Are You Planning To Embark On An Advanced Analytics Journey?

Paul Pallath

Welcome to the new world! The manner in which data is generated and captured today has come of age. Traditionally the most common way of generating data from B2C/B2B2C business processes was by having interactions captured as part of transactional systems in a highly structured format. But with the changing technological landscape, much has changed in how data is generated and captured.

What data supports this view?

According to the ESG Digital Archive Market Forecast, the growth in data volumes that is driven by unstructured data amounts to more than 88% compared to structured data. What’s more, Computer World states that unstructured information may account for more than 70% to 80% of all data in organizations.

The change has come because we in the 21st century have redefined the way business is conducted. Significant advancement in Internet technology has forced most businesses to establish a digital online presence to stay relevant. Likewise, every interaction that a customer has in the digital online ecosystem leaves behind a digital footprint containing huge amounts of information.

Social media presences, for individuals and businesses, have increased the speed at which information travels. This has made it possible to share opinions in blogs or multimedia content. The result is the constant generation of large amounts of unstructured data.

All that unstructured data is good news for data scientists

However, this is good news for data scientists.

The previous figures imply that we have now Yottabytes [1024] of data at our disposal for deriving business value – and that amount of data is about to increase.

The Internet of Things, with its emphasis on completely connected systems, has resulted in the availability of high-speed, streaming data. This makes it possible for innovations that use data to build technologies to enable machines talk to one another (and perhaps eventually become intelligent enough to remove humans from the loop)! Taking the trend into consideration, Brontobytes [1027] of data to work with will soon be a reality for data scientists.

So, what is the best way for a business to capture and benefit from this information? Of course, capturing the massive swathes of data available is an important part of the Big Data story. But it’s not the most important part.

The most vital activity is to generate insights that add value to your business. This takes vision, it takes change, it takes…advanced analytics.

For organizations embarking on a journey into advanced analytics, it’s vital to keep in mind these important considerations:

  • How do we measure business value and return on investment?
  • How do we use advanced analytics effectively?
  • Is advanced analytics just another technology project?
  • Is Big Data equal to high quality insight?

In next week’s Predictive blog, I’ll discuss each one of these considerations in more detail.

For expert insight on your own digital transformation, listen to Coffee Talk with Game Changers on The Digital Economy: How Organizations Adapt.

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Paul Pallath

About Paul Pallath

Dr Paul Pallath is the Chief Data Scientist & Senior Director with the Advanced Analytics Organisation at SAP. With over 20 years of experience in Machine Learning, Paul has several research publications in the field of Machine Learning & Data Mining in International Journals and conferences and has also invented several patentable ideas.  He has a Master’s Degree in Computer Applications with Gold Medal, and PhD in Machine Learning, both from Indian Institute of Technology, Delhi.

Innovation In The Chemical Industry: Real-World Examples

Stefan Guertzgen

A recent S.M.A.C. Talk Technology Podcast delves into the trends that make the global chemical industry tick and how its progressive use of technology appears to be reshaping grassroots businesses within the sector.

Hosted by Brian Fanzo and Daniel Newman, the 15-minute audio interview of industry expert Thorsten Wenzel, vice president of the worldwide chemical business unit of SAP, illuminates some practical success stories.

Without a doubt, Wenzel possesses a cutting-edge and global understanding of the chemical sector, where the forward-looking innovation resides and misconceptions about the industry’s willingness to embrace technology. He points out that industry analysts have too often claimed chemical-focused companies had fallen behind other industries.

“A digital transformation is not really new for the chemical industry,” Wenzel says. “We are doing that since 25 years, and if you think about it, there’s lots of truth about that at the plant level where a lot of automatization efforts and digitalization efforts were done in the last 20 years already.

“But on the other side, if you talk to analysts and compare industries, it seems to be that the chemical industry is somehow a laggard and little bit delayed in comparison to other industries, which are way more advanced in that. So this is somehow contradictory, but I can tell you, wherever I go, whenever I talk to customers, digital transformation and IoT topics are on top of the agenda.”

