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Cloud, Mobility, Security, And Big Data: The Big Four For Business Growth

Shelly Kramer

Companies failing to make a strategic investment in technology in key areas of their business may be missing out on opportunities for growth as a consequence. That’s one of the key findings from a recent report that suggests that it’s not just operational efficiencies that investment in technology can offer, but also impressive increases in revenue growth rates.

This suggestion comes from Dell’s second annual Global Technology Index (GTAI 2015) – a survey of 2,900 business and IT decision makers in mid-market organizations (100-4,999 employees), distributed across multiple industries in North and South America, Europe, Asia, and Australia. The survey was designed to gain a greater understanding of solution maturity levels, as well as adoption drivers and inhibitors in the key technologies of cloud, mobility, Big Data, and security. If you’re behind the curve on the adoption of technology in your business, this statistic from the study should give you pause: Companies actively investing in these big four technologies are seeing up to 53% higher revenue rates.

Dell GTAI chart

It’s perhaps time to start doing some serious thinking about what technology can do for your organization, now and in the future. Equally as important is exploring what your competitors are doing with regard to the adoption of technology and how that might present a competitive advantage. I know this is something we explore with our B2B clients of all sizes on a regular basis – and is an important part of our overall strategic plans. 

Cloud boosts efficiency and revenue growth

The adoption of cloud technology has the potential to support operational and organizational efficiencies, with the study identifying three key benefits:

  • Cost savings were identified by 42% of respondents
  • Getting things done more efficiently (40%)
  • Better allocation of IT resources (38%)

But over and above these benefits, the research was also able to establish that the organizations that were actively employing the cloud were seeing much higher revenue growth rates. These amounted to a significant 46% increase for on-premises cloud and 51% when off-premises cloud technology was used.

Infographic: GTAI Cloud – higher revenue growth rates

The results of the study suggest that cloud adoption and expansion are driven largely by the expectation of greater organizational speed and improved employee satisfaction. And that higher revenue growth finding – that should be enough to motivate anyone still sitting on the cloud fence.

Mobility strategies boost growth but BYOD on the decline

Organizations implementing a mobility strategy are also seeing revenue growth fueled by improvements in efficiency, smoother business processes, and reduced paperwork. The study found that companies deploying mobile technology showed 44% higher revenue growth rates than those who weren’t, while effective use of a BYOD program could boost revenues by an even more impressive 53%.

With mobility though, the waters are somewhat muddied with the expansion of the BYOD tech trend restricted by fears over the potential security problems that allowing employee-owned devices might deliver.

Infographic: GTAI mobility – employee-owned devices

The suggestion that enthusiasm for BYOD might be waning will come as a surprise to many, as the use of employee-owned devices has gained considerable momentum over the last few years. Perhaps lower-cost devices and the need for greater control over access to company resources is what’s beginning to swing the pendulum away from this popular business practice. I’m curious to know how these “restricted employees” feel, and whether shadow IT will simply rise as a result.

Big revenue gains from Big Data

The results of the study suggest that organizations that have actively embraced the use of Big Data are seeing 50% higher revenue rates than those who haven’t. Not a surprising finding. The integration of Big Data into operations and using data to drive strategies is pretty much table stakes these days – for businesses of all sizes. Respondents to the survey agree, with 41% saying that Big Data has resulted in better targeting and increased ROI from their marketing efforts.

Also not surprising is that we’re not there yet. Progress in harnessing the full power of Big Data appears be moderate at best, with almost half (44%) of survey respondents reporting they are still not sure how to get the best from the plethora of information they have at their fingertips.

Lets face it; the science of Big Data is still in its infancy. But if the results of the Dell study are anything to go by, businesses that can reach that nirvana have the potential to create spectacular revenue gains.

Strategic security can equal competitive advantage

Digital security challenges are undoubtedly increasing across the board for all businesses. For many though, rather than seeing a strategic security investment as a burden, they consider that it can actually give them a competitive advantage. As this infographic from the study illustrates, almost eight out of every 10 respondents thought security enhances the organization’s ability to react to market conditions.

Infographic: GTAI security – market conditions response

The result is that for an increasing number of companies, particularly in North America, business managers are taking the view that the implementation of strong security measures allows them to feel confident being innovative, thereby gaining a competitive advantage.

Paradoxically, security concerns – together with cost – are the biggest obstacles to adoption of cloud, mobile, and Big Data for many organizations (a topic that I’ll return to here soon).

