Part 1 in the “CFOs Rethink Business” series
Technology is no longer confined to a single industry; it’s infused across our economy. As a result, the modern company is unlike anything the world has ever seen: Today, data is the chief currency for businesses, and nearly every company has a technology story woven into its brand and offerings.
This shift has led to several important consequences. For starters, the surge of technology has blurred industry lines. Traditional automotive manufacturers are transitioning into technology and energy companies, and the hospitality industry hasn’t been the same since the sharing economy significantly disrupted the space. It’s also blurring leadership lines, as members of the C-suite increasingly find themselves face-to-face with new responsibilities for strategic leadership that move beyond their typical job description.
SAP collaborated with the Aspen Institute’s Cyber & Technology Program to take a deeper dive into just how tectonic this shift has been, and how it is changing the way businesses and leaders operate. Over the course of in-depth interviews with senior executives across a multitude of industries, the following themes dominated the discussion:
- Consumer behavior and preferences have changed, and they demand that companies keep up with them. Tech-native customers demand seamless, individualized service by the minute. It’s crucial for business leaders to understand that customer acquisition starts long before they interact with your company. With more touchpoints available today, customers expect tailored service and offerings before they walk in the door.
- Ubiquitous connectivity has shifted the product model. That the digital economy has been reshaping businesses’ approaches to customers is also indicative of a new understanding of the product. The ubiquitous connectivity afforded by the Internet of Things means that an organization’s products must be designed to reflect individualized customer preferences and provide added levels of servicing.
- The digital economy has redefined the person-corporation relationship. Our new digital age has sparked an “open source” movement. Customers and partners are excited to collaborate with global enterprises to directly improve customer experiences and build world-changing services. It’s the basis for SAP’s own SAP.iO Fund, and reflects a turning point in how organizations are expected to operate in our digital economy.
A shift in how leaders think
With the new challenges and demands of the digital economy, members of the C-suite are finding their defined roles and responsibilities increasingly blurred as they are required to move beyond their traditional job descriptions. CFOs, for example, are now expected to own not only the financial sphere, but to do so with technical fluency.
Mitchell Paull, a partner with professional services firm EY with whom SAP also collaborated on the study, noted, “The chief financial officer must transform their traditional role from finance leader to business advisor, aligning an organization’s finance, business, innovation, and technology strategies. Failure to take a holistic view of these elements opens the door for competing entities (especially nontraditional ones) to pass them by.” Chief innovation officers are breaking out of project silos, acting as “chief collaboration officers” as they partner closely with business leaders to deliver strategic outcomes.
Role transformations like this point to greater insight on how executives are expected to operate in our connected world today. Digital leaders are tasked with challenging their businesses’ core propositions and competencies and identify new opportunities to disrupt traditional lines of business. For example, how are you exploring opportunities to introduce new services that amplify, and in some cases replace, your existing product lines? How are your corporate data assets fueling insights needed to meet the needs of the 21st-century customer?
These findings are all indicative of a shift from a one-size-fits-all product offering approach to a dynamic, service-oriented style of business that treats customers like “individuals at scale,” tailoring products and services to meet their specific needs, while simultaneously including them throughout the innovation process. There are new rules to play by in today’s digital age, and no one is exempt from the need to rethink how we approach our customers, our products, and our leadership strategies.
Join the Aspen Institute and SAP for a C-level roundtable conversation
The Aspen Institute and SAP invite you for an intimate, C-level roundtable conversation, exploring how companies succeed in today’s evolving digital economy. You’ll hear from peer leaders and strategists—from the Fortune 100 to the bestseller lists—about companies who are leading the way in digital transformation. To join us, register here.
In the next blog in this series, Martin Mrugal, chief innovation officer, SAP North America, will continue to peel back the layers of success in the digital economy with a look at how to rethink your organization’s value chain. Stay tuned.