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Will A Robot Take Your Marketing Job?

Tom Pick

Are you panicked yet that artificial intelligence (AI) will soon put you out of work? Could a robot take your marketing job? Some of the brightest minds in Silicon Valley are warning of massive job displacement across the economy in the next decade.

But there remain good reasons not to be terribly alarmed. At least, not for a while.

First, the bad news: according to ThinkGrowth.org, “Between nine percent and 47% of jobs are in danger of being made irrelevant due to technological change (in the next 15 years), with the worst threats falling among the less educated.”

Some panelists at SXSW this spring were even more apocalyptic. Bill Gates said, “AI is the biggest threat to the human race. I can’t believe more people are not worried about this.” Steve Wozniak added, “Fast machines will eventually get rid of slow humans.”

There’s no question the nature of work will continue to change. Automation has been gradually displacing human labor since before the industrial revolution. And AI will expand the range of tasks machines can perform through “smart” automation.

Yet the future for workers may not be so bleak after all, particularly in skilled trades and in creative professions like marketing. Here’s why.

Robots can’t make it alone – even in manufacturing

Robots have been used in manufacturing since 1959. And it’s true, automation in general, and robots in particular, have had a significant impact on factory employment. The number of U.S. workers employed in manufacturing fell 39% from its peak in 1977 to 2012. Five million factory jobs have disappeared since 2000, partly due to trade, but primarily due to automation.

However, those trends don’t quite tell the whole story. The United States has actually added 1 million manufacturing jobs since employment in the sector bottomed out in 2010. And growth is continuing. According to the latest figures from the Bureau of Labor Statistics (BLS):

“In February (2017), employment in manufacturing rose by 28,000. The manufacturing diffusion index increased from 50.0 in January to 65.4, its highest level since November 2014. A value above 50 indicates that more component industries gained jobs than lost them.”

Factories are having trouble finding workers – at least finding those with the right skills. In Minnesota, for example, “nearly 5,000 manufacturing jobs are unfilled – a number that will likely grow as more and more employees move into retirement.” And nationwide, Bloomberg projects, “Over the next decade, 3.4 million manufacturing jobs are expected to become available as baby boomers retire and economic growth spurs work opportunities… but a skills gap could result in 2 million of those jobs staying unfilled.”

How is it possible that employment may grow and factories may face (human) worker shortages even as robotics and AI technologies advance? Simple: Automation increases productivity (which increases societal wealth) and makes the United States more competitive globally. We’ll need more workers and more robots.

Driverless vehicles roll forward slowly

A recent U.S. government report, Artificial Intelligence, Automation, and Economy, predicts driverless automated vehicle (AV) technology may eliminate 2.2 to 3.1 million existing U.S. jobs. But any such job losses that occur won’t happen immediately or abruptly. They will be spread out over time.

Further, the report concedes that certain types of drivers (e.g., long-haul truckers transporting goods) are more likely to be replaced than others (school bus drivers transporting children, for example). The study also notes, “New jobs will also likely be created, both in existing occupations – cheaper transportation costs will lower prices and increase demand for goods and all the related occupations such as service and fulfillment – and in new occupations not currently foreseeable.”

And those projected job losses assume AV technology will become reliable and trusted. Though great progress has been made (driverless vehicles are being tested in several cities beyond San Francisco, Detroit, and Pittsburgh), some of the hardest work remains. As the expression among software developers goes, the first 90% of a project takes 10% of the time; and the last 10% of the project takes the other 90%.

AV technology will need to work nearly flawlessly before adoption becomes widespread. Business Insider has reported that lawyers are “salivating” over self-driving cars because they are “going to get a whole host of new defendants,” with deep pockets, in the event of any crashes.

Development of AV technology that works dependably regardless of weather, daylight, and other conditions remains challenging. As Gary Marcus, a best-selling author, entrepreneur, and professor of psychology at NYU, pointed out in TechCrunch regarding AI, “look, for example, at a driverless car; that’s a form of intelligence, modest intelligence, the average 16-year-old can do it, as long as they’re sober, with a couple of months of training. Yet Google has worked on it for seven years and their car still can only drive –  as far as I can tell, since they don’t publish the data … on sunny days, without too much traffic.”

