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The Internet of Things Enables Precision Logistics (And Could Save The Planet Too!)

David Stephenson

A degree of precision in every aspect of the economy that was impossible before the IoT is one of my fav memes. That’s in part because it should encourage companies that have held back from IoT strategies to get involved now (because they can realize immediate benefits in lower operating costs, greater efficiency, etc.), and also it brings with it so many ancillary benefits, such as reduced environmental impacts (remember: waste creation = inefficiency!).

 Zero Marginal Cost Society

Zero Marginal Cost       Society

I’m reminded of that while reading Jeremy Rifkin’s fascinating Zero Marginal Cost Economy, which I got months ago for research in writing my own book proposal and didn’t get around to until recently.  I’d always heard he was something of an eccentric, but, IMHO, this one’s brilliant.  Rifkin’s thesis:

“The coming together of the Communications Internet with the fledgling Energy Internet and Logistics Internet in a seamless twenty-first-century intelligent infrastructure, “the Internet of Things (IoT),” is giving rise to a Third Industrial Revolution. The Internet of Things is already boosting productivity to the point where the marginal cost of producing many goods and services is nearly zero, making them practically free.”

Tip: When the marginal cost of producing things is nearly zero, you’re gonna need a new business model, so get this book!

At any rate, one of the three revolutions he mentioned was the “Logistics Internet.”

I’m a nut about logistics, especially as it relates to supply chain and distribution networks, which I see as crucial to the radically new “circular enterprise” rotating around a real-time IoT data hub. Just think how efficient your company could be if your suppliers — miles away rather than on the other side of the world — knew instantly via M2M data sharing what you needed and when and delivered it at precisely the right time. Or if the SAP prototype vending machine notified the dispatcher, again on a M2M basis, so that delivery trucks were automatically re-routed to the machine that was most likely  to run out first!

I wasn’t quite sure what Rifkin meant about a Logistics Internet until I read his reference to the work of Benoit Montreuil, “Coca-Cola Material Handling & Distribution Chair and Professor” at Georgia Tech, who, as Rifkin puts it, closes the loop nicely in terms of imagery:

“.. just as the digital world took up the superhighway metaphor, now the logistics industry ought to take up the open-architecture metaphor of distributed Internet communication to remodel global logistics.

Montreuil elaborates on the analogy (and incidentally, places this in the context of global sustainability, saying that the current logistics paradigm is unsustainable), and paraphrases my fav Einstein saying:

“The global logistics sustainability grand challenge cannot be addressed through the same lenses that created the situation. The current logististics paradigm must be replaced by a new paradigm enabling outside-the-box paradigm enabling meta-systemic creative thinking.”

Wooo: meta-systemic creative thinking! Count me in!

Montreuil’s answer is a “physical Internet” for logistics, which he says is a necessity not only because of the environmental impacts of the current, inefficient system (such as 14% of all greenhouse gas emissions in France), but also its ridiculous costs, accounting for 10% of the US GDP according to a 2009 Department of Transportation report!  That kind of waste brings out my inner Scotsman!

Rifkin cites a variety of examples of the current system’s inefficiency based on Montreuil’s research:

  • Trucks in the US are, on average, only 60% full, and globally the efficiency is only 10%!
  • In the U.S. they were empty 20% of miles driven
  • U.S. business inventories were $1.6 trillion as of March, 2013 — so much for “just in time.”
  • Time-sensitive products such as food, clothing, and medical supplies are unsold because they can’t be delivered on time.

Montreuil’s “physical Internet” has striking parallels to the electronic one:

  • Cargo (like packets) must be packaged in standardized module containers
  • Like the internet, the cargo must be structured independently of the equipment so it can be processed seamlessly through a wide range of networks, with smart tags and sensors for identification and sorting (one of the first examples of the IoT I wrote about was FedEx’s great SenseAware containers for high-value cargo!)

