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Timo ElliottVP, Global Innovation Evangelist
@timoelliott
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80% of CEOs think they deliver a superior customer experience
Source: The New Yorker
— but only 8% of customers agree.
What Is Digital Disruption Really About?
Millennials trust strangers over family and friends. They lean on
User-Generated Experiences for purchase decisions.
Source: Brian Solis’ Future of Business, 2013
73% of people surveyed wouldn’t care if the brands
they use disappeared from their life.
Source: Co.Exist
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“Customer experience is the last source of sustainable
differentiation and the new competitive battleground”- Gartner
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Disruption
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Airbnb is the worlds largest
hotelier — with no hotels
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Don’t be this guy
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This Doesn’t Help Much, Either…
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Are you the taxi company, or
Uber? (or both?)
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By 2020, information will be used to
reinvent,
digitalize, or
eliminate %of business processes and products
from a decade earlier.
From The Back Office To The Business Models of Future
”
“
17Internal
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
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IT Controls Less and Less IT Spending
A DECADE AGO TODAY
70% 58% <50%
2017
IT becomes a
standard part of
“products”
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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”
“
CEOs expect to double digital revenue over the
next 5 years.
– Gartner, 2015
“ ”
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Beware Of The Shark Fin
Innovators Early Adopters Early Majority Late Majority Laggards
ADOPTION BY DIFFERENT SEGMENTS OVER TIME
Network effects mean most of the benefits go to early
adopters, who disrupt traditional ways of working
Source: Accenture
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IT Overestimates Transformation Success
Only somewhat successful overall
Successful in some areas but not in others
Extremely successful overall
Largely unsuccessful overall
Very successful overall
Non-IT IT
Very or Extremely
Successful:
75% of IT
respondents
60% of Business
respondents
How successful have you been to date with your digital / IT transformation initiatives?
Enterprise Management Associates study, 2015, tranformingIT.org
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Executives Think Their Industry is Threatened…
Source: MIT Sloan Management Review 2015, Strategy, Not Technology, Drives Digital Transformation,
Don’tknow
To what extent are digital technologies disrupting your industry?
Greatextent
Moderateextent
Smallextent
Not at all
5%
16%
35%
41%
3%
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…But Their Organizations Don’t Think It’s a Threat
Source: MIT Sloan Management Review 2015, Strategy, Not Technology, Drives Digital Transformation,
Don’t knowStronglydisagree
Stronglyagree
Agree Neitheragree nordisagree
Disagree
I am satisfied with my organization's current reaction to digital trends.
6%
30%
20%
33%
10%
1%Don’t knowStronglydisagree
Stronglyagree
Agree Neitheragree nordisagree
Disagree
My organization views digital technologies as a threat.
20%
36%
17%18%
8%
2%
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They’re Divided On Whether It’s Doing Enough
Source: MIT Sloan Management Review 2015, Strategy, Not Technology, Drives Digital Transformation,
Don’t knowStronglydisagree
Stronglyagree
Agree Neitheragree nordisagree
Disagree
I am satisfied with my organization's current reaction to digital trends.
6%
30%
20%
33%
10%
1%Don’t knowStronglydisagree
Stronglyagree
Agree Neitheragree nordisagree
Disagree
My organization views digital technologies as a threat.
20%
36%
17%18%
8%
2%
25Internal
Good News: CIO Pay up 30%-40% Since 2012 (In the US…)
Competition in the digital age means boards often
view the CIO as a senior leader of the company...
Elite CIOs and other senior technology leaders are
earning more money than ever, a sign of demand
for people with a proven ability to bring in new
revenue through the use of data or otherwise
employ technology to outrun the competition.– Wall Street Journal, 2015”
“
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Digital Transformation
Balance the needs of today with a vision of the future
New
Customer Experiences
New
Value Creation Models
New
Business Models
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New
Customer Experiences
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We All Want Luxury Service
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Omnichannel Personalization
8 million members of Nespresso club
200,000 orders per day
20 different languages
200 Nespresso stores
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The Connected Car Experience
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New
Business Models
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Kaeser CompressorsEnabling Predictive Maintenance
A global leader in air compressors
≈€500 million, 4,800 employees,
50 countries, partners in
additional 60 countries
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Benefits
Customers
• Less downtime
• Decreased time to resolution
• Optimal longevity and performance
Kaeser
• More efficient use of spare parts, etc
• New sales opportunities
• Better product development
“We are seeing improved uptime of equipment,
decreased time to resolution, reduced operational
risks and accelerated innovation cycles.
Most importantly, we have been able to align our
products and services more closely with our
customers’ needs.”•
Kaeser CIO
Falko Lameter
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Kaeser Kompressoren – Just buy the air, not a compressor
35© 2015 SAP SE or an SAP affiliate company. All rights reserved.
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37© 2014 SAP AG or an SAP affiliate company. All rights reserved.
