Why The Next Steve Jobs Might Just Come From Kazakhstan

Vivek Bapat

Denis is a typical nine-year-old who loves playing video games. His parents both work full-time jobs — his father is an accomplished engineer and his mother is a professor of economics. Thrice a week during the summer, his grandmother drives him to a small computer training center on the outskirts of town. When his parents discovered this training center through Facebook, Denis proactively suggested he wanted to go there to learn how to make his own computer games. On return trips, Denis often tells his grandmother, with great excitement, how he just developed a new game in which a monkey must make several moves, jumping and spinning over obstacles to gather fruit.

Alzhan is 13. Altai, his proud father, takes Alzhan to the center twice a week. He recognizes great potential in his son’s innate math and English skills and is convinced that early exposure to computers and programming will provide an edge in his son’s future career prospects.

Boris attends the training center five days a week, for six hours a day. Quiet and serious, the 14-year-old has always known he wanted to be a programmer and loves tinkering around with new programs and advanced algorithms.

Elya, also 14, is a sharp, savvy young girl with boundless energy. She wants to study medicine and become a doctor. She attends the training center for several hours a day, thrice a week, to get familiar with programming skills that might accelerate her academic trajectory.

These are aspirations of some of the children I met at Love to Code, a small entrepreneurial educational center on the outskirts of Almaty, Kazakhstan, a prominent city in Central Asia on the iconic Silk Road.

Weaving these strands of diverse aspirations together into a proverbial magic carpet of dreams is one of the founders of Love to Code, CEO Yeldos Balgabekov.

Attired in casual shorts and t-shirt, Yeldos is a soft-spoken, mild-mannered 28-year-old. He has a bold vision to educate one million kids in Kazakhstan with basic and advanced computer programming skills by 2020. Of humble origins, Yeldos has a finance, math, and economics background from one of the most well-recognized universities in Kazakhstan, but has developed significant skills in programming through self-study and interest over time.

I met Yeldos and students Denis, Alzhan, Boris, and Elya — along with many more aspiring coders — during a two-week trip to Kazakhstan. I was there as part of a two-week “social sabbatical” offered by my company, SAP, in support of its mission to help the world run better and improve people’s lives. Together with SAP colleagues Eckhardt Siess and Matthias Medert, we served as a team of consultants to Love to Code and Yeldos in his quest to improve digital literacy in Kazakhstan. During our two weeks there, we worked with numerous stakeholders — including students — to identify the opportunities and challenges in bringing Love to Code’s vision to life.

Inspired by the likes of Khan Academy, Yeldos created Love to Code in 2015. It’s a private programming school with a unique approach built on top of commercially available tools such as Scratch, Code Monkey, Python, and other languages. The curriculum uses a proprietary step-by step-process so children between the ages of 8–15 can learn at their own pace through hands-on one-on-one instruction delivered in Russian, Kazakh, and English. Today, Yeldos operates five training centers in major cities including Almaty, with ambitions to grow across the country. He recently organized a national coding event, where his programs touched 150,000 kids with an hour of coding.

Balgabekov’s ambition to get a million kids coding is not as far-fetched as it may sound. Although Kazakhstan was one of the last former Soviet satellite states to claim its independence, it is still very much an emerging nation. Its history and resources (including large oil reserves) provide it with major advantages, which have accelerated its growth. The ninth-largest country in the world, Kazakhstan is abundant in natural resources such as oil, natural gas, and minerals, including 40% of the world’s uranium, providing the underpinnings of the largest economy in Central Asia. It was a space center during the Soviet era, making engineering and mathematics admired pursuits, and its school system produces a population that is virtually 100% literate. While Kazakhstan is 70% Muslim, the religion is not practiced with the orthodoxy found in other regions.

On the other hand, Kazakhstanis have a broad gulf between rich and poor, and despite an elected government (the same president has been in office since the early 1990s), there are limits to freedom of the press, freedom of assembly, and other rights that might challenge the authority of the state. In a country where the average monthly salary is 130,000 Tenge (USD $400/month), only a tiny elite earns enough to cover the monthly 25,000–65,000 Tenge cost of the courses at Love to Code.