With the Logistics Internet, we’d move from the old point-to-point and hub-and-spoke systems to ones that are “distributed, multi-segment, intermodal.” A single, exhausted, over-worked (and more accident-prone) driver would be replaced by several. It’s a  little counterintuitive, but Montreuil says that while it would take a driver 240 hours to get from Quebec to L.A.under the current system; instead 17 drivers in a distributed one would each drive about 3 hours, and the cargo would get there in only 60 hours.

Under the new system, the current fractionated, isolated warehouse and distribution mess would be replaced by a fully integrated one involving all of the 535,000 facilities nationwide, cutting time and dramatically reducing environmental impacts and fuel consumption.

Most important for companies, and looping back to my precision meme, Montreuil points out that an open supply network allows firms to reduce their lead time to near zero if their stock is distributed among some of the hundreds of distribution centers that are located near their final buyer market. And once we have more 3-D printing, the product might actually be printed out near the destination. How cool is that?

Trucking is such an emblematic aspect of the 20th-century economy, yet as with the neat things that Union Pacific and other lines are doing with the 19th-century’s emblematic railroads, they can be transformed into a key part of the 21st century “precision economy” — but only if we couple IoT technology with “IoT thinking.”

Now let’s pick up our iPads & head to the loading dock!

I’ll be addressing this subject in one of my two speeches at the SCM2016 Conference later this month. Hope to see you there! 

 

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The Digital Athlete Brings Science To Sports

Stefan Wagner

Sports are beautiful. Visually striking, poetic, and lyrical.

While there will always be art in sports, today it is science that is dominating the genre. Science is shaping how athletes train and perform. Science is guiding how teams select players, develop game plans, run practices, and scout opponents.

The digital transformation seen in so many areas of business and society is coming to athletics. Digital sports is playing an ever-increasing role in how athletes game and keep a competitive advantage.

What’s driving digital?

To understand how the digital athlete is possible today, it’s important to understand the trends that allow the transformation to happen.

Hyperconnectivity allows us all to be connected at anytime from anywhere via mobile devices. Cloud computing and supercomputing make it easier to collect, store, analyze, and retrieve vast quantities of data. Analytics programs can interpret information and offer athletes and coaches insights, all in real time.

All that data is made possible by the Internet of Things (IoT), the vast network of objects connected to each other. These objects can detect, collect, store, and send data thanks to embedded sensors, software, and wireless connectivity. Lastly, advances in cybersecurity keep data on athletes protected.

The digital athlete

What does the digital athlete look like? First, she is outfitted with wearables that track performance measures such as speed, agility, respiration, and heart rate. This information is fed in real time to coaches and trainers.

Mobile apps let her and her coaches review data and recommendations on the fly. Platforms collect the data from myriad sources, the athlete, and her teammates. Structured data, such as that from wearables, and unstructured data, such as video footage, can be captured and analyzed.

The collected data gives a comprehensive, 360-degree view of the athlete. Her trainers can identify the strain of workouts or potential damage due to improper form. Doing so can prevent injuries, or help injured athletes return to competition sooner. Coaches can pinpoint advantages that can be exploited during competition. Training regimens can be created to suit specific conditions, opponents, or competitions.

Our digital athlete can gain insights far faster than before. Video footage does not need to be broken down. Instead, insights are delivered in real time. The same immediacy is possible with data, collected either from practices or even within a contest, allowing for immediate adjustments.

The athlete also has more insights on her competitors. Scouting reports on opponents can contain richer arrays of information. Data interpretation happens faster. Virtual reality and gamification let athletes simulate situations without risking injury, getting more practice without fatigue.

The digital athlete can relay information about opponents during the competition to staff. Acting on that information allows coaches to recommend new strategies in-game.

Barriers to usage

The art of sport will certainly continue. There are nuances and intuition that will guide many decisions. But incorporating science into sports may take some time, particularly among teams and coaches who may prefer traditional approaches. That reluctance is an advantage to early adopters who seize upon the opportunity in these early stages of digital athletics.