Still, robots and AI already have displaced some workers and will continue to expand into new jobs, particularly those that deal with things rather than people. It will likely be a long time before robots are trusted to care for children or adults with special needs, but they’ve already been running warehouses for years.

Public policy will need to address those job losses, for example with displacement assistance and retraining programs. But standing in the way of AI and robotic progress would be counterproductive (literally); by increasing productivity, they raise living standards across society. Schemes like a robot tax are a bad idea.

So, robots can weld and they can drive – but can they market?

Technology has eliminated wide swaths of employment in the past, from telephone operators and electric typewriter repairers, to photo technicians and video rental store cashiers. It’s now threatening various types of clerks, professional drivers, even insurance underwriters and appraisers.

But AI is more likely to change how marketers work than to replace them. It will supplement the efforts of human workers rather than take their jobs. Why?

First, consider one type of technology already in wide use: marketing automation software. Despite the label, these applications don’t “automate” marketing; they merely enable marketing professionals to set up sequences of email messages that are then automatically sent out using human-defined sequences and branches.

There are marketing professionals, agencies, and consultants who specialize in optimizing the use of marketing automation systems. In the words of Marketing Week, marketing automation platforms “don’t destroy jobs, they just change what jobs are needed.”

Second, there are several distinctly human characteristics essential to marketing that will likely prove vexing to mimic with silicon.

  • Interpretation: An AI-based tool like PaveAI can evaluate 16 million possible correlations within Google Analytics then produce a report showing the most significant findings. But it still requires a human to interpret the results.

For example, knowing that the highest conversion rate correlates with visitors who land on your homepage on a weekday during business hours is about as unsurprising as any data point could be to a B2B marketer. But discovering the lowest conversion rate is associated with a particular section of your website that visitors often reach through organic search is far more interesting, and actionable.

Sentiment analysis presents another type of problem. Words like bomb, sick, mad, bad, and beast are generally considered negative terms to associate with your brand; yet all have, within recent memory, had a positive connotation in slang. People get that (hopefully). Machines will likely struggle.

  • Creativity: Marketing is an almost uniquely left brain and right brain profession. Data analysis, where AI can help, is of course vital.

But emotion plays a significant role in every considered purchase process, impacting both consumer and B2B buying decisions.

The creative side of marketing appeals to our emotions, and that side requires distinctly human creativity. It’s difficult to imagine, for example, even the most sophisticated AI systems coming up with something like E-TRADE’s invest in vests commercial.

  • Originality:  AI can help marketers optimize current channels, but it won’t develop radically new ideas. For example, AI can help optimize and personalize email content – but AI never would have come up with the idea of using email for marketing in the first place (that was Gary Thuerk of Digital Equipment Corporation).

AI may help with optimizing messaging and timing on social networks. But it couldn’t have spontaneously computed Oreo’s famous dunk-in-the-dark tweet… Or suggested creating a profile for KFC’s famous founder on LinkedIn. And it certainly wouldn’t have invented a sporting event to support brand content marketing, as Red Bull has done with Crashed Ice.

  • Perspective: Not every question, in any realm of life, has a clear-cut answer. Even when looking at the same underlying data, reasonable and intelligent people can disagree, based on their beliefs, assumptions, experiences, and definitions – in short, based on their perspective.

For example, is it possible to accurately measure the ROI of social media marketing efforts? AI could provide an answer – and with the right data sources, even perform the calculations – but it couldn’t provide the perspective on the answer that a human thought leader provides.

In marketing content, it’s often the perspective that’s as interesting as the answer. It’s difficult to imagine an AI system weaving a narrative from a unique or interesting perspective. It’s even harder to imagine AI writing this post.

  • Persuasiveness: Great marketing in any form – text, visual, video – combines logic with emotion to move buyers to act. AI has logic literally at its core, but trying to teach AI to understand human emotions has so far been an enormous challenge.

Robots: The new job creators?