Between tastings of camel’s milk, horse milk, and horse meat — local delicacies reflective of the nomadic history of the Kazakh people — we witnessed a free-flowing energy. There is a hunger and desire to compete, especially in areas like technology and digital literacy, where the market is just forming and where early movers have the potential to strike it big. While there is little legal infrastructure to protect intellectual property, local coding education startups like Method.kz and Step.it are already carving out niches in the market. It will be only a matter of time until international players such as U.S.-based Tynker focus on Central Asia.

Typical of a startup, Love to Code always feels like it is on the verge of a breakthrough. The demand for its services is clear among parents, students, and teachers. It has an array of go-to-market models, including franchise and private-label opportunities, no different than anywhere else. It has a strong product that it’s constantly improving. Its challenge is clearly in scaling the program and bringing it to a wide swath of the population. That’s where the SAP team focused our time, identifying prospective partners and distribution outlets. Then we began doing the legwork.

One scalable idea, bringing Love to Code into schools, is fraught with challenges. Mr. Mereihan, the young principal at one of the top-10 public schools in the country specializing in physics and math, told us that he recognized the great value in programs such as those offered by Love to Code. However, for him to introduce the program into his public school, it would have to be endorsed and funded by the Ministry of Education. The Ministry requires a full-fledged curriculum from grades 1–12 — a very high bar. The expensive private schools we asked reported they already covered the topic (though our research suggests otherwise) — and besides, their students could likely afford the fees at the Love to Code facilities.

Mr. Murat Narkulov, the highly progressive director of the United Nations Development Fund in Kazakhstan, is already planning to incorporate coding education into their programs for women and people with disabilities. They are thinking about a JAVA/Rush application that gamifies coding. It would be delivered free of charge on mobile phones with the aim of reaching millions of people in five years. We found that these organizations could provide the muscle and the money required to scale digital instruction and learning.

The greatest opportunities to scale Love to Code, it turns out, are coming from wealthy private donors. Many of them are creating their own funds and NGOs with the explicit intent of improving the civil life of the country. Making coding education across income levels and populations a priority for these new social investors will, in our opinion, present the best opportunity for the widespread teaching of digital skills. Technology companies can also do their part to create a pull for future talent with digital skills — investing the region, creating new jobs, training their employees, and improving wages for high-tech workers.

Despite all of these issues and hurdles that would seem daunting to the best of the best, Yeldos keeps pushing ahead with a flat organization of a few full-time and part-time workers. He is constantly on the go. Like a Swiss army knife,  he does it all: develops the content, delivers training, and talks to investors, clients, and parents. With the classic persona of a founder of a self-funded company, he is quick to strike new deals and make instant adjustments to the business.

As we peeled the layers of the onion back each day, we discovered a new set of ideas, events, opportunities, and surprises that challenged our recommendations from the day before. In the end, our findings and consultations helped uncover a few new ideas, and a short-term and longer-term strategy for sustenance, growth, and scale. Most importantly, it helped validate the fundamental beliefs and tenets of the business model from an independent, external perspective.

One more thing: We learned that Yeldos recently won a full academic scholarship funded by the British government to attend a one-year Master’s program in Computer Engineering in Southampton, U.K. He has decided to take this opportunity to beef up his credentials in data science and is leaving for the U.K. in six weeks. His wife and his 18-month old baby girl are both supportive of this life-changing opportunity. While he is away, his co-founders and staff plan to step in to sustain the business.

Yeldos intends to drive some of the business development efforts to grow the business while managing the rigors of what will be undoubtedly a challenging period in this life.

But he knows that the hopes and dreams of young Denis, Alzhan, Boris, and Elya — representative of the children of Kazakhstan, are all unequivocally pinned on to his own. And that he bears and owes them a greater sense of responsibility in their success than that of his own.

Vivek Bapat is senior vice president and global head of Marketing Strategy at SAP.

This story previously appeared on Medium.


About Vivek Bapat

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

What Makes A Successful Smart City?

Phil King

It was back in 2011 that Mark Deakin and Husam Al Wear defined the concept of a smart city as a place where a range of electronic and digital technologies are deployed to transform living and working environments. In practice, this could mean using physical devices and sensors to optimize the performance of city operations and services, monitoring what’s happening across the city, interacting with communities, managing the city’s evolution, and generally improving the lives and safety of citizens.

As things stand today, I can’t think of many places in the UK that fit this kind of advanced definition. Simple things like reliable Internet access in urban areas still remain a struggle for many, let alone genuine smart city examples of the Internet of Things (IoT) deployed to create joined-up, connected spaces.

