Digital: When Ignorance Isn't Bliss

Kerry Brown

Surprisingly, I was late to the iPhone game. Like many, I loved the keyboard and email capabilities of my BlackBerry and didn’t understand what all the fuss was about…until I got an iPhone. Then, my smartphone (like everyone else’s) became an extension of my person—more like oxygen and a life tool than a phone. I didn’t know what I didn’t know —I wasn’t aware of what I was missing until I had the new technology in my hands.

Digital is new and uncharted territory for many. Technology is changing the way we do almost everything. Several factors have contributed to the rise of technology—it is becoming more and more affordable, which makes widespread usage more feasible for any company. It’s also becoming more viable—reliably supporting users’ technology needs. For companies, this is good news, but also potentially bad news if not adopted widely or supported effectively. The final factor of technology proliferation is one that is extremely important, but often overlooked. That factor is desirability—and any company investing in technology must consider making it desirable and consumable by its workforce.

Radical change at its simplest example is the smartphone, but even more broadly, devices are now using natural language where interacting with Siri and Alexa is commonplace and computers have algorithms that can read facial expressions and identify patterns. These technologies are already fundamentally changing how humans interact with and consume technology, and the workplace is no exception.

Digital workforce implications

We all know that digital technology is everywhere in the workplace, but does it really change the way we work? The answer is a resounding “yes!” Yet according to a study by the Technical University of Munich, 64% of respondents worldwide admit to not having the skills necessary for digital transformation.

Their concerns are valid. Oxford University examined 700 job descriptions across all job types and found that 47% were likely to be replaced by technology within a decade. Another 19% were moderately likely to be replaced. With that in mind, part of the challenge in digital transformation is anticipating how people will work in this world and how AI, robots, and people will be integrated into a new and more efficient workforce. How will people interact with these digital forces in the workplace?

In the digital continuum below, the evolution of the workforce begins to bring clarity to expected opportunities for transformation and potential areas of need for your workforce.

non-learning versus self-learningSource: SAP

It is worth identifying where you and your organization sit on the continuum of digital transformation. Where are you now? Where do you want to be and when? Where will technology and competition drive you? What leadership and workforce capabilities are needed to support your road map?

As you develop your future workforce, here are some key implications to address:

  1. Jobs will change—and some kinds of jobs will go away. While recent studies show that automation and machine talent will replace existing workers, that doesn’t mean those jobs are gone forever—just that human/machine collaboration will increase and that workers will need to continuously learn new digital and analytical skills.
  1. How and where we work will change. Technology allows people to work from almost anywhere. Workers may rarely go into an office or meet their managers in person, and collaboration with people in different countries will likely increase. Employees will need to consistently learn new skills to keep up with constant change, and employee engagement and adoption will be the ultimate testament to a company’s return on technology investment.
  1. The digital workforce of the future will require different leadership. Executives and managers must learn to lead a more remote workforce and engage employees differently. Leaders must also learn to lead by example—embracing a digital mindset themselves and making decisions based on data.
  1. Teaching and learning in the workplace will change significantly. Learning will be just in time, constant, and personalized. Learners will be able to design their own journey based on the skills required by their jobs—in real-time. Careers will be managed differently and companies will compete hotly for new global talent.

Often, the largest value comes from using technology in a disruptive manner and changing business models. As business model transformation can be proactive or reactive, equally the workforce needs to respond in an agile and nimble manner. A deliberate strategy will allow you to be more responsive to disruption.

The topic of digital is still not well understood by many, in particular as it relates to the workforce. How or if we make transformation desirable will determine success short and long term. This blog series will explore the following questions, providing guidance and examples:

  • What’s really changing? What does the digital workforce of the future look like?
  • How can my organization effectively merge digital business and digital talent to harness new capabilities?
  • Who will your workforce be, from top to bottom, what roles and skills will be needed?
  • How does talent need to evolve to respond to digital transformation?

For more on this topic, see Leading In The Digital Era.