An analysis by The Economist on the impact of robots and AI on employment suggests not only that the fear of massive job losses is likely overblown, but that in some cases automation may actually increase the number of jobs for humans. A study of the American job market from 1982 to 2012 found that:

“Employment grew significantly faster in occupations (for example, graphic design) that made more use of computers, as automation sped up one aspect of a job, enabling workers to do the other parts better. The net effect was that more computer-intensive jobs within an industry displaced less computer-intensive ones. Computers thus reallocate rather than displace jobs, requiring workers to learn new skills. This is true of a wide range of occupations…

“So far, the same seems to be true of fields where AI is being deployed. For example, the introduction of software capable of analyzing large volumes of legal documents might have been expected to reduce the number of legal clerks and paralegals, who act as human search engines during the ‘discovery’ phase of a case; in fact, automation has reduced the cost of discovery and increased demand for it. Judges are more willing to allow discovery now, because it’s cheaper and easier… The number of legal clerks in America increased by 1.1% a year between 2000 and 2013.”

The analysis also reiterates that almost every new wave of technology in the past has raised the specter of mass unemployment, only to end up creating more jobs than were destroyed. The term “technological unemployment” sounds like a concept Gates or Wozniak may have devised. The phrase was in fact coined by economist John Maynard Keynes in the 1930s. The total U.S. labor force more than doubled in the following five decades.

In marketing, AI will take over routine and data analysis-intensive tasks, but also create new opportunities for human employees – for example, in training and teaching AI systems. AI is already being used in areas like personalizing product recommendations and more granularly targeting advertising.

But AI requires human training, testing, and teaching both during the implementation phase and on an ongoing basis. Both human testing and human judgment are needed upfront in terms of preparing AI platforms for the real world and determining when they are ready to go live.

A Harvard Business Review article points out the level at which AI systems are “good enough” varies widely by application; a mistake by Alexa or Siri in understanding speech and ordering the wrong item is annoying. A mistake by a self-driving vehicle may be fatal.

Once live, AI platforms – just like a human graduating from college and entering the workforce – need continued training over time to increase their capabilities and stay current with changing tastes and technology. And that means people, as explained in VentureBeat: “AI’s advancement up the value chain is only possible with the aid of human intelligence.”

Historically, technological advancements have always ended up creating more jobs than they destroyed. Today may prove to be different, but for now, it appears robots are more likely to be workplace assistants rather than job terminators. As a marketer, you probably don’t have to worry about robots or AI taking your job. But you will need to be prepared to work with these technologies to do your job better.

For more on marketing in today’s digital-driven environment, read Primed: Prompting Customers to Buy.

Photo: The Adventurist and MOCIST Flickr via Compfight cc

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What Gen Z’s Arrival In The Workforce Means For Recruiters

Meghan M. Biro

Generation Z’s arrival in the workforce means some changes are on the horizon for recruiters. This cohort, born roughly from the mid-90s to approximately 2010, will be entering the workforce in four Hiring Generation Z words in 3d letters on an organization chart to illustrate finding young employees for your company or businessshort years, and you can bet recruiters and employers are already paying close attention to them.

This past fall, the first group of Gen Z youth began entering university. As Boomers continue to work well past traditional retirement age, four or five years from now, we’ll have an American workplace comprised of five generations.

Marketers and researchers have been obsessed with Millennials for over a decade; they are the most studied generation in history, and at 80 million strong they are an economic force to be reckoned with. HR pros have also been focused on all things related to attracting, motivating, mentoring, and retaining Millennials and now, once Gen Z is part of the workforce, recruiters will have to shift gears and also learn to work with this new, lesser-known generation. What are the important points they’ll need to know?

Northeastern University led the way with an extensive survey on Gen Z in late 2014 that included 16- through 19-year-olds and shed some light on key traits. Here are a few points from that study that recruiters should pay special attention to:

  • In general, the Generation Z cohort tends to be comprised of self-starters who have a strong desire to be autonomous. 63% of them report that they want colleges to teach them about being an entrepreneur.
  • 42% expect to be self-employed later in life, and this percentage was higher among minorities.
  • Despite the high cost of higher education, 81% of Generation Z members surveyed believe going to college is extremely important.
  • Generation Z has a lot of anxiety around debt, not only student loan debt, and they report they are very interested in being well-educated about finances.
  • Interpersonal interaction is highly important to Gen Z; just as Millennials before them, communicating via technology, including social media, is far less valuable to them than face-to-face communication.

Of course Gen Z is still very young, and their opinions as they relate to future employment may well change. For example, reality is that only 6.6% of the American workforce is self-employed, making it likely that only a small percentage of those expecting to be self-employed will be as well. The future in that respect is uncertain, and this group has a lot of learning to do and experiences yet ahead of them. However, when it comes to recruiting them, here are some things that might be helpful.