Athletes, coaches, and owners may resist these innovations for other reasons. Jobs, revenue, and public opinion are on the line each season. Sports receive far more media attention than most any other industry. Many sports professionals may prefer to take a wait-and-see approach and reduce perceived risk.

Digital athletes will benefit most when teams, leagues, and owners focus on simplifying procedures. Complexity impedes adoption when data cannot be interpreted and used without complicated steps in conversion, uploading, and storage. To work effectively, data collected from multiple sources in different formats needs to be reconciled quickly to be useful.

In many cases, athletes do not have the luxury of time. The next competition is often just days or hours away. Preparation and practice time is limited and must be maximized. Opponents may not be known until the last minute, leaving little time to create, implement, and perfect a strategy. Collection, analysis, and retrieval of data needs to happen quickly.

The future is here

In many cases, digital athletics and athletes are already here. In a 90-minute singles tennis match, technologies can record 60,000 to 70,000 discrete records. During an hour of football (soccer) practice, 77.7 million data points are generated. By 2019, IDC projects there will be 111.9 million smartbands sold worldwide. One Major League baseball game produces 7 terabytes of uncompressed data.

Consider a recent decision by the Women’s Tennis Association. Players can now access real-time performance data during matches. Coaches can instruct players during match play based on the provided information.

In coming years, more athletes will be wearing sensors during practice and competition. Sensors connected to baseball bats, tennis racquets, and polo mallets will tell coaches how strong players are striking balls and how accurate their impacts are.

Conclusion

Athletes are always looking for a competitive edge. Today, digital transformation provides advantages to athletes that were the stuff of science fiction earlier. Armed with detailed information collected from multiple sources and analyzed in real time, digital athletes will soon be the norm. Those athletes and sports organizations that see the potential possible through digital innovation will remain a step ahead, a few seconds faster, and have more wins in their record book.

To learn more about digital transformation in the sports industry, click here.

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Stefan Wagner

About Stefan Wagner

Stefan Wagner is Global Manager of the Sports & Entertainment Business Unit at SAP. Through intensive contact with international premium customers and many co-innovation projects, Stefan’s team supports the sustainable development of this nascent branch of SAP. Of key importance is the close collaboration with SAP’s development teams. In his free time, Stefan is an avid skier, tennis, and rugby player.

Finding Value In IoT Data

Paul Taylor

One day soon, we will wake up and wonder how we ever survived in a world of “dumb” disconnected things. Our homes, including our pantries, closets, and shoe racks, and our offices, factories, and vehicles will be full of connected devices.

The World Economic Forum estimates that the number of connected devices will grow at a compound annual growth rate (CAGR) of 21.6% over the next four years from 22.9 billion in 2016 to a headline-grabbing 50.1 billion by 2020 – equivalent to almost five connected devices for every person on the planet.

By 2020, there will be an estimated 5 connected devices to every 1 person on the planet.

But that will be just the beginning. Welcome to the Internet of Things (IoT).

Underpinning the growth of IoT are tumbling prices for the sensors that turn “dumb” things into “smart” devices and capture data from the environment around them, and the vast data-centric and mostly wireless networks that connect these devices to each other and to the broader Internet.

As the sensors grow ever cheaper, and the network grows ever larger, the more data we as individuals, professionals, companies, and governments can collect and analyze to make ever more intelligent decisions.

Just like other commoditizing electronic components, fierce competition, and Moore’s Law has driven down prices, especially for accelerometers and gyroscope sensors typically used in smartphones and other mobile devices.

As a result, manufacturers can add sensor and communications modules to almost any product for a few dollars, bringing the day when everything (valued at $10 or more is) I0T-ready a big step closer.

“Our perspective is that cost of both the sensors and devices is approaching free and the size is approaching invisible,” said James Bailey, managing director of the mobility practice at Accenture, last year. “Literally everything will have IoT technology at some point.”