About Kerry Brown

Kerry Brown is the VP of User Adoption at SAP. She is an international speaker on change management, learning, talent and organizational development, social and collaboration, interacting with diverse global occupational cultures and industries, including many Fortune customers.

How To Measure The Business Impact Of Employee Collaboration

Daisy Hernandez

How many businesses measure the impact of collaboration on their enterprise? Heidi Gardner, Harvard Law School Distinguished Fellow and Lecturer, and author of “Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos,” explores the importance of recognizing the role collaboration plays in order to help companies understand the true value of teamwork in the workplace.

Daisy: Why is collaboration important in today’s business environment?

Heidi: Collaboration is prominent across many business environments and sectors, in part because of a rise in “expertise specialization.” The rapid pace of knowledge change creates an incentive for executives to specialize, or become experts in, a specific subject matter across all knowledge-based industries.

At the same time, problems are increasingly complex and multi-disciplinary, no matter the subject area you are examining, from the business environment to the political climate. Therefore, narrowly specialized experts who integrate the knowledge with others’—that is, foster collaboration with their peers—are increasingly important across the landscape.

What are the imperatives for organizations or individuals to think about when developing collaboration incentives? What kinds of problems are these parties trying to address?

First and foremost, there is no “silver bullet” to collaboration implementation. Companies must realize that they need to transform their employee mindsets from individualized to team-oriented. Therefore, they must tackle this process with a multi-pronged approach that promotes individual and collective adoption of collaborative behavior.

How do you incentivize your employees to embrace a collaborative mindset? Find the pockets of collaboration excellence that already exist within the organization, and promote the upside of engaging in these ways. From financial profits to strategic company advantage, growth and reputation, organizational leaders must demonstrate how colleague-to-colleague collaboration strengthens the core business.

When working to develop new initiatives in a corporate atmosphere, there is a certain level of resistance stemming from the idea that “that couldn’t happen here.” Therefore, leaders must take a look at the atmosphere already in place.

What performance measurement practices does the company have? Are employee management and corporate communication systems running effectively? Are there physical arrangements in place that provide the opportunity for employees to have spontaneous interactions throughout the day, which sociologists have historically noted as important for community development? By taking a closer eye to these key components, businesses can more effectively establish collaborative practices and technologies that remove the common perception that it is too difficult to get people engaged, keep them updated, and avoid duplicated performance efforts.

How can employers use collaboration tools and strategies to knock down barriers and provide more flexibilities in employee work?

As mentioned earlier, while technology isn’t a “silver bullet,” it is a crucial tool to facilitate collaboration.

First, collaboration technology assists with corporate growth and development. For instance, when companies are experiencing global growth, possibly through a merger and acquisition, this evolution can make it difficult for individuals to realize their own company service offerings. With the right technologies, companies can provide access on an “as-needed” basis for people to explore their company and connect back with the individual who is best suited to address their questions and needs.

Secondly, these tools help to make work “come alive,” by replicating interpersonal relationships. Many companies lack the ability to foster familiarity and trust among employees. Collaborative technologies provide rich environments where colleagues can move past the immediate questions that come to mind when working with peers (such as others’ intentions or willingness to share credit) and participate in projects in a “functionally equivalent” manner.

Relationships can not only be fostered, but advanced, through the use of collaboration technologies. Developers have enabled these tools to humanize experiences and functionalities as much as possible through the creation of virtual workspaces. Employees are able to share emotions with each other and coordinate ideas through a respectful rapport.

Third, collaborating across time zones is never easy. With collaboration technology, however, bridging time zones is possible, as employees no longer have to wait to catch up on conference calls, but can now work productivity in a “round-the-clock” fashion. Additionally, with virtual workspaces, users can input doodles and quick notes that capture direct emotions more effectively than a typical font face would.

Have your clients used collaboration technologies in specific lines-of-businesses?

Yes. Across my research and client base, I have seen collaboration technologies support retention of top talent, improve onboarding of new hires, and enhance employee development. In fact, one of my financial services clients is utilizing collaboration strategies to bring people with different expertise, who may have otherwise not collaborated, together to create a more holistic, customer-centric business approach.