But that doesn’t mean our cities are not smart at all or on a pathway to becoming smarter for their citizens. Indeed, for many towns and cities in the UK, the term “smart city” is more of an aspiration than a reality at present. Improvements and innovations have been incremental rather than wholesale. The key is to continue investing in technology, pushing development, and looking towards the urban outlier smart cities to see what we in Britain can learn.

Defining what we mean by “smart”

London Mayor Sadiq Khan recently announced that he wants London to be the world’s smartest city by 2020. But with only two years left to fulfill that vision, it seems quite the ask – especially as London was recently overtaken by Bristol as the smartest city in the UK.

In a way, this suggests that we need to reassess what we mean by “smart” if we’re to deliver changes that will truly improve the lives of UK citizens and to perhaps reconsider the milestones at which we’re aiming.

We’ve had glimpses of what can be achieved. From the Bristol Is Open project that saw the city jump to the top of the UK’s innovation table, to Milton Keynes’ commitment to using technology to become more sustainable with its MK:Smart initiative. And Manchester’s CityVerve project. All of these examples highlight the fact that there’s no reason why London, Birmingham, Newcastle, Glasgow, Cardiff, and cities all over the UK can’t act, think, and be smarter now.

Time to act ahead of Brexit impact

There is, of course, an element of urgency about this. It will be increasingly important for cities to embrace innovative technology ahead of any Brexit legislation coming into force. With the UK on the path to exit the European Union, the pressure will mount on cities to not only remain attractive to foreign visitors but also to ensure they provide a seamless, enjoyable experience to those living there.

As things stand, the UK is slightly behind the curve when it comes to smart technology deployment. But there are examples we as a nation can look to when seeking improvements. And I’m not just talking about capitals and major conurbations.

The French town of Antibes, for instance, uses IoT software to control its water management system. Officials use intelligent solutions to monitor and analyze the town’s water distribution system over 315 kilometers, aggregating 15,000 data points per hour collected from more than 2,000 sensors to look at temperature, salinity, chlorine levels, pH, and the pumps and valves that steer the flow of water.

Importantly, the innovation is aligned to economic and social priorities. Antibes is a lively resort in Southeastern France with a summer population of 250,000, triple the number of year-round citizens. People are attracted by the flair of the coast, water sports, and the French joie de vivre. Keeping their water infrastructure efficient and citizens safe is of the utmost importance.

The solution now helps the city anticipate breakdowns, optimize maintenance schedules, and plan future investments. And, as any smart city solution should, it provides the best service for citizens at the best cost. With citizens paying less than half the national average per cubic meter, Antibes offers a great example of how public sector organizations can take mountains of data and transform it into valuable information, then use that to inform local knowledge and increase public safety.

UK organizations should absolutely look at and learn from innovative deployments of smart technology around the world if they are to improve the lives of their citizens and the experiences they offer to visitors. Happily, there’s plenty of support out there, including the government-led Future Cities Catapult, Innovate UK, and the Scottish Smart Cities initiatives. So it’s time for local governments to act and get the UK on the map in terms of smart technology deployments.

Learn how SAP smart cities technologies help local governments like Antibes improve citizen services and livability, grow economic prosperity, and keep pace with change – without dipping into extra budget or resources.


Phil King

About Phil King

Drawing from his 30 years of experience in IT and public sector organizations, Phil King is the Sales Director for the Public Sector in the UK and Ireland at SAP. He is passionate about working with the public sector to drive innovation that improves people’s lives and makes the world a better place.

Mississauga Looks To Citizens And Industry As It Bridges Digital Divide

Shawn Slack

The Southern Ontario city of Mississauga is already established as an early frontrunner in the smart city movement, with free high-speed WiFi blanketing the city, a 750-sensor smart traffic light network, and 50,000 LED streetlights. But there is massive opportunity beyond this.

As we turn our attention to bridging the digital divide, consultations with the public and agency and industry partners have helped us identify key areas in which we could use technology to solve problems as part of the pan-Canadian Smart Cities Challenge.