Technology playing a key revenue role

The latest GTAI survey clearly demonstrates the correlation between the use of technology and a resultant growth in revenue. Strategic investment in the “big four” technologies of cloud, Big Data, mobile, and security is seen as doing a lot more than just boosting efficiency and saving time. These technologies and their use actually frees up resources that allow organizations to invest in other areas of the business, areas that can have a direct impact on revenue growth.

The study suggests that it is business leaders who are driving adoption of Big Data and mobility, while cloud and security projects tend to be more equal partners with IT. Organizations who marry the interests of the C-suite when it comes to Big Data and mobility and the IT team when it comes to cloud and security will be well-placed for success (and increased productivity and profitability) moving forward.

What do you think about the data presented here? Is it accurate as it relates to what you see either in your organization or with your clients? How far along the technology adoption process are you? Are you a corporate early adopter facing push-back from senior leaders and constantly having to argue your case? Have you experienced first-hand how technology has helped a business succeed? I’d love to hear your thoughts and stories. Tweet me @ShellyKramer and copy @DellPowerMore.

Learn more about how SAP sees its role in the digital economy. Our Digital Planet: A Digital-First World.

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Smart Machines Create Markets For Cyber-Physical Advances

Marion Heindenreich

Today, industrial machines are more intelligent than ever before. These intelligent machines are changing companies in many ways.

Why smart machines?

Mobile networked computers were a key breakthrough for making smart machines. Big Data allows machines and computers to store information and analyze complex patterns. Cloud computing offers broad access to information and more storage.

These computerized machines are both physical and virtual. Some call them “cyber-physical” machines. Technology lets them be self-aware and connected to each other and larger systems.

Businesses change their approaches

Intelligent machines allow companies to innovate in many areas. For one, the value proposition for customers is evolving. Businesses now model and plan in different ways in many industries.

Makers of industrial machines and parts work in new ways within the organization. Engineering now partners with mechanical, electronic, and software staff to develop new products. Manufacturing now seamlessly ties what happens on the shop floor to the customer.

Service models are changing too. Scheduled and reactionary servicing of machines is fading. Now intelligent machines track themselves. Machines detect problems and report them automatically. Major problems or failures are predicted and reported.

A data mining example

One good industrial example is mining, which can be dangerous and difficult. As ores become scarce, the costs of mining have increased.

“Smart machines” started in mining in the late 1990s. Software and hardware let remote users change settings. Operators moved hydraulic levers from a safe distance. Sensors observed performance and diagnosed issues.

Data cables connected machines to computers on the surface. Continuous and remote monitoring of the machines grew. Over time, embedded sensors helped improve monitoring, diagnostics, and data storage.

The technology means workers only go underground to fix specific issues. As a result, accident and injury risk is lower.

New wireless technology now lets mining companies connect data from many mine sites. Service centers access large amounts of data and can improve performance. Maintenance is prioritized and equipment downtime is reduced.

Opportunity abounds

For companies the time is now. Today, mobile “connected things” generate 17% of the digital universe. By 2020 that share grows to 27%.

You might not be investing in this so-called “Internet of Things” (devices that connect to each other). But it’s a good bet your competitors are. A December 2015 study reported 33% of industrial companies are investing in the Internet of Things. Another 25% are considering it.

There are risks

This new dawning era of manufacturing is exciting. But there are concerns. Cyber attacks on the Internet of Things are not new. But as the use of intelligent machines grows, the threat of cyber attacks in industry grows.

Data confidentiality and privacy are concerns. So too are software and hardware vulnerabilities. Exposure to attack lies not just in the virtual space but the physical too. Tampering with unattended machines and theft pose serious risk.

To address these threats, industries must invest in cybersecurity along with smart machines.

Conclusion

The potential advantages of smart machines are staggering. They can reshape industries and change how companies produce new products and create new markets.

For more information, please download the white paper Digital Manufacturing: Powering the Fourth Industrial Revolution.

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Marion Heindenreich

About Marion Heindenreich

Marion Heidenreich is a solution manager for the SAP Industrial Machinery and Components Business Unit who focuses on solution innovations like Product Costing on SAP HANA and cloud solutions, as well as providing financial and business analysis for industry business strategy definition and business planning.

Mining Firms Turn To Tech

Ruediger Schroedter

Gone are the days in mining when assessments of potential dig sites meant lots of waiting for results. Gone, too, is the uncertainty on a mine job about where to go next.

For mining executives, recent advances in digital technology allow companies to make decisions at a rapid pace. Decisions that used to take days and weeks now can be done in minutes and hours.

With more information available faster, mining leaders reduce both short- and long-term financial risk. Data from across the enterprise inform decisions about buying and selling assets. Profitability should increase, driven by key technology advances.