Generation Z is constantly connected

Like Millennials, Gen Z is a cohort of digital natives; they have had technology and the many forms of communication that affords since birth. They are used to instant access to information and, like their older Gen Y counterparts, they are continually processing information. Like Millennials, they prefer to solve their own problems, and will turn to YouTube or other video platforms for tutorials and to troubleshoot before asking for help. They also place great value on the reviews of their peers.

For recruiters, that means being ready to communicate on a wide variety of platforms on a continual basis. In order to recruit the top talent, you will have to be as connected as they are. You’ll need to keep up with their preferred networks, which will likely always be changing, and you’ll need to be transparent about what you want, as this generation is just as skeptical of marketing as the previous one.

Flexible schedules will continue to grow in importance

With the growth of part-time and contract workers, Gen Z will more than likely assume the same attitude their Millennial predecessors did when it comes to career expectations; they will not expect to remain with the same company for more than a few years. Flexible schedules will be a big part of their world as they move farther away from the traditional 9-to-5 job structure as work becomes more about life and less about work, and they’ll likely take on a variety of part time roles.

This preference for flexible work schedules means that business will happen outside of traditional work hours, and recruiters’ own work hours will, therefore, have to be just as flexible as their Gen Z targets’ schedule are. Companies will also have to examine what are in many cases decades old policies on acceptable work hours and business norms as they seek to not only attract, but to hire and retain this workforce with wholly different preferences than the ones that came before them. In many instances this is already happening, but I believe we will see this continue to evolve in the coming years.

Echoing the silent generation

Unlike Millennials, Gen Z came of age during difficult economic times; older Millennials were raised in the boom years. As Alex Williams points out in his recent New York Times piece, there’s an argument to be made that Generation Z is similar in attitude to the Silent Generation, growing up in a time of recession means they are more pragmatic and skeptical than their slightly older peers.

So how will this impact their behavior and desires as job candidates? Most of them are the product of Gen X parents, and stability will likely be very important to them. They may be both hard-working and fiscally savvy.

Sparks & Honey, in their much quoted slideshare on Gen Z, puts the number of high-schooler students who felt pressured by their parents to get jobs at 55 percent. Income and earning your keep are likely to be a big motivation for GenZ. Due to the recession, they also share the experience of living in multi-generational households, which may help considerably as they navigate a workplace comprised of several generations.

We don’t have all the answers

With its youngest members not yet in double digits, Gen Z is still maturing. There is obviously still a lot that we don’t know. This generation may have the opposite experience from the Millennials before them, where the older members experienced the booming economy, with some even getting a career foothold, before the collapse in 2008. Gen Z’s younger members may get to see a resurgent economy as they make their way out of college. Those younger members are still forming their personalities and views of the world; we would be presumptuous to think we have all of the answers already.

Generational analysis is part research, but also part theory testing. What we do know is that this second generation of digital natives, with its adaption of technology and comfort with the fast-paced changing world, will leave its mark on the American workforce as it makes its way in. As a result, everything about HR will change, in a big way. I wrote a post for my Forbes column recently where I said, “To recruit in this environment is like being part wizard, part astronaut, part diplomat, part guidance counselor,” and that’s very true.

As someone who loves change, I believe there has never been a more exciting time to be immersed in both the HR and the technology space. How do you feel about what’s on the horizon as it relates to the future of work and the impending arrival of Generation Z? I’d love to hear your thoughts.

Social tools are playing an increasingly important role in the workplace, especially for younger workers. Learn more: Adopting Social Software For Workforce Collaboration [Video].

The post What Gen Z’s Arrival In The Workforce Means For Recruiters appeared first on TalentCulture.

Image: Bigstock

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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.

How The Digital Economy Is Defining An Entire Generation

Julia Caruso

millennial businesswomen using digital technology at work“Innovation distinguishes between a leader and a follower.” – Steve Jobs

As a part of the last wave of Millennials joining the workforce, I have been inspired by Jobs’ definition of innovation. For years, Millennials like me have been told that we need to be faster, better, and smarter than our peers. With this thought in mind and the endless possibilities of the Internet, it’s easy to see that the digital economy is here, and it is defining my generation.