He also sees things such as predictive maintenance, shutdowns, turnaround, outages, and profitability as driving force issues going forward. But Wenzel enjoys the unique talent of breaking down complex theoretical ideas into tangible lessons. And real-life success stories are things non-theorists can really wrap their heads around.

Technology transforms businesses in practical ways

During the podcast, Wenzel provides examples that make sense to real meat-and-potatoes business decision-makers. During his time in the chemical industry, he watched as a paint outfit completely shifted its marketing strategy and to some extent, its customer base by integrating virtual technology.

“Let me just give you one example: This is Asian Paints from India, which was the classical producer selling their paints and coatings via the classical channels; wholesale, distribution, the big supermarkets,” Wenzel says. “And they confirmed … They changed their business model from a just producing-oriented model to a more service-oriented model. That means today, Asian Paints is a company which visits the big customers they have, like companies with big corporate offices, offices that would like to change their interior, who want to paint their offices in a new way.”

Asian Paints, Wenzel says, changed directions by integrating virtual design applications. These programs allowed them to go into high-end corporate spaces, photograph, image, and create design proposals for the customer. They transformed from a one-dimensional manufacturer to a “service-oriented” outfit that went beyond just selling paint products. Basically, virtual design helped them become profitable on two fronts.

In the agricultural industry, organizations like Monsanto have morphed from product producers and sellers to developing hands-on relationships with salt-of-the-earth farmers.

“Monsanto is doing something where they really use machine learning for seed optimization,” Wenzel says. “They let the machine bring out the seeds, put on the fertilizer, the plant protection chemicals, and then see which plants grow best and what do we have to do from the seeds producer perspective to really have the optimum seed portfolio for our customers, plus plant protection, plus disease protection. So that’s an interesting thing we are seeing with these customers, both based on machine learning.”

By using machine learning, farmers can convey images directly to Monsanto, which can advise them on plant-protection and seed protocols. Just as IoT, Big Data, and blockchain provide beginning-to-end technology that has reformed much of the retail industry, the chemical sector is immersed in stakeholder connectivity.

Regardless of insider and outsider differences of opinion about the chemical industry embracing technology, digital transformation is having a profound impact on businesses and the economic advancement of people everywhere. That extends from the chemical product manufacturer to the end customer. In effect, things like digital boardrooms put all the key stakeholders in the same virtual space.

Take 15 minutes while enjoying your beverage of choice and immerse yourself in the cutting-edge thinking of this S.M.A.C. Talk Technology Podcast featuring SAP chemical industry expert Thorsten Wenzel.

Hear the full episode here. Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading Accelerating Digital Transformation in Chemicals.

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Stefan Guertzgen

About Stefan Guertzgen

Dr. Stefan Guertzgen is the Global Director of Industry Solution Marketing for Chemicals at SAP. He is responsible for driving Industry Thought Leadership, Positioning & Messaging and strategic Portfolio Decisions for Chemicals.

Your Duty Of Care And The Increase In Traveler Concerns

Tina Gunn

The Global Business Travel Association (GBTA) reports that spending on global business travel is growing and is expected to reach $1.6 trillion by 2020. Despite increasing global uncertainty around unforeseen events, organizations show no signs of slowing down business travel. Therefore, the duty of care and travel risk management programs need to be at the forefront of your organization’s security conversations, as outlined in a report produced by the Business Travel News (BTN) group.

Your organization most likely has some level of a duty-of-care solution in place; however, even organizations with a good track record in providing safety and security measurements still have some gaps in providing the right level of duty of care to their travelers and employees – and gaps that may be perceived by the organization as small could be viewed as negligent.