In doing so, this business is acknowledging that office environments are not always conducive to direct cross-department partnership. Just because people are working in the same office environment does not mean that they are regularly conversing and bouncing ideas off of one another. With collaborative technologies, employees who have highly complementary knowledge bases have a platform to connect and share.

This Q&A originally appeared on the SAP Community.

For more insight on building a culture of collaboration, see Developing Strong Virtual Team Culture Through Communication Tools.


Daisy Hernandez

About Daisy Hernandez

Daisy Hernandez is Global VP of Product Management at SAP. Under her executive leadership she leads product management and enablement for SAP Jam Collaboration. She is an experience professional who has held several leadership positions with specialties in social software, collaboration applications, cloud computing, enterprise software, agile methodologies and management.

Making A Business Case For Digital HR

Naomi Benjamin

My last blog, The Evolution of HR and the Missing Link?, proposed that technology is key to enabling the HR function to move from transactional processor to strategic advisor, but making a business case for any HR tech is often seen as a barrier to implementation. So how do you go about making a business case for digital HR transformation?

Based on personal and shared experiences with our customers, successful digital HR transformation business cases share some common characteristics.

Successful digital HR transformation business cases are business-led, focusing on the business value of the technology and clearly demonstrating a concrete list of the benefits a digital HR workplace can provide in line with the company’s overall strategic business objectives.

Onboarding new employees, for example, can generally be one of the most manual, time-consuming and repetitive tasks. Using technology, we can simplify and scale the onboarding process by making it repeatable, which would be crucial to supporting a company’s growth strategy.

Today, we see our customers investigating more advanced scenarios such as building an integrated “employee experience platform” leveraging machine learning, chatbots, apps, and other advanced technologies to empower employees and support their ongoing needs, as well as aiding company objectives of employee satisfaction and retention.  IRT, a community-owned care provider for seniors, used the technology to enhance employee empowerment and accountability and support building a culture of customer-centricity and innovation across the organization.

This leads us to the next point: Digital HR transformation isn’t just about HR. According to Deloitte’s 2017 Human Capital Trends report, “It’s about HR teams taking up the dual challenge of transforming HR operations on the one hand, and transforming the workforce and the way work is done on the other.”

It’s therefore not surprising that successful digital HR transformation business cases include input from other departments across the organization, including IT and other technical teams and often compliance and finance. John Holland, a leading integrated infrastructure and property company, is a good example of this. Peter Howell, group general manager organizational development, suggested that the importance of working within a bigger mandate for digital transformation was the “biggest pearl of wisdom” he could offer following the company’s successful implementation of a digital HR solution.

A business-led business case naturally includes a problem definition and quantification of the impact, which is necessary for demonstrating tangible ROI over time. The problem definition is an honest analysis of the processes today, warts and all. Quantification in HR has traditionally been focused on lost opportunity costs, which are difficult to accurately quantify. Consider, for example, the digitization of a leave request: “How much more productive would managers be if they approved leave requests from their mobile device?”

Today, measurable HR indicators like onboarding costs and turnover rates, both pre- and -post implementation, are critical to calculating the tangible investment returns over time that management requires, and to support an ongoing digital HR transformation strategy that future-proofs the business.

For example, Amy Grubb, CEO of Cloud Consulting Partners, explains how a company with 10,000 employees developed a business case by showing how the cloud would lower the cost of turnover, which represented 10 percent of the annual payroll. HR, IT and finance worked together to explicitly demonstrate that by reducing turnover five percent, they could save the company four million dollars in annual turnover costs.

Of course, management buy-in is crucial to the approval of any business case. As evidenced by both John Holland and IRT, demonstrating how the digital HR transformation is aligned to the broader business plans made it easier to get C-Suite buy-in. Additionally, including leaders across the organization at the early stages will give them insight into the vision and perhaps ratify the decision-making process.