At the same time, the cost of embedded processors, networking and cloud-based computing – other key components in the IoT world – have all fallen.

The opportunity for transformation

IoT, particularly the Internet of Industrial Internet of Things (IoIT), is about hyperconnectivity and sensor-generated data – huge amounts of it. But the real value lies in what you can do with that data – in the outcomes it enables, rather than the collection, transmission, or storage of that data.

“We need more data-driven decision making,” said Tanja Rückert, executive vice president of Digital Assets and IoT at SAP,  during the SAP Executive Summit on the Internet of Things that took place earlier this month.

Her views were echoed by Nils Herzberg, senior vice president and global co-lead of IoT Go to Market, who stressed that “data is the fuel of the 21st century.”

Nevertheless, a recent study found that while 81 percent of business executives believe that successful adoption of industrial IoT is critical to their company’s future success, only 25 percent have a clear industrial IoT strategy.

A challenge and a huge opportunity remains for those enterprise software and services companies that have the technology and tools available to help people and businesses make sense of, analyze, and harness the tsunami of data that we are about to be engulfed by.

Here’s the real business potential to add value through IoT: Companies in almost every industry will transform into digital businesses which means oversight must be powered by real-time data – fed in large part by sensors.

As Herzberg, says, the beauty of sensors that they bring real-time data to applications: “Customers run applications for business critical processes, which could run better with real-time awareness.”

Big Data analytics and machine learning will deliver personal and business insights and will enable us to make immediate decisions based on that data – rather than relying as we have in the past, on guesswork or out-of-date forecasts. “When sensors provide real-time information, customers can make better decisions, rather than using guess work,” says Herzberg.

IoT data is already helping companies track goods on their way through the supply chain and immediately alert managers in case of theft or damage, reducing waiting times in busy ports, playing a key roll in jet engine and tractor predictive maintenance, helping farmers optimize crop yields, and improving safety across a number of public and private enterprises.

The market

So how big is the market opportunity? Cisco, the networking equipment group, predicts the global Internet of Things market will be $14.4 trillion by 2022, with the majority invested in improving customer experiences.

Cisco suggested that additional areas of investment would include reducing the time-to-market ($3T), improving supply chain and logistics ($2.7T) and cost reduction strategies ($2.5T) and increasing employee productivity ($2.5T).

But the implications of IoT and the Big Data analytics that it feeds will go far beyond traditional business models and have a profound impact on both enterprises and individuals. When combined with machine learning and cognitive computing, the insights derived from IoT data will enable us as individuals and businesses users to deploy intelligent agents empowered to make autonomous decisions and negotiate with other agents on our behalf.

This is not about machines replacing humans. Rather, intelligent apps augment humans’ ability to run the business. Predicted businesses will deploy intelligent agents across multiple areas to help all employees, from sales to suppliers to shop floor.

Things to outcomes

Ultimately, machines will help people understand connections between information by monitoring, analyzing, and correlating data that people wouldn’t see ordinarily. This helps people improve outcomes. For example, in healthcare it can mean improving patients’ recovery times.

Enterprise IoT may be Big Data’s killer app, but ultimately it is still about people.

For more insight on the Internet of Things, see IoT, Sensors, And All Things Digital: Can We Handle It All?

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Customer Experience: OmniChannel. OmniNow. OmniWow.

Jamie Anderson, Volker Hildebrand, Lori Mitchell-Keller, and Stephanie Overby

The lines between the digital and physical customer experience today are largely artificial. Customers shop in retail stores with their devices at the ready. They expect online-like personalization and recommendations in the aisles. They’re looking for instant gratification and better sensory experiences from digital channels. It’s an omnichannel world and companies must figure out how to live in it: delivering a superior customer experience regardless of the entry point.

