The New Rules Of Engagement

Bernd Leukert

Recently I was asked if I ever get tired of discussing “digitalization.” While there is a simple answer to that question, there are no simple answers to what “digital” means for companies or us as individuals—be it in our private or professional lives.

Digitalization has moved from simply improving existing business models to profoundly disrupting them, resulting in a redefinition of roles and boundaries. We see the lines between industries blurring: Car manufacturers integrate solutions traditionally reserved for finance and telecommunications, sports apparel companies move into high-tech digital fitness. The rise of configurable, personalized products and e-commerce means that producers no longer simply produce: Manufacturers now also enjoy direct relationships with the end consumers.

As the rules of engagement between buyers, suppliers, and partners change, so do the ways we interact and collaborate—as both individuals and organizations. A strong, open ecosystem is now more important than ever, but equally important are the models of interaction. Increasingly in today’s world, it’s all about partnering to effectively deal with the challenges—and, of course, benefits—of digitalization.

Rethinking traditional collaboration models

The traditional role of software providers—and the clue is in the name—is also affected by this change. Simply developing, selling, and shipping the latest solutions—regardless of how cutting-edge they may be—is not enough anymore. Because despite realizing the importance of digitalization, many organizations still struggle to identify where and how emerging platforms, technologies, and applications could offer value. So it is not the question of why transform that often remains unanswered, but rather the what, the when, and the how. Companies want more than just a provider of software as their partner, they want a partner to help them digitalize products, processes, services—or in short, their business.

But digital transformation is obviously not a one-size-fits-all process: every company is different and there is no blueprint to apply that can cover all scenarios. What is possible, however, is to combine forces—the expertise of the provider and the customer—to uncover exciting new opportunities together. This shift sees the software provider move beyond software provision and even co-innovation to a business risk-and-benefit-sharing co-engineering model.

Sharing the risks and the benefits

Co-innovation has long played a crucial role in our success at SAP. Working hand-in-hand with our customers through the development process has led to many groundbreaking solutions. But in the co-innovation model, the relationship with the customer only goes so far. Once the product is on the market, the collaboration is scaled back significantly.

In our co-engineering projects, on the other hand, we take our relationship with the customer to the next level. We work together to understand their digital potential and then scale it out, with both parties sharing the risks and benefits—from the initial development through to its market launch and beyond. It’s about a long-term approach that lays the best possible foundation for sustained growth.

One great example of such a project is the “LANDLOG” collaboration with Japanese multinational Komatsu. The company, which specializes in manufacturing, selling construction, mining equipment, and industrial machinery, invested in the creation of a new cloud-based Internet of Things (IoT) platform. This “smart construction platform” is powered by a highly innovative IoT portfolio and aims to centrally manage and optimize construction processes, significantly improving resource utilization and safety standards. Here our partnership extends beyond simply delivering the co-innovated product: With a double-digit equity stake in the project, we are both taking on a share of the risks involved in such a venture, but at the same time, we will have a stake in its financial success. It other words, the success of this project is also the success of its stakeholders.

So, to return to the question of whether I am getting bored of discussing digitalization, the answer is obviously a clear no: There are still many challenges and opportunities ahead—something that I am regularly reminded of in discussions with our customers and partners. Remaining relevant, innovative, and competitive in rapidly changing markets requires us all to reexamine the ways we work, from what we provide to how we provide it. It’s a very exciting time for all organizations, and I am looking forward to working together with our customers and partners to shape the future.

For another perspective on digital transformation, see Why Digital Transformation Is A Nothingburger—And What To Do About It.

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Bernd Leukert

About Bernd Leukert

Bernd Leukert is a member of the Executive Board of SAP SE with global responsibility for development and delivery of all products across SAP’s product portfolio.

Will The Collaborative Economy Completely Reimagine Tomorrow's Big Business?

Daniel Newman

Today, the largest car rental and hospitality companies are Uber and Airbnb, respectively. What do they have in common? Let’s see — neither of them own physical possessions associated with their service, and both have turned a non-performing asset into an incredible revenue source.

