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Refugee Code Week: Programming A Future Perspective

SAP News Center

Refugee Code Week opens up new perspectives for refugees and displaced youth throughout the Middle East.

“Come in!” Nisreen’s father says cheerfully, as he invites us in from the dusty street. Inside his small house, the air is cool and smells of fresh tea. The tiny rooms are clean and lovingly decorated. Grandmother and niece are already waiting for us in the living room. It looks almost like their home in Syria did before the war, they tell us. Outside, laughing children play tag. It’s a little paradise they have created for themselves here.

But not all is as it seems at first glance: Nisreen Abu-Salou, 37, is a Syrian refugee, and the walls of the house are made of sheet metal. She and her father live there alone, her mother having since returned to Syria to Nisreen’s brothers and sisters. They have no idea how the rest of the family is doing. Contact with the outside world is only possible sporadically. Nisreen’s new “home” is Al Zaatari, a refugee camp in Jordan. It is the largest refugee camp in the Middle East, and with 80,000 inhabitants, the second largest in the world.

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Nisreen Abu-Salou with her family

Back in Syria, she worked as a teacher and taught children from grade five up to graduation. Her curiosity for all things new was her constant companion. Her eyes light up just reminiscing about it. And now she has the chance to learn programming.

Nisreen has been taking part in Refugee Code Week, an initiative sponsored by SAP in collaboration with the United Nations Commission for Refugees (UNHCR) and Galway Education Center. The aim of the project is to introduce refugees in the Middle East to the basics of computer programming. The courses were held in Jordan, Egypt, Lebanon, and Turkey.

Skills for now and the future

There are currently millions of refugees of all ages stuck in camps throughout war zones and hosting countries. Despite their wide range of skills and qualifications, most of these people have no choice but to idle away the day. For children, the biggest issue is the lack of access to education, especially beyond the elementary level.

The IT industry in this region, on the other hand, needs highly trained specialists to drive digital transformation and help secure the region’s long-term economic growth. Saudi Arabia alone already had a shortfall of some 30,000 IT professionals. Meanwhile, it is estimated that businesses and governments will invest around $260 billion in IT in the Middle East and Africa (MEA) in 2016 alone.

So what could be more obvious than to tap that tremendous motivation of the refugees – especially of the girls – and invest in a better future, right here and now?

The results

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Together with 33 partners, this event was able to equip 10,200 participants with coding skills. This infographic gives a detailed overview of the achievements during Refugee Code Week 2016.


The impact of the initiative is particularly evident in the camps nearest the Syrian border in Jordan. Take Amnah, for example, a 12-year-old girl also from the Al Zaatari camp. She says that learning with the special Scratch software is very easy “and a lot of fun, too.”

Some women in the program are students; others are teachers, such as 21-year old Rana. She sees this project as a unique opportunity for girls to shape their future and to develop a perspective, even in a seemingly hopeless environment such as theirs. Participants were taught in groups aged 8 to 11 years and 12 to 17 years. Free online courses were also offered to those who were unable to attend on-site.

Training for hundreds of teachers

The students didn’t just benefit from the pedagogical and didactical quality of the Scratch teaching program, which is very practice-oriented and thus capable of maintaining the learners’ enthusiasm even through the phases of dry theory. They also benefited from the high level of motivation of their teachers. 2,439 teachers have been trained by experts and supported by numerous volunteers. And they are not only coming from the refugee communities; volunteers also come from the host countries who will also forward their new digital knowledge to local youth.

“Hence the importance of ‘Train-the-Trainer’ events, where master instructors empower both refugees and local youth to become the next expert coding teachers,” explains Claire Gillissen-Duval, director of SAP Corporate Social Responsibility for EMEA and global lead of Africa and Refugee Code Weeks. “Leveraging freely accessible materials and teaching tools, Train-the-Trainer events provide a sound, replicable structure for inter-group knowledge sharing, unlocking the potential of people to serve as resources for each other.”

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Children living at Al Zaatari

The entire model builds on the success of Africa Code Week. In its second year now, the event, together with hundreds of partners, passed on coding skills to 427,000 children, teenagers, and young adults in Africa. Many of those participants now have career perspectives they never would have dreamed possible before. This is also the experience of the 10,200 participants of Refugee Code Week: Whether as employees in companies or as freelancers: their skills are in demand and can be used anywhere in the world – especially, of course, in their home countries, where they hope to be soon able to return and support economic recovery.