Luxury fashion brand Rebecca Minkoff, for example, opened its first three retail stores with the intent of taking customers’ best online experiences and bringing them to life. “In the past, you had this brick-and-mortar experience, and you had the online experience,” says company president Uri Minkoff. “There were such great advantages and efficiencies that emerged with shopping online. You could get recommendations, see how something should be styled, create wish lists, access user-generated content. In the store, it was still just you and the product, and maybe a sales associate. But [unlike online] you had all five of your senses.”

Rebecca Minkoff’s new stores still stimulate those senses while incorporating some of the intelligence that online channels typically bring to bear. Each store features a large interactive screen at the entrance, where customers can browse products or order a beverage. Shoppers can interact with salespeople or they can make purchases on a mobile app without ever talking to a soul. Inside a fitting room, RFID-tagged merchandise is displayed on an interactive mirror, where customers can request new sizes or the designer’s recommended coordinates (a real-life recommendation engine).

The company has found that 30% of women ask for additional items based on the recommendations. It has also sold three times more of its new ready-to-wear line than it anticipated. “We were an accessories-dominant brand,” says Minkoff. “But we’ve been able to build this direct relationship with our customers, helping them with outfit completers and also getting a better sense of what they want based on what’s actually happening in our fitting rooms.”

Each piece of technology adds to the experience while capturing the details. Rebecca Minkoff’s integrated systems can remember a customer’s previous visits and preferred colors and sizes, and can enable associates to set up a fitting room with appropriate garments. On the back end, the company gets the kind of visibility into in-store conversions once possible only in digital transactions. “The technology gives us the ability to create the kind of experience each customer wants. She can shop anonymously or be treated like a VIP,” says Minkoff.

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Build Around a Big Idea

Rebecca Minkoff’s approach is a bellwether. It’s not enough simply to provide continuity or consistency from one channel to another. Customers don’t think in terms of channels, and neither should companies. Rather, it’s about defining the overarching experience you want to deliver to customers and then building the appropriate offline and online elements to achieve that intended outcome.

As more goods and even services are commoditized, companies must compete on the experiences they create (see The ROI of Customer Experience). That means coming up with a big idea that drives the design of the customer experience. “Every great experience needs to have a theme,” says Joe Pine, consultant and coauthor of The Experience Economy and Infinite Possibility: Creating Customer Value on the Digital Frontier. “That’s the organizing principle of the experience. It’s how you decide what’s in and what’s out.”

For example, Rebecca Minkoff serves as an image consultant to its Millennial customers, who expect personalization, recognition, and tech innovation, using a mix of online and offline techniques. To stand apart, companies must come up with their own unifying idea and then integrate data and systems, rework organizational models, and rethink key strategic metrics and employee incentives in order to integrate the physical and digital worlds around that idea.

Here are some examples of companies that have created a theme-driven experience using online and offline elements.

Nespresso: Imparting a Sense of Luxury

At the most basic level, Nespresso is a manufacturer of coffee and coffee machines. But the company has successfully turned what it sells and how it sells it into a very specific type of experience. Nespresso strives to impart a feeling of quality, exclusivity, even luxury in a host of ways.

sap_Q316_digital_double_feature3_images2The company has created the Nespresso Club, which maintains direct relationships with thousands of customers. Its customer service centers are staffed by 1,000 highly trained coffee experts who don’t just push products but offer advice and guidance as a sommelier might do with wine. Its 450 retail stores (up from just one Parisian in 2000) are called boutiques; the largely inventory-free showrooms are built around tasting and learning.

Online, the focus is on efficiency and service. Customers who prefer digital interactions can order through the web site or mobile app, which offers the option of courier delivery within a two-hour window. The company also recently introduced a Bluetooth-enabled coffee machine, which when paired with a smartphone app, can track a customer’s usage, simplify machine maintenance, and as Wired pointed out, enable remote brewing.

Success didn’t happen overnight, but today Nespresso is one of Nestlé’s fastest growing and most profitable brands, according to Bloomberg.