Finally developing a technology road map and a roll-out strategy and communicating exactly what will be delivered, why, and when, including how a digital transformation project will affect people in the business (aka good old change management) may be last pieces of the puzzle required to secure management approval for your digital HR transformation business case.

For more on HR technology, see Artificial Intelligence Enables Humanity In Human Resources.


Naomi Benjamin

About Naomi Benjamin

Naomi has over 20 years HR domain experience across multiple industries and countries. As a Human Resources Technology Advisor at SAP, Naomi works with both the I.T and HR functions of organisations across the Asia Pacific region to understand how the implementation of Technology can support HR practices and deliver tangible business outcomes and measurable business benefits. Based in Melbourne, Naomi’s focus also includes how Cloud solutions can deliver business value through integrations, extensibility, compliance and security.

The Blockchain Solution

By Gil Perez, Tom Raftery, Hans Thalbauer, Dan Wellers, and Fawn Fitter

In 2013, several UK supermarket chains discovered that products they were selling as beef were actually made at least partly—and in some cases, entirely—from horsemeat. The resulting uproar led to a series of product recalls, prompted stricter food testing, and spurred the European food industry to take a closer look at how unlabeled or mislabeled ingredients were finding their way into the food chain.

By 2020, a scandal like this will be eminently preventable.

The separation between bovine and equine will become immutable with Internet of Things (IoT) sensors, which will track the provenance and identity of every animal from stall to store, adding the data to a blockchain that anyone can check but no one can alter.

Food processing companies will be able to use that blockchain to confirm and label the contents of their products accordingly—down to the specific farms and animals represented in every individual package. That level of detail may be too much information for shoppers, but they will at least be able to trust that their meatballs come from the appropriate species.

The Spine of Digitalization

Keeping food safer and more traceable is just the beginning, however. Improvements in the supply chain, which have been incremental for decades despite billions of dollars of technology investments, are about to go exponential. Emerging technologies are converging to transform the supply chain from tactical to strategic, from an easily replicable commodity to a new source of competitive differentiation.

You may already be thinking about how to take advantage of blockchain technology, which makes data and transactions immutable, transparent, and verifiable (see “What Is Blockchain and How Does It Work?”). That will be a powerful tool to boost supply chain speed and efficiency—always a worthy goal, but hardly a disruptive one.

However, if you think of blockchain as the spine of digitalization and technologies such as AI, the IoT, 3D printing, autonomous vehicles, and drones as the limbs, you have a powerful supply chain body that can leapfrog ahead of its competition.

What Is Blockchain and How Does It Work?

Here’s why blockchain technology is critical to transforming the supply chain.

Blockchain is essentially a sequential, distributed ledger of transactions that is constantly updated on a global network of computers. The ownership and history of a transaction is embedded in the blockchain at the transaction’s earliest stages and verified at every subsequent stage.

A blockchain network uses vast amounts of computing power to encrypt the ledger as it’s being written. This makes it possible for every computer in the network to verify the transactions safely and transparently. The more organizations that participate in the ledger, the more complex and secure the encryption becomes, making it increasingly tamperproof.

Why does blockchain matter for the supply chain?

  • It enables the safe exchange of value without a central verifying partner, which makes transactions faster and less expensive.
  • It dramatically simplifies recordkeeping by establishing a single, authoritative view of the truth across all parties.
  • It builds a secure, immutable history and chain of custody as different parties handle the items being shipped, and it updates the relevant documentation.
  • By doing these things, blockchain allows companies to create smart contracts based on programmable business logic, which can execute themselves autonomously and thereby save time and money by reducing friction and intermediaries.

Hints of the Future

In the mid-1990s, when the World Wide Web was in its infancy, we had no idea that the internet would become so large and pervasive, nor that we’d find a way to carry it all in our pockets on small slabs of glass.

But we could tell that it had vast potential.

Today, with the combination of emerging technologies that promise to turbocharge digital transformation, we’re just beginning to see how we might turn the supply chain into a source of competitive advantage (see “What’s the Magic Combination?”).