Direct from school to career

For some of the Refugee Code Week participants, the dream of a career becomes true even sooner. The 90 best “Master Class” students are selected to participate in a special “bootcamp” training program from non-profit partner RBK (formerly ReBootKamp). Of these, at least 30 can look forward to a job offer from the partner network upon completion.

Fatima Himmamy has already participated in a RBK training. The 26-year-old from Aleppo, who has already completed a four-year computer studies program, describes the initiative as one of the best experiences of her life. Being a teacher in the project is much more than just a job to her, though. It has given her a different perspective and has changed her life in the camp.

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Fatima Himmamy

The project has given her new drive, and lots of satisfaction, because passing her knowledge to other women and girls is a cause that’s particularly dear to her heart. “I love what I’m doing here,” she says.

Refugee Code Week demonstrates how people – even those in need – can turn potential opportunities into a better future. In the end, it all comes down to determination. And when it comes to determination, the participating girls and women are in a class of their own.

For more stories of how technology education can turn young lives around, see Bringing New Educational Opportunities To Rwandan Youth.

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Saving The World’s Treasure: Can Technology Stop Pirates?

Simon Davies

When you hear the word pirates, you might think of eye patches, crosses on maps, parrots on shoulders, or all of the above in a Disney movie. Despite the fact that the fictional kind of pirate has thoroughly permeated the common consciousness, Somali pirates have been a real threat to international shipping since the early 21st century.

We need some great plans to combat these sea thieves. In this day and age, technology seems to be the best answer.

Pirates are a real threat to the global economy

Yep, they’re real. On June 23rd, 2017, a group of armed pirates hijacked a Thai oil tanker and drained the vessel of 1.5 million litres of diesel fuel.

Studies have shown that more than 80% of the world’s trade is transported by sea, which means that our economy is highly reliant on the shipping trade. It’s no mystery why pirates seem eager to hijack merchant’s vessels and claim the “treasure” on board. Maritime piracy is a big problem that can take a sizeable cut from the world’s economy—$6 billion, to be exact.

Satellite imagery provides eyes from above

Maritime tracking using the latest in satellite technology is the new solution on the horizon, according to Earth observation experts Earth-i, who have discussed how satellite data helps prevent maritime piracy. With high-resolution images, it’s possible to track ship and vessel movements to ensure safe passage for passenger and cargo boats across the world’s seas.

Monitoring, observation, and tracking technology has been used to surveil trade at sea with precision and reliability. Pirates can disable terrestrial AIS (Automatic Identification Systems), which are used to track ships and vessels, but the same cannot be said for satellite AIS.

Companies using satellite AIS also benefit from the tech’s capability of providing coverage for the most remote parts of the Earth and sea 24/7.

Unmanned stealth vessels can take on pirates remotely

A self-made millionaire has taken the treacherous seas’ biggest problem into his own hands by inventing a one-of-a-kind high-tech stealth boat.

The Ghost is a seaborne combat vessel made by Greg Sancoff’s startup, Juliet Marine. It’s called “Ghost” because it’s “virtually invisible to sonar and radar detection through its aluminium and stainless steel construction.”

Sancoff said that although the boat can function as a speedboat and attack ships for Navy SEALS, it is best suited for fighting pirates. Gas turbines are used for the engine, and the ship rides above the water on robotically stabilised pontoons, making the vessel steady on rough seas.

Inside the high-tech vessel, the battleship is controlled by an array of computer screens, but Greg Sancoff said that the anti-pirate machine can be modified for unmanned operations, potentially making the Ghost moniker even more fitting.

Unmanned stealth vessels may be an effective way to combat pirates, but they are expensive. That expense may be justified if Juliet Marine is accurate in saying that two Ghosts, which would cost $20 million, could protect thousands of square miles.

Hardware for tackling pirates head-on isn’t always effective

Large budgets have already been spent on hardware for directly tackling pirates, with less than impressive results.

The long-range acoustic device (LRAD) uses a pain-inducing sound beam that has been used to drive pirates away, and the ADS (active denial system) transmits a narrow beam of electromagnetic energy to heat the skin without causing permanent damage. The wave can be used to penetrate beneath the skin and cause an unbearable burning sensation, forcing pirates to jump overboard.

