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Digital Transformation: Reimagining The World, Industry By Industry

Pat Bakey

The world as we know it is continually changing, and one of the fundamental drivers is digital transformation. Person by person, company by company, and industry by industry, a new reality is evolving.

The global economy is undergoing a digital transformation as well, and it’s happening at breakneck speed. Consequently, established business models no longer work, and previously successful business networks are rapidly disintegrating while industry boundaries evaporate. New, powerful players are emerging and shaking up the status quo as products get smart and consumers get even smarter.

What does that mean to the everyday person like you and me? It means imagining the world differently—because we must, and because we can.

Re-imagining industry

To see how the world can be imagined, let’s look at the agricultural industry—one that we can relate to because we all need food to survive.

One of the ambitious objectives of the United Nations Sustainable Development Goals (SDGs) is to eliminate hunger by 2030. However, with an estimated 9 billion people living on earth by 2050, this goal will not be possible unless we start re-imagining how food is produced today. In fact, a report from the Food and Agriculture Organization of the United Nations says that to feed the entire world population in 2050, food production must increase by 70%.

That means that the soybean farmer in Iowa as well as the cashew farmer in Africa must do things differently. And they can, thanks to digital transformation and new business models, such as precision farming, which combines a variety of technologies to enable farmers to increase production, optimize investments, and maximize returns.

Feeding the world is an attainable reality

For the agricultural industry—which consists of more than one billion workers worldwide—precision farming is a bold step. But now, farmers in even the most remote parts of the world can maximize yields like never before. They can also minimize irrigation, labor, and energy usage while intelligently using fertilizers, herbicides, and pesticides that may cause harm to the environment. They can produce better food, more economically and more efficiently.

It’s advancements like this that will end world hunger. In fact, the International Food and Policy Research Institute recently reported that agricultural technologies could increase global crop yields by as much as 67% percent while cutting food prices nearly in half by 2050.

Precision farming in action

Big Data, mobile, supply chain, and cloud technologies are key enablers for precision farming. Here are a few examples of how these tools are helping farmers around the globe.

  • Gaining new insights. Farmers are using Big Data from the Precision Agriculture Hub, which connects the world’s biggest agricultural businesses, farmers, and suppliers to farm smarter. Through technology solutions and the supply chain and network of F4FAgriculture, farmers can gain insights on which crops to plant where and when. They can also learn what pesticides and fertilizers to use; how upcoming weather patterns will affect their crops; and where the best market prices are. With this critical data, they can maximize their yields, optimize sales, and help feed more people.
  • Learning new ways to farm. The African Cashew Initiative works to help over 300,000 small-scale farmers increase cashew productivity and income in five African countries (Benin, Burkina Faso, Côte d’Ivoire, Ghana, and Mozambique). By offering training programs, materials, and access to mobile business applications, these farmers are learning the best way to bring their product to market too. They can more efficiently forecast and plan, connect to the best buyers, and implement advanced marketing strategies.
  • Increasing sustainability. In northern Ghana, the StarShea Network is helping rural women learn more efficient ways to harvest and process shea nuts and butter. The network, with more than 15,000 members, provides information technology, education, and microfinancing to its members so they can conduct business independently and sustainably. For instance, through mobile technology, these women have access to the current market prices so they can sell their products competitively to global customers. They also have the technology to scan personalized barcode labels on each shea nut sack to track individual production and storage details. 

SAP is helping the world re-imagine itself

The vision and purpose of SAP is to help the world run better and improve people’s lives. We are committed to accelerating our customers’ digital transformation and we challenge them to reimagine their operational processes, business models, and the way they interact with the world.

We are also committed to the United Nations SDGs, including improving the health of the world by ending hunger – because we must, and we can.

To learn more about precision farming initiatives from SAP, visit here.

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Pat Bakey

About Pat Bakey

Pat Bakey is the president of Industry Cloud for SAP. He is responsible for the industry cloud footprint, which covers 25 industries globally, the finance and extended supply chain lines of business and the go-to-market execution of SAP Business Suite 4 SAP HANA (SAP S/4HANA). By offering prescriptive cloud road maps by industry and lines of business, the Industry Cloud organization serves every customer in every cloud model (private, public, and hybrid), for any business size, anywhere in the world, enabling SAP’s customers to approach their digital transformation through an industry lens.