Risks for travelers and employees are on the rise

With the continual increase in business travel – global crises that are hitting the headlines are grabbing the attention of travel decision makers at organizations. The potential risks your travelers could encounter, domestically and internationally, are numerous – including geopolitical, health-related, and environmentally-related incidents. Even historically low-risk areas are reporting catastrophic events that are adding to the growing concerns for traveling employees.

Not only do organizations need to be prepared to fulfill duty-of-care obligations in high-profile incidents; they need to consider the smaller, more common travel risks that can happen when commuting into the office, including pedestrian accidents, car accidents, and incidents on public transportation.

“The broader notion of traveler well-being and duty of care issues are not only linked to emergencies and medical incidents,” notes GBTA’s Corporate Social Responsibility Toolkit. “The stress of business travel caused by delays, lost baggage, less productivity (yet consistently high workload), or the simple fact of being away from friends and family should not be underestimated.”

Travel risk management programs need to incorporate all your employees’ (not just travelers’) safety and security and be prepared to assist with the range of risks and incidents possible.

An ethical responsibility, not just a legal one

Legal obligations concerning insurance, lawsuits, and costs are what typically drive most organizations to implement duty-of-care initiatives. However, the moral obligation to your travelers and employees needs to be a driving factor as well.

“When companies concentrate on the moral part, their actions tend to answer the legal questions as well,” explains Stephen Barth, University of Houston law professor and founder of the Hospitality Lawyer media and information platform. “The companies that we see take the more proactive approach are the ones that don’t view it as a legal obligation, but view it as an ethical corporate responsibility.”

In the U.S., workers’ compensation reaches only so far, covering those who get injured on the job, and within a certain distance of their workplace. However, with growth and expansion increasingly taking business across borders – where an organization’s duty of care responsibilities begin and end are unclear when sending employees abroad.

In recent years, numerous countries around the world have started implementing legal statutes that side with the employee when there is a gross breach of duty-of-care responsibilities resulting in the death of an employee.

A recent traveler survey demonstrates that safety and security is one of the fastest-growing topics of concern for employees traveling on behalf of their organizations. Proactively incorporating an ethical responsibility in your duty-of-care program assists in addressing the increase in employee anxiety about medical and security disruptions while traveling.

Mitigating business risks while protecting your greatest asset: People

A single duty-of-care incident can result in staggering costs to an organization including medical expenses, sick pay, employment litigation, morale and productivity loss, and employee fall out – as well as damage to the organization’s reputation.

To help mitigate liability risks while fulfilling the moral obligation to your employees’ safety and security, industry experts suggest:

  • Consistent travel risk management policy and procedures encompassing all employees
  • Proactive safety training
  • Clear monitoring and communication channels
  • Multi-channel data management for tracking and response coordination
  • Legal and executive management cooperation
  • Incident response reporting and measurement for ongoing improvement

Organizations cannot afford to be negligent with the safety and security of their travelers and employees in today’s global landscape. It’s imperative to implement a travel risk management program or re-evaluate your existing program to determine that you’ll be able to monitor, locate, and communicate to all employees and fulfill your duty-of-care obligation if a crisis arises.

Download the full BTN report, The Travel Risk Management Imperative. Learn more about how to fulfill your duty of care with SAP Concur solutions.

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Tina Gunn

About Tina Gunn

Tina Gunn is the content marketing manager for the Enterprise Americas team at SAP Concur. Tina earned her degree in Journalism from the University of Washington and brings her experience in content strategy and digital marketing to SAP Concur. When she’s not creating thought leadership and sales enablement content, Tina writes fiction and screenplays of the horror and sci-fi genres.

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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Cloud Computing: Separating Myth From Reality

Misa Rawlins and Krishnakant Dave

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

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

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

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

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

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

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

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

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

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

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

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

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

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

www.deloitte.com/SAP

SAP@deloitte.com

@DeloitteSAP

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

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Misa Rawlins

About Misa Rawlins

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

Krishnakant Dave

About Krishnakant Dave

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