Unfortunately, as Wired discussed in an article titled “Sonic, Pain Weapons All Wrong for Pirate Fight,” these options are severely limited. The LRAD can be rendered completely useless by pirates’ firearms; guns such as the AK-47 out-range the non-lethal sonic weapon. Meanwhile, the ADS, costing $3 million, is known to have harmed the people using it.

Evasion remains the best defense

Despite the proliferation of high-tech solutions for taking on pirates, HowStuffWorks maintains that the best defense against pirates can be low-tech: “The best defense against a pirate attack is evasion.” They have recommended that crews encountering pirates should fire flares, sound their alarms, call for help, and warn other ships in the area when encountering pirates. They should then commit to outmaneuvring the pirates.

With the ability to monitor the progress and route of vessels, shipping companies using satellite systems to track their ships will find avoiding pirates far easier. This informed-evasion not only keeps the monitored crews safe; it can also provide greater security for all vessels at sea. If shipping companies share their insights (gained through satellite data) with the relevant authorities, they will always be one step ahead. Removing the element of surprise from the arsenal of pirates, which is arguably one of their best weapons, could help prevent maritime piracy for good.

For more on technology’s role in security, see Ransomware Attack Highlights Need For Comprehensive Cybersecurity.

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About Simon Davies

Simon Davies is a London-based freelance writer with an interest in startup culture, issues, and solutions. He works explores new markets and disruptive technologies and communicates those recent developments to a wide, public audience. Simon is also a contributor at socialbarrel.com, socialnomics.net, and tech.co. Follow Simon @simontheodavies on Twitter.

Why Youth Will Determine ASEAN’s Success In The Digital Revolution

Michael Zipf

Don’t let the European Union and all of its troubles fool you. At least one regional integration has a lot to celebrate: The Association of Southeast Asian Nations (ASEAN) turns 50 this year.

Indonesia, Malaysia, Philippines, Thailand, and Singapore founded the association in 1967 to facilitate economic and political collaboration among its members and to accelerate economic growth and social progress. Five more countries joined ASEAN in the 1980s and 1990s, helping to make it an economic powerhouse with a combined GDP of US$2.5 trillion. (If it were a single country, ASEAN would be the seventh-largest economy in the world.)

But ASEAN is in the middle of the same digital revolution as the rest of the world. Technologies such as artificial intelligence, robotics, machine learning, 3D printing, autonomous vehicles, and nanotechnology, along with accelerating progress in genetics, automation, and materials science, are shaking up the planet’s economies.

ASEAN taking over as the world’s factory

We are at “an inflection point in the history of our economies and societies because of digitization,” according to economists Erik Brynjolfsson and Andrew McAfee in their latest book, The Second Machine Age. “It’s an inflection point in the right direction – bounty instead of scarcity, freedom instead of constraint – but one that will bring with it some difficult challenges and choices … The choices we make from now on will determine what kind of world that is.”

Brynjolfsson and McAfee are optimistic about the future, but they argue that technology may “leave a lot of people, organizations, and institutions behind.” They point out that especially workers with only “ordinary skills and abilities to offer” will suffer since “computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.”

The low cost of labor in Indonesia, Laos, Myanmar, and Vietnam is a competitive advantage for multinational firms – and for ASEAN. Experts from ANZ Bank believe “Southeast Asia will take up China’s mantle of the world’s factory over the next 10 to 15 years.”

Preparing the next generation

Much of what lies ahead for ASEAN will depend on how the younger generations will handle digitalization – and the challenges described in the 17 United Nations Sustainable Development Goals. Almost half of the region’s population will be younger than 30 by 2020. It will be a young, diverse, and digitally savvy population – so ASEAN could be in a good position to benefit from the digital transformation.

But getting into that good position will not be easy. Youths need to be prepared for the digital economy and be sensitized for what’s needed to ensure prosperity in a sustainable way. The challenges ahead are so fundamental that ASEAN will need help from all its stakeholders: public and private sectors, academia, and civil society.