Your Best Brand Advocates: Employees With Passion

Olesya Tarasenko

When I think about developing brand advocates, customers are the ones who most often come to mind. However, after reading a recent blog post from one of my millennial peers, I was reminded of how important it is to have your most passionate employees serve as ambassadors of the purpose of your business as well. After all, they are the most organic sources of your brand promotion, both within and outside of your organization—especially if you are a purpose-driven company.

Why passion at work matters

To understand this concept better, let’s look at why passion at work matters and how that ties into purpose. Here are a few reasons why it is important to help your employees to find passion in every aspect of their lives, including their work and career:

  • Passion triggers personal and professional growth. When people follow their passion, I believe they automatically become growth-oriented and naturally tend to take on more challenging tasks. The achievement of tasks leads to greater success, both personally and professionally.
  • Passionate people strive to be their best. When passion inspires people, they work harder because they are more personally involved. This also seems to motivate them to make things happen even when a situation seems impossible.
  • Passion teaches people to tolerate uncertainty and discomfort. When people are inspired, they can tolerate a lot more ambiguity and insecurity.

More and more, passion is a quality that many dynamic companies now want to encourage in their employees. And when the passion is fired up in employees, the logical next step is to encourage them to turn that passion into projects that support a company’s purpose.

Turn passion into value

Back in 2010, Steve Jobs said Apple’s core value was the belief that people with passion can change the world for the better. He essentially was talking about purpose-driven marketing and how employees’ passions can make a difference in a company.

So how can you encourage passion in your company? Here are three simple steps you can take:

  1. Learn about your employees’ passions. Understanding what your employees are passionate about helps managers get to know them better on a more personal level. This in turn can lead to conversations that are more individually tailored and meaningful for employees.
  1. Develop a “driver profile” for each employee. Creating a profile of what drives your employees can help you quickly see where their passions can align with your company’s purpose.
  1. Launch “find your passion” programs within your organization. Once you understand what drives your employees, you can help them create “passion projects” that would interest them and nourish your company’s purpose. 

What are passion projects? They are simply projects that people feel excited about working on because they align with their own passions and purpose. For example, an Autism at Work program within your company would be a great passion project for someone who has an autistic child. Or Back-to-Work initiatives could encourage women who have returned to the workforce after having children help others who are just starting that process.

These are brilliant ways to encourage your employees to build a connection with your company’s purpose. These projects may be outside of the typical scope of a position or job responsibilities, but they are still aligned with the big-picture objectives of your organization.

Passion creates more passion

When employees are connected to a company’s purpose through passion projects at work, the sources that feed your company’s purpose initiatives multiply, creating a long-lasting natural source of nourishment. And when you encourage your employees to link their passions with meaningful projects at work, you start to build stronger connections between them and your company.

In essence, it is pretty simple: Make employees’ passions a priority of your business and you will soon find your business’s purpose among your employees’ priorities.

This blog is part of our Millennials on Purpose series. To learn more about SAP’s higher purpose to help the world run better and improve people’s lives, visit sap.com/purpose.

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Olesya Tarasenko

About Olesya Tarasenko

Olesya Tarasenko is an HR Early Talent at SAP, currently finishing her final rotation in the HR Operations, Cloud Services, team in Prague, Czech Republic. With her multicultural background and diverse HR experiences, including international, Olesya aims to promote personal and professional development and help employees reach their full potential at work. Olesya holds a Master’s degree in Human Resource Development from Villanova University in Pennsylvania and is passionate about continuous learning, innovation, and simplification.

Super Bowl Commercials And Purpose-Driven Business

Thomas Leisen

Every year, millions of people look forward to the final match of the National Football League (NFL) in the United States. Most of the 100-plus million viewers want to watch the world’s best football players give their all to win the coveted title of Super Bowl Champions.

Then there are those who tune in just to watch the highly entertaining halftime performances with big-name music stars.

Last but not least, there is a third category of viewers: Those folks who watch the Super Bowl simply because of all the funny, passionate commercials that air during the game. This attention is well-deserved, as advertisers invest a lot of research, money, and creativity – approximately $5 million – to come up with extraordinary ideas that aim to wow millions of people during a short 30-second spot.

Storytelling captures more attention

So what makes these ads so intriguing? Of course, the timing—during one of the biggest sports events in the world—makes them special. But in my opinion, what really makes these commercials popular is their storytelling approach.