Our plan involves supporting at-risk citizens, youth, new immigrants, and others in the local community by building a digital ecosystem that provides access to digital services and support. Here’s how it will look:

  • The kit – Made up of items such as laptops, kits will be available throughout the city and integrated into programs and services already offered at libraries and other agencies.
  • The connection – Mini WiFi-enabled digital hubs located throughout the city will provide easy and equitable access to services for people with or without a device through intelligent digital signs.
  • The hub – Locations designed for remote working and learning will feature workspaces and digital amenities to enable residents to work and learn within their own community.
  • The community – The needs of the local community will drive the development of each kit, connection, and hub.
  • The ride – Use of public and active transportation will be promoted as the ideal way to move throughout the community. MiWay will be the ride connecting to the hubs and the connections with traffic signal priority and Wi-Fi.
  • The technology – Leading-edge technologies including intelligent digital signage, artificial intelligence, voice-first services, augmented reality, open data, and mobility.

On the surface, it might look like we are simply introducing a bunch of technology to try to solve the challenges of economic and social divides in our city. But for this to work, technology must be considered part of the means to a solution rather than the solution itself.

Digital technologies can help us achieve goals such as bringing communities back together and improving opportunity and quality of life for everyone. We want to stitch our city services together into one digital experience that benefits all citizens and provides better support to the community so it can thrive.

The city of the near-future will look very different to today. IDC predicts 72% of the workforce will be mobile by 2020. This is a major shift, and our digital ecosystem is a head start in making Mississauga a desirable place to be in this new world.

Our public workforce of 7,000 is already leading by example on this front. We have introduced software such as SAP Concur and SAP SuccessFactors, allowing us to go paperless, and many public servants are working remotely from homes, libraries, and coffee shops around the city.

We want to give as many Mississaugans as possible the opportunities to succeed in the digital economy while continuing to include technology in our wider strategy to make the city a better and more enjoyable place to live, work, and play.

I will be talking alongside some of the world’s leading public sector and technology innovators at the SAP Smart Cities Forum on April 23.


Shawn Slack

About Shawn Slack

Shawn Slack is the Director of Information Technology and Chief Information Officer for the City of Mississauga.

Hack the CIO

By Thomas Saueressig, Timo Elliott, Sam Yen, and Bennett Voyles

For nerds, the weeks right before finals are a Cinderella moment. Suddenly they’re stars. Pocket protectors are fashionable; people find their jokes a whole lot funnier; Dungeons & Dragons sounds cool.

Many CIOs are enjoying this kind of moment now, as companies everywhere face the business equivalent of a final exam for a vital class they have managed to mostly avoid so far: digital transformation.

But as always, there is a limit to nerdy magic. No matter how helpful CIOs try to be, their classmates still won’t pass if they don’t learn the material. With IT increasingly central to every business—from the customer experience to the offering to the business model itself—we all need to start thinking like CIOs.

Pass the digital transformation exam, and you probably have a bright future ahead. A recent SAP-Oxford Economics study of 3,100 organizations in a variety of industries across 17 countries found that the companies that have taken the lead in digital transformation earn higher profits and revenues and have more competitive differentiation than their peers. They also expect 23% more revenue growth from their digital initiatives over the next two years—an estimate 2.5 to 4 times larger than the average company’s.

But the market is grading on a steep curve: this same SAP-Oxford study found that only 3% have completed some degree of digital transformation across their organization. Other surveys also suggest that most companies won’t be graduating anytime soon: in one recent survey of 450 heads of digital transformation for enterprises in the United States, United Kingdom, France, and Germany by technology company Couchbase, 90% agreed that most digital projects fail to meet expectations and deliver only incremental improvements. Worse: over half (54%) believe that organizations that don’t succeed with their transformation project will fail or be absorbed by a savvier competitor within four years.

Companies that are making the grade understand that unlike earlier technical advances, digital transformation doesn’t just support the business, it’s the future of the business. That’s why 60% of digital leading companies have entrusted the leadership of their transformation to their CIO, and that’s why experts say businesspeople must do more than have a vague understanding of the technology. They must also master a way of thinking and looking at business challenges that is unfamiliar to most people outside the IT department.

In other words, if you don’t think like a CIO yet, now is a very good time to learn.

However, given that you probably don’t have a spare 15 years to learn what your CIO knows, we asked the experts what makes CIO thinking distinctive. Here are the top eight mind hacks.