Global partnership for sustainable development

The ASEAN Foundation is rolling out three initiatives in 2017 to address ASEAN’s economic, environmental, and societal issues. The projects are based on three focus areas:

  • Education: The data analytics competition “ASEAN Data Science Explorers“ (ADSE) is already underway. University students across all 10 ASEAN member states from any discipline are invited to deliver data-driven insights for ASEAN across six U.N. Sustainable Development Goals cloud-based analytics.
  • Volunteerism: In collaboration with the United Nations Volunteers (UNV) program and the German Federal Ministry for Economic Cooperation and Development, ASEAN Secretariat, ASEAN Foundation, SAP, and other partners have launched the Youth Volunteering Innovation Challenge (YVIC) in ASEAN. Under the theme “Impact ASEAN,” the initiative supports young volunteers throughout the ASEAN countries in their journey to catalyze youth-led innovation for social impact and sustainable development.
  • Entrepreneurship: Through social sabbatical programs, employees from companies such as SAP are supporting social impact intermediaries through mentoring and pro-bono consulting. The program, in association with several partners, will impact close to 20 social enterprises across Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand, and Vietnam in 2017.

These and other collaborative efforts will help many of ASEAN’s young people excel alongside Brynjolfsson and McAfee’s “computers, robots, and other digital technologies.” Beyond justifying the two economists’ optimism, these efforts will help equip youth in the 10 ASEAN countries with the skills they need to meet the United Nations Sustainable Development Goals – and to thrive in the digital economy.

Applying artificial intelligence (AI) to complex decisions has clear benefits. But it also increasingly means automating ethical choices that can alter human lives. Learn more about how scientists are Teaching Machines Right from Wrong.

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Primed: Prompting Customers to Buy

Volker Hildebrand, Sam Yen, and Fawn Fitter

When it comes to buying things—even big-ticket items—the way we make decisions makes no sense. One person makes an impulsive offer on a house because of the way the light comes in through the kitchen windows. Another gleefully drives a high-end sports car off the lot even though it will probably never approach the limits it was designed to push.

We can (and usually do) rationalize these decisions after the fact by talking about needing more closet space or wanting to out-accelerate an 18-wheeler as we merge onto the highway, but years of study have arrived at a clear conclusion:

When it comes to the customer experience, human beings are fundamentally irrational.

In the brick-and-mortar past, companies could leverage that irrationality in time-tested ways. They relied heavily on physical context, such as an inviting retail space, to make products and services as psychologically appealing as possible. They used well-trained salespeople and employees to maximize positive interactions and rescue negative ones. They carefully sequenced customer experiences, such as having a captain’s dinner on the final night of a cruise, to play on our hard-wired craving to end experiences on a high note.

Today, though, customer interactions are increasingly moving online. Fortune reports that on 2016’s Black Friday, the day after Thanksgiving that is so crucial to holiday retail results, 108.5 million Americans shopped online, while only 99.1 million visited brick-and-mortar stores. The 9.4% gap between the two was a dramatic change from just one year prior, when on- and offline Black Friday shopping were more or less equal.

When people browse in a store for a few minutes, an astute salesperson can read the telltale signs that they’re losing interest and heading for the exit. The salesperson can then intervene, answering questions and closing the sale.

Replicating that in a digital environment isn’t as easy, however. Despite all the investments companies have made to counteract e-shopping cart abandonment, they lack the data that would let them anticipate when a shopper is on the verge of opting out of a transaction, and the actions they take to lure someone back afterwards can easily come across as less helpful than intrusive.

In a digital environment, companies need to figure out how to use Big Data analysis and digital design to compensate for the absence of persuasive human communication and physical sights, sounds, and sensations. What’s more, a 2014 Gartner survey found that 89% of marketers expected customer experience to be their primary differentiator by 2016, and we’re already well into 2017.

As transactions continue to shift toward the digital and omnichannel, companies need to figure out new ways to gently push customers along the customer journey—and to do so without frustrating, offending, or otherwise alienating them.

The quest to understand online customers better in order to influence them more effectively is built on a decades-old foundation: behavioral psychology, the study of the connections between what people believe and what they actually do. All of marketing and advertising is based on changing people’s thoughts in order to influence their actions. However, it wasn’t until 2001 that a now-famous article in the Harvard Business Review formally introduced the idea of applying behavioral psychology to customer service in particular.