QVC: Using Online to Complement the Experience

The theme that has driven television-shopping giant QVC’s customer experience for decades has been “inspiration and entertainment.” Traditionally that was delivered through the joy of spontaneous discovery while watching the channel.

Matching that experience online has been difficult, however. At a digital retail conference in 2015, QVC’s CEO explained that in the past the company had failed to deliver the same rich interactions online that it had developed with its TV audiences, according to Total Retail. So the company decided to rethink its use of digital tools to focus on complementing the experience it delivers through TV screens, according to RetailWire.

For example, after enticing TV viewers with products, QVC introduces the next step in the buying journey—“impulse to buy”—in which viewers are spurred on with televised countdown clocks or limited merchandise availability. Online, the company has been experimenting with second-screen content (for instance, recipes that compliment a cooking product being sold on TV) to further propel purchases. The QVC app features the same item that is on-air along with a prompt that reveals all the items featured on TV in recent hours. On Apple devices equipped with Touch ID, customers can check out in less than 10 seconds with the fingerprint-enabled “speed buy” button. The third phase—“purchase and receive”—is complemented by a simple and reliable online browsing and purchasing platform. The last stage—“own and enjoy”—is accompanied by follow-on e-mail communication with tips on how to use products.

Last year, the company reported that 44% of total QVC sales came from online channels (up from 40% in 2014), and nearly half of those were completed on a mobile device. In fact, QVC is currently the tenth largest mobile commerce retailer in the United States, according to Internet Retailer.

Domino’s: Focusing on Speed and Convenience

sap_Q316_digital_double_feature3_images3Domino’s Pizza built a fast-food empire not necessarily on the quality of its pies but instead on the experience of getting hot food delivered quickly. What started out as a promise to deliver a pizza within 30 minutes to customers who phoned in their order is now a themed experience of efficient food delivery that can be fulfilled a number of ways. Domino’s AnyWare project enables customers to order pizzas from their TV, their Twitter account, their smartwatch, or their connected car, for starters. The Domino’s app features zero-click ordering functionality: Domino’s will start fulfilling the usual order for customers who opt in 10 seconds after opening the app.

Domino’s Australian stores are piloting GPS tracking whereby employees begin working on an order only when the customer enters the “cook zone”—a dynamically updated area around a given store that results in the customer arriving to a just-prepared order. The tool builds upon previously developed GPS-based technology for tracking delivery drivers, according to ZDNet. And the company that came up with the corrugated pizza box and the Heatwave Bag to keep pies warm is now building the DXP—a delivery car with a built-in warming oven. All in the name of the fast- and hot-food delivery experience.

Mohawk Industries: Using Social to Streamline Customer Interactions

Mohawk Industries grew to become a US$8 billion flooring manufacturer by relying on customers to visit its dealers’ retail locations to see, touch, and feel the carpet, hardwood, laminate, or tile they planned to purchase.

sap_Q316_digital_double_feature3_images4Today, instead of waiting for customers to find Mohawk, it has redesigned its experience to find them. It has adopted new technology and reworked its sales processes to reflect that new focus. The company’s 1,200 sales representatives have access to a 360-degree view of each customer, complete with analytics and sales tools on their tablets, enabling them to capture and follow through on leads generated through social media engagement.

By analyzing online discussions in real time, representatives can jump into the conversation and help customers find the product they may be searching for and direct the consumer to a retailer to finish the sale. In one episode, a woman was posting about her interest in a particular leopard rug on Twitter. Mohawk’s team surfaced the tweet, passed it on to a channel partner who contacted the woman and closed the sale within two minutes. Today, the company boasts an 80% close rate on sales started and guided in social media and has made $8 million on 14,000 such social leads. Mohawk Industries expects an increase of $25 million in sales year-over-year, thanks to its new customer-centric approach.