1. Think in Systems

A lot of businesspeople are used to seeing their organization as a series of loosely joined silos. But in the world of digital business, everything is part of a larger system.

CIOs have known for a long time that smart processes win. Whether they were installing enterprise resource planning systems or working with the business to imagine the customer’s journey, they always had to think in holistic ways that crossed traditional departmental, functional, and operational boundaries.

Unlike other business leaders, CIOs spend their careers looking across systems. Why did our supply chain go down? How can we support this new business initiative beyond a single department or function? Now supported by end-to-end process methodologies such as design thinking, good CIOs have developed a way of looking at the company that can lead to radical simplifications that can reduce cost and improve performance at the same time.

They are also used to thinking beyond temporal boundaries. “This idea that the power of technology doubles every two years means that as you’re planning ahead you can’t think in terms of a linear process, you have to think in terms of huge jumps,” says Jay Ferro, CIO of TransPerfect, a New York–based global translation firm.

No wonder the SAP-Oxford transformation study found that one of the values transformational leaders shared was a tendency to look beyond silos and view the digital transformation as a company-wide initiative.

This will come in handy because in digital transformation, not only do business processes evolve but the company’s entire value proposition changes, says Jeanne Ross, principal research scientist at the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT). “It either already has or it’s going to, because digital technologies make things possible that weren’t possible before,” she explains.

2. Work in Diverse Teams

When it comes to large projects, CIOs have always needed input from a diverse collection of businesspeople to be successful. The best have developed ways to convince and cajole reluctant participants to come to the table. They seek out technology enthusiasts in the business and those who are respected by their peers to help build passion and commitment among the halfhearted.

Digital transformation amps up the urgency for building diverse teams even further. “A small, focused group simply won’t have the same breadth of perspective as a team that includes a salesperson and a service person and a development person, as well as an IT person,” says Ross.

At Lenovo, the global technology giant, many of these cross-functional teams become so used to working together that it’s hard to tell where each member originally belonged: “You can’t tell who is business or IT; you can’t tell who is product, IT, or design,” says the company’s CIO, Arthur Hu.

One interesting corollary of this trend toward broader teamwork is that talent is a priority among digital leaders: they spend more on training their employees and partners than ordinary companies, as well as on hiring the people they need, according to the SAP-Oxford Economics survey. They’re also already being rewarded for their faith in their teams: 71% of leaders say that their successful digital transformation has made it easier for them to attract and retain talent, and 64% say that their employees are now more engaged than they were before the transformation.

3. Become a Consultant

Good CIOs have long needed to be internal consultants to the business. Ever since technology moved out of the glasshouse and onto employees’ desks, CIOs have not only needed a deep understanding of the goals of a given project but also to make sure that the project didn’t stray from those goals, even after the businesspeople who had ordered the project went back to their day jobs. “Businesspeople didn’t really need to get into the details of what IT was really doing,” recalls Ferro. “They just had a set of demands and said, ‘Hey, IT, go do that.’”

Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants.

But that was then. Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants. “If you’re building a house, you don’t just disappear for six months and come back and go, ‘Oh, it looks pretty good,’” says Ferro. “You’re on that work site constantly and all of a sudden you’re looking at something, going, ‘Well, that looked really good on the blueprint, not sure it makes sense in reality. Let’s move that over six feet.’ Or, ‘I don’t know if I like that anymore.’ It’s really not much different in application development or for IT or technical projects, where on paper it looked really good and three weeks in, in that second sprint, you’re going, ‘Oh, now that I look at it, that’s really stupid.’”

4. Learn Horizontal Leadership

CIOs have always needed the ability to educate and influence other leaders that they don’t directly control. For major IT projects to be successful, they need other leaders to contribute budget, time, and resources from multiple areas of the business.

It’s a kind of horizontal leadership that will become critical for businesspeople to acquire in digital transformation. “The leadership role becomes one much more of coaching others across the organization—encouraging people to be creative, making sure everybody knows how to use data well,” Ross says.

In this team-based environment, having all the answers becomes less important. “It used to be that the best business executives and leaders had the best answers. Today that is no longer the case,” observes Gary Cokins, a technology consultant who focuses on analytics-based performance management. “Increasingly, it’s the executives and leaders who ask the best questions. There is too much volatility and uncertainty for them to rely on their intuition or past experiences.”