The article’s authors, Richard B. Chase and Sriram Dasu, respectively a professor and assistant professor at the University of Southern California’s Marshall School of Business, describe how companies could apply fundamental tenets of behavioral psychology research to “optimize those extraordinarily important moments when the company touches its customers—for better and for worse.” Their five main points were simple but have proven effective across multiple industries:

  1. Finish strong. People evaluate experiences after the fact based on their high points and their endings, so the way a transaction ends is more important than how it begins.
  2. Front-load the negatives. To ensure a strong positive finish, get bad experiences out of the way early.
  3. Spread out the positives. Break up the pleasurable experiences into segments so they seem to last longer.
  4. Provide choices. People don’t like to be shoved toward an outcome; they prefer to feel in control. Giving them options within the boundaries of your ability to deliver builds their commitment.
  5. Be consistent. People like routine and predictability.

For example, McKinsey cites a major health insurance company that experimented with this framework in 2009 as part of its health management program. A test group of patients received regular coaching phone calls from nurses to help them meet health goals.

The front-loaded negative was inherent: the patients knew they had health problems that needed ongoing intervention, such as weight control or consistent use of medication. Nurses called each patient on a frequent, regular schedule to check their progress (consistency and spread-out positives), suggested next steps to keep them on track (choices), and cheered on their improvements (a strong finish).

McKinsey reports the patients in the test group were more satisfied with the health management program by seven percentage points, more satisfied with the insurance company by eight percentage points, and more likely to say the program motivated them to change their behavior by five percentage points.

The nurses who worked with the test group also reported increased job satisfaction. And these improvements all appeared in the first two weeks of the pilot program, without significantly affecting the company’s costs or tweaking key metrics, like the number and length of the calls.

Indeed, an ongoing body of research shows that positive reinforcements and indirect suggestions influence our decisions better and more subtly than blatant demands. This concept hit popular culture in 2008 with the bestselling book Nudge.

Written by University of Chicago economics professor Richard H. Thaler and Harvard Law School professor Cass R. Sunstein, Nudge first explains this principle, then explores it as a way to help people make decisions in their best interests, such as encouraging people to eat healthier by displaying fruits and vegetables at eye level or combatting credit card debt by placing a prominent notice on every credit card statement informing cardholders how much more they’ll spend over a year if they make only the minimum payment.

Whether they’re altruistic or commercial, nudges work because our decision-making is irrational in a predictable way. The question is how to apply that awareness to the digital economy.

In its early days, digital marketing assumed that online shopping would be purely rational, a tool that customers would use to help them zero in on the best product at the best price. The assumption was logical, but customer behavior remained irrational.

Our society is overloaded with information and short on time, says Brad Berens, Senior Fellow at the Center for the Digital Future at the University of Southern California, Annenberg, so it’s no surprise that the speed of the digital economy exacerbates our desire to make a fast decision rather than a perfect one, as well as increasing our tendency to make choices based on impulse rather than logic.

Buyers want what they want, but they don’t necessarily understand or care why they want it. They just want to get it and move on, with minimal friction, to the next thing. “Most of our decisions aren’t very important, and we only have so much time to interrogate and analyze them,” Berens points out.

But limited time and mental capacity for decision-making is only half the issue. The other half is that while our brains are both logical and emotional, the emotional side—also known as the limbic system or, more casually, the primitive lizard brain—is far older and more developed. It’s strong enough to override logic and drive our decisions, leaving rational thought to, well, rationalize our choices after the fact.

This is as true in the B2B realm as it is for consumers. The business purchasing process, governed as it is by requests for proposals, structured procurement processes, and permission gating, is designed to ensure that the people with spending authority make the most sensible deals possible. However, research shows that even in this supposedly rational process, the relationship with the seller is still more influential than product quality in driving customer commitment and loyalty.

Baba Shiv, a professor of marketing at Stanford University’s Graduate School of Business, studies how the emotional brain shapes decisions and experiences. In a popular TED Talk, he says that people in the process of making decisions fall into one of two mindsets: Type 1, which is stressed and wants to feel comforted and safe, and Type 2, which is bored or eager and wants to explore and take action.

People can move between these two mindsets, he says, but in both cases, the emotional brain is in control. Influencing it means first delivering a message that soothes or motivates, depending on the mindset the person happens to be in at the moment and only then presenting the logical argument to help rationalize the action.