Customer Experience Design: Where to Begin

Developing a unique, valuable, and relevant customer experience that combines the best of offline and online capabilities is a huge undertaking. All corporate functions, including marketing, customer service, sales, operations, finance, and HR as well as product or business lines—all of which typically have competing metrics and agendas—must buy into the experience and collaborate to make it happen. And the ideal mix of digital and physical components will vary by company. But there are some best practices to get companies started on their own journeys.

Start at the Top

Without leadership buy-in, changes will not happen. “Customer experience is not a feature, it’s not a shiny button. It’s a concept that sometimes is tough to grasp. But we believe that if done right, it will keep customers loyal. And so we put a lot of effort into it,” says Kevin Scanlon, director of total customer experience at tech company EMC. “That’s why having that top-down support is paramount. If you don’t have it, you’re spinning your wheels. It’s going to give you the resources, the focus, and the attention that you need to design that consistent experience.”

To demonstrate its commitment, every VP and above at EMC has a customer experience metric as part of their quarterly goal.

Begin with the End in Mind

Companies can take a page from the design-thinking approach to product development, starting with the experience they want customers to have with their company and then putting in place the people, processes, and systems to make that happen across various touchpoints. Uber didn’t start by buying 1,000 cars. It started with a completely new customer experience it wanted to deliver—straddling the digital and physical—and then built the organization around that. Uber ultimately leveraged people, process, and technology to bring that to life, but it started with a unique customer journey.

Design for the Customer, Not the Company

sap_Q316_digital_double_feature3_images5To date, most corporate processes have been designed for internal efficiency or cost savings with little consideration for the impact on the customer. Companies that want to design for consistent experiences have to reexamine those business processes from the customer perspective. In order to deliver a standout and consistent experience, enterprises must bring together an assortment of data from a variety of systems—including POS transactions, mobile purchases, call center activity, notes from sales calls, and social media.

The average retailer has customer data in more than a dozen different systems. But it’s not just the front-end customer-facing systems that need orchestrating; back office systems and processes, from your supply chain to fulfillment to customer service, must be designed to deliver the intended experience. For example, Nespresso has to orchestrate a number of back-end and front-end systems to offer customers premium courier delivery within two-hour windows.

Put Someone in Charge

Companies that are truly invested in creating integrated, standout customer experiences often create a centralized function that can bring together the people, processes, and technology to bring them to life. Sometimes there is a chief customer officer or head of customer experience. But unless these people are really empowered, they’re toothless.

EMC’s Scanlon is empowered. He heads up a function that has been transformed from focusing on product quality into a centralized customer experience center of excellence staffed with 60 full-time professionals. The center has translated into “more focus, more energy, more insight to our customers,” says Scanlon. “And we can deliver that insight to our internal stakeholders, which trickles down to our account teams and lets them have more meaningful conversations that benefit our customers—and benefit the company over time.”

Centralize Customer Data

Even if there is no central customer experience function, there needs to be a central data repository and analytics system: a digital foundation that everyone can use to improve their piece of that experience. EMC’s customer experience group has a data governance function that maintains a single source of customer truth. “They’re able to pull all relevant data sources into one location and get past the typical customer data challenges,” says Scanlon.

Invest in People

Companies that care about the customer experience invest in the people who deliver it. Human beings are the clearest signposts on the customer journey. Companies must hire the best, train for desired outcomes, and reward based on experience metrics: for being brand ambassadors and for going above and beyond on behalf of the customer.

sap_Q316_digital_double_feature3_images6Rethink Metrics and Incentives

One major bank was having trouble driving adoption of its online banking tools. The customers that used the tools loved them, but the tools weren’t getting traction. The problem? The branch managers had no interest in promoting digital banking. They wanted to drive as much traffic as possible to their physical branches because this was one of their key performance metrics.

The solution was to change the compensation approach in order to reward employees for the entire customer experience, including online banking adoption. Branch managers were measured on online and offline customer behavior in their regions. That became a single and critical KPI, and it boosted the desired behaviors and improved overall customer satisfaction.