Many experts expect this trend to continue as the confluence of automation and data keeps chipping away at the organizational pyramid. “Hierarchical, command-and-control leadership will become obsolete,” says Edward Hess, professor of business administration and Batten executive-in-residence at the Darden School of Business at the University of Virginia. “Flatter, distributive leadership via teams will become the dominant structure.”

5. Understand Process Design

When business processes were simpler, IT could analyze the process and improve it without input from the business. But today many processes are triggered on the fly by the customer, making a seamless customer experience more difficult to build without the benefit of a larger, multifunctional team. In a highly digitalized organization like Amazon, which releases thousands of new software programs each year, IT can no longer do it all.

While businesspeople aren’t expected to start coding, their involvement in process design is crucial. One of the techniques that many organizations have adopted to help IT and businesspeople visualize business processes together is design thinking (for more on design thinking techniques, see “A Cult of Creation“).

Customers aren’t the only ones who benefit from better processes. Among the 100 companies the SAP-Oxford Economics researchers have identified as digital leaders, two-thirds say that they are making their employees’ lives easier by eliminating process roadblocks that interfere with their ability to do their jobs. Ninety percent of leaders surveyed expect to see value from these projects in the next two years alone.

6. Learn to Keep Learning

The ability to learn and keep learning has been a part of IT from the start. Since the first mainframes in the 1950s, technologists have understood that they need to keep reinventing themselves and their skills to adapt to the changes around them.

Now that’s starting to become part of other job descriptions too. Many companies are investing in teaching their employees new digital skills. One South American auto products company, for example, has created a custom-education institute that trained 20,000 employees and partner-employees in 2016. In addition to training current staff, many leading digital companies are also hiring new employees and creating new roles, such as a chief robotics officer, to support their digital transformation efforts.

Nicolas van Zeebroeck, professor of information systems and digital business innovation at the Solvay Brussels School of Economics and Management at the Free University of Brussels, says that he expects the ability to learn quickly will remain crucial. “If I had to think of one critical skill,” he explains, “I would have to say it’s the ability to learn and keep learning—the ability to challenge the status quo and question what you take for granted.”

7. Fail Smarter

Traditionally, CIOs tended to be good at thinking through tests that would allow the company to experiment with new technology without risking the entire network.

This is another unfamiliar skill that smart managers are trying to pick up. “There’s a lot of trial and error in the best companies right now,” notes MIT’s Ross. But there’s a catch, she adds. “Most companies aren’t designed for trial and error—they’re trying to avoid an error,” she says.

To learn how to do it better, take your lead from IT, where many people have already learned to work in small, innovative teams that use agile development principles, advises Ross.

For example, business managers must learn how to think in terms of a minimum viable product: build a simple version of what you have in mind, test it, and if it works start building. You don’t build the whole thing at once anymore.… It’s really important to build things incrementally,” Ross says.

Flexibility and the ability to capitalize on accidental discoveries during experimentation are more important than having a concrete project plan, says Ross. At Spotify, the music service, and CarMax, the used-car retailer, change is driven not from the center but from small teams that have developed something new. “The thing you have to get comfortable with is not having the formalized plan that we would have traditionally relied on, because as soon as you insist on that, you limit your ability to keep learning,” Ross warns.

8. Understand the True Cost—and Speed—of Data

Gut instincts have never had much to do with being a CIO; now they should have less to do with being an ordinary manager as well, as data becomes more important.

As part of that calculation, businesspeople must have the ability to analyze the value of the data that they seek. “You’ll need to apply a pinch of knowledge salt to your data,” advises Solvay’s van Zeebroeck. “What really matters is the ability not just to tap into data but to see what is behind the data. Is it a fair representation? Is it impartial?”

Increasingly, businesspeople will need to do their analysis in real time, just as CIOs have always had to manage live systems and processes. Moving toward real-time reports and away from paper-based decisions increases accuracy and effectiveness—and leaves less time for long meetings and PowerPoint presentations (let us all rejoice).

Not Every CIO Is Ready

Of course, not all CIOs are ready for these changes. Just as high school has a lot of false positives—genius nerds who turn out to be merely nearsighted—so there are many CIOs who aren’t good role models for transformation.

Success as a CIO these days requires more than delivering near-perfect uptime, says Lenovo’s Hu. You need to be able to understand the business as well. Some CIOs simply don’t have all the business skills that are needed to succeed in the transformation. Others lack the internal clout: a 2016 KPMG study found that only 34% of CIOs report directly to the CEO.