In the digital economy, working with those tendencies means designing digital experiences with the full awareness that people will not evaluate them objectively, says Ravi Dhar, director of the Center for Customer Insights at the Yale School of Management. Since any experience’s greatest subjective impact in retrospect depends on what happens at the beginning, the end, and the peaks in between, companies need to design digital experiences to optimize those moments—to rationally design experiences for limited rationality.

This often involves making multiple small changes in the way options are presented well before the final nudge into making a purchase. A paper that Dhar co-authored for McKinsey offers the example of a media company that puts most of its content behind a paywall but offers free access to a limited number of articles a month as an incentive to drive subscriptions.

Many nonsubscribers reached their limit of free articles in the morning, but they were least likely to respond to a subscription offer generated by the paywall at that hour, because they were reading just before rushing out the door for the day. When the company delayed offers until later in the day, when readers were less distracted, successful subscription conversions increased.

Pre-selecting default options for necessary choices is another way companies can design digital experiences to follow customers’ preference for the path of least resistance. “We know from a decade of research that…defaults are a de facto nudge,” Dhar says.

For example, many online retailers set a default shipping option because customers have to choose a way to receive their packages and are more likely to passively allow the default option than actively choose another one. Similarly, he says, customers are more likely to enroll in a program when the default choice is set to accept it rather than to opt out.

Another intriguing possibility lies in the way customers react differently to on-screen information based on how that information is presented. Even minor tweaks can have a disproportionate impact on the choices people make, as explained in depth by University of California, Los Angeles, behavioral economist Shlomo Benartzi in his 2015 book, The Smarter Screen.

A few of the conclusions Benartzi reached: items at the center of a laptop screen draw more attention than those at the edges. Those on the upper left of a screen split into quadrants attract more attention than those on the lower left. And intriguingly, demographics are important variables.

Benartzi cites research showing that people over 40 prefer more visually complicated, text-heavy screens than younger people, who are drawn to saturated colors and large images. Women like screens that use a lot of different colors, including pastels, while men prefer primary colors on a grey or white background. People in Malaysia like lots of color; people in Germany don’t.

This suggests companies need to design their online experiences very differently for middle-aged women than they do for teenage boys. And, as Benartzi writes, “it’s easy to imagine a future in which each Internet user has his or her own ‘aesthetic algorithm,’ customizing the appearance of every site they see.”

Applying behavioral psychology to the digital experience in more sophisticated ways will require additional formal research into recommendation algorithms, predictions, and other applications of customer data science, says Jim Guszcza, PhD, chief U.S. data scientist for Deloitte Consulting.

In fact, given customers’ tendency to make the fastest decisions, Guszcza believes that in some cases, companies may want to consider making choice environments more difficult to navigate— a process he calls “disfluencing”—in high-stakes situations, like making an important medical decision or an irreversible big-ticket purchase. Choosing a harder-to-read font and a layout that requires more time to navigate forces customers to work harder to process the information, sending a subtle signal that it deserves their close attention.

That said, a company can’t apply behavioral psychology to deliver a digital experience if customers don’t engage with its site or mobile app in the first place. Addressing this often means making the process as convenient as possible, itself a behavioral nudge.

A digital solution that’s easy to use and search, offers a variety of choices pre-screened for relevance, and provides a friction-free transaction process is the equivalent of putting a product at eye level—and that applies far beyond retail. Consider the Global Entry program, which streamlines border crossings into the U.S. for pre-approved international travelers. Members can skip long passport control lines in favor of scanning their passports and answering a few questions at a touchscreen kiosk. To date, 1.8 million people have decided this convenience far outweighs the slow pace of approvals.

The basics of influencing irrational customers are essentially the same whether they’re taking place in a store or on a screen. A business still needs to know who its customers are, understand their needs and motivations, and give them a reason to buy.

And despite the accelerating shift to digital commerce, we still live in a physical world. “There’s no divide between old-style analog retail and new-style digital retail,” Berens says. “Increasingly, the two are overlapping. One of the things we’ve seen for years is that people go into a store with their phones, shop for a better price, and buy online. Or vice versa: they shop online and then go to a store to negotiate for a better deal.”

Still, digital increases the number of touchpoints from which the business can gather, cluster, and filter more types of data to make great suggestions that delight and surprise customers. That’s why the hottest word in marketing today is omnichannel. Bringing behavioral psychology to bear on the right person in the right place in the right way at the right time requires companies to design customer experiences that bridge multiple channels, on- and offline.