Digging in to the data

There are two key drivers to this digital revolution. The first is the rise of the Internet of Things (IoT). The IoT consists of devices that are equipped with sensors, software, and wireless capabilities. These devices are connected to each other and can detect, store, and send data.

Bonus: Click here to learn more about Digital Transformation in Mining.

The second is the rise of Big Data, mobile, and cloud computing. Today’s mobile devices can track, send, and receive data from remote sites worldwide. Cloud computing stores billions of bytes of data at low cost. Big Data analytics programs take data coming from many different locations and systems and synthesize it. Those programs then better inform decisions by offering dashboards, metrics, and predictive modeling.

Robots are able to venture into hazardous areas and move material with remote human oversight. On-site mining data is sent via mobile phone to a cloud-based platform. For mining, the convergence of these technologies provides extraordinary possibilities.

Technology at play

The potential impact is significant. A recent report by McKinsey & Co. showed the use of advanced analytics in mining and related industries had a major impact. Firms using these programs to assess production areas increased their profit margins by 2-3 percentage points.

One mining company used so-called Monte Carlo simulations to reduce certain capital expenses. Monte Carlo simulations use complex algorithms and repeated random sampling to model possible outcomes. They’re frequently used in finance, biology, and insurance. The Mining Journal reported how the company challenged assumptions about a project’s capital needs. It took historical data on certain disruptions such as rainfall patterns. Then models of its mines were made showing the impact of flooding and rainwater. The data led to a new strategy that maximized storage capacity and handling across all its mines. Capital costs dropped by 20 percent.

18 Aug 2012, South Dakota, USA --- USA, South Dakota, Lead, View of open pit --- Image by © Bryan Mullennix/Tetra Images/Corbis

Buy or sell?

With so many variables at play, mining valuation is not for the faint of heart. Integrated data streams available at the discovery stage make for better informed purchase decisions.

Software programs today can take data to build and validate exploration models. These programs use 3D visualization and validated geophysical, analytical, and drill hole data. In turn, detailed 3D topographical models are possible.

Other programs assess historical, assay, and drilling data. This information creates viable scenarios for determining whether to buy or sell a site.

These tools use data consistently from one potential site to the next, allowing for forecasting of economic risk that is consistent across the organization. The firm today can use “real options valuation” to develop models of outcomes given changing economic conditions. With clearer information about potential risks, firms can decide whether to stage, sell, abandon, expand, or buy.

Anticipating, not reacting

Mining companies realize today that these analytic platforms and dashboards offer many advantages. Users have a clearer interpretation of the aggregated and analyzed data points from multiple areas. Using predictive analytics, mining decisions are made based on smart assumptions, not past historical information.

Robust software programs can generate reports almost instantaneously. Supervisors have on-site access to the analysis through a web browser or app. This data has many uses. Drilling managers save time and can make quicker decisions on next moves. Supplies can be ordered faster. Needed data for accreditation and compliance is immediately accessible.

Selecting the right sites

One example is assay analysis. Today, geologists do not wait weeks or months for assay results. Instead of off-site analysis, web-based applications deliver information much faster to inform decisions.

Robots are sending information about field operations, safety, needed maintenance, and drilling performance.  Some devices send the information themselves. In other cases, staff use mobile phones, tablets, or laptops.  This information and analytics in turn help with site selection. Integrating data from mine planning, ventilation, safety, rock engineering, and mineral resources improves overall forecasting.

Discovery, particularly of Tier 1 sites, is an increasingly costly venture for mining companies. Demand for many products is increasing while discovery rates are dropping. Mined product is of a lesser quality, particularly in mature mining locations. Many possible sites are in areas that are underexplored areas with difficult and deep cover.

The advanced technologies available today are contributing to rapid improvement in these discovery issues.

Prospective drilling

Consider the drill hole. To reduce costs in exploration, there needs to be enough rich information from the opening drill hole. It needs to be delivered in as close to real time as possible. Doing so lessens the risk of the second drill hole. Better information from the start helps improve vectoring. It provides better information about what mineral systems are being drilled.

This approach, called prospective drilling, is becoming increasingly used in mining. It employs drilling activity to map covered mineral systems. In turn, geochemical and geophysical vectoring can lead firms toward deposits.

Australia has invested heavily in this area. The Deep Exploration Technologies Cooperative Research Centre (DET CRC) has a singular vision: uncovering the future. Its core purpose is “develop transformational technologies for successful mineral exploration through deep, barren cover rocks.”

