Digitalist Flash Briefing: Transformation Pays Off For Digital Leaders

Peter Johnson

Today’s flash briefing covers how undergoing a digital transformation is paying off for leading companies.

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Peter Johnson

About Peter Johnson

Peter Johnson is a Senior Director of Marketing Strategy and Thought Leadership at SAP, responsible for developing easy to understand corporate level and cross solution messaging. Peter has proven experience leading innovative programs to accelerate and scale Go-To-Market activities, and drive operational efficiencies at industry leading solution providers and global manufactures respectively.

Technology Drives Profit For Engineering, Construction, And Operations Companies

Judy Cubiss and Ginger Shimp

In a recent podcast, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (social, mobile, analytics, cloud) Technology Podcasts spoke with Michael Shomberg, global vice president and general manager for the engineering, construction, and operations business unit at SAP, about the challenges and opportunities coming to the forefront in the construction industry.  This was an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries.  Listen to a short clip of the podcast:

Construction companies face greater challenges than ever before.  Shomberg elucidates:

projects are getting more complex they are getting bigger more efficient more environmentally safe and the experienced are retiring and being replaced by tech enabled millennials

These surprises, Shomberg explains, are making it difficult for construction companies to meet their cost and/or schedule goals.

Construction labor productivity has been flat for 60 years, which is in direct contrast to industrial business, which have seen a 2X increase in labor productivity in the same time period. Clearly there is a lot of opportunity for the construction industry to improve and learn from other industries.

Challenges and solutions

Digital transformation is a broad term that is going to have an increasingly significant impact on how business is conducted, particularly for construction companies. Industry leaders recognize the need for digitization, what they call the industrialization of construction. Overall, the construction industry has lagged technologically. But now, as technology interconnectivity is now widely available, the industry is at an inflection point. Shomberg says that this means it is possible to take those proven technologies from the manufacturing world and move them to construction. He adds that things like real-time feedback, optimization of procedures, and lean costing to eliminate the waste will help drive efficiency as the size and complexity of projects continue to grow.

chinese based contractor build a 57-story building in just 19 days

Construction leaders also need to address very real demographic shifts in the workforce—both the workforce at large, and as they relate specifically to the construction industry. As baby boomers and even Gen-Xers continue to retire, the “old school” way of managing the day-to-day activities, with Excel and paper, within a construction company will increasingly decline. As veteran authorities retire, they are being replaced with millennials who are comfortable with (and prefer) integrated technology, using hardware like iPads and iPhones and creating an atmosphere in which it’s possible to access real-time feedback through mobile and cloud technologies. This in turn increases efficiency and eliminates surprises.

large Middle Eastern contractor uses the internet of things to monitor and improve asset utilization saving approximately 15 million dollars per year

Technology can be used to share even more rich information to and from the field, as well as to provide visual data from the site in order to forestall surprises. As Shomberg puts it: “If there is an issue, which there always are on construction sites, managers know immediately and can re-plan so as not to have that issue mushroom and maybe become a much bigger problem.”

To the surprise of no one, digital transformation requires fundamental infrastructure changes, such as eliminating multiple databases, abolishing data warehouses, and jettisoning the slow processing of information. Eradicating the manual processing of information means that daily forecasting and daily updates become a reality. Now everybody knows exactly what’s going on, and there is a single plan available for all the troops. This is something that has eluded construction for many years but is now possible thanks to digital connectivity.

To listen this episode of Digital Industries for the construction industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.

Transforming into a truly digital business is much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.

For more on how SAP can help you drive your own digital transformation in the construction industry, visit us online.

Further resources

Chairman Zhang’s Flatpack Skyscrapers, BBC News June 11, 2015.

The Internet of Things Is Giving the Construction Industry a New Strategy, IBM Big Data & Analytics Hub, June 4, 2015.


Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.

Intersecting Innovations Create Change

Jeff Woods


I recently took part in a lively panel in New York City where we discussed the impact of the intersections among digital technologies. During the discussion, we uncovered one aspect of why second-generation digital disruptions like customer experiences driven by machine learning are so much larger than first-generation disruptions like e-commerce: The exponential technologies that underpin digital transformation—the cloud, mobility, analytics—have been deployed across vast portions of the economy. Everything is web enabled. Data is everywhere.

Second-generation innovations develop when you layer sensors, machine learning, and other digital technologies on top of the existing digital landscape and let human ingenuity create connections among them. This issue of Digitalist covers three aspects of these intersecting innovations.

Digitalist Magazine Q3 2017

Our cover story, “Unleash the Killer API,” examines how the application programming interface (API)—a mature component of software development—can be used to connect increasingly digitized services. Originally, application developers used APIs mainly to join different pieces of software to build a more complex application. Today, these APIs connect software, services, data, and—when sensors are used—physical assets. The intersection of conventional APIs, sensors, and data enable business platforms that are powerful enough to create unprecedented customer experiences and redefine competition across industries.

In “Infinite Personalization,” we explore the intersection of Big Data and machine learning facilitated by the mass digitization of customer sentiment. We have the ability to know what customers want even better than they do themselves, creating immense opportunities to deliver ever more personalized interactions, products, and services.

Navigating the changes wrought by these digital intersections puts tremendous pressure on enterprises. Our third feature, “The New DNA of Change,” probes the new skills that are required to keep up with digital transformation. Change no longer happens at a point in time; nor can it be managed as if it does. Rather, change is constant and iterative. The new change management toolbox includes practices such as mindfulness and design thinking to help people and enterprises continually adapt so they are better able to meet customers’ needs.

