Embracing The New World Of Digital Procurement Requires A New Mindset

Tiffany Rowe

There is little argument anymore that the future of procurement is digital. New technologies, ranging from the Internet of Things to 3D printing to artificial intelligence, are changing the way companies of all sizes approach procurement and therefore changing the role of chief procurement officers (CPOs) and how they work.

While CPOs have accepted the inevitability of digital procurement, in many cases they have not yet determined exactly what it will look like for them, or what they need to do in order to successfully transition into this new world. The technology itself is still in development and advancing every day, but to take advantage of it, CPOs and other procurement professionals need to develop a new mindset and approach to their work.

Shifting from savings to value

For decades, the chief responsibility of procurement teams has been to purchase necessary goods and services for the company, with a priority on getting the best possible price for them. Because of procurement’s involvement in every aspect of a business, though, their role has expanded into one that’s integral to containing and reducing costs and maintaining a healthy bottom line.

In that vein, procurement has become more focused on value than on savings. Procurement teams must leverage the company’s purchasing power into not only securing the best price for goods and services, but also securing those goods and services within the terms and timeframe required by the company. This often means finding efficiencies and ways to take advantage of technology to streamline – and potentially automate – cumbersome paper-based transactions and ordering processes.

One way that many companies are taking a more strategic approach to procurement and improving value is by making procurement a more visible part of the company and developing more cross-functional teams to ensure a broader understanding of the business as a whole. This has meant bringing in staff from other departments to work in procurement for a stint to better understand those processes. It’s also meant adding procurement personnel to different teams and projects to both provide a purchasing perspective and learn more about other areas of the business. With these arrangements, purchasing becomes a more strategic process in which procurement decisions are made with an eye toward the value they can bring to the organization.

A strategic function

Shifting procurement toward a focus on value requires thinking strategically, something that hasn’t always been a priority for CPOs. Companies are now looking for procurement teams to have a better overall understanding of business fundamentals – even going so far as to encourage employees to enroll in online MBA programs to effectively learn about business strategy development and implementation. One area in particular that’s seeing a great deal of change is technology strategy, thus requiring a new approach.

In short, CPOs must turn their focus toward developing a technology strategy to deliver procurement services. The strategy must not only include a plan for developing and implementing a data architecture for procurement services, but also be focused on measuring and analyzing performance in this area. This usually means working closely with IT to develop a long-term strategy and a roadmap and a business case for investing in procurement technology, including specific goals, KPIs, and conclusions about how the technology can help achieve not only the overall strategic objectives for procurement, but for the organization.

Accepting artificial intelligence

Finally, moving into the world of digital procurement also requires an acceptance of the role of machine learning and artificial intelligence in procurement processes and learning to embrace to potential of these tools. Some have decried the rise of AI as a worst-case scenario, claiming that “robots” will eventually take over procurement and all purchasing will be automated.

While AI and technology do have potential to streamline certain processes, the likelihood of machines entirely replacing humans in procurement is highly unlikely. AI is a tool, one that can handle some of the most rote processes in procurement and provide data and insights that allow you to create more value and achieve the ultimate goal of protecting the bottom line. AI frees humans from processes that take away from their ability to innovate and solve problems, and therefore CPOs and their teams are better served to embrace the technology that’s already here and put it to use.

The rapid expansion of technology is changing virtually everything about the way we do business. By changing how you see technology and its role in your work, you can more fully embrace the technology and become an even more important part of your organization.

For more on digital transformation in procurement, see Integration: The Key To Digitizing Procurement Processes.


Tiffany Rowe

About Tiffany Rowe

Tiffany Rowe is a marketing administrator who assists in contributing resourceful content. Tiffany prides herself in her ability to provide high-quality content that readers will find valuable.

People Are The Engine That Drives Finance Transformation: Part 2

Nilly Essaides

Part 2 of a 2-part series. Read Part 1

Part 1 of this series set out the premise that finance executives will realize the benefits of financial transformation only if their teams have the right skills – the overarching takeaway from The Hackett Group’s recent Best Practices Conference. In Part 2, we’ll look at how a few companies are getting ahead of the curve.

How are companies preparing?