Don’t be surprised, because this is the new model for doing business. People want to rent instead of own, and at the same time, they want to monetize whatever they have in excess. This is the core of the sharing economy. The concept of earning money by sharing may have existed before, but not at such a large scale. From renting rooms to rides to clothes to parking spaces to just about anything else you can imagine, the sharing economy is rethinking how businesses are growing.

What’s driving the collaborative economy?

The sharing economy, or the collaborative economy, as it’s also called, is “an economic model where technologies enable people to get what they need from each other—rather than from centralized institutions,” explains Jeremiah Owyang, business analyst and founder of Crowd Companies, a collaborative economy platform. This means you could rent someone’s living room for a day or two, ride someone else’s bike for a couple of hours, or even take someone’s pet out for a walk—all for a rental fee.

Even a few years ago, this sort of a thing was unthinkable. When Airbnb launched in 2008, many people were skeptical, as the whole idea seemed not only irrational, but totally stupid. I mean, why would anyone want to spend the night in a stranger’s room and sleep on an air bed, right? Well, turns out many people did! Airbnb moved from spare rooms to luxury condos, villas, and even castles and private islands in more than 30,000 cities across 190 countries, and rentals reached a staggering 15 million plus last year.

What is driving this trend? Millennials definitely play a role. Their love for everything on-demand, plus their frugal mindset, makes them ideal for the sharing economy. But the sharing economy is attractive to consumers across a wide demographic, as it only makes sense.

How collaborative economy is reshaping the future of businesses

Until recently, collaborative-economy startups like Uber and Airbnb were looked upon as threats. Disuptors to any marketplace are usually threatening, so this isn’t surprising. Established businesses that were accustomed to the way things had always been did (and still do) rail against companies like Uber or AirBnB, yet consumers seem to love them. And that’s what matters. Uber has faced many harsh criticisms, yet it continues to provide more than a million rides a month.

We are living in an era of consumer-driven enterprise, where consumers are at the helm. Perhaps this is the biggest reason why the collaborative economy is here to stay. No matter what industry, companies are trying to bring customers to the fore. A collaborative business model allows customers to call the shots. A great example is the cloud, which relies on resource sharing and allows users to scale up or down according to their needs.

Today, traditional businesses are participating in a collaborative economy in different ways. Some are acquiring startups. General Motors, for example, invested $3 million to acquire RelayRides, a peer-to-peer car sharing service. Others are entering into partnerships like Marriott, which partnered with LiquidSpace, an online platform to book flexible workspaces. Other brands, like GE, BMW, Walgreens, and Pepsi are also stepping into the collaborative-economy space and holding the hands of startups instead of competing with them.

Changes in the workplace

Remote work and telecommuting has taken off as companies become more comfortable with the idea of people working outside their offices, and cloud technology is enabling that. Now, let’s look at the scenario from the lens of the sharing economy. With companies looking to find temporary resources that can meet the fast-changing demands of the business, freelancers could replace a large chunk of full-time professionals in future. Why? Because at the heart of this disruptive practice lies the concept of sharing human resources.

As companies set out to temporarily use the services of people to meet short- and medium-term goals, it’s going to completely change the way we build companies. Also, as we have seen through the growth of companies like Airbnb and Uber, it’s going to change the deliverables that companies provide. With demand changing and technology proliferating at breakneck speed, it’s not just important that businesses start to see and adopt this change; it’s imperative because companies that over-commit to any one thing will find themselves obsolete.

When it comes to workplaces, so much is happening today that it’s impossible to predict where things are ultimately headed. But one thing is for sure: The collaborative economy is not going anywhere as long as our priorities are built around better, faster, more efficient and cost-effective.

Want more insight on today’s sharing economy? see Collaborative Economy: It’s Real And It’s Disrupting Enterprises.

This article was originally seen on Ricoh Blog.

The post Will the Collaborative Economy Completely Reimagine Tomorrows Big Business appeared first on Millennial CEO.

