Telecommunications Companies: Here's How To Use End-To-End Enterprise Offers To Boost Revenue

Julie Stoughton

Telecommunications companies are not new to the Internet of Things (IoT). Many have long used these tools as a way to gather data and implement change. These organizations, called communication service providers (CSPs), also tend to be willing to adopt technology that enhances operations. Organizations have routinely used IoT to automate processes and ensure networks remain stable. Yet, further investment in this area can also boost revenue. With the IoT market expected to be a $267 billion industry by 2020, according to BCG Perspectives, organizations cannot overlook this opportunity.

End-to-end enterprise adoption could mean new revenue streams

The industry continues to face fierce competition. Finding ways to reduce costs is one thing. Looking for ways to boost revenue streams continues to be critical. However, one of the largest opportunities available to CSPs has yet to be tapped by these organizations.

Within the telecommunications industry, a key area for IoT adoption is in providing platforms for end-to-end enterprise offerings, as well as for connected consumer services. Entry into these markets could provide an incredible new source of revenue. Some experts believe it could represent as much as a quarter of all CSPs’ total revenue within a matter of years.

Another key area for CSPs is in the thriving market of connected homes. Telecommunications organizations will see significant revenue by successfully launching connected home applications for consumers.

Finally, working with commercial entities to create methods for regulatory compliance can also be important. Many entities are struggling in this area due to stringent guidelines. This can be improved with IoT applications through telecommunications companies.

Why telecommunications networks matter

Consider the data from the IoT application. In IoT, there are numerous networks of networks. All are capable of pulling in massive amounts of data that can be used, in a variety of ways, to provide information. However, this type of network requires very specific elements. It must be incredibly reliable, provide ample reach, and have the resilience necessary to manage some of the most challenging circumstances. Other industries, including the semiconductor industry, are finding opportunities to use the tools they have to enhance IoT adoption.

These are the types of services that CSPs can offer beyond what other organizations can. CSPs are now a central point of integration where the digital world connects. Some organizations (generally the largest CSPs in major areas) are already aligning their networks to meet this important, developing need. And, as a result, they are seeing profitable margins.

Where is the endpoint and profit potentials for today’s smaller CSPs? The biggest opportunity lies with enterprise customers. These are end users who are looking for platforms and connectivity that will allow their own transformation into the digital world. CSPs can significantly play a role in this area.

Why CSPs should focus here

The telecommunications industry is still not immune to digital change. In fact, many organizations are struggling financially with the services they offer. High-margin profit centers are being eroded by low-margin network connectivity. Consumers and other end users are finding more affordable ways to get the services they need. New technology, including 5G, is coming as well. That will further increase competition in this sector. As a result, it has become necessary for CSPs to find alternative streams of revenue that can tap into their massive, secure networks to facilitate IoT.

This is also a very significant new opportunity for CSPs. Right now, less than 10% of the overall IoT market comes from connectivity and network managed services, like those CSPs can offer. Implementing these services will enhance profitability. For example, digital applications enabled by IoT, a key service that CSPs can provide, is likely to represent more than 30% of large CSPs’ enterprise-based revenue.

How to take advantage of the opportunities

Putting in place enterprise end-to-end offerings like this can seem overwhelming, but it offers profit potential and fits the framework that CSPs already have. To facilitate this, organizations need to first focus on connectivity. The well-developed networks of CSP management services, as well as their IoT-enabled applications, provide an access point. These organizations already have the ability to scale the number of things connected within any enterprise. They have the tools available to move data across the cloud in a reliable manner. And, they have the means to distribute intelligence to further points.

Creating the digital platform to launch it all

To transform from a typical connectivity service provider into one that meets the newer service demands, a telecom organization needs a versatile IoT platform. The platform must provide the support necessary for large-application development. It must be able to integrate its customers’ backend systems into the new platform. Additionally, it must provide the services that help CSPs manage the cost of their operations as their organization grows.

With 8.4 billion “things” in use and connected in 2017, according to Gartner, it’s time to find a way to tap into this industry. Transforming CSPs’ services through end-to-end offerings can create a new revenue source in one of the fastest growing and in-demand industries today.

 Learn how to bring new technologies and services together to power digital transformation by downloading The Future Services Sector: Connected Services for Continuous Delivery.

Turn thinking into doing at Mobile World Congress 2018 in Barcelona February 26 – March 1, 2018. Learn more!