What’s the Magic Combination?

Those who focus on blockchain in isolation will miss out on a much bigger supply chain opportunity.

Many experts believe emerging technologies will work with blockchain to digitalize the supply chain and create new business models:

  • Blockchain will provide the foundation of automated trust for all parties in the supply chain.
  • The IoT will link objects—from tiny devices to large machines—and generate data about status, locations, and transactions that will be recorded on the blockchain.
  • 3D printing will extend the supply chain to the customer’s doorstep with hyperlocal manufacturing of parts and products with IoT sensors built into the items and/or their packaging. Every manufactured object will be smart, connected, and able to communicate so that it can be tracked and traced as needed.
  • Big Data management tools will process all the information streaming in around the clock from IoT sensors.
  • AI and machine learning will analyze this enormous amount of data to reveal patterns and enable true predictability in every area of the supply chain.

Combining these technologies with powerful analytics tools to predict trends will make lack of visibility into the supply chain a thing of the past. Organizations will be able to examine a single machine across its entire lifecycle and identify areas where they can improve performance and increase return on investment. They’ll be able to follow and monitor every component of a product, from design through delivery and service. They’ll be able to trigger and track automated actions between and among partners and customers to provide customized transactions in real time based on real data.

After decades of talk about markets of one, companies will finally have the power to create them—at scale and profitably.

Amazon, for example, is becoming as much a logistics company as a retailer. Its ordering and delivery systems are so streamlined that its customers can launch and complete a same-day transaction with a push of a single IP-enabled button or a word to its ever-attentive AI device, Alexa. And this level of experimentation and innovation is bubbling up across industries.

Consider manufacturing, where the IoT is transforming automation inside already highly automated factories. Machine-to-machine communication is enabling robots to set up, provision, and unload equipment quickly and accurately with minimal human intervention. Meanwhile, sensors across the factory floor are already capable of gathering such information as how often each machine needs maintenance or how much raw material to order given current production trends.

Once they harvest enough data, businesses will be able to feed it through machine learning algorithms to identify trends that forecast future outcomes. At that point, the supply chain will start to become both automated and predictive. We’ll begin to see business models that include proactively scheduling maintenance, replacing parts just before they’re likely to break, and automatically ordering materials and initiating customer shipments.

Italian train operator Trenitalia, for example, has put IoT sensors on its locomotives and passenger cars and is using analytics and in-memory computing to gauge the health of its trains in real time, according to an article in Computer Weekly. “It is now possible to affordably collect huge amounts of data from hundreds of sensors in a single train, analyse that data in real time and detect problems before they actually happen,” Trenitalia’s CIO Danilo Gismondi told Computer Weekly.

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials.

The project, which is scheduled to be completed in 2018, will change Trenitalia’s business model, allowing it to schedule more trips and make each one more profitable. The railway company will be able to better plan parts inventories and determine which lines are consistently performing poorly and need upgrades. The new system will save €100 million a year, according to ARC Advisory Group.

New business models continue to evolve as 3D printers become more sophisticated and affordable, making it possible to move the end of the supply chain closer to the customer. Companies can design parts and products in materials ranging from carbon fiber to chocolate and then print those items in their warehouse, at a conveniently located third-party vendor, or even on the client’s premises.

In addition to minimizing their shipping expenses and reducing fulfillment time, companies will be able to offer more personalized or customized items affordably in small quantities. For example, clothing retailer Ministry of Supply recently installed a 3D printer at its Boston store that enables it to make an article of clothing to a customer’s specifications in under 90 minutes, according to an article in Forbes.

This kind of highly distributed manufacturing has potential across many industries. It could even create a market for secure manufacturing for highly regulated sectors, allowing a manufacturer to transmit encrypted templates to printers in tightly protected locations, for example.

Meanwhile, organizations are investigating ways of using blockchain technology to authenticate, track and trace, automate, and otherwise manage transactions and interactions, both internally and within their vendor and customer networks. The ability to collect data, record it on the blockchain for immediate verification, and make that trustworthy data available for any application delivers indisputable value in any business context. The supply chain will be no exception.

