.”

Yikes.

Thankfully, other tech luminaries have a much sunnier disposition about AI and machine learning.

Bill Gates recently told CNBC, “AI will make our lives more productive and creative,” while Mark Zuckerberg believes A.I. is going to make our lives better in the future. As for the doomsday scenarios making headlines, Zuckerberg thinks they are “pretty irresponsible.”

Personalizing the shopping experience

Gates and Zuckerberg’s thoughts are backed by serious research. IDC predicts cognitive/AI capabilities will figure in to some 40 percent of digital transformation initiatives by 2019.

And at SAP’s recent TechEd event, it was revealed that machine learning can help the $2.4 trillion fashion industry with a more personalized consumer experience, according to Margaret Laffan, director of Business Development, Machine Learning at SAP.

“Static window displays of the past won’t work in today’s world of fast fashion and consumer demands for an increasingly more personalized experience,” said Laffan in a recent story, The Ultimate Personal Shopper Is A Machine. “Machine learning gives retailers the speed and intelligence to quickly match the hottest looks with every customer’s fashion style.”

As you can see from this video demo of what this level of personalization looks like, it becomes much easier to understand why AI and machine learning can improve people’s lives without being creepy.

For more on this topic, see Why The Time Is Now For AI And Machine Learning.

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About Tim Clark

Tim Clark is the Head of Brand Journalism at SAP. He is responsible for evangelizing and implementing writing best practices that generate results across blog channels, integrated marketing plans and native advertising efforts.

Digitalist Flash Briefing: Answers To Two Burning Questions About Conversational AI

Bonnie D. Graham

Today’s briefing looks at a current hot topic – conversational AI and digital assistants for your business – from the perspective of another hot innovation from back in the day.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist.” Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

Read more on today’s topic

 

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About Bonnie D. Graham

Bonnie D. Graham is the creator, producer and host/moderator of 29 Game-Changers Radio series presented by SAP, bringing technology and business strategy thought leadership panel discussions to a global audience via the Business Channel on World Talk Radio. A broadcast journalist with nearly 20 years in media production and hosting, Bonnie has held marketing communications management roles in the business software, financial services, and real estate industries. She calls SAP Radio her "dream job". Listen to Coffee Break with Game-Changers.

The Future Will Be Co-Created

Dan Wellers and Timo Elliott

 

Just 3% of companies have completed enterprise digital transformation projects.
92% of those companies have significantly improved or transformed customer engagement.
81% of business executives say platforms will reshape industries into interconnected ecosystems.
More than half of large enterprises (80% of the Global 500) will join industry platforms by 2018.

Link to Sources


Redefining Customer Experience

Many business leaders think of the customer journey or experience as the interaction an individual or business has with their firm.

But the business value of the future will exist in the much broader, end-to-end experiences of a customer—the experience of travel, for example, or healthcare management or mobility. Individual companies alone, even with their existing supplier networks, lack the capacity to transform these comprehensive experiences.


A Network Effect

Rather than go it alone, companies will develop deep collaborative relationships across industries—even with their customers—to create powerful ecosystems that multiply the breadth and depth of the products, services, and experiences they can deliver. Digital native companies like Baidu and Uber have embraced ecosystem thinking from their early days. But forward-looking legacy companies are beginning to take the approach.

Solutions could include:

  • Packaging provider Weig has integrated partners into production with customers co-inventing custom materials.
  • China’s Ping An insurance company is aggressively expanding beyond its sector with a digital platform to help customers manage their healthcare experience.
  • British roadside assistance provider RAC is delivering a predictive breakdown service for drivers by acquiring and partnering with high-tech companies.

What Color Is Your Ecosystem?

Abandoning long-held notions of business value creation in favor of an ecosystem approach requires new tactics and strategies. Companies can:

1.  Dispassionately map the end-to-end customer experience, including those pieces outside company control.

2.  Employ future planning tactics, such as scenario planning, to examine how that experience might evolve.

3.  Identify organizations in that experience ecosystem with whom you might co-innovate.

4.  Embrace technologies that foster secure collaboration and joint innovation around delivery of experiences, such as cloud computing, APIs, and micro-services.

