Digital transformation remains a hot topic in the C-suite. However, transformation efforts are meeting with mixed results. Over 60 percent of companies Lopez Research surveyed strongly agreeing with the statement "Our digital transformation efforts are moving slower than expected." Successful digital transformation efforts require a company to operate its business effectively while simultaneously navigating people, process and technology changes. The delicate balance of execution and evolution requires a company to lean on its strategic vendors for assistance.
Companies like SAP are at the core of businesses operations for a diverse range of companies such as Bosch, Nestle and Royal Dutch Shell. To learn more about how various industries are approaching digital transformation, I attended SAP's SAPPHIRE and ASUG conference. The conference provides ample opportunity to discuss the challenges and opportunities of digital transformation initiatives with various business leaders and SAP executives. There were at least seven key takeaways that every business leader should consider as they build transformation strategies.
1. Cloud computing helps companies embrace simplification. For several years, business leaders have focused their digital transformation efforts on removing operational complexity. SAP's prior tagline, “Run Simple”, represented the momentum behind the need to reduce complexity in software and business process. Over the past several years, SAP transitioned from highly customizable software to Software as a Service (SaaS) and embraced working with multiple Infrastructure as a Service (IaaS) companies. This shift has provided customers with software that is easier to use and update. In line with SAP's concept of "Run Simple", digital transformation can mean better instead of new and different. In some cases, many of the digital transformation benefits occur when a company simplifies its existing software and services. For example, Komatsu spoke with me about the benefits of streamlining the order process with web and mobile ordering at the conference.
2. Cloud, analytics and new data enable contextual, personalized experiences. Additionally, the cloud has also enabled scale, flexibility and the opportunity to deliver new business models such as mass personalization, data as a service, and equipment as a service. At SAP's SAPPHIRE event, the company launched its new tagline "Best Run", signifying the enterprise shift from simplification of existing tasks to designing operational excellence using new functions such as machine learning, digital twins, and new user interfaces. For example, Adidas highlighted how the company could change its design and delivery process. Adidas CIO, Michael Voegle, spoke of creating a one-to-one, bidirectional digital customer experience that includes full supply chain transparency to buy online and pick up in the store. Instead of a typical 18-month design time frame, Adidas is also using machine learning and a new prototype store that enables its customers to design a personalized product that can be built and shipped within 24 hours. The concept of “Best Run” moves beyond simple to offering new and differentiated experiences to delivering Right-time Experiences.
3. User experience expectations demand new interfaces. Mobility defined the last era of user experience design with touch, app stores and development for smaller screens. Today’s technology enables another realm of experiences that offers conversational and voice interfaces, digital overlays with augmented reality and immersive experiences with virtual reality. Additionally, new input mechanisms such as pens, totems and gestures are changing how individuals interact and consume data. Every company needs to rethink how these new interaction models will change their business. SAP showcased numerous changes in UX such as conversational interfaces with voice and chatbots as well as augmented reality and virtual reality. Digital twins, a concept that allows companies to design and test various design products and operation scenarios in software, were also given the spotlight during various demonstrations.
4. Don't underestimate the challenges with behavioral change. Whenever you digitize a process or change a process, the outcome must be significantly more desirable to create a change in behavior. Creating a new digital application or experience doesn’t immediately equal delivering end user value. At SAP’s Cloud digital experience summit, Vesta Wind Systems told me one of the main challenges with delivering meaningful digital transform lies in building a user experience that is superior to paper regarding functionality, ease of use, and ease of training. The company showcased a new mobile project management application that dramatically simplifies and improve the process of windmill installation and repairs using SAP Cloud Platform and the software developer kit (SDK) for Apple's iOS.
5. The era of apps has evolved into the age of data. Focus on the AI wave of analytics. Mobility and the creation of apps have dominated the conversation of the past decade. At the same time, the world became connected and data-rich with sensors in smartphones and connected devices. Companies, awash with data, must find better ways to analyze and disseminate information to employees. The next decade of technology advancements will focus on helping a company analyze data, make predictions and deliver contextual services. Many SAP customers are specifically looking at how their company can integrate IoT data into their applications and processes. The machine learning branch of Artificial Intelligence holds great promise for pattern recognition and data correlation.
6. Stop trying to centralize your data. You must master combining data while leaving it where it resides. The concept of one universal data lake or ocean where all your data lives sounds appealing, but it's a Sisyphean task that's doomed to fail. Many cloud services make it near impossible to easily extract your data and the challenge of managing. To address this mounting challenge, SAP announced a new suite of tools aimed at governing and integrating data across highly federated environments called the Hana Data Management Suite https://www.sap.com/products/technology-platforms/data-management.html. It uses a collection of existing SAP services SAP HANA, SAP Data Hub, SAP Cloud Platform, Big Data Services, and SAP Enterprise Architecture Designer(EA Designer) offerings. The idea behind the service is to leave your data where it is but to include it as part of your overall analysis. Copying data led to heartache as companies try to define a data source of truth. Other challenges with moving data include the risk of security breaches for data in transit. If you want a laugh and some insight on one of the products, you should read the blog titled “How to Explain SAP Data Hub to a Six-Year-Old. It's hysterical.
7. Supply chain data enhances the CRM experience. Bill McDermott, the CEO of SAP, made some bold claims about taking on Salesforce.com with the next generation of CRM solutions. While it's too early to tell if his claim will bear fruit, one thing is certain, companies can deliver a superior customer experience with better insight into supply chain issues. Currently, the front line of customer experience, such as sales and customer service professionals, have limited visibility into supply chain issues such as parts availability, finished goods inventory, transportation timelines and the state of goods as they transit the supply route. This information lives in one or more systems, but by connecting it to the CRM system, a company’s employees can provide the customer with more insight into the cause of an issue and the time to resolution.
Overall it was great to see the progress that companies such as Adidas, L3 Technologies, Under Armour and others have made in their transformation efforts