Photo Credit: Pedrolu33 via Compfight cc

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Daniel Newman

About Daniel Newman

Daniel Newman serves as the Co-Founder and CEO of EC3, a quickly growing hosted IT and Communication service provider. Prior to this role Daniel has held several prominent leadership roles including serving as CEO of United Visual. Parent company to United Visual Systems, United Visual Productions, and United GlobalComm; a family of companies focused on Visual Communications and Audio Visual Technologies. Daniel is also widely published and active in the Social Media Community. He is the Author of Amazon Best Selling Business Book "The Millennial CEO." Daniel also Co-Founded the Global online Community 12 Most and was recognized by the Huffington Post as one of the 100 Business and Leadership Accounts to Follow on Twitter. Newman is an Adjunct Professor of Management at North Central College. He attained his undergraduate degree in Marketing at Northern Illinois University and an Executive MBA from North Central College in Naperville, IL. Newman currently resides in Aurora, Illinois with his wife (Lisa) and his two daughters (Hailey 9, Avery 5). A Chicago native all of his life, Newman is an avid golfer, a fitness fan, and a classically trained pianist

How One Business Approach Can Save The Environment – And Bring $4.5 Trillion To The World Economy

Shelly Dutton

Despite reports of a turbulent global economy, the World Bank delivered some great news recently. For the first time in history, extreme poverty (people living on less than $1.90 each day) worldwide is set to fall to below 10%. Considering that this rate has declined from 37.1% in 1990 to 9.6% in 2015, it is hopeful that one-third of the global population will participate the middle class by 2030.

For all industries, this growth will bring new challenges and pressures when meeting unprecedented demand in an environment of dwindling – if not already scarce – resources. First of all, gold, silver, indium, iridium, tungsten, and many other vital resources could be depleted in as little as five years. And because current manufacturing methods create massive waste, about 80% of $3.2 trillion material value is lost irrecoverably each year in the consumer products industry alone.

This new reality is forcing companies to rethink our current, linear “take-make-dispose” approach to designing, producing, delivering, and selling products and services. According to Dan Wellers, Digital Futures lead for SAP, “If the economy is not sustainable, we are in trouble. And in the case of the linear economy, it is not sustainable because it inherently wastes resources that are becoming scarce. Right now, most serious businesspeople think sustainability is in conflict with earning a profit and becoming wealthy. True sustainability, economic sustainability, is exactly the opposite. With this mindset, it becomes strategic to support practices that support a circular economy in the long run.”

The circular economy: Good for business, good for the environment

What if your business practices and operation can help save our planet? Would you do it? Now, what if I said that this one business approach could put $4.5 trillion up for grabs?

By taking a more restorative and regenerative approach, every company can redesign the future of the environment, the economy, and their overall business. “Made possible by the digital economy, forward-thinking businesses are choosing to embrace this value to intentionally reimagine the economy around how we use resources,” observed Wellers. “By slowing down the depletion of resources and possibly even rejuvenating them, early adopters of circular practices have created business models that are profitable, and therefore sustainable. And they are starting to scale.”

In addition to making good financial sense, there’s another reason the circular economy is a sound business practice: Your customers. In his blog 99 Mind-Blowing Ways the Digital Economy Is Changing the Future of Business, Vivek Bapat revealed that 68% of consumers are interested in companies that bring social and environmental change. More important, 84% of global consumers actively seek out socially and environmentally responsible brands and are willing to switch brands associated with those causes.

Five ways your business can take advantage of the circular economy

As the circular economy proves, business and economic growth does not need to happen at the cost of the environment and public health and safety. As everyone searches for an answer to job creation, economic development, and environmental safety, we are in an economic era primed for change.

Wellers states, “Thanks to the exponential growth and power of digital technology, circular business models are becoming profitable. As a result, businesses are scaling their wealth by investing in new economic growth strategies.”

What are these strategies? Here are five business models that can enable companies to unlock the economic benefits of the circular economy, as stated in Accenture’s report Circular Advantage: Innovative Business Models and Technologies that Create Value:

  1. Circular supplies: Deliver fully renewable, recyclable, and biodegradable resource inputs that underpin circular production and consumption systems.
  2. Recovery of resources: Eliminate material leakage and maximize the economic value of product return flows.
  3. Extension of product life: Extend the life cycle of products and assets. Regain the value of your resources by maintaining and improving them by repairing, upgrading, remanufacturing, or remarketing products.
  4. Sharing platforms: Promote a platform for collaboration among product users as individuals or organizations.
  5. Product as a service: Provide an alternative to the traditional model of “buy and own.” Allow products to be shared by many customers through a lease or pay-for-use arrangement.