Asking questions is no longer enough. Digital transformation is here, and the challenges are not two to three years away. They are 12-18 months ahead. Some companies are getting in front of this by taking steps to get their people and organizations ready. Here’s how:

They develop comprehensive talent-development programs. We’re working with several leading companies that are in the latest stages of creating comprehensive finance talent-development frameworks that begin with onboarding and continue through training, development, and retention. They are tailored to every employee in the finance hierarchy. They include training in technical, technological, and soft skills. They bring together finance and business leaders so that finance staff can get to know their “customers” right away, and they incorporate learning success in the performance evaluation process.

One large technology company has begun to hire computer science graduates into the internship program and train them in finance while training existing professionals in analytics skills using internal and external sources. The program also teaches soft skills and business partnering acumen.

Another European company launched an intense six-month training initiative last year that focuses on developing finance business collaboration capabilities. The company anticipates a big share of finance’s transactional roles to be replaced by machines. It established a business partnering “college” that provides a five-day “crash” course, followed by a 100-day practicum. The first 500 graduates delivered $300 million in additional value by improving business performance during their first 100 days.

They build digital centers of excellence. Companies are increasingly centralizing their digital talent and execution capabilities in hubs that bring like-minded experts together and allow them to design, build, pilot, and run new technologies. These Centers of Excellence, or COEs, eliminate the need for hiring multiple specialists within business units or functions and allow for quick ramp-up and faster time to benefit.

They typically comprise a small group of data specialists and IT-savvy finance and other executives who understand the business requirements and can bridge the language and knowledge gap between. The COE builds the business case, designs the first robots or AI applications, pilots them on a small scale or in a lab environment, tests, rolls them out, and runs the new systems.

This smart automation COE or digital operations provides leadership with knowledge of best practices, support, training, deployment, and operations of new digital solutions across the enterprise and/or within a function or business unit. Through knowledge-sharing and access to common tools and methodologies, it promotes higher delivery standards, communization of practices and lower cost, and faster time to benefit. Plus, perhaps most critically, the COE builds the governance and delivery model for quick scale-up throughout the enterprise.

One technology company leveraged its robotics process automation (RPA) COE to deploy 256 robots throughout its controller organization. The company managed to bring cash application to zero errors and is now moving into cognitive computing and AI. Another has a COE for master data management across the enterprise and an RPA COE, which will soon deploy robots to manage the master data–management change review and approval process.

They empower their employees to own their careers. Companies with a future-trending talent strategy are taking advantage of the incoming millennial workforce view of “work” and leveraging it across the company. They are encouraging everyone on their teams to take charge of their own career development. Finance professionals must realize that career advancement and development won’t just “happen” to them.

While smart companies will offer career development programs, it will be up to finance professionals to pursue opportunities, advocate for rotations inside and outside of finance, seek lateral moves, request to be on new projects to build their personal portfolio, and demand time with their leaders. In the words of Heidi Stock, VP of Talent Management at Bosch: “We must create a framework and culture which engages associates to shape their own individual development according to their aptitudes and interests.”

Conclusion

Digital transformation is behind the top three factors that are driving the change in the talent profile for finance in the next two to three years, according to The Hackett Group’s research (see chart below). It will decrease the emphasis on repetitive work; it will increase the emphasis on value-add work; and it will force an adjustment to technologies like robotics, AI, and the cloud. 

Finance professionals are only beginning to ask the questions about what it all means to their skill development and career prospects. They’re not going to be replaced by machines. But many of their traditional activities will be. Hence, it’s incumbent upon finance workers to take charge of their own careers, take advantage of the new programs their companies offer, learn to speak the language of technology, and hone their uniquely human skills of translation, partnering, communication, and negotiation.

Read People Are The Engine That Drives Finance Transformation: Part 1.


Nilly Essaides

About Nilly Essaides

Nilly Essaides is senior research director, Finance & EPM Advisory Practice at The Hackett Group. Nilly is a thought leader and frequent speaker and meeting facilitator at industry events, the author of multiple in-depth guides on financial planning & analysis topics, as well as monthly articles and numerous blogs. She was formerly director and practice lead of Financial Planning & Analysis at the Association for Financial Professionals, and managing director at the NeuGroup, where she co-led the company’s successful peer group business. Nilly also co-authored a book about knowledge management and how to transfer best practices with the American Productivity and Quality Center (APQC).

