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Timo ElliottSAP Innovation Evangelist
@timoelliott
CIOs and Digital Disruption
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Internal
Digital Business
But only 25% have a plan in place, and less than 15% are funding and executing a digital transformation plan.
– Digitalist Magazine, 2015
”
“ 90% of CEOs believe the digital economy will have a major impact on their industry.
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Internal
Executives Think Their Industry is Threatened…
Source: MIT Sloan Management Review 2015, Strategy, Not Technology, Drives Digital Transformation
76%
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Internal
…But Their Organizations Don’t Think It’s a Threat
Source: MIT Sloan Management Review 2015, Strategy, Not Technology, Drives Digital Transformation
56%
New Technology = Business Opportunity
@timoelliott
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 7Internal
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 8Internal
Expectations Are High
More than 60% of CEOs expect 15%–50% of their earnings growth in the next 5 years to come from technology-enabled business innovations.
– McKinsey study, 2013
”“
In the next five years, CIOs expect digital revenues to more than double, from 16% to 37%.
– Gartner, 2016
“ ”
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 10Internal
“What does digital business mean for your company and industry?”
CEO responses:
What IS Digital Business?
CEOs
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 12Internal
Digital Business
“Digital business is the creation of new business designs by blurring the digital and physical worlds”
13
IT Craftsmanship IT Industrialization Digitalization
IT provides innovations and new
capabilities
IT supports efficiency, effectiveness, and
integrity
Engage
Offer
Monetize
Adapt
Create
Ideate
Digital provides continual opportunities for growth, innovation,
and differentiation
The Third Era of Information Technology
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 14Internal
By 2020, information will be used to
reinvent, digitalize, or
eliminate 80%of business processes and products
from a decade earlier.
From The Back Office To The Business Models of Future
”
“
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 16Internal
Digital Transformation
NewCustomer Experiences
New Value Creation Models
New Business Models
Digital transformation is not about technology—it is about strategy and new ways of thinking.
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 18Internal
The Good News: IT is More Important Than Ever
The vast majority of CIOs (84%) agree that the role is becoming more important to their business.
– State of the CIO Report 2016 ”“
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 19Internal
The Bad News: CEOs Think CIOs Can’t Innovate
Almost half of CEOs describe CIOs as being out of touch with the business and unable to understand how to apply IT in new ways…
– Jill Dyché “The New IT”, 2015”“
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 21Internal
IT Overestimates Digital Transformation Success
Largely unsuccessful overall
Only somewhat successful overall
Successful in some areas but not in others
Very unsuccessful overall
Extremely successful overall
Non-IT IT
Very or Extremely Successful:75% of IT respondents60% of Business respondents
How successful have you been to date with your digital transformation initiatives?
Enterprise Management Associates study, 2015, tranformingIT.org
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 22Internal
DIGITAL TRANSFORMATION
To digitally disrupt yourself, you must disrupt your processes and your product.
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 24Internal
The Meteor is Coming…
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 25Internal
Series1
IT Controls Less and Less IT Spending
A DECADE AGO TODAY
70%
Series1 Series1
58% <50%
2017
“The trend toward business leaders making more decisions about IT spending is accelerating faster than CIOs have anticipated, highlighting the need to collaborate more with their LOB counterparts.”
— The State of the CIO Report, 2016
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 26Internal
“Do business people see you as Uber? Or the taxi company?”
27
Who is Responsible For Digital Business?
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 28Internal
The Future of the CIO
Chief Innovation Officers
Chief Infrastructure Officers
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 29Internal
Embrace Shadow IT
Don’t fight back—be a co-conspirator…
“IT is too important to be left to the IT department, say Business Execs”
-Information Age
“Over 90% of business departments spend their own budget on IT, with sales and marketing among the top spenders”
—Forrester
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 30Internal
New Organizational Styles
”The days of a centralized controlled IT world are over just like the centralized state-run economy of the Soviet Union is a thing of the past”
—Forrester
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 31InternalFrom flying planes to being air-traffic controllers
“There’s nothing wrong with shadow IT, as long as you’re the one casting the shadow!”
-H. James Dallas, CIO Medtronic
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 35Internal
Reliability and Agility
“CIOs practicing bimodal IT are making a strategic mistake.”
—Forrester
“Customer experiences aren’t confined to a small subset of systems. Even simple purchases needs to reach back into fulfillment and billing systems.”
“Fast. Not two speeds.”
—Forrester
Suite
Applications
S/4HANA
DigitalBoardroomIcon
Analytics
C4A
BOBJ
ExtensionsApplicationsIoT
HANA Cloud Platform
(Micro-) Services
IoTPlatform
Identity Management
Business Network
CEC
Platform
HANAEnterprise
Computing Platform
any DB Hadoop
VoraDistributed Computing
Platform
SAP Platform for Digital Transformation
Workforce engagement
Digital Core
Supplier collaborationBusiness networks
Assets and the internet of things
Customer-experienceOmni channel
SAP HANA Platform
SAP’S 5 DIGITAL PILLARS
© 2014 SAP AG. All rights reserved. 44
Design Thinking
Understand
Ideate
Prototype
Test
Build
Deliver
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 45Internal
DIGITAL TRANSFORMATION
“It’s time to go fast; you cannot out-slow the competition.”
Sharyn Leaver, Forrester