To get to that point, the DET CRC is borrowing a drilling technique from the oil business. Coiled tubing is paired with downhole and top-of-the-hole sensors. The informaton provides petrophysical, structural, rock fabric, geochemical, and mineralogical data all at once.

Conclusion

To meet increasing demands for new viable sites, and to improve efficient on sites, mining is changing. Using smart, connected products and robust data modeling, mining is being done faster, safer, and more efficiently than ever.

Join a LiveTwitterChat on digitalization in mining on May 4th from 10-11 a.m. EST: #digitalmining

The global mining and metals industry will come together to discuss how digital innovation is impacting the mining industry July 12-14 at the International SAP Conference for Mining and Metals in Frankfurt, Germany.  Don’t miss this opportunity to meet with world leaders and learn how your organization can become a connected digital enterprise.

Follow speakers and pre-event activities by following sapmmconf and @sapmillmining on Twitter

AA Mining and Metals Forum

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Ruediger Schroedter

About Ruediger Schroedter

Ruediger Schroedter is responsible for solution management of SAP solutions for the mining industry worldwide. He has spent more than 15 years in the mill products and mining industries and has extensive experience implementing SAP solutions for customers in these industries before coming to SAP.

How Much Will Digital Cannibalization Eat into Your Business?

Fawn Fitter

Former Cisco CEO John Chambers predicts that 40% of companies will crumble when they fail to complete a successful digital transformation.

These legacy companies may be trying to keep up with insurgent companies that are introducing disruptive technologies, but they’re being held back by the ease of doing business the way they always have – or by how vehemently their customers object to change.

Most organizations today know that they have to embrace innovation. The question is whether they can put a digital business model in place without damaging their existing business so badly that they don’t survive the transition. We gathered a panel of experts to discuss the fine line between disruption and destruction.

SAP_Disruption_QA_images2400x1600_3

qa_qIn 2011, when Netflix hiked prices and tried to split its streaming and DVD-bymail services, it lost 3.25% of its customer base and 75% of its market capitalization.²︐³ What can we learn from that?

Scott Anthony: That debacle shows that sometimes you can get ahead of your customers. The key is to manage things at the pace of the market, not at your internal speed. You need to know what your customers are looking for and what they’re willing to tolerate. Sometimes companies forget what their customers want and care about, and they try to push things on them before they’re ready.

R. “Ray” Wang: You need to be able to split your traditional business and your growth business so that you can focus on big shifts instead of moving the needle 2%. Netflix was responding to its customers – by deciding not to define its brand too narrowly.

qa_qDoes disruption always involve cannibalizing your own business?

Wang: You can’t design new experiences in existing systems. But you have to make sure you manage the revenue stream on the way down in the old business model while managing the growth of the new one.

Merijn Helle: Traditional brick-and-mortar stores are putting a lot of capital into digital initiatives that aren’t paying enough back yet in the form of online sales, and they’re cannibalizing their profits so they can deliver a single authentic experience. Customers don’t see channels, they see brands; and they want to interact with brands seamlessly in real time, regardless of channel or format.

Lars Bastian: In manufacturing, new technologies aren’t about disrupting your business model as much as they are about expanding it. Think about predictive maintenance, the ability to warn customers when the product they’ve purchased will need service. You’re not going to lose customers by introducing new processes. You have to add these digitized services to remain competitive.

qa_qIs cannibalizing your own business better or worse than losing market share to a more innovative competitor?

Michael Liebhold: You have to create that digital business and mandate it to grow. If you cannibalize the existing business, that’s just the price you have to pay.

Wang: Companies that cannibalize their own businesses are the ones that survive. If you don’t do it, someone else will. What we’re really talking about is “Why do you exist? Why does anyone want to buy from you?”

Anthony: I’m not sure that’s the right question. The fundamental question is what you’re using disruption to do. How do you use it to strengthen what you’re doing today, and what new things does it enable? I think you can get so consumed with all the changes that reconfigure what you’re doing today that you do only that. And if you do only that, your business becomes smaller, less significant, and less interesting.

qa_qSo how should companies think about smart disruption?

Anthony: Leaders have to reconfigure today and imagine tomorrow at the same time. It’s not either/or. Every disruptive threat has an equal, if not greater, opportunity. When disruption strikes, it’s a mistake only to feel the threat to your legacy business. It’s an opportunity to expand into a different marke.

SAP_Disruption_QA_images2400x1600_4Liebhold: It starts at the top. You can’t ask a CEO for an eight-figure budget to upgrade a cloud analytics system if the C-suite doesn’t understand the power of integrating data from across all the legacy systems. So the first task is to educate the senior team so it can approve the budgets.