GDPR: Don’t Forget The Human Touch

Neil Patrick

If you’ve ever ridden a horse, you’ll be familiar with the phrase, “Dangerous at both ends and uncomfortable in the middle.” It applies just as well to the looming GDPR as it does to the equine world. The General Data Protection Regulation comes into effect on May 25, which for the complexity of the regulation – and depending on your level of readiness – is very soon.

We’ve all seen the considerable media coverage and the countless conferences dedicated to the technical measures and requirements. Much less, however, has been written about the human in the middle of it all. If you think about the human beings (otherwise known as your colleagues) in the midst of all this, there are at least three considerations shaping the human impact of GDPR – tone at the top, execution in the middle, and employee and contractor implications at the other end.

Tone at the top

It may sound like an obvious point, but unless there is executive sponsorship, a GDPR program will not reach deeply enough into the organization to be effective. It’s surprising how many organizations continue to make this mistake. Executive sponsorship ensures that the necessary change management and training programs will get properly funded, be adequately deployed, and have the necessary ongoing attention for a business as usual inclusion.

Sadly, a 2018 PwC study on the global state of information security found that less than a third of boards directly participate in a review of security and privacy risks. Without a solid understanding of the risks, boards are not well-positioned to exercise their oversight responsibilities for data protection and privacy matters.

Put bluntly, without executive sponsorship, GDPR programs are likely to become compliance tick-box programs, will not change how people behave, and are likely to ultimately fail.

Execution in the middle

Having a host of corporate policies and mission statements is one thing, but ensuring that named individuals are responsible for guaranteeing enforcement across the business is another. Article 5 of the GDPR requires controllers to demonstrate how they comply with the accountability principles. Article 83 talks about intentional or negligent violations. It is as much about certifying as guaranteeing.

The Information Commissioner’s Office (ICO) talks about rolling out the GDPR as “… a framework that should be used to build a culture of privacy that pervades the entire organization.” This requires middle management to push the message down and throughout the organization. People need to do this, not technology. People must take ownership of ensuring understanding and use of policies as standard operating procedures.

Execution also covers gap detection, escalation and mitigation, and disciplinary activities. People need training to understand what is acceptable and unacceptable within the parameters of the corporate data-privacy culture. There is frequently no single owner for developing a GDPR program. By virtue of its scope, GDPR is highly distributed and sits with legal, marketing, HR, procurement, customer support, analytics, R&D, and M&A.

Imbuing an organization with the correct data privacy culture will reduce the risk of breaches and sanctions. And of course, people come and go, get promoted, take temporary roles and sabbaticals, and go on holidays. The burden of ensuring that this is handled cost-effectively, consistently, and safely, in a “business as usual way,” lies with the people involved. In other words, preventing people from falling back on old habits and bad behavior sits with management teams and business process owners.

Execution also puts the equally essential bottom-up feedback channel back into the change management program. And if it is recorded digitally (software exists for this), an auditable trail of evidence of actions can persist to “police the police.”

Employee and contractor impacts

People who are deeply engaged with personal data, or who have access to systems and processes that contain personal data, need awareness and procedural training – with refresh enablement because GDPR is not a one-off occasion.

Every internal process, policy, and workflow ends up with a human being at the end who is required to perform an activity. Companies must ensure that this end-user behavior fits within the corporate data-privacy culture. (It’s surprising how many organizations make this assumption without checking or don’t have processes in place to confirm how well it is done.)

Former U.S. Deputy Attorney General Paul McNulty is often quoted saying, “If you think compliance is expensive, try noncompliance.” He’s right. The Ponemon Institute estimates noncompliance costs 2.71 times the cost of maintaining or meeting compliance requirements. Noncompliance costs come from those associated with business disruption, productivity losses, fines, penalties, and settlement costs, among others.

With a little planning, GDPR doesn’t need to be “dangerous at both ends” nor “uncomfortable in the middle.” The ICO has a great training checklist for SME organizations. In your pursuit of GDPR compliance, I’d urge you to consider the human being in the middle of your processes, policies, and technical requirements who will be on the receiving end of guaranteeing their adherence and enforcement.

This article originally appeared in Accountancy Age and is republished by permission.