Finally, in this issue’s Boldly Digital column, “Only the Soft Survive,” we’re honored to have Jenny Dearborn, SAP senior vice president and chief learning officer, contribute her views about how soft skills—which today are treated dismissively—will be essential to thriving throughout our change-filled careers.

We hope these and the other stories in this issue of Digitalist enable you to navigate the intersecting innovations that are creating opportunities and change in your enterprise.

Jeff Woods
Editorial Director


Jeff Woods

About Jeff Woods

Jeff Woods is the VP of Marketing Strategy and Thought Leadership Marketing at SAP. He is responsible for SAP's digital-first thought leadership content marketing strategy, including creating the core marketing and positioning messages around digital transformation that form the foundation for SAP Marketing messaging and demand generation.

Diving Deep Into Digital Experiences

Kai Goerlich


Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.

What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”

Download the executive brief Diving Deep Into Digital Experiences.

Read the full article Swimming in the Immersive Digital Experience.


Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu


Jenny Dearborn: Soft Skills Will Be Essential for Future Careers

Jenny Dearborn

The Japanese culture has always shown a special reverence for its elderly. That’s why, in 1963, the government began a tradition of giving a silver dish, called a sakazuki, to each citizen who reached the age of 100 by Keiro no Hi (Respect for the Elders Day), which is celebrated on the third Monday of each September.

That first year, there were 153 recipients, according to The Japan Times. By 2016, the number had swelled to more than 65,000, and the dishes cost the already cash-strapped government more than US$2 million, Business Insider reports. Despite the country’s continued devotion to its seniors, the article continues, the government felt obliged to downgrade the finish of the dishes to silver plating to save money.

What tends to get lost in discussions about automation taking over jobs and Millennials taking over the workplace is the impact of increased longevity. In the future, people will need to be in the workforce much longer than they are today. Half of the people born in Japan today, for example, are predicted to live to 107, making their ancestors seem fragile, according to Lynda Gratton and Andrew Scott, professors at the London Business School and authors of The 100-Year Life: Living and Working in an Age of Longevity.

The End of the Three-Stage Career

Assuming that advances in healthcare continue, future generations in wealthier societies could be looking at careers lasting 65 or more years, rather than at the roughly 40 years for today’s 70-year-olds, write Gratton and Scott. The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

It will be replaced by a new model in which people continually learn new skills and shed old ones. Consider that today’s most in-demand occupations and specialties did not exist 10 years ago, according to The Future of Jobs, a report from the World Economic Forum.

And the pace of change is only going to accelerate. Sixty-five percent of children entering primary school today will ultimately end up working in jobs that don’t yet exist, the report notes.

Our current educational systems are not equipped to cope with this degree of change. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is outdated by the time students graduate, the report continues.

Skills That Transcend the Job Market

Instead of treating post-secondary education as a jumping-off point for a specific career path, we may see a switch to a shorter school career that focuses more on skills that transcend a constantly shifting job market. Today, some of these skills, such as complex problem solving and critical thinking, are taught mostly in the context of broader disciplines, such as math or the humanities.

Other competencies that will become critically important in the future are currently treated as if they come naturally or over time with maturity or experience. We receive little, if any, formal training, for example, in creativity and innovation, empathy, emotional intelligence, cross-cultural awareness, persuasion, active listening, and acceptance of change. (No wonder the self-help marketplace continues to thrive!)

The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

These skills, which today are heaped together under the dismissive “soft” rubric, are going to harden up to become indispensable. They will become more important, thanks to artificial intelligence and machine learning, which will usher in an era of infinite information, rendering the concept of an expert in most of today’s job disciplines a quaint relic. As our ability to know more than those around us decreases, our need to be able to collaborate well (with both humans and machines) will help define our success in the future.

Individuals and organizations alike will have to learn how to become more flexible and ready to give up set-in-stone ideas about how businesses and careers are supposed to operate. Given the rapid advances in knowledge and attendant skills that the future will bring, we must be willing to say, repeatedly, that whatever we’ve learned to that point doesn’t apply anymore.

Careers will become more like life itself: a series of unpredictable, fluid experiences rather than a tightly scripted narrative. We need to think about the way forward and be more willing to accept change at the individual and organizational levels.

Rethink Employee Training

One way that organizations can help employees manage this shift is by rethinking training. Today, overworked and overwhelmed employees devote just 1% of their workweek to learning, according to a study by consultancy Bersin by Deloitte. Meanwhile, top business leaders such as Bill Gates and Nike founder Phil Knight spend about five hours a week reading, thinking, and experimenting, according to an article in Inc. magazine.

If organizations are to avoid high turnover costs in a world where the need for new skills is shifting constantly, they must give employees more time for learning and make training courses more relevant to the future needs of organizations and individuals, not just to their current needs.

The amount of learning required will vary by role. That’s why at SAP we’re creating learning personas for specific roles in the company and determining how many hours will be required for each. We’re also dividing up training hours into distinct topics:

  • Law: 10%. This is training required by law, such as training to prevent sexual harassment in the workplace.

  • Company: 20%. Company training includes internal policies and systems.

  • Business: 30%. Employees learn skills required for their current roles in their business units.

  • Future: 40%. This is internal, external, and employee-driven training to close critical skill gaps for jobs of the future.

In the future, we will always need to learn, grow, read, seek out knowledge and truth, and better ourselves with new skills. With the support of employers and educators, we will transform our hardwired fear of change into excitement for change.

We must be able to say to ourselves, “I’m excited to learn something new that I never thought I could do or that never seemed possible before.” D!