Blockchain Is the Change Driver

The supply chain is configured as we know it today because it’s impossible to create a contract that accounts for every possible contingency. Consider cross-border financial transfers, which are so complex and must meet so many regulations that they require a tremendous number of intermediaries to plug the gaps: lawyers, accountants, customer service reps, warehouse operators, bankers, and more. By reducing that complexity, blockchain technology makes intermediaries less necessary—a transformation that is revolutionary even when measured only in cost savings.

“If you’re selling 100 items a minute, 24 hours a day, reducing the cost of the supply chain by just $1 per item saves you more than $52.5 million a year,” notes Dirk Lonser, SAP go-to-market leader at DXC Technology, an IT services company. “By replacing manual processes and multiple peer-to-peer connections through fax or e-mail with a single medium where everyone can exchange verified information instantaneously, blockchain will boost profit margins exponentially without raising prices or even increasing individual productivity.”

But the potential for blockchain extends far beyond cost cutting and streamlining, says Irfan Khan, CEO of supply chain management consulting and systems integration firm Bristlecone, a Mahindra Group company. It will give companies ways to differentiate.

“Blockchain will let enterprises more accurately trace faulty parts or products from end users back to factories for recalls,” Khan says. “It will streamline supplier onboarding, contracting, and management by creating an integrated platform that the company’s entire network can access in real time. It will give vendors secure, transparent visibility into inventory 24×7. And at a time when counterfeiting is a real concern in multiple industries, it will make it easy for both retailers and customers to check product authenticity.”

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials. Although the key parts of the process remain the same as in today’s analog supply chain, performing them electronically with blockchain technology shortens each stage from hours or days to seconds while eliminating reams of wasteful paperwork. With goods moving that quickly, companies have ample room for designing new business models around manufacturing, service, and delivery.

Challenges on the Path to Adoption

For all this to work, however, the data on the blockchain must be correct from the beginning. The pills, produce, or parts on the delivery truck need to be the same as the items listed on the manifest at the loading dock. Every use case assumes that the data is accurate—and that will only happen when everything that’s manufactured is smart, connected, and able to self-verify automatically with the help of machine learning tuned to detect errors and potential fraud.

Companies are already seeing the possibilities of applying this bundle of emerging technologies to the supply chain. IDC projects that by 2021, at least 25% of Forbes Global 2000 (G2000) companies will use blockchain services as a foundation for digital trust at scale; 30% of top global manufacturers and retailers will do so by 2020. IDC also predicts that by 2020, up to 10% of pilot and production blockchain-distributed ledgers will incorporate data from IoT sensors.

Despite IDC’s optimism, though, the biggest barrier to adoption is the early stage level of enterprise use cases, particularly around blockchain. Currently, the sole significant enterprise blockchain production system is the virtual currency Bitcoin, which has unfortunately been tainted by its associations with speculation, dubious financial transactions, and the so-called dark web.

The technology is still in a sufficiently early stage that there’s significant uncertainty about its ability to handle the massive amounts of data a global enterprise supply chain generates daily. Never mind that it’s completely unregulated, with no global standard. There’s also a critical global shortage of experts who can explain emerging technologies like blockchain, the IoT, and machine learning to nontechnology industries and educate organizations in how the technologies can improve their supply chain processes. Finally, there is concern about how blockchain’s complex algorithms gobble computing power—and electricity (see “Blockchain Blackouts”).

Blockchain Blackouts

Blockchain is a power glutton. Can technology mediate the issue?

A major concern today is the enormous carbon footprint of the networks creating and solving the algorithmic problems that keep blockchains secure. Although virtual currency enthusiasts claim the problem is overstated, Michael Reed, head of blockchain technology for Intel, has been widely quoted as saying that the energy demands of blockchains are a significant drain on the world’s electricity resources.