To learn more about the circular economy, check out Dan Wellers’ blog “4 Ways The Digital Economy Is Circular.”

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Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Why Artificial Intelligence Is Not Really Artificial – It Is Very Tangible

Sven Denecken

The topic of artificial intelligence (AI) is buzzing through academic conferences, dominating business strategy sessions, and making waves in the public discussion. Every presentation I see includes it, even if it’s only used as a buzzword – its frequency is rivaling the use of “Uber for X” that’s been so popular in recent years.

While AI is a trending topic, it’s not mere buzz. It is already deeply ingrained into the strategy and design of our products – well beyond a mere shout-out in presentations. As we strive to optimize our products to better serve our customers and partners, it is worth taking AI seriously because of its unique role in product innovation.

AI will be inherently disruptive. Now that it has left the realm of academic projects and theoretical discussion – now that it is directly driving speed and hyper-automation in the business world – it is important to start with a review that de-mystifies the serious decisions facing business leaders and clarifies the value for users, customers, and partners. I’ll also share some experiences on how AI is contributing to solutions that run business today.

Let’s first start with the basics: the difference between AI, machine learning, and deep learning.

  • Artificial intelligence (AI) is broadly defined to include any simulation of human intelligence exhibited by machines. This is a growth area that is branching into multiple areas of research, development, and investment. Examples of AI include autonomous robotics, rule-based reasoning, natural language processing (NLP), knowledge representation techniques (knowledge graphs), and more.
  • Machine learning (ML) is a subfield of AI that aims to teach computers how to accomplish tasks using data inputs, but without explicit rule-based programming. In enterprise software, ML is currently the best method to approach the goals of AI.
  • Deep learning (DL) is a subfield of ML describing the application of (typically multilayer) artificial neural networks. Neural networks take inspiration from the human brain, with processors consisting of small neuron-like computing units connected in ways that resemble biological structures. These networks can learn complex, non-linear problems from input data. The layering of the networks allows cascaded learning and abstraction levels. This can accomplish tasks like: starting with line recognition, progressing to identifications of shapes, then objects, then full scene. In recent years, DL has led to breakthroughs in a series of AI tasks including speech, vision, and language processing.

AI applications for cloud ERP solutions

Industry 4.0 describes the trend of automation and data exchange in manufacturing. This comprises cyber-physical systems, the Internet of Things (IoT), cloud computing, and cognitive computing – everything that adds up to create a “smart factory.” There is a parallel in the world beyond manufacturing, where data- and service-based sectors need to capture and analyze more data quickly and act on that information for competitive advantage.

By serving as the digital core of the organization, enterprise resource planning (ERP) solutions play a key role in business transformation for companies adapting to the emerging reality of Industry 4.0. AI solutions powered by ML will be a broad, high-impact class of technologies that serve as a key pillar of more responsive business capabilities – both in manufacturing and all the sectors beyond. As such, ERP must embrace AI to deliver the vision for the future: smarter, more efficient, more flexible, more automated operations.

Enterprise applications powered by AI and ML will drive massive productivity gains via automation. This is not automation in the sense of repetitive, preprogrammed processes, but rather capabilities for software to handle administrative tasks and learn from user behavior to anticipate what every individual in the company might need next.

Cloud-based ERP is ideal for companies looking to accelerate transformation with AI and ML because it delivers innovation faster and more reliably than any onsite deployment. Users can take advantage of rapid iterations and optimize their processes around outcomes rather than upkeep.

Case in point: intelligent ERP applications need to include a digital assistant. This should be context-aware, designed to make business processes more efficient and automated. By providing information or suggestions based on the business context of the user and the situation, the digital assistant will allow every user to spend more time to concentrate on higher-value thinking instead of on repetitive tasks. Combined with built-in collaboration tools, this upgrade will speed reaction to changing conditions and create more time for innovation.

Imagine a system that, like a highly capable assistant, can greet you in the morning with a helpful insight: “Hello Sven, I have assessed your situation and the most recent data – here are the areas you should focus on first.” This approach to contextualized analysis of real-time data is far more effective than a hard-programmed workflow or dump of information that leaves you to sort through outdated information.