Read 3 Reasons CFOs & Finance Professionals Should Attend SAPPHIRE NOW to learn about what’s happening at this year’s SAPPHIRE NOW and ASUG Conference – panels, keynotes, discussions, presentations, and endless ways to connect to people and gain new ideas for streamlining processes. Join SAP’s finance team and partners June 5–7, in Orlando, Florida.

Follow SAP Finance online: @SAPFinance (Twitter) | LinkedIn | Facebook | YouTube


Neil Patrick

About Neil Patrick

Dr. Neil Patrick is a Director of SAP Centre of Excellence for GRC & Security covering EMEA. He has over 12 years’ experience in Governance, Risk Management and Compliance (GRC) & Security fields. During this time he has been a managing consultant, run professional services delivery teams in the UK and USA, conducted customer business requirements sessions around the world, and sales and business development initiatives. Neil has presented core GRC and Security thought leadership sessions in strategic customer-facing engagements, conferences and briefing sessions.

The Human Angle

By Jenny Dearborn, David Judge, Tom Raftery, and Neal Ungerleider

In a future teeming with robots and artificial intelligence, humans seem to be on the verge of being crowded out. But in reality the opposite is true.

To be successful, organizations need to become more human than ever.

Organizations that focus only on automation will automate away their competitive edge. The most successful will focus instead on skills that set them apart and that can’t be duplicated by AI or machine learning. Those skills can be summed up in one word: humanness.

You can see it in the numbers. According to David J. Deming of the Harvard Kennedy School, demand for jobs that require social skills has risen nearly 12 percentage points since 1980, while less-social jobs, such as computer coding, have declined by a little over 3 percentage points.

AI is in its infancy, which means that it cannot yet come close to duplicating our most human skills. Stefan van Duin and Naser Bakhshi, consultants at professional services company Deloitte, break down artificial intelligence into two types: narrow and general. Narrow AI is good at specific tasks, such as playing chess or identifying facial expressions. General AI, which can learn and solve complex, multifaceted problems the way a human being does, exists today only in the minds of futurists.

The only thing narrow artificial intelligence can do is automate. It can’t empathize. It can’t collaborate. It can’t innovate. Those abilities, if they ever come, are still a long way off. In the meantime, AI’s biggest value is in augmentation. When human beings work with AI tools, the process results in a sort of augmented intelligence. This augmented intelligence outperforms the work of either human beings or AI software tools on their own.

AI-powered tools will be the partners that free employees and management to tackle higher-level challenges.

Those challenges will, by default, be more human and social in nature because many rote, repetitive tasks will be automated away. Companies will find that developing fundamental human skills, such as critical thinking and problem solving, within the organization will take on a new importance. These skills can’t be automated and they won’t become process steps for algorithms anytime soon.

In a world where technology change is constant and unpredictable, those organizations that make the fullest use of uniquely human skills will win. These skills will be used in collaboration with both other humans and AI-fueled software and hardware tools. The degree of humanness an organization possesses will become a competitive advantage.

This means that today’s companies must think about hiring, training, and leading differently. Most of today’s corporate training programs focus on imparting specific knowledge that will likely become obsolete over time.

Instead of hiring for portfolios of specific subject knowledge, organizations should instead hire—and train—for more foundational skills, whose value can’t erode away as easily.

Recently, educational consulting firm Hanover Research looked at high-growth occupations identified by the U.S. Bureau of Labor Statistics and determined the core skills required in each of them based on a database that it had developed. The most valuable skills were active listening, speaking, and critical thinking—giving lie to the dismissive term soft skills. They’re not soft; they’re human.


This doesn’t mean that STEM skills won’t be important in the future. But organizations will find that their most valuable employees are those with both math and social skills.

That’s because technical skills will become more perishable as AI shifts the pace of technology change from linear to exponential. Employees will require constant retraining over time. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is already outdated by the time students graduate, according to The Future of Jobs, a report from the World Economic Forum (WEF).

The WEF’s report further notes that “65% of children entering primary school today will ultimately end up working in jobs that don’t yet exist.” By contrast, human skills such as interpersonal communication and project management will remain consistent over the years.