Amazon, for example, is known for its friction-free online purchasing. The company’s pilot store in Seattle has no lines or checkout counters, extending the brand experience into the physical world in a way that aligns with what customers already expect of it, Dhar says.

Omnichannel helps counter some people’s tendency to believe their purchasing decision isn’t truly well informed unless they can see, touch, hear, and in some cases taste and smell a product. Until we have ubiquitous access to virtual reality systems with full haptic feedback, the best way to address these concerns is by providing personalized, timely, relevant information and feedback in the moment through whatever channel is appropriate. That could be an automated call center that answers frequently asked questions, a video that shows a product from every angle, or a demonstration wizard built into the product. Any of these channels could also suggest the customer visit the nearest store to receive help from a human.

The omnichannel approach gives businesses plenty of opportunities to apply subtle nudges across physical and digital channels. For example, a supermarket chain could use store-club card data to push personalized offers to customers’ smartphones while they shop. “If the data tells them that your goal is to feed a family while balancing nutrition and cost, they could send you an e-coupon offering a discount on a brand of breakfast cereal that tastes like what you usually buy but contains half the sugar,” Guszcza says.

Similarly, a car insurance company could provide periodic feedback to policyholders through an app or even the digital screens in their cars, he suggests. “Getting a warning that you’re more aggressive than 90% of comparable drivers and three tips to avoid risk and lower your rates would not only incentivize the driver to be more careful for financial reasons but reduce claims and make the road safer for everyone.”

Digital channels can also show shoppers what similar people or organizations are buying, let them solicit feedback from colleagues or friends, and read reviews from other people who have made the same purchases. This leverages one of the most familiar forms of behavioral psychology—reinforcement from peers—and reassures buyers with Shiv’s Type 1 mindset that they’re making a choice that meets their needs or encourages those with the Type 2 mindset to move forward with the purchase. The rational mind only has to ask at the end of the process “Am I getting the best deal?” And as Guszcza points out, “If you can create solutions that use behavioral design and digital technology to turn my personal data into insight to reach my goals, you’ve increased the value of your engagement with me so much that I might even be willing to pay you more.”

Many transactions take place through corporate procurement systems that allow a company to leverage not just its own purchasing patterns but all the data in a marketplace specifically designed to facilitate enterprise purchasing. Machine learning can leverage this vast database of information to provide the necessary nudge to optimize purchasing patterns, when to buy, how best to negotiate, and more. To some extent, this is an attempt to eliminate psychology and make choices more rational.

B2B spending is tied into financial systems and processes, logistics systems, transportation systems, and other operational requirements in a way no consumer spending can be. A B2B decision is less about making a purchase that satisfies a desire than it is about making a purchase that keeps the company functioning.

That said, the decision still isn’t entirely rational, Berens says. When organizations have to choose among vendors offering relatively similar products and services, they generally opt for the vendor whose salespeople they like the best.

This means B2B companies have to make sure they meet or exceed parity with competitors on product quality, pricing, and time to delivery to satisfy all the rational requirements of the decision process. Only then can they bring behavioral psychology to bear by delivering consistently superior customer service, starting as soon as the customer hits their app or website and spreading out positive interactions all the way through post-purchase support. Finishing strong with a satisfied customer reinforces the relationship with a business customer just as much as it does with a consumer.

The best nudges make the customer relationship easy and enjoyable by providing experiences that are effortless and fun to choose, on- or offline, Dhar says. What sets the digital nudge apart in accommodating irrational customers is its ability to turn data about them and their journey into more effective, personalized persuasion even in the absence of the human touch.

Yet the subtle art of influencing customers isn’t just about making a sale, and it certainly shouldn’t be about persuading people to act against their own best interests, as Nudge co-author Thaler reminds audiences by exhorting them to “nudge for good.”

Guszcza, who talks about influencing people to make the choices they would make if only they had unlimited rationality, says companies that leverage behavioral psychology in their digital experiences should do so with an eye to creating positive impact for the customer, the company, and, where appropriate, the society.

In keeping with that ethos, any customer experience designed along behavioral lines has to include the option of letting the customer make a different choice, such as presenting a confirmation screen at the end of the purchase process with the cold, hard numbers and letting them opt out of the transaction altogether.