Indeed, Wired magazine has estimated that by July 2019, the Bitcoin network alone will require more energy than the entire United States currently uses and that by February 2020 it will use as much electricity as the entire world does today.

Still, computing power is becoming more energy efficient by the day and sticking with paperwork will become too slow, so experts—Intel’s Reed among them—consider this a solvable problem.

“We don’t know yet what the market will adopt. In a decade, it might be status quo or best practice, or it could be the next Betamax, a great technology for which there was no demand,” Lonser says. “Even highly regulated industries that need greater transparency in the entire supply chain are moving fairly slowly.”

Blockchain will require acceptance by a critical mass of companies, governments, and other organizations before it displaces paper documentation. It’s a chicken-and-egg issue: multiple companies need to adopt these technologies at the same time so they can build a blockchain to exchange information, yet getting multiple companies to do anything simultaneously is a challenge. Some early initiatives are already underway, though:

  • A London-based startup called Everledger is using blockchain and IoT technology to track the provenance, ownership, and lifecycles of valuable assets. The company began by tracking diamonds from mine to jewelry using roughly 200 different characteristics, with a goal of stopping both the demand for and the supply of “conflict diamonds”—diamonds mined in war zones and sold to finance insurgencies. It has since expanded to cover wine, artwork, and other high-value items to prevent fraud and verify authenticity.
  • In September 2017, SAP announced the creation of its SAP Leonardo Blockchain Co-Innovation program, a group of 27 enterprise customers interested in co-innovating around blockchain and creating business buy-in. The diverse group of participants includes management and technology services companies Capgemini and Deloitte, cosmetics company Natura Cosméticos S.A., and Moog Inc., a manufacturer of precision motion control systems.
  • Two of Europe’s largest shipping ports—Rotterdam and Antwerp—are working on blockchain projects to streamline interaction with port customers. The Antwerp terminal authority says eliminating paperwork could cut the costs of container transport by as much as 50%.
  • The Chinese online shopping behemoth Alibaba is experimenting with blockchain to verify the authenticity of food products and catch counterfeits before they endanger people’s health and lives.
  • Technology and transportation executives have teamed up to create the Blockchain in Transport Alliance (BiTA), a forum for developing blockchain standards and education for the freight industry.

It’s likely that the first blockchain-based enterprise supply chain use case will emerge in the next year among companies that see it as an opportunity to bolster their legal compliance and improve business processes. Once that happens, expect others to follow.

Customers Will Expect Change

It’s only a matter of time before the supply chain becomes a competitive driver. The question for today’s enterprises is how to prepare for the shift. Customers are going to expect constant, granular visibility into their transactions and faster, more customized service every step of the way. Organizations will need to be ready to meet those expectations.

If organizations have manual business processes that could never be automated before, now is the time to see if it’s possible. Organizations that have made initial investments in emerging technologies are looking at how their pilot projects are paying off and where they might extend to the supply chain. They are starting to think creatively about how to combine technologies to offer a product, service, or business model not possible before.

A manufacturer will load a self-driving truck with a 3D printer capable of creating a customer’s ordered item en route to delivering it. A vendor will capture the market for a socially responsible product by allowing its customers to track the product’s production and verify that none of its subcontractors use slave labor. And a supermarket chain will win over customers by persuading them that their choice of supermarket is also a choice between being certain of what’s in their food and simply hoping that what’s on the label matches what’s inside.

At that point, a smart supply chain won’t just be a competitive edge. It will become a competitive necessity. D!

About the Authors

Gil Perez is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Tom Raftery is Global Vice President, Futurist, and Internet of Things Evangelist, at SAP.

Hans Thalbauer is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Dan Wellers is Global Lead, Digital Futures, at SAP.

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

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.