For example, organizations already report that they are having difficulty finding people equipped for the Big Data era’s hot job: data scientist. That’s because data scientists need a combination of hard and soft skills. Data scientists can’t just be good programmers and statisticians; they also need to be intuitive and inquisitive and have good communication skills. We don’t expect all these qualities from our engineering graduates, nor from most of our employees.

But we need to start.

From Self-Help to Self-Skills

Even if most schools and employers have yet to see it, employees are starting to understand that their future viability depends on improving their innately human qualities. One of the most popular courses on Coursera, an online learning platform, is called Learning How to Learn. Created by the University of California, San Diego, the course is essentially a master class in human skills: students learn everything from memory techniques to dealing with procrastination and communicating complicated ideas, according to an article in The New York Times.

Attempting to teach employees how to make behavioral changes has always seemed off-limits to organizations—the province of private therapists, not corporate trainers. But that outlook is changing.

Although there is a longstanding assumption that social skills are innate, nothing is further from the truth. As the popularity of Learning How to Learn attests, human skills—everything from learning skills to communication skills to empathy—can, and indeed must, be taught.

These human skills are integral for training workers for a workplace where artificial intelligence and automation are part of the daily routine. According to the WEF’s New Vision for Education report, the skills that employees will need in the future fall into three primary categories:

  • Foundational literacies: These core skills needed for the coming age of robotics and AI include understanding the basics of math, science, computing, finance, civics, and culture. While mastery of every topic isn’t required, workers who have a basic comprehension of many different areas will be richly rewarded in the coming economy.
  • Competencies: Developing competencies requires mastering very human skills, such as active listening, critical thinking, problem solving, creativity, communication, and collaboration.
  • Character qualities: Over the next decade, employees will need to master the skills that will help them grasp changing job duties and responsibilities. This means learning the skills that help employees acquire curiosity, initiative, persistence, grit, adaptability, leadership, and social and cultural awareness.


The good news is that learning human skills is not completely divorced from how work is structured today. Yonatan Zunger, a Google engineer with a background working with AI, argues that there is a considerable need for human skills in the workplace already—especially in the tech world. Many employees are simply unaware that when they are working on complicated software or hardware projects, they are using empathy, strategic problem solving, intuition, and interpersonal communication.

The unconscious deployment of human skills takes place even more frequently when employees climb the corporate ladder into management. “This is closely tied to the deeper difference between junior and senior roles: a junior person’s job is to find answers to questions; a senior person’s job is to find the right questions to ask,” says Zunger.

Human skills will be crucial to navigating the AI-infused workplace. There will be no shortage of need for the right questions to ask.

One of the biggest changes narrow AI tools will bring to the workplace is an evolution in how work is performed. AI-based tools will automate repetitive tasks across a wide swath of industries, which means that the day-to-day work for many white-collar workers will become far more focused on tasks requiring problem solving and critical thinking. These tasks will present challenges centered on interpersonal collaboration, clear communication, and autonomous decision-making—all human skills.

Being More Human Is Hard

However, the human skills that are essential for tomorrow’s AI-ified workplace, such as interpersonal communication, project planning, and conflict management, require a different approach from traditional learning. Often, these skills don’t just require people to learn new facts and techniques; they also call for basic changes in the ways individuals behave on—and off—the job.

Attempting to teach employees how to make behavioral changes has always seemed off-limits to organizations—the province of private therapists, not corporate trainers. But that outlook is changing. As science gains a better understanding of how the human brain works, many behaviors that affect employees on the job are understood to be universal and natural rather than individual (see “Human Skills 101”).

Human Skills 101

As neuroscience has improved our understanding of the brain, human skills have become increasingly quantifiable—and teachable.

Though the term soft skills has managed to hang on in the popular lexicon, our understanding of these human skills has increased to the point where they aren’t soft at all: they are a clearly definable set of skills that are crucial for organizations in the AI era.