“A nudge is directing people in a certain direction,” Dhar says. “But for an ethical vendor, the only right direction to nudge is the right direction as judged by the customers themselves.” D!

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


About the Authors:

Volker Hildebrand is Global Vice President for SAP Hybris solutions.

Sam Yen is Chief Design Officer and Managing Director at SAP.

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

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How Artificial Intelligence Will Transform Tomorrow’s Digital Supply Chain

Alina Gross

Artificial intelligence (AI) may sound futuristic, but it’s a real-life breakthrough that exists in the present. Anyone who interacts with an online search engine, shops on Amazon, owns a self-parking car, or talks to voice-powered personal assistants like Siri or Alexa is using AI.

AI is a field of computer science in which a machine is equipped with the ability to mimic the cognitive functions of a human. An AI machine can make decisions or predictions based on its past experiences, or it can respond to entirely new scenarios. When given a goal, not only does it attempt to achieve its objective, it continuously tries to improve upon its past performance.

Revolutionizing the digital supply chain

Within five years, 50% of manufacturing supply chains will be robotically and digitally controlled and able to provide direct-to-consumer and home shipments, according to IDC Manufacturing Insights. Additionally, 47% of supply chain leaders believe AI is disruptive and important with respect to supply chain strategies, per a 2016 SCM World survey. With that in mind, 85% of organizations have already adopted or will adopt AI technology into their supply chains within one year, according to a 2016 Accenture report.

Supply chains need AI to aggregate their mass amounts of data. In the supply chain, AI can analyze large data sets and recommend customer service and operations improvements while supporting better working capital management. As corporate systems become more interconnected, providing access to a wider breadth of supply chain data, the opportunity to leverage AI increases.

Let’s look at the potential benefits of using AI to link transportation data with order data:

A logistics enterprise ensures the delivery of a product within two days. With AI, the carrier can view past performances from shipping a similar product on a specific day, using a particular route, which reveals there’s a 25% chance the order will arrive in four days, not two. This information supplies customer service and supply chain professionals with proactive alerts of potential fulfillment challenges.

To take this a step further, AI could also compare historical shipping data to the customer’s requested delivery date to provide recommendations on whether this particular carrier’s performance meets requirements, or if you need to consider a different logistics enterprise that is 15% more expensive, but 25% more likely to deliver the product on time.

Step by step to a more efficient supply chain with AI

There are many opportunities to use AI throughout the supply chain, from buying raw materials/components and converting them into finished products to selling and delivering items to customers. Supply chains can also use AI to end repetitive manual tasks and begin automating processes. This can enable companies to reallocate time and resources to their core business, and other high-value, judgment-based jobs, by using AI for low-value, high-frequency activities.

In an AI-driven selling platform, chatbots can manage many of the sales, customer service, and operations tasks traditionally handled by humans, including interacting with buyers, taking orders, and passing those orders through the supply chain. In warehouse operations, AI-capable robotics and sensors can enable organizations to enhance stacking and retrieval, order picking, stock-level management, and re-ordering processes.

Amazon is currently combining automation with human labor to increase productivity by using robots that can glide quickly across the floor to rearrange items on shelves into neatly organized rows, or alert human workers when they need to stack the shelves with new products or retrieve goods for packaging. And Logistics company DHL is using AI and automation to create self-sufficient forklifts that understand what products need to be moved, where they need to be moved, and when they need to be moved.

Supply chain companies see a path forward with AI

Leveraging AI is an important next step for supply chain companies looking to lower costs and improve productivity. It can enable your organization to spend less time on repetitive processes, such as planning, monitoring, and coordinating, and focus more on innovation and growth.

AI still needs careful monitoring, however, as well as experienced and knowledgeable logistics and operations professionals to ensure it’s being used to its maximum potential.

For more on how AI and advanced tech can help boost your business, see Next-Gen Technology Separates Digital Leaders From The Rest.

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Alina Gross

About Alina Gross

Alina Gross is currently pursuing her BA in international business at Heilbronn University. She plans on deepening her knowledge by adding an MA in international marketing. During her six-month, full-time internship at SAP, she has focused on marketing and project management topics within the field of supply chain, especially around event management and social media.