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New Applications And Business Models Made Simple
Weissbeerger Beverage Analytics
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Bypassing Existing Systems
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Information Is Money
By 2016, 30% of businesses will have begun
directly or indirectly monetizing their information
assets via bartering or selling them outright. .– Gartner 2015”
“
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New
Value Creation Models
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Co-Creation
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Port of Hamburg
Freight
Forwarders
& Truck Drivers
Port Road Management and
Operations Backend Systems
(Knowledge Base + Operations)
Real Time
IntegrationSmart
Operations
Platform
TRAILERTRUCK
Port Operator runs Real
Time Road Traffic Control
Systems
Built-in Telematics Unit
Tablets & Smartphones
PORT
Business Network of
950+ Connected Businessese.g. maintenance, spare, part, food and
beverage, medical, cargo, terminal,
marine, container, research and
engineering, warehouse and storage
related suppliers and service providers
Smart Logistics Hub
operated by
SAP Cloud
Parking Space
Providers
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Balance the needs of today
with a vision of the future
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STRATEGY, NOT TECHNOLOGY, DRIVES
DIGITAL TRANSFORMATION- MITSloan Management Review ”
“
Less digitally mature organizations tend to focus
on individual technologies and have strategies that
are decidedly operational in focus. Digital
strategies in the most mature organizations are
developed with an eye on transforming the
business.
“
”
© 2014 SAP AG. All rights reserved. 46
Design
ThinkingCut across existing silos,
start with the customer,
outside-in
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Never Let a Crisis Go To Waste…
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Own Culture Change
Build a community
Bottom-up innovation
Sponsor hackathons
Celebrate heroes
Accept fast fails
Paint the walls with data
Encourage self-service
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Pick Your Focus Areas
CustomerExperience
Omni-Channel
WorkforceEngagement
Assets& Internet of Things
SupplierCollaboration
Business Networks
Digital Core
Executive Dashboards
Source:
In-Memory Data Management: An Inflection
Point for Enterprise Applications.
Hasso Plattner Alexander Zeier
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SOCIALANALYTICS
MOBILEAPPLICATIONS
CLOUDNETWORKS
Simplicity is the Ultimate Sophistication
SIMPLE
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Simplicity Becomes Strategic
18%20%
25%
37%
Improvetransparency,accountability,
and risk
Improvecustomer orconsumer
engagement
Improveproductivity
Improveperformance
across allbusiness lines
KEY TAKEAWAY:
62% of
respondents say
simplification
improves
productivity and
business
performance.
Survey by SAP and Knowledge@Wharton 2014
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Cloud First
85% view cloud as part of their transformation initiatives
Top impacts of cloud on transformation were:
• Cloud is resource for accelerating transformation
• Cloud promoted more dialog between IT and the business
• Cloud has forced IT to reorganize
• (15% saw cloud as more disruptive than helpful)
Enterprise Management Associates study, 2015, tranformingIT.org
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Cloud Security Concerns? Think Again
Many enterprises are paying an opportunity cost
by allowing unwarranted security fears to inhibit
their use of public cloud services that would be
more secure, and more agile, than processes they
implement within their own data centers.
– Gartner: Top Strategic Predictions for 2016 and Beyond
”
“
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Cloud Security Concerns? Think Again
Recent history has shown that virtually all public
cloud services are highly resistant to attack and, in
the majority of circumstances, represent a more
secure starting point than traditional in-house
implementations. No significant evidence exists to
indicate that commercial cloud service providers
have performed less securely than end-user
organizations themselves. In fact, most available
evidence points to the opposite.– Gartner: Top Strategic Predictions for 2016 and Beyond
”
“
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Managing Risk
By 2017, the typical IT org will
spend up to 30% of its budget on
Risk, Security & ComplianceGartner
89%of CIOs say the discipline of risk management is
not keeping up.
of CIOs agree that the digital world engenders
new, vastly different and higher levels of risk.
69%
“”
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SAP HANA: Simple. Agile. Cloud.
Backed by >40 years of support for business-critical systems
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Conclusion
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Gartner on Digital Transformation
“No company, irrespective of size and industry, can
afford to avoid the digital disruption taking place.
Gartner predicts that this will be a defining year in
which CIOs will use digital to transform their risks into
bold business outcomes”
“As the digital business matures and becomes more
pervasive, organizations are making digital the core of
their enterprise strategy. The focus towards a true
digital business starts with the customer or citizen and
considers a whole new technology ecosystem”
Jeffrey Mann, Gartner research vice president.
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Determine Your Level of Digital Courage
Digital Core
Digital Product
Extensions
Digitally-Driven
Business Models
Digital Co-Creation Passively
Respond
Take the Lead
Change the
Game
ENTERPRISE CIO
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The World Has Changed.
What Are YOUR Next Steps To Transform Your Business?