Lately we’ve all read articles proclaiming that “the digital economy and the economy are becoming one in the same. The lines are being blurred.” While this may be true, Millennials do not see this distinction. To us, it’s just the economy. Everything we do happens in the abstract digital economy – we shop digitally, get our news digitally, communicate digitally, and we take pictures digitally. In fact, the things that we don’t do digitally are few and far between.

Millennial disruption: How to get our attention in the digital economy

In this fast-moving, highly technical era, innovation and technology are ubiquitous, forcing companies to deliver immediate value to consumers. This principle is ingrained in us – it’s stark reality. One day, a brand is a world leader, promising incredible change. Then just a few weeks later, it disappears. Millennials view leaders of the emerging (digital) economy as scrappy, agile, and comfortable making decisions that disrupt the norm, and that may or may not pan out.

What does it take to earn the attention of Millennials? Here are three things you should consider:

1. Millennials appreciate innovations that reinvent product delivery and service to make life better and simpler.

Uber, Vimeo, ASOS, and Apple are some of the most successful disruptors in the current digital economy. Why? They took an already mature market and used technology to make valuable connections with their Millennial customers. These companies did not invent a new product – they reinvented the way business is done within the economy. They knew what their consumers wanted before they realized it.

Millennials thrive on these companies. In fact, we seek them out and expect them to create rapid, digital changes to our daily lives. We want to use the products they developed. We adapt quickly to the changes powered by their new ideas or technologies. With that being said, it’s not astonishing that Millennials feel the need to connect regularly and digitally.

2. It’s not technology that captures us – it’s the simplicity that technology enables.

Recently, McKinsey & Company revealed that “CEOs expect 15%–50% of their companies’ future earnings to come from disruptive technology.” Considering this statistic, it may come as a surprise to these executives that buzzwords – including cloud, diversity, innovation, the Internet of Things, and future of work – does not resonate with us. Sure, we were raised on these terms, but it’s such a part of our culture that we do not think about it. We expect companies to deeply embed this technology now.

What we really crave is technology-enabled simplicity in every aspect of our lives. If something is too complicated to navigate, most of us stop using the product. And why not? It does not add value if we cannot use it immediately.

Many experts claim that this is unique to Millennials, but it truly isn’t. It might just be more obvious and prevalent with us. Some might translate our never-ending desire for simplicity into laziness. Yet striving to make daily activities simpler with the use of technology has been seen throughout history. Millennials just happen to be the first generation to be completely reliant on technology, simplicity, and digitally powered “personal” connections.

3. Millennials keep an eye on where and how the next technology revolution will begin.

Within the next few years Millennials will be the largest generation in the workforce. As a result, the onslaught of coverage on the evolution of technology will most likely be phased out. While the history of technology is significant for our predecessors, this not an overly important story for Millennials because we have not seen the technology evolution ourselves. For us, the digital revolution is a fact of life.

Companies like SAP, Amazon, and Apple did not invent the wheel. Rather, they were able to create a new digital future. For a company to be successful, senior leaders must demonstrate a talent for R&D genius as well as fortune-telling. They need to develop easy-to-use, brilliantly designed products, market them effectively to the masses, and maintain their product elite. It’s not easy, but the companies that upend an entire industry are successfully balancing these tasks.

Disruption can happen anywhere and at any time. Get ready!

Across every industry, big players are threatened — not only by well-known competitors, but by small teams sitting in a garage drafting new ideas that could turn the market upside down. In reality, anyone, anywhere, at any time can cause disruption and bring an idea to life.

Take my employer SAP, for example. With the creation of SAP S/4HANA, we are disrupting the tech market as we help our customers engage in digital transformation. By removing data warehousing and enabling real-time operations, companies are reimagining their future. Organizations such as La Trobe University, the NFL, and Adidas have made it easy to understand and conceptualize the effects using data in real time. But only time will tell whether Millennials will ever realize how much disruption was needed to get where we are today.

Find out how SAP Services & Support you can minimize the impact of disruption and maximize the success of your business. Read SAP S/4HANA customer success stories, visit the SAP Services HUB, or visit the customer testimonial page on SAP.com.

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About Julia Caruso

Julia Caruso is a Global Audience Marketing Specialist at SAP. She is responsible for developing strategic digital media plans and working with senior executives to create high level content for SAP S/4HANA and SAP Activate.