Personal assistants have been around in the consumer space for some time now, but it takes an ML-based approach to bring that experience, and all its benefits, to the enterprise. Based on the pace of change in ML, a cloud-based ERP can best deliver the latest innovations to users in a form that has immediate business applications.

An early application of ML in the enterprise will be intelligence derived from past patterns. The system will capture much richer detail of customer- and use-case-specific behavior, without the costs of manually defining hard rule sets. ML can apply predictive detection methods, which are trained to support specific business use cases. And unlike pre-programmed rules, ML updates regularly as strategies – not monthly or weekly – but by the day, hour, and minute.

How ML and AI are making cloud ERP increasingly more intelligent

Digital has disrupted the world and changed the way businesses operate, creating a new level of complexity and speed. To stay competitive, businesses must transform to achieve a new level of agility. At the same time, advances in consumer technology (Siri, Alexa, and Google Now in the personal assistant space, and countless mobile apps beyond that) have created a desire and need for intuitive user interfaces that anticipate the user’s needs. Building powerful tools that are easy to interact with will rely on ML and predictive analytics solutions – all of which are uniquely suited to cloud deployment.

The next wave of innovation in enterprise solutions will integrate IoT, ML, and AI into daily operations. The tools will operate on every type of device and will apply native-device capabilities, especially around natural language processing and natural language interfaces. Augment this interface with machine learning, and you’ll see a system that deeply understands users and supports them with incredible speed.

What are some use cases for this intelligent ERP?

Digital assistants already help users keep better notes and take intelligent screenshots. They also link notes to the apps users were working on when they were created. Intelligent screenshots allow users to navigate to the app where the screenshot was taken and apply the same filter parameters. They recognize business objects within the application context and allow you to add them to your collection of notes and screenshots. Users can chat right from the business application without entering a separate collaboration room. Because the digital assistants are powered by ML, they help you move faster the more you use them.

In the future, intelligent cloud ERP with ML will deliver value in many ways. To name just a few examples (just scratching the surface):

  1. Finance accruals. Finance teams use a highly manual and speculative process to determine bonus accruals. Applying ML to these calculations could instead generate a set of unbiased accrual figures, so finance teams have more time during closing periods for activities that require review and judgment.
  1. Project bidding. Companies rely heavily on personal experience when deciding to bid for commercial projects. ML would give sales and project teams access to decades-worth of projects from around the world at the touch of a button. This capability would help firms decide whether to bid, how much to bid, and how to plan projects for greatest profitability.
  1. Procurement negotiation. Procurement involves a wide range of information and continuous supplier communication. Because costs go directly to the bottom line, anything that improves efficiencies and reduces inventory will make a real difference. ML can mine historical data to predict contract lifecycles and forecast when a purchasing contract is expected so that you can renegotiate to suit actual needs, rather than basing decisions on a hunch.

What does the near future hold?

An intelligent ERP puts the customer at the center of the solution. It delivers flexible automation using AI, ML, IoT, and predictive analytics to drive digital transformation of the business. It delivers a better experience for end users by providing live information in context and learning what the user needs in every scenario. It eliminates decisions made on incomplete or outdated reports.

Digitization continues to disrupt the world and change the way businesses operate, creating a new level of complexity and speed that companies must navigate to stay competitive. Powering business innovation in the digital age will be possible by building and deploying the latest in AI-powered capabilities. We intend to stay deeply engaged with our most innovative partners, our trusted customers, and end users to achieve the promises of the digital age – and we will judge our success by the extent to which everyone who uses our system can drive innovation.

Learn how SAP is helping customers deploy new capabilities based on AI, ML, and IoT to deliver the latest technology seamlessly within their systems

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Sven Denecken

About Sven Denecken

Sven Denecken is Senior Vice President, Product Management and Co-Innovation of SAP S/4HANA, at SAP. His experience working with customers and partners for decades and networking with the SAP field organization and industry analysts allows him to bring client issues and challenges directly into the solution development process, ensuring that next-generation software solutions address customer requirements to focus on business outcome and help customers gain competitive advantage. Connect with Sven on Twitter @SDenecken or e-mail at sven.denecken@sap.com.