Take, for example, the commercial in which a dad tracks his daughter’s first date via a car tracker — I bet everyone got a chuckle out of that one! Or how about the one where a baby tries to come into the world sooner than expected because he or she wants some Doritos? This compelling kind of storytelling has been used for more than 30 years, since Apple produced its 1984 commercial.

The most popular ads don’t simply tell customers what is unique about a particular product; they put the story first and let the product’s selling points speak through the story.

As shown by Super Bowl commercials, ads with stories show viewers the company’s personality and strengthens its relationship with them. They don’t focus on trying to sell or convince viewers of something. Instead, they entertain and touch the audience emotionally, and the storyteller’s intention to get people to buy is overlooked.

This effect is related to a mechanism called transportation, and there is significant research around its implications on business. In essence, storytelling is a more powerful tool for advertising and public relations than most other communication formats.

Interestingly, storytelling is an area where market research is often waiting for new developments from the real world instead of the other way around. For example, in one of my master courses focusing on storytelling, we have been analyzing past Super Bowl commercials and can’t wait for this year’s to debut for further analysis.

Purpose-driven business needs storytelling

As a millennial, I believe my generation loves the modern storytelling approach in all kinds of communications, as it can be a welcome antidote to our Twitter 140-character world.

We also love this approach because we perceive it as proof of a company’s authenticity, or purpose, which we value not only from the customer’s perspective, but also from the employees.’

When I looked at the 2016 Fit for Purpose report, I wasn’t surprised to see that nearly all the highest-ranked companies used a storytelling approach to bring their purpose to their customers. SAP is one of these companies, and as an employee, I get to experience how this company brings purpose into everything it does for our customers each and every day.

Who will win this year’s Super Bowl? What stories will this year’s Super Bowl commercials tell us? I hesitate to try to predict either outcome, but I am certain of one thing: I will enjoy the storytelling of this year’s advertisers! 

This blog is part of our Millennials on Purpose series. To learn more about SAP’s higher purpose to help the world run better and improve people’s lives, visit sap.com/purpose.

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Thomas Leisen

About Thomas Leisen

Thomas Leisen is a millennial and master student working in HR at SAP. In his role, he creates insights into the heart-beat of the organization through employee surveys and assessments. In one of his internal research projects, he analyzed the communication effectiveness of millennials versus other generations with regards to modern communication channels. He is an expert in data-driven insights, business and communication psychology, and generation research (especially millennials). Leisen is also supporting purpose-driven marketing at SAP.

How Emotionally Aware Computing Can Bring Happiness to Your Organization

Christopher Koch


Do you feel me?

Just as once-novel voice recognition technology is now a ubiquitous part of human–machine relationships, so too could mood recognition technology (aka “affective computing”) soon pervade digital interactions.

Through the application of machine learning, Big Data inputs, image recognition, sensors, and in some cases robotics, artificially intelligent systems hunt for affective clues: widened eyes, quickened speech, and crossed arms, as well as heart rate or skin changes.




Emotions are big business

The global affective computing market is estimated to grow from just over US$9.3 billion a year in 2015 to more than $42.5 billion by 2020.

Source: “Affective Computing Market 2015 – Technology, Software, Hardware, Vertical, & Regional Forecasts to 2020 for the $42 Billion Industry” (Research and Markets, 2015)

Customer experience is the sweet spot

Forrester found that emotion was the number-one factor in determining customer loyalty in 17 out of the 18 industries it surveyed – far more important than the ease or effectiveness of customers’ interactions with a company.


Source: “You Can’t Afford to Overlook Your Customers’ Emotional Experience” (Forrester, 2015)


Humana gets an emotional clue

Source: “Artificial Intelligence Helps Humana Avoid Call Center Meltdowns” (The Wall Street Journal, October 27, 2016)

Insurer Humana uses artificial intelligence software that can detect conversational cues to guide call-center workers through difficult customer calls. The system recognizes that a steady rise in the pitch of a customer’s voice or instances of agent and customer talking over one another are causes for concern.

The system has led to hard results: Humana says it has seen an 28% improvement in customer satisfaction, a 63% improvement in agent engagement, and a 6% improvement in first-contact resolution.


Spread happiness across the organization

Source: “Happiness and Productivity” (University of Warwick, February 10, 2014)

Employers could monitor employee moods to make organizational adjustments that increase productivity, effectiveness, and satisfaction. Happy employees are around 12% more productive.