5.  Hire, train for, and reward creativity, innovation, and customer-centricity.


Evolve or Be Commoditized

Some companies will remain in their traditional industry boxes, churning out products and services in isolation. But they will be commodity players reaping commensurate returns. Companies that want to remain competitive will seek out their new ecosystem or get left out in the cold.


Download the executive brief The Future Will be Co-Created.


Read the full article The Future Belongs to Industry-Busting Ecosystems.

Turn insight into action, make better decisions, and transform your business.  Learn how.

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About Dan Wellers

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

About Timo Elliott

Timo Elliott is an Innovation Evangelist for SAP and a passionate advocate of innovation, digital business, analytics, and artificial intelligence. He was the eighth employee of BusinessObjects and for the last 25 years he has worked closely with SAP customers around the world on new technology directions and their impact on real-world organizations. His articles have appeared in articles such as Harvard Business Review, Forbes, ZDNet, The Guardian, and Digitalist Magazine. He has worked in the UK, Hong Kong, New Zealand, and Silicon Valley, and currently lives in Paris, France. He has a degree in Econometrics and a patent in mobile analytics. 

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Blockchain: Much Ado About Nothing? How Very Wrong!

Juergen Roehricht

Let me start with a quote from McKinsey, that in my view hits the nail right on the head:

“No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.”

Now, in the industries that I cover in my role as general manager and innovation lead for travel and transportation/cargo, engineering, construction and operations, professional services, and media, I engage with many different digital leaders on a regular basis. We are having visionary conversations about the impact of digital technologies and digital transformation on business models and business processes and the way companies address them. Many topics are at different stages of the hype cycle, but the one that definitely stands out is blockchain as a new enabling technology in the enterprise space.

Just a few weeks ago, a customer said to me: “My board is all about blockchain, but I don’t get what the excitement is about – isn’t this just about Bitcoin and a cryptocurrency?”

I can totally understand his confusion. I’ve been talking to many blockchain experts who know that it will have a big impact on many industries and the related business communities. But even they are uncertain about the where, how, and when, and about the strategy on how to deal with it. The reason is that we often look at it from a technology point of view. This is a common mistake, as the starting point should be the business problem and the business issue or process that you want to solve or create.

In my many interactions with Torsten Zube, vice president and blockchain lead at the SAP Innovation Center Network (ICN) in Potsdam, Germany, he has made it very clear that it’s mandatory to “start by identifying the real business problem and then … figure out how blockchain can add value.” This is the right approach.

What we really need to do is provide guidance for our customers to enable them to bring this into the context of their business in order to understand and define valuable use cases for blockchain. We need to use design thinking or other creative strategies to identify the relevant fields for a particular company. We must work with our customers and review their processes and business models to determine which key blockchain aspects, such as provenance and trust, are crucial elements in their industry. This way, we can identify use cases in which blockchain will benefit their business and make their company more successful.

My highly regarded colleague Ulrich Scholl, who is responsible for externalizing the latest industry innovations, especially blockchain, in our SAP Industries organization, recently said: “These kinds of use cases are often not evident, as blockchain capabilities sometimes provide minor but crucial elements when used in combination with other enabling technologies such as IoT and machine learning.” In one recent and very interesting customer case from the autonomous province of South Tyrol, Italy, blockchain was one of various cloud platform services required to make this scenario happen.

How to identify “blockchainable” processes and business topics (value drivers)

To understand the true value and impact of blockchain, we need to keep in mind that a verified transaction can involve any kind of digital asset such as cryptocurrency, contracts, and records (for instance, assets can be tangible equipment or digital media). While blockchain can be used for many different scenarios, some don’t need blockchain technology because they could be handled by a simple ledger, managed and owned by the company, or have such a large volume of data that a distributed ledger cannot support it. Blockchain would not the right solution for these scenarios.

Here are some common factors that can help identify potential blockchain use cases:

  • Multiparty collaboration: Are many different parties, and not just one, involved in the process or scenario, but one party dominates everything? For example, a company with many parties in the ecosystem that are all connected to it but not in a network or more decentralized structure.
  • Process optimization: Will blockchain massively improve a process that today is performed manually, involves multiple parties, needs to be digitized, and is very cumbersome to manage or be part of?
  • Transparency and auditability: Is it important to offer each party transparency (e.g., on the origin, delivery, geolocation, and hand-overs) and auditable steps? (e.g., How can I be sure that the wine in my bottle really is from Bordeaux?)
  • Risk and fraud minimization: Does it help (or is there a need) to minimize risk and fraud for each party, or at least for most of them in the chain? (e.g., A company might want to know if its goods have suffered any shocks in transit or whether the predefined route was not followed.)