Why Blockchain Is Crucial For FP&A: Part 1

Brian Kalish

Part 17 in the Dynamic Planning Series

In these times of almost continuous technological change, there is a natural tendency to be suspect of whatever is being heralded as the “flavor of the month” or the “next best bet.” In early 2017, I was graciously given the opportunity to speak on what I believed to be the technologies that were transforming finance and specifically, the FP&A function. The talk I ended up giving covered five areas:

  • Advanced analytics and forecasting
  • Robotic process automation
  • Cloud and Software-as-a-Service
  • Artificial intelligence
  • Blockchain

While all these topics deserve further investigation, for this article, I want to focus on blockchain. Part of the reason for diving deeper into blockchain is the lack of understanding of what it actually is and the great amount of time people in the finance function are currently spending talking about it. This has greatly changed in the past nine months.

Last March, while hosting an FP&A Roundtable in Boston, I ask a group of 25 senior FP&A professionals how familiar they were with the concept of blockchain. Out of this august group, there was only one participant who felt truly comfortable with the concept. I still get asked on a regular basis, all over the world, “Blockchain. What is it?”

Blockchain: What is it?

By allowing digital information to be distributed but not copied, blockchain technology has created the spine of a new type of Internet. Picture a spreadsheet that is duplicated thousands of times across a network of computers. Now imagine that this network is designed to regularly update this spreadsheet, and you have a basic understanding of blockchain.

Information held on a blockchain exists as a shared and continually reconciled database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly transparent and easily verifiable. No centralized version of this information exists for someone to corrupt. Hosted by many computers simultaneously, its data is accessible to any authorized user.

Blockchain technology is like the Internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain 1) cannot be controlled by any single entity and 2) has no single point of failure. The Internet itself has proven to be durable for almost 30 years. It’s a track record that bodes well for blockchain technology as it continues to be developed.

A self-auditing ecosystem

The blockchain network lives in a state of consensus, one that automatically checks in with itself on a regular basis. A kind of self-auditing ecosystem of a digital value, the network reconciles every transaction that happens at regular intervals. Each group of these transactions is referred to as a “block.” Two important properties result from this:

Transparency. Data is embedded within the network as a whole, and by definition, is available to all authorized users.

Incorruptibility. Altering any unit of information on the blockchain would mean using a huge amount of computing power to override the entire network. In theory, it is possible; however, in practice, it’s unlikely to happen.

A decentralized technology

By design, the blockchain is a decentralized technology, so anything that happens on it is a function of the network as a whole. Some important implications stem from this. By creating a new way to verify transactions, aspects of traditional commerce may become unnecessary.

Today’s Internet has security problems that are familiar to everyone. However, by storing data across its network, the blockchain eliminates the risks that come with data held centrally. There are no centralized points of vulnerability that can be exploited. In addition, while we all currently rely on the “username/password” system to protect our identity and assets online, blockchain security methods use encryption technology.

I hope this little tutorial helps describe what blockchain is. In my next article, I’ll discuss the value of blockchain to the FP&A profession.

For more on this topic, read the two-part “Blockchain and the CFO” series and “When Blockchain Fulfills CFOs’ Paperless Vision.”

2018 will be a busy year with FP&A Roundtables in St. Louis, Charlotte, Atlanta, San Diego, Las Vegas, London, Boston, Minneapolis, DFW, San Francisco, Hong Kong, Jeddah, and many other locations around the world to support the global FP&A community.

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Brian Kalish

About Brian Kalish

Brian Kalish is founder and principal at Kalish Consulting. As a public speaker and writer addressing many of the most topical issues facing treasury and FP&A professionals today, he is passionately committed to building and connecting the global FP&A community. He hosts FP&A Roundtable meetings in North America, Europe, Asia, and South America. Brian is former executive director of the global FP&A Practice at AFP. He has over 20 years experience in finance, FP&A, treasury, and investor relations. Before joining AFP, he held a number of treasury and finance positions with the FHLB, Washington Mutual/JP Morgan, NRUCFC, Fifth Third Bank, and Fannie Mae. Brian attended Georgia Tech in Atlanta, GA for his undergraduate studies and the Pamplin College of Business at Virginia Tech for his graduate work. In 2014, Brian was awarded the Global Certified Corporate FP&A Professional designation.