This lack of a strategic perspective is holding back digital transformation at many organizations. They approach digital transformation as a cool, one-off project: we’re going to put this new mobile app in place and we’re done. But that’s not a systematic approach; it’s an island of innovation that doesn’t join up with the other islands of innovation. In the longer term, this kind of development creates more problems than it fixes.

Such organizations are not building in the capacity for change; they’re trying to get away with just doing it once rather than thinking about how they’re going to use digitalization as a means to constantly experiment and become a better company over the long term.

As a result, in some companies, the most interesting tech developments are happening despite IT, not because of it. “There’s an alarming digital divide within many companies. Marketers are developing nimble software to give customers an engaging, personalized experience, while IT departments remain focused on the legacy infrastructure. The front and back ends aren’t working together, resulting in appealing web sites and apps that don’t quite deliver,” writes George Colony, founder, chairman, and CEO of Forrester Research, in the MIT Sloan Management Review.

Thanks to cloud computing and easier development tools, many departments are developing on their own, without IT’s support. These days, anybody with a credit card can do it.

Traditionally, IT departments looked askance at these kinds of do-it-yourself shadow IT programs, but that’s changing. Ferro, for one, says that it’s better to look at those teams not as rogue groups but as people who are trying to help. “It’s less about ‘Hey, something’s escaped,’ and more about ‘No, we just actually grew our capacity and grew our ability to innovate,’” he explains.

“I don’t like the term ‘shadow IT,’” agrees Lenovo’s Hu. “I think it’s an artifact of a very traditional CIO team. If you think of it as shadow IT, you’re out of step with reality,” he says.

The reality today is that a company needs both a strong IT department and strong digital capacities outside its IT department. If the relationship is good, the CIO and IT become valuable allies in helping businesspeople add digital capabilities without disrupting or duplicating existing IT infrastructure.

If a company already has strong digital capacities, it should be able to move forward quickly, according to Ross. But many companies are still playing catch-up and aren’t even ready to begin transforming, as the SAP-Oxford Economics survey shows.

For enterprises where business and IT are unable to get their collective act together, Ross predicts that the next few years will be rough. “I think these companies ought to panic,” she says. D!

About the Authors

Thomas Saueressig is Chief Information Officer at SAP.

Timo Elliott is an Innovation Evangelist at SAP.

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

Bennett Voyles is a Berlin-based business writer.

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


Cloud Computing: Separating Myth From Reality

Misa Rawlins and Krishnakant Dave

Across industries, many enterprise leaders believe and understand that cloud computing is here to stay. Globally, public cloud services market revenue is projected to reach US$411 billion by 2020, compared with $260 billion in 2017, according to research firm Gartner, Inc. Cloud technology in all its forms—software, platform, or infrastructure as a service—is rapidly becoming essential to the needs of business today. With cloud computing, organizations can simplify IT, save costs, scale rapidly, drive standardization and user adoption, and start getting ahead of tomorrow’s needs when it comes to customer engagement, the supply chain, the workforce, a simplified finance function, and more.

Despite the short- and long-term advantages, some executives remain uncertain about the next steps or have lingering questions about the benefits of moving to the cloud. For many leaders, separating the cloud myths from the facts can prove daunting. Start here, with these insights that can help you bust big myths about the cloud and start moving confidently toward a cloud-enabled transformation of your organization.

Myth No. 1: Moving to the cloud is too costly. “Costly” is a relative term. The cloud can be costly – but costs should be weighed against benefit and return once requirements and migration plans are in place. Rapidly evolving business demands, for example, can dramatically alter cloud-related requirements. Meanwhile, new technologies are dramatically redefining the art of the possible with the cloud. Because migrating to the cloud is not a true “plug-and-play” proposition, and many enterprise leaders underestimate what a migration or implementation involves, some organizations can be surprised by the costs of a cloud transformation. Without a clear understanding of the potential benefits—without a clear business case for moving to the cloud—the focus on costs can overshadow the return on investment. Knowing the value that cloud solutions can bring—not just the costs—can help manage expectations.