Running Future Cities on Blockchain

Dan Wellers , Raimund Gross and Ulrich Scholl

Building on the Blockchain Framework

Some experts say these seemingly far-future speculations about the possibilities of combining technologies using blockchain are actually both inevitable and imminent:


Democratizing design and manufacturing by enabling individuals and small businesses to buy, sell, share, and digitally remix products affordably while protecting intellectual property rights.
Decentralizing warehousing and logistics by combining autonomous vehicles, 3D printers, and smart contracts to optimize delivery of products and materials, and even to create them on site as needed.
Distributing commerce by mixing virtual reality, 3D scanning and printing, self-driving vehicles, and artificial intelligence into immersive, personalized, on-demand shopping experiences that still protect buyers’ personal and proprietary data.

The City of the Future

Imagine that every agency, building, office, residence, and piece of infrastructure has an entry on a blockchain used as a city’s digital ledger. This “digital twin” could transform the delivery of city services.

For example:

  • Property owners could easily monetize assets by renting rooms, selling solar power back to the grid, and more.
  • Utilities could use customer data and AIs to make energy-saving recommendations, and smart contracts to automatically adjust power usage for greater efficiency.
  • Embedded sensors could sense problems (like a water main break) and alert an AI to send a technician with the right parts, tools, and training.
  • Autonomous vehicles could route themselves to open parking spaces or charging stations, and pay for services safely and automatically.
  • Cities could improve traffic monitoring and routing, saving commuters’ time and fuel while increasing productivity.

Every interaction would be transparent and verifiable, providing more data to analyze for future improvements.


Welcome to the Next Industrial Revolution

When exponential technologies intersect and combine, transformation happens on a massive scale. It’s time to start thinking through outcomes in a disciplined, proactive way to prepare for a future we’re only just beginning to imagine.

Download the executive brief Running Future Cities on Blockchain.


Read the full article Pulling Cities Into The Future With Blockchain

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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.

Raimund Gross

About Raimund Gross

Raimund Gross is a solution architect and futurist at SAP Innovation Center Network, where he evaluates emerging technologies and trends to address the challenges of businesses arising from digitization. He is currently evaluating the impact of blockchain for SAP and our enterprise customers.

Ulrich Scholl

About Ulrich Scholl

Ulrich Scholl is Vice President of Industry Cloud and Custom Development at SAP. In this role, Ulrich discovers and implements best practices to help further the understanding and adoption of the SAP portfolio of industry cloud innovations.

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4 Traits Set Digital Leaders Apart From 97% Of The Competition

Vivek Bapat

Like the classic parable of the blind man and the elephant, it seems everyone has a unique take on digital transformation. Some equate digital transformation with emerging technologies, placing their bets on as the Internet of Things, machine learning, and artificial intelligence. Others see it as a way to increase efficiencies and change business processes to accelerate product to market. Some others think of it is a means of strategic differentiation, innovating new business models for serving and engaging their customers. Despite the range of viewpoints, many businesses are still challenged with pragmatically evolving digital in ways that are meaningful, industry-disruptive, and market-leading.

According to a recent study of more than 3,000 senior executives across 17 countries and regions, only a paltry three percent of businesses worldwide have successfully completed enterprise-wide digital transformation initiatives, even though 84% of C-level executives ranks such efforts as “critically important” to the fundamental sustenance of their business.

The most comprehensive global study of its kind, the SAP Center for Business Insight report “SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart,” in collaboration with Oxford Economics, identified the challenges, opportunities, value, and key technologies driving digital transformation. The findings specifically analyzed the performance of “digital leaders” – those who are connecting people, things, and businesses more intelligently, more effectively, and creating punctuated change faster than their less advanced rivals.

After analyzing the data, it was eye-opening to see that only three percent of companies (top 100) are successfully realizing their full potential through digital transformation. However, even more remarkable was that these leaders have four fundamental traits in common, regardless of their region of operation, their size, their organizational structure, or their industry.

We distilled these traits in the hope that others in the early stages of transformation or that are still struggling to find their bearings can embrace these principles in order to succeed. Ultimately I see these leaders as true ambidextrous organizations, managing evolutionary and revolutionary change simultaneously, willing to embrace innovation – not just on the edges of their business, but firmly into their core.