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Julie Stoughton

About Julie Stoughton

Julie Stoughton is the Head of Telecommunications Marketing & Communications at SAP. She is a seasoned professional with 16 years of marketing and product marketing experience in software and media technologies. Julie's specialties include strategic market development, positioning and messaging, customer segmentation, product launches, ROI analysis, and go-to-market execution.

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

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.

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Catherine Lynch

About Catherine Lynch

Catherine Lynch is a Senior Director of Industry Cloud Marketing at SAP. She is a content marketing specialist with a particular focus on the professional services and media industries globally. Catherine has a wide international experience of working with enterprise application vendors in global roles, creating thought leadership and is a social media practitioner.

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Paul Kurchina

About Paul Kurchina

Paul Kurchina is a community builder and evangelist with the Americas’ SAP Users Group (ASUG), responsible for developing a change management program for ASUG members.

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Konstanze Werle

About Konstanze Werle

Konstanze Werle is a Director of Industries Marketing at SAP. She is a content marketing specialist with a particular focus on the travel and transportation, engineering and construction and real estate industries worldwide. Her goal is to help companies in these industries to simplify their business by sharing latest trends and innovation in their industry.

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Angelica Valentine

About Angelica Valentine

Angelica is the Marketing Manager at Wiser. Wiser collects and analyzes online and in-store data with unmatched speed, scale and accuracy. She is experienced in strategy and creation for cross-channel content. Angelica is passionate about growing engagement and conversion rates through excellent content. Her work has also appeared on VentureBeat, Bigcommerce, Retail Touchpoints, and more. She holds a Bachelor’s degree in Sociology from Barnard College of Columbia University in New York City.

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Introducing Digitalist Magazine: Helping You Lead Digital Transformation

Jeff Woods

executive reads digitalist magazineOver the past three years, as the Business Innovation Blog, we’ve brought you some of the greatest thinking in business innovation. We thank you for being with us on this journey. Today we are taking a new direction: As we realize the importance of the digital economy, our goal is to bring leaders everything they need to know to transform their enterprises for the digital economy. We bring you Digitalist Magazine, Online Edition.

Digitalists are the people with the leadership responsibility to guide our organizations through this change. We realize both the power and importance of the digital transformation. This magazine is a guide to help digitalists drive this transformation. More importantly, it will bring our networks together to help change the world for the better.

Over the next few weeks, we will focus our content to help you better understand the digital economy – focused around five main areas: the overall Digital Economy, the Future of Work, Finance, the Future of Resources, and the Future of the Customer Experience. Today, you see our new logo and our new place on the web. As we go forward, you will see a fresh new site filled with content targeted at helping you lead the digital transformation – focused at the enterprise level rather than just the consumer level.

Ultimately the digital impact is too great to be just about downloading your favorite movie or a clip from yesterday’s game. It means bringing people together to make meaningful progress addressing the vexing issues of humanity. We take this journey together, to make the world run better and improve people’s lives.

Check out some of our top digital economy content here.

Comments

Uli Muench

About Uli Muench

Uli Muench is Global Vice President of the Automotive Industry Business Unit at SAP.

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

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.

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Catherine Lynch

About Catherine Lynch

Catherine Lynch is a Senior Director of Industry Cloud Marketing at SAP. She is a content marketing specialist with a particular focus on the professional services and media industries globally. Catherine has a wide international experience of working with enterprise application vendors in global roles, creating thought leadership and is a social media practitioner.

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Paul Kurchina

About Paul Kurchina

Paul Kurchina is a community builder and evangelist with the Americas’ SAP Users Group (ASUG), responsible for developing a change management program for ASUG members.

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Konstanze Werle

About Konstanze Werle

Konstanze Werle is a Director of Industries Marketing at SAP. She is a content marketing specialist with a particular focus on the travel and transportation, engineering and construction and real estate industries worldwide. Her goal is to help companies in these industries to simplify their business by sharing latest trends and innovation in their industry.

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Angelica Valentine

About Angelica Valentine

Angelica is the Marketing Manager at Wiser. Wiser collects and analyzes online and in-store data with unmatched speed, scale and accuracy. She is experienced in strategy and creation for cross-channel content. Angelica is passionate about growing engagement and conversion rates through excellent content. Her work has also appeared on VentureBeat, Bigcommerce, Retail Touchpoints, and more. She holds a Bachelor’s degree in Sociology from Barnard College of Columbia University in New York City.

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Tags:

Awareness

Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.

Comments

Uli Muench

About Uli Muench

Uli Muench is Global Vice President of the Automotive Industry Business Unit at SAP.