Active listening: Paying close attention when receiving information and drawing out more information than received in normal discourse

Critical thinking: Gathering, analyzing, and evaluating issues and information to come to an unbiased conclusion

Problem solving: Finding solutions to problems and understanding the steps used to solve the problem

Decision-making: Weighing the evidence and options at hand to determine a specific course of action

Monitoring: Paying close attention to an issue, topic, or interaction in order to retain information for the future

Coordination: Working with individuals and other groups to achieve common goals

Social perceptiveness: Inferring what others are thinking by observing them

Time management: Budgeting and allocating time for projects and goals and structuring schedules to minimize conflicts and maximize productivity

Creativity: Generating ideas, concepts, or inferences that can be used to create new things

Curiosity: Desiring to learn and understand new or unfamiliar concepts

Imagination: Conceiving and thinking about new ideas, concepts, or images

Storytelling: Building narratives and concepts out of both new and existing ideas

Experimentation: Trying out new ideas, theories, and activities

Ethics: Practicing rules and standards that guide conduct and guarantee rights and fairness

Empathy: Identifying and understanding the emotional states of others

Collaboration: Working with others, coordinating efforts, and sharing resources to accomplish a common project

Resiliency: Withstanding setbacks, avoiding discouragement, and persisting toward a larger goal

Resistance to change, for example, is now known to result from an involuntary chemical reaction in the brain known as the fight-or-flight response, not from a weakness of character. Scientists and psychologists have developed objective ways of identifying these kinds of behaviors and have come up with universally applicable ways for employees to learn how to deal with them.

Organizations that emphasize such individual behavioral traits as active listening, social perceptiveness, and experimentation will have both an easier transition to a workplace that uses AI tools and more success operating in it.

Framing behavioral training in ways that emphasize its practical application at work and in advancing career goals helps employees feel more comfortable confronting behavioral roadblocks without feeling bad about themselves or stigmatized by others. It also helps organizations see the potential ROI of investing in what has traditionally been dismissed as touchy-feely stuff.

In fact, offering objective means for examining inner behaviors and tools for modifying them is more beneficial than just leaving the job to employees. For example, according to research by psychologist Tasha Eurich, introspection, which is how most of us try to understand our behaviors, can actually be counterproductive.

Human beings are complex creatures. There is generally way too much going on inside our minds to be able to pinpoint the conscious and unconscious behaviors that drive us to act the way we do. We wind up inventing explanations—usually negative—for our behaviors, which can lead to anxiety and depression, according to Eurich’s research.

Structured, objective training can help employees improve their human skills without the negative side effects. At SAP, for example, we offer employees a course on conflict resolution that uses objective research techniques for determining what happens when people get into conflicts. Employees learn about the different conflict styles that researchers have identified and take an assessment to determine their own style of dealing with conflict. Then employees work in teams to discuss their different styles and work together to resolve a specific conflict that one of the group members is currently experiencing.

How Knowing One’s Self Helps the Organization

Courses like this are helpful not just for reducing conflicts between individuals and among teams (and improving organizational productivity); they also contribute to greater self-awareness, which is the basis for enabling people to take fullest advantage of their human skills.

Self-awareness is a powerful tool for improving performance at both the individual and organizational levels. Self-aware people are more confident and creative, make better decisions, build stronger relationships, and communicate more effectively. They are also less likely to lie, cheat, and steal, according to Eurich.

It naturally follows that such people make better employees and are more likely to be promoted. They also make more effective leaders with happier employees, which makes the organization more profitable, according to research by Atuma Okpara and Agwu M. Edwin.

There are two types of self-awareness, writes Eurich. One is having a clear view inside of one’s self: one’s own thoughts, feelings, behaviors, strengths, and weaknesses. The second type is understanding how others view us in terms of these same categories.

Interestingly, while we often assume that those who possess one type of awareness also possess the other, there is no direct correlation between the two. In fact, just 10% to 15% of people have both, according to a survey by Eurich. That means that the vast majority of us must learn one or the other—or both.

Gaining self-awareness is a process that can take many years. But training that gives employees the opportunity to examine their own behaviors against objective standards and gain feedback from expert instructors and peers can help speed up the journey. Just like the conflict management course, there are many ways to do this in a practical context that benefits employees and the organization alike.

For example, SAP also offers courses on building self-confidence, increasing trust with peers, creating connections with others, solving complex problems, and increasing resiliency in the face of difficult situations—all of which increase self-awareness in constructive ways. These human-skills courses are as popular with our employees as the hard-skill courses in new technologies or new programming techniques.

Depending on an organization’s size, budget, and goals, learning programs like these can include small group training, large lectures, online courses, licensing of third-party online content, reimbursement for students to attain certification, and many other models.