Scott Underwood: Some of the most interesting questions are internal organizational questions, keeping people from feeling that their livelihoods are in danger or introducing ways to keep them engaged.

Leon Segal: Absolutely. If you want to enter a new market or introduce a new product, there’s a whole chain of stakeholders – including your own employees and the distribution chain. Their experiences are also new. Once you start looking for things that affect their experience, you can’t help doing it. You walk around the office and say, “That doesn’t look right, they don’t look happy. Maybe we should change that around.”

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

To learn more about how to disrupt your business without destroying it, read the in-depth report Digital Disruption: When to Cook the Golden Goose.

Download the PDF (1.2MB)

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How Disruption Will Cause The Insurance Industry To Change

Joe Pacor

Digital transformation is changing our world, and the insurance industry cannot sit idly and avoid these changes. It’s expected that the digital customer experience will drastically drive insurance profitability in the years to come. Over 50% of insured clients won’t recommend an insurer that doesn’t have digital interaction options. An overwhelming 61% of customers prefer to track their claim status digitally instead of contacting the insurance company or agency through more traditional means. It’s estimated that 79% of insurance executives recognize the need for innovation, but are having problems with daily operations. Over 60% see both opportunities and threats in the digital transformation process. At the same time, 74% of insurance executives feel they don’t have the necessary skills to drive the needed changes.

How does your company adapt to such a changing landscape? One common way approach is updating existing business models. Many companies have already been successful in driving digital transformation through a wide range of channels. Online-only insurance solutions and faster approval times are emerging in some companies. Others are turning to e-aggregator platforms to  keep their business afloat while changing company practices and assets to the digital economy.

Here are a few examples of promising companies and how they’re innovating to meet disruption.

Esurance

Esurance started in 1999 as an online-only business. With over five million customers, it has seen rapid growth since its beginnings. And because the insurer started out with a direct insurance digital approach, it is ahead of the game in terms of digital transformation since many competitors are still struggling to move away from their agency-based model.

Though it’s not available nationwide, it has become available in 43 states, which is still significant growth for a company that is not yet 20 years old. Esurance offers much lower rates, due to its direct insurance approach that cuts out many middleman expenses. As one of the first direct insurance companies, it is still catching up to competitors for customer service, but may very well be an example of future insurance company operations.

Haven Life

When it comes to fast approval, Haven Life has Big Data science down perfectly. This MassMutual spin-off claims it can approve most customers for new term life insurance in about 20 minutes. The company bases its decision on motor vehicle records from the state, prescription drug information, a customer questionnaire, and other data available to the company. The quick decision process will make the company much more popular among individuals seeking insurance policies under $1 million. As the system is based entirely online, it reduces agency costs significantly.

Moneysupermarket

In the UK, a newer e-aggregator platform helps customers compare prices and purchase insurance online. Moneysupermarket provides fast access to other online services as well. It was launched in 1999 as a digital-only solution that compares mortgage rates. In 2003, the insurance portion of the platform began with a mission to save at approximately 10 million households at least £200 through competitive shopping.

The company streamlines the process by having the prospect fill out a single form. That information is then used to pull quotes from multiple insurance companies. The prospects can compare the different policies to see which one is the best fit for their situation. They can then either select and purchase at that time or come back at a later time to finish the process. The company benefits by seeing additional sales at a much reduced cost compared to traditional marketing channels.

The role Big Data plays

Insurance businesses are also forming new business networks to provide a more tailored product to clients. As an example, State Farm and ADT provide a paired offering that protects connected homes through a single service. This helps customers reduce the number of businesses they must work with. At the same time, both companies benefit with increased business as customers turn to the network for simplicity.

Meanwhile, the Internet of Things is creating a new level of hyperconnectivity and data harvesting behind the scenes. Insurance rates currently based on a doctor’s visit will instead draw information from wearable devices, workout records, and pharmacy records. Rate reductions for self-driving cars will be based on the percentage of time the car is driven by a human versus driven autonomously.

With all these changes disrupting the industry, remaining flexible and connected makes all the difference. Is your company ready to meet the changes digital transformation is causing? If you aren’t, it is time to look at options to become more agile.

Learn more about how we can help you meet the challenges of disruption head on today. Please download our Insurance White Paper “How Insurers Can Prepare for the Digital Revolution” today to see what SAP has to offer. We will work with you to develop an insurance business that’s ready to meet the needs of the digital world.

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About Joe Pacor

Joe Pacor is senior director, Industry Cloud Marketing-Insurance at SAP, responsible for driving the growth of SAP's value proposition as a technology provider, trusted business partner, and thought leader for the insurance industry.