Tags:

Awareness

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.
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CEO Priorities And Challenges In The Digital World

Dr. Chakib Bouhdary

Digital transformation is here, and it is moving fast. Companies are starting to realize the enormous power of digital technologies like artificial intelligence (AI), Internet of things (IoT) and blockchain. These technologies will drive massive opportunities—and threats—for every company, and they will impact all aspects of business, including the business model. In fact, business velocity has never been this fast, yet it will never be this slow again.

To move quickly, companies need to be clear on what they want to achieve through digital transformation and understand the possible roadblocks. Based on my meetings with customer executives across regions and industries, I have learned that CEOs often have the same three priorities and face the same three challenges:

1. Customer experience – No longer defined by omnichannel and personalized marketing.

Not surprisingly, 92 percent of digital leaders focus on customer experience. However, this is no longer just about omnichannel and personalized marketing – it is about the total customer experience. Businesses are realizing that they need to reimagine their value proposition and orchestrate changes across the value chain – from the first point of interaction to manufacturing, to shipment, to service – and be able to deliver the total customer experience. In some cases, it will even be necessary to change the core product or service itself.

2. Step change in productivity – Transform productivity and cost structure through digital technologies.

Businesses have been using technology to achieve growth for decades, but by combining emerging technologies, they can now achieve a significant productivity boost and reduce costs. For this to happen, companies must first identify the scenarios that will drive significant change in productivity, prioritize them based on value, and then determine the right technologies and solutions. Both Mckinsey and Boston Consulting Group expect a 15 to 30 percent improvement in productivity through digital advancements – blowing the doors off business-as-usual and its incremental productivity growth of 1 to 2 percent.

3. Employee engagement – Fostering a culture of innovation should be at the core of any business.

Companies are looking to create an environment that encourages creativity and innovation. Leaders are attracting the needed talent and building the right skill sets. Additionally, they aim for ways to attract a diverse workforce, improve collaborations, and empower employees – because engaged employees are crucial in order to achieve the best results. This Gallup study reveals that approximately 85 percent of employees worldwide are performing below their potential due to engagement issues.

As CEOs work towards achieving these three desired outcomes, they face some critical challenges that they must address. I define the top three challenges as follows: run vs. innovate, corporate cholesterol, and digital transformation roadmap.

1. Run vs. innovate – To be successful you must prioritize the future.

The foremost challenge that CEOs are facing is how they can keep running current profitable businesses while investing in future innovations. Quite often these two conflict as most executives mistakenly prioritize the first and spend much less time on the latter. This must change. CEOs and their management teams need to spend more time thinking about what digital is for them, discuss new ideas, and reimagine the future. According to Gartner, approximately 50 percent of boards are pushing their CEOs to make progress on digital. Although this is a promising sign, digital must become a priority on every CEOs agenda.

2. Corporate cholesterol – Do not let company culture get in the way of change.

The older the company is, the more stuck it likely is with policies, procedures, layers of management, and risk averseness. When a company’s own processes get in the way of change, that is what I call “corporate cholesterol.” CEOs need to change the culture, encourage cross-team collaborations, and bring in more diverse thinking to reduce the cholesterol levels. In fact, both Mckinsey and Capgemini conclude that culture is the number-one obstacle to digital effectiveness.

3. Digital transformation roadmap – Digital transformation is a journey without a destination.

Many CEOs struggle with their digital roadmap. Questions like: Where do I start? Can a CDO or another executive run this innovation for me? What is my three- to five-year roadmap? often come up during the conversations. Most companies think that there is a set roadmap, or a silver bullet, for digital transformation, but that is not the case. Digital transformation is a journey without a destination, and each company must start small, acquire the necessary skills and knowledge, and continue to innovate.

It is time to face the digital reality and make it a priority. According to KPMG, 70 percent to 80 percent of CEOs believe that the next three years are more critical for their company than the last fifty. And there is good reason to worry, as 75 percent of S&P 500 companies from 2012 will be replaced by 2027 at the current disruption rate.

Download this short executive document. 

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Dr. Chakib Bouhdary

About Dr. Chakib Bouhdary

Dr. Chakib Bouhdary is the Digital Transformation Officer at SAP. Chakib spearheads thought leadership for the SAP digital strategy and advises on the SAP business model, having led its transformation in 2010. He also engages with strategic customers and prospects on digital strategy and chairs Executive Digital Exchange (EDX), which is a global community of digital innovation leaders. Follow Chakib on LinkedIn and Twitter