Human Skills Are the Constant

Automation and artificial intelligence will change the workplace in unpredictable ways. One thing we can predict, however, is that human skills will be needed more than ever.

The connection between conflict resolution skills, critical thinking courses, and the rise of AI-aided technology might not be immediately obvious. But these new AI tools are leading us down the path to a much more human workplace.

Employees will interact with their computers through voice conversations and image recognition. Machine learning will find unexpected correlations in massive amounts of data but empathy and creativity will be required for data scientists to figure out the right questions to ask. Interpersonal communication will become even more important as teams coordinate between offices, remote workplaces, and AI aides.

While the future might be filled with artificial intelligence, deep learning, and untold amounts of data, uniquely human capabilities will be the ones that matter. Machines can’t write a symphony, design a building, teach a college course, or manage a department. The future belongs to humans working with machines, and for that, you need human skills. D!


About the Authors

Jenny Dearborn is Chief Learning Officer at SAP.

David Judge is Vice President, SAP Leonardo, at SAP.

Tom Raftery is Global Vice President and Internet of Things Evangelist at SAP.

Neal Ungerleider is a Los Angeles-based technology journalist and consultant.

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

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HR In The Age Of Digital Transformation

Neha Makkar Patnaik

HR has come a long way from the days of being called Personnel Management. It’s now known as People & Culture, Employee Experience, or simply People, and the changes in the last few years have been especially far-reaching, to say the least; seismic even.

While focused until recently on topics like efficiency and direct access to HR data and services for individual employees, a new and expanded HR transformation is underway, led by employee experience, cloud capabilities including mobile and continuous upgrades, a renewed focus on talent, as well as the availability of new digital technologies like machine learning and artificial intelligence. These capabilities are enabling HR re-imagine new ways of delivering HR services and strategies throughout the organization. For example:

  • Use advanced prediction and optimization technologies to shift focus from time-consuming candidate-screening processes to innovative HR strategies and business models that support growth
  • Help employees with tailored career paths, push personalized learning recommendations, suggest mentors and mentees based on skills and competencies
  • Predict flight risk of employees and prescribe mitigation strategies for at-risk talent
  • Leverage intelligent management of high-volume, rules-based events with predictions and recommendations

Whereas the traditional view of HR transformation was all about doing existing things better, the next generation of HR transformation is focused on doing completely new things.

These new digital aspects of HR transformation do not replace the existing focus on automation and efficiency. They work hand in hand and, in many cases, digital technologies can further augment automation. Digital approaches are becoming increasingly important, and a digital HR strategy must be a key component of HR’s overall strategy and, therefore, the business strategy.

For years, HR had been working behind a wall, finally got a seat at the table, and now it’s imperative for CHROs to be a strategic partner in the organization’s digital journey. This is what McKinsey calls “Leading with the G-3” in An Agenda for the Talent-First CEO, in which the CEO, CFO, and CHRO (i.e., the “G-3”) ensure HR and finance work in tandem, with the CEO being the linchpin and the person who ensures the talent agenda is threaded into business decisions and not a passive response or afterthought.

However, technology and executive alignment aren’t enough to drive a company’s digital transformation. At the heart of every organization are its people – its most expensive and valuable asset. Keeping them engaged and motivated fosters an innovation culture that is essential for success. This Gallup study reveals that a whopping 85% of employees worldwide are performing below their potential due to engagement issues.

HR experiences that are based on consumer-grade digital experiences along with a focus on the employee’s personal and professional well-being will help engage every worker, inspiring them to do their best and helping them turn every organization’s purpose into performance. Because, we believe, purpose drives people and people drive business results.

Embark on your HR transformation journey

Has your HR organization created a roadmap to support the transformation agenda? Start a discussion with your team about the current and desired state of HR processes using the framework with this white paper.

Also, read SAP’s HR transformation story within the broader context of SAP’s own transformation.


Neha Makkar Patnaik

About Neha Makkar Patnaik

Neha Makkar Patnaik is a principal consultant at SAP Labs India. As part of the Digital Transformation Office, Neha is responsible for articulating the value proposition for digitizing the office of the CHRO in alignment with the overall strategic priorities of the organization. She also focuses on thought leadership and value-based selling programs for retail and consumer products industries.