Create a Single View of the Company

For years, companies have talked about the importance of understanding the customer. And that remains true, particularly when it comes to delivering a valuable customer experience online and off. But successful customer experience design is just as much about giving customers a clear understanding of the company through coordinated experiences that deliver on the brand’s theme and bring it to life in various ways in bricks and mortar, through devices, in online interactions, and everywhere in between. D!

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

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Is The Internet Of Things And Wearable Technology The New Black?

Fred Isbell

The Internet of Things (IoT) is a classic hype cycle phenomenon. Besides forecasts of high growth, it is capturing a large share of interest and overall mindshare.

One thing is clear: The elements of the IoT are here to stay. Once we get past the definition of IoT, which is commonly referred as sensor-based devices and machine-to-machine communications, businesses can open themselves to enormous potential.

When trying to understand new things, I prefer to embrace them as a part of my daily life. When tablets first emerged, I didn’t go anywhere without my trusted iPad. In fact, I sometimes leave my laptop home knowing that I can do most of what I need on this device. And based on that experience, I took my own advice when it came to wearable technology recently – and the results were eye-opening.  I’m now onto my second-generation wearable device, showcasing just how quickly this is all changing.wearable-1

But first let’s jump into the time-travel machine back to February 2015. I was attending the MIT/Sloan School Sports and Analytics conference in Boston, and it seemed that everyone was mentioning wearable technology. The buzz was verified weeks later when I attended the IDC Directions Annual conference, where wearables made the short list of technology ubiquity. A year later, I returned to the MIT/Sloan School Sports and Analytics conference in Boston a little bit wiser. At that point, I invested in a Fitbit and started tracking my own personal statistics for exercise, sleep, and more. Needless to say, the geek in me was in full force as I wore both a Fitbit and a sports watch at the same time. I didn’t want to miss anything, and my middle-aged eyes appreciated the help.

One of the benefits of working for a tech company is the opportunity to adopt new technology in every aspect of my life. My employer, SAP, kicked off a new wellness program, incorporating wearables in how its employees track their health and wellness. I took advantage of this opportunity, replacing my sports watch with a second-generation Fitbit and consolidating two devices into one.

My wearable journey is certainly not complete yet, but it’s become integrated into my life in a very nonintrusive way. Just as my tablet has become an extension of me, so has the wearable device. I even exchange screen shots of my results – such as when I rode my first charity JDRF bike ride over the summer – to friends so we celebrate our achievements.

Very soon, our interactions with the IoT and wearable will become the norm, and we won’t think twice about it. But at the same time, it’s becoming a big business. Market watcher CCS Insight sees this as a US$14 billion market growing to over US$40 billion by 2020. All of these devices will generate even more data, making Big Data bigger than anyone could have predicted.

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All of that data will generate increased demand for applications – especially analytics – to understand, interpret, and use this information. And if you think about it, my Fitbit app on my phone is really a personal business intelligence tool and the ultimate example of the consumerization of IT.

Not surprisingly, tech leaders such as SAP talk about the fusion of business-to-business (B2B) and business- to-consumer (B2B) into what some call “business-to-business-to-consumer” (B2B2C). The proliferation of wearable technology is a great example of this. The market for applications and solutions will increase exponentially – supported by cloud-based delivery and unprecedented demand for the infrastructure to deliver real-time intelligence and much more.

Wearables are indeed the new black as it becomes mainstream and part of society. I’ll come back shortly with a further discussion of how we can apply this technology in sports and analytics. In the interim, I need to head to the gym to get my 10,000 steps and the fitness equivalent to make my Fitbit – and me – happy!

For more on the impact of connected devices, see How Tech Changes Up Health In The Workplace.

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About Fred Isbell

Fred Isbell is the Senior Director of SAP Digital Business Services Marketing at SAP. He is an experienced, results- and goal-oriented senior marketing executive with broad and extensive experience & expertise in high technology and marketing. He has a BA from Yale and an MBA from the Duke Fuqua School of Business.