Here are the four traits that set these leaders apart from the rest:

Trait #1: They see digital transformation as truly transformational

An overwhelming majority (96%) of digital leaders view digital transformation as a core business goal that requires a unified digital mindset across the entire enterprise. But instead of allowing individual functions to change at their own pace, digital leaders prefer to evolve the organization to help ensure the success of their digital strategies.

The study found that 56% of these businesses regularly shift their organizational structure, which includes processes, partners, suppliers, and customers, compared to 10% of remaining companies. Plus, 70% actively bring lines of business together through cross-functional processes and technologies.

By creating a firm foundation for transformation, digital leaders are further widening the gap between themselves and their less advanced competitors as they innovate business models that can mitigate emerging risks and seize new opportunities quickly.

Trait #2: They focus on transforming customer-facing functions first

Although most companies believe technology, the pace of change, and growing global competition are the key global trends that will affect everything for years to come, digital leaders are expanding their frame of mind to consider the influence of customer empowerment. Executives who build a momentum of breakthrough innovation and industry transformation are the ones that are moving beyond the high stakes of the market to the activation of complete, end-to-end customer experiences.

In fact, 92% of digital leaders have established sophisticated digital transformation strategies and processes to drive transformational change in customer satisfaction and engagement, compared to 22% of their less mature counterparts. As a result, 70% have realized significant or transformational value from these efforts.

Trait #3: They create a virtuous cycle of digital talent

There’s little doubt that the competition for qualified talent is fierce. But for nearly three-quarters of companies that demonstrate digital-transformation leadership, it is easier to attract and retain talent because they are five times more likely to leverage digitization to change their talent management efforts.

The impact of their efforts goes beyond empowering recruiters to identify best-fit candidates, highlight risk factors and hiring errors, and predict long-term talent needs. Nearly half (48%) of digital leaders understand that they must invest heavily in the development of digital skills and technology to drive revenue, retain productive employees, and create new roles to keep up with their digital maturity over the next two years, compared to 30% of all surveyed executives.

Trait #4: They invest in next-generation technology using a bimodal architecture

A couple years ago, Peter Sondergaard, senior vice president at Gartner and global head of research, observed that “CIOs can’t transform their old IT organization into a digital startup, but they can turn it into a bi-modal IT organization. Forty-five percent of CIOs state they currently have a fast mode of operation, and we predict that 75% of IT organizations will be bimodal in some way by 2017.”

Based on the results of the SAP Center for Business Insight study, Sondergaard’s prediction was spot on. As digital leaders dive into advanced technologies, 72% are using a digital twin of the conventional IT organization to operate efficiently without disruption while refining innovative scenarios to resolve business challenges and integrate them to stay ahead of the competition. Unfortunately, only 30% of less advanced businesses embrace this view.

Working within this bimodal architecture is emboldening digital leaders to take on incredibly progressive technology. For example, the study found that 50% of these firms are using artificial intelligence and machine learning, compared to seven percent of all respondents. They are also leading the adoption curve of Big Data solutions and analytics (94% vs. 60%) and the Internet of Things (76% vs. 52%).

Digital leadership is a practice of balance, not pure digitization

Most executives understand that digital transformation is a critical driver of revenue growth, profitability, and business expansion. However, as digital leaders are proving, digital strategies must deliver a balance of organizational flexibility, forward-looking technology adoption, and bold change. And clearly, this approach is paying dividends for them. They are growing market share, increasing customer satisfaction, improving employee engagement, and, perhaps more important, achieving more profitability than ever before.

For any company looking to catch up to digital leaders, the conversation around digital transformation needs to change immediately to combat three deadly sins: Stop investing in one-off, isolated projects hidden in a single organization. Stop viewing IT as an enabler instead of a strategic partner. Stop walling off the rest of the business from siloed digital successes.

As our study shows, companies that treat their digital transformation as an all-encompassing, all-sharing, and all-knowing business imperative will be the ones that disrupt the competitive landscape and stay ahead of a constantly evolving economy.

Follow me on twitter @vivek_bapat 

For more insight on digital leaders, check out the SAP Center for Business Insight report, conducted in collaboration with Oxford Economics,SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart.”

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About Vivek Bapat

Vivek Bapat is the Senior Vice President, Global Head of Marketing Strategy and Thought Leadership, at SAP. He leads SAP's Global Marketing Strategy, Messaging, Positioning and related Thought Leadership initiatives.