Myth No. 2: The benefits of the cloud aren’t substantial enough. As vendors adopt a “cloud-first” stance for many solutions and product updates, organizations that move to the cloud may have a competitive advantage—no matter the size of the enterprise. Cloud solutions continue to offer abundant and increasing functionality. And with the help of an end-to-end solution provider, you can configure cloud solutions to the specific needs of your industry and your business. For larger organizations, rapidly deployable cloud solutions can help support growth or the unique needs of certain business units, such as new acquisitions or foreign subsidiaries, for example. For smaller organizations, the cloud can help you position your organization to tap new opportunities and tame growth challenges.

Myth No. 3: Cloud is too risky. All digital technologies and all business models come with inherent risk. In a hyperconnected world, no system is immune from cyber attacks, insider threats, data leakage, or related risks. No transformation project is a guaranteed success. Market changes, new competition, regulatory issues, and other factors can require you to change your cloud strategy overnight.

Because the risks are real, take advantage of resources and capabilities that can help reduce risk and ensure that your technology investments align tightly with clear business objectives. The maturity of the software goes a long way toward mitigating risk with cloud projects. You can add an extra layer of capabilities such as managed cloud services to provide active, hands-on oversight of cloud applications and infrastructure—helping you to avoid service interruptions and address issues proactively.

Myth No. 4: Cloud computing is still an immature technology. Like other evolving technologies, cloud is advancing every day. Those who wait for the next generation of cloud offerings may find themselves missing out on tangible benefits as competitors leverage cloud technology to sharpen their edge. Across industries, leading organizations are not waiting. Many view cloud technology as evolving but necessary, and they are leveraging it effectively today. Some, for example, are tightly integrating cloud software solutions to streamline supply chain processes, boost information transparency, and improve decision-making across the board—all the while tapping the cloud benefits of cost savings and scalability. Others are confidently turning to infrastructure solutions delivered and running solutions in a private or hybrid cloud. Still others are turning to cloud platform solutions to extend the power of existing applications, build modern analytics platforms, or support new Internet of Things business models. Turning the cloud to your advantage may depend less on the maturity of the technology and more on the power of your imagination.

Myth No. 5: Moving to the cloud will be easy. Cloud technology can help organizations streamline and simplify their IT landscapes and their business processes, reducing needs around capital expenses and infrastructure while helping to save costs. But migrating to the cloud requires more than simply plugging in technology. It requires an ability to address a host of considerations—data migration, the business-specific capabilities of solutions, change management, governance, systems integration, security, and more.

A cloud transformation is more than a plug-and-play project or a traditional system implementation. It requires progressive thinking and an ability to align technology with your business needs and processes— for today and for the future. Migrating to the cloud is a journey. Moving forward with the cloud will require a vision of your “to be” state—your destination—as well as a strategy for getting you there.

To learn more, and to find out what IDC thinks about the future of the cloud, please read this study that presents a strategic blueprint for enterprises on their digital transformation journey.

For more information on how to simplify innovation with cloud technology, learn more about SAP Cloud Platform.

Ready to reimagine the potential of the cloud? Contact us to get the conversation started.

Contact Krishnakant Dave at kdave@deloitte.com and follow him on Twitter: @kkdave

Contact Misa Rawlins at mrawlins@deloitte.com and follow her on Twitter: @misa_rawlins




This article originally appeared on Deloitte.com and is republished by permission.


Misa Rawlins

About Misa Rawlins

As a senior manager and consultant in Deloitte’s SAP practice, Misa Rawlins enjoys helping her clients not only to figure out how to solve their current business problems, but also to envision how a modern cloud platform can transform their organizations moving ahead. Within the practice, she has specifically chosen to take a leadership role around the sales and delivery of SAP S/4HANA Cloud because she considers it the wave of the future. She has made it her mission to deeply understand this technology to better advise clients on what moving to a cloud infrastructure really means.

Krishnakant Dave

About Krishnakant Dave

As a principal in Deloitte’s global SAP practice, KK Dave is a consulting leader for Deloitte’s largest clients; part of the U.S. SAP leadership team where he spearheads Deloitte's cloud offerings; and leader of global go-to-market efforts in the wholesale distribution and manufacturing sector. In these roles, he assists clients in their business transformation journeys using the absolute latest SAP toolset, which presently comprises SAP S/4HANA, SAP Cloud Platform, and SAP S/4HANA Cloud, among other technologies.