Connecting blockchain with the Internet of Things

This is where blockchain’s value can be increased and automated. Just think about a blockchain that is not just maintained or simply added by a human, but automatically acquires different signals from sensors, such as geolocation, temperature, shock, usage hours, alerts, etc. One that knows when a payment or any kind of money transfer has been made, a delivery has been received or arrived at its destination, or a digital asset has been downloaded from the Internet. The relevant automated actions or signals are then recorded in the distributed ledger/blockchain.

Of course, given the massive amount of data that is created by those sensors, automated signals, and data streams, it is imperative that only the very few pieces of data coming from a signal that are relevant for a specific business process or transaction be stored in a blockchain. By recording non-relevant data in a blockchain, we would soon hit data size and performance issues.

Ideas to ignite thinking in specific industries

  • The digital, “blockchained” physical asset (asset lifecycle management): No matter whether you build, use, or maintain an asset, such as a machine, a piece of equipment, a turbine, or a whole aircraft, a blockchain transaction (genesis block) can be created when the asset is created. The blockchain will contain all the contracts and information for the asset as a whole and its parts. In this scenario, an entry is made in the blockchain every time an asset is: sold; maintained by the producer or owner’s maintenance team; audited by a third-party auditor; has malfunctioning parts; sends or receives information from sensors; meets specific thresholds; has spare parts built in; requires a change to the purpose or the capability of the assets due to age or usage duration; receives (or doesn’t receive) payments; etc.
  • The delivery chain, bill of lading: In today’s world, shipping freight from A to B involves lots of manual steps. For example, a carrier receives a booking from a shipper or forwarder, confirms it, and, before the document cut-off time, receives the shipping instructions describing the content and how the master bill of lading should be created. The carrier creates the original bill of lading and hands it over to the ordering party (the current owner of the cargo). Today, that original paper-based bill of lading is required for the freight (the container) to be picked up at the destination (the port of discharge). Imagine if we could do this as a blockchain transaction and by forwarding a PDF by email. There would be one transaction at the beginning, when the shipping carrier creates the bill of lading. Then there would be look-ups, e.g., by the import and release processing clerk of the shipper at the port of discharge and the new owner of the cargo at the destination. Then another transaction could document that the container had been handed over.

The future

I personally believe in the massive transformative power of blockchain, even though we are just at the very beginning. This transformation will be achieved by looking at larger networks with many participants that all have a nearly equal part in a process. Today, many blockchain ideas still have a more centralistic approach, in which one company has a more prominent role than the (many) others and often is “managing” this blockchain/distributed ledger-supported process/approach.

But think about the delivery scenario today, where goods are shipped from one door or company to another door or company, across many parties in the delivery chain: from the shipper/producer via the third-party logistics service provider and/or freight forwarder; to the companies doing the actual transport, like vessels, trucks, aircraft, trains, cars, ferries, and so on; to the final destination/receiver. And all of this happens across many countries, many borders, many handovers, customs, etc., and involves a lot of paperwork, across all constituents.

“Blockchaining” this will be truly transformational. But it will need all constituents in the process or network to participate, even if they have different interests, and to agree on basic principles and an approach.

As Torsten Zube put it, I am not a “blockchain extremist” nor a denier that believes this is just a hype, but a realist open to embracing a new technology in order to change our processes for our collective benefit.

Turn insight into action, make better decisions, and transform your business. Learn how.

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Juergen Roehricht

About Juergen Roehricht

Juergen Roehricht is General Manager of Services Industries and Innovation Lead of the Middle and Eastern Europe region for SAP. The industries he covers include travel and transportation; professional services; media; and engineering, construction and operations. Besides managing the business in those segments, Juergen is focused on supporting innovation and digital transformation strategies of SAP customers. With more than 20 years of experience in IT, he stays up to date on the leading edge of innovation, pioneering and bringing new technologies to market and providing thought leadership. He has published several articles and books, including Collaborative Business and The Multi-Channel Company.