Walking on emotional eggshells

Whether customers and employees will be comfortable having their emotions logged and broadcast by companies is an open question. Customers may find some uses of affective computing creepy or, worse, predatory. Be sure to get their permission.


Other limiting factors

The availability of the data required to infer a person’s emotional state is still limited. Further, it can be difficult to capture all the physical cues that may be relevant to an interaction, such as facial expression, tone of voice, or posture.



Get a head start


Discover the data

Companies should determine what inferences about mental states they want the system to make and how accurately those inferences can be made using the inputs available.


Work with IT

Involve IT and engineering groups to figure out the challenges of integrating with existing systems for collecting, assimilating, and analyzing large volumes of emotional data.


Consider the complexity

Some emotions may be more difficult to discern or respond to. Context is also key. An emotionally aware machine would need to respond differently to frustration in a user in an educational setting than to frustration in a user in a vehicle.

 


 

download arrowTo learn more about how affective computing can help your organization, read the feature story Empathy: The Killer App for Artificial Intelligence.


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Christopher Koch

About Christopher Koch

Christopher Koch is the Editorial Director of the SAP Center for Business Insight. He is an experienced publishing professional, researcher, editor, and writer in business, technology, and B2B marketing. Share your thoughts with Chris on Twitter @Ckochster.

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In An Agile Environment, Revenue Models Are Flexible Too

Todd Wasserman

In 2012, Dollar Shave Club burst on the scene with a cheeky viral video that won praise for its creativity and marketing acumen. Less heralded at the time was the startup’s pricing model, which swapped traditional retail for subscriptions.

For as low as $1 a month (for five two-bladed cartridges), consumers got a package in the mail that saved them a trip to the pharmacy or grocery store. Dollar Shave Club received the ultimate vindication for the idea in 2016 when Unilever purchased the company for $1 billion.

As that example shows, new technology creates the possibility for new pricing models that can disrupt existing industries. The same phenomenon has occurred in software, in which the cloud and Web-based interfaces have ushered in Software as a Service (SaaS), which charges users on a monthly basis, like a utility, instead of the typical purchase-and-later-upgrade model.

Pricing, in other words, is a variable that can be used to disrupt industries. Other options include usage-based pricing and freemium.

Products as services, services as products

There are basically two ways that businesses can use pricing to disrupt the status quo: Turn products into services and turn services into products. Dollar Shave Club and SaaS are two examples of turning products into services.

Others include Amazon’s Dash, a bare-bones Internet of Things device that lets consumers reorder items ranging from Campbell’s Soup to Play-Doh. Another example is Rent the Runway, which rents high-end fashion items for a weekend rather than selling the items. Trunk Club offers a twist on this by sending items picked out by a stylist to users every month. Users pay for what they want and send back the rest.

The other option is productizing a service. Restaurant franchising is based on this model. While the restaurant offers food service to consumers, for entrepreneurs the franchise offers guidance and brand equity that can be condensed into a product format. For instance, a global HR firm called Littler has productized its offerings with Littler CaseSmart-Charges, which is designed for in-house attorneys and features software, project management tools, and access to flextime attorneys.

As that example shows, technology offers opportunities to try new revenue models. Another example is APIs, which have become a large source of revenue for companies. The monetization of APIs is often viewed as a side business that encompasses a wholly different pricing model that’s often engineered to create huge user bases with volume discounts.

Not a new idea

Though technology has opened up new vistas for businesses seeking alternate pricing models, Rajkumar Venkatesan, a marketing professor at University of Virginia’s Darden School of Business, points out that this isn’t necessarily a new idea. For instance, King Gillette made his fortune in the early part of the 20th Century by realizing that a cheap shaving device would pave the way for a recurring revenue stream via replacement razor blades.

“The new variation was the Keurig,” said Venkatesan, referring to the coffee machine that relies on replaceable cartridges. “It has started becoming more prevalent in the last 10 years, but the fundamental model has been there.” For businesses, this can be an attractive model not only for the recurring revenue but also for the ability to cross-sell new goods to existing customers, Venkatesan said.

Another benefit to a subscription model is that it can also supply first-party data that companies can use to better understand and market to their customers. Some believe that Dollar Shave Club’s close relationship with its young male user base was one reason for Unilever’s purchase, for instance. In such a cut-throat market, such relationships can fetch a high price.

To learn more about how you can monetize disruption, watch this video overview of the new SAP Hybris Revenue Cloud.

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