No Buzzwords, Just Real Change

Photo: iStockphoto
Photo: iStockphoto

The transformation to a digital world is moving ahead faster than anyone could have imagined in the wake of the widespread availability and adoption of innovations including Big Data, mobile, and cloud computing. Yet over 70 percent of transformation initiatives fail, according to Anand Eswaran, Executive Vice President of Global Services at SAP AG. Eswaran, whose company co-sponsored the SAP Global Business Transformation Summit in Washington, D.C., kicked off the two-day event, which brought together hundreds of customers, academics, consultants, industry analysts, and other experts from 40 countries. Transformation was top of mind for everyone as they participated in a variety of interactive sessions designed to share lessons learned and spark ideas on how to realize transformation. The agenda’s impressive lineup featured luminaries from renowned institutions including the Harvard University Business School and the University of Oxford. Every conversation emphasized one foundational theme: innovation happens only when business and technology are joined at the hip.

Identifying the problem is not enough: transformation requires integrated skills

According to Daniel Krauss, Director of Business Consulting Research at Gartner, siloes between business and technology are breaking down in the digital age. “It’s not about having just industry or business strategy skills. It’s not just about implementation or building stuff. You need the research, ideation, and creativity to put them all together. You need new tools and methodologies to drive a completely new way of how the customer thinks, and how you are helping them on this journey using technologies to continuously innovate.”

Keynote speaker Dr. Ashish Nanda also picked up on the integration theme. Nanda is a professor at Harvard University Law School who works with the SAP-affiliated Business Transformation Academy, the other co-sponsor of the Summit. “Innovation occurs within the continuous interface between customers, suppliers, and partners – at forums like this and in the process of doing business. And you can’t just ask the customer either. You have to engage with the customer, project to the future, and come up with something beyond their imagination,” he said.

Next page: How to avoid transformational failure

Research from the University of Oxford has found that IT projects are one hundred times more likely to exceed projected costs than expected. During his keynote, Alexander Budzier, Senior Researcher at the University of Oxford, urged the audience to be ahead of what he calls “black swans,” so-called high-profile, hard-to-predict, negative events that organizations typically rationalize in hindsight. In business parlance, this translates to unmet deadlines, major cost overruns, and project failure. But transformation doesn’t have to be this way, said Budzier. “You can spot black swans early. Costs go up immediately and keep rising. If someone tells you their project is unique, that should raise red flags. There are extreme complexities in terms of interdependencies – the coupling of different deliverables. The project team has little influence over what’s going on in the wider environment, and they are ineffective in driving change across the organization.”

This is why Eswaran said that SAP Business Transformation Services (BTS) is taking the lead on aligning customers and partners to a sustainable business model that enables transformation to the digital enterprise. “With our cloud strategy, along with innovations like SAP HANA and mobile, SAP is a significantly different company now than five years ago. SAP Services touches half a billion people and up to 15 percent of customers. We want to make sure that customers understand new technologies and how to use them to fundamentally change how they do business in a digital world,” he said.

SAP advises on IT and business transformation

Yves Gouret, Director of L’Oreal’s KISS Program, said that SAP BTS was an important partner in his company’s supply chain transformation to help achieve its goal of gaining one billion new consumers.
“I always ask SAP to challenge my team on everything – if they think that the way we’re using all the SAP tools is to the greatest advantage. It’s not only IT, they advise us on business transformation, ensuring that our solutions are designed according to SAP best practice business scenarios.”

Next page: Interplay between technology and business is getting tighter

Yves Gouret, Director of L’Oreal’s KISS Program (Photo: SAP)
Yves Gouret, Director of L’Oreal’s KISS Program (Photo: SAP)

When it comes to transformation, the stakes are high but so are the rewards. Joshua Greenbaum, industry analyst and principal of Enterprise Applications Consulting, said, “The interplay between technology and business is getting tighter by the minute, and we have good metrics on the value of transformation. For success, you need to have senior-level buy-in, focus on the process and business goals before the technology, as many stakeholders involved as possible, close and broad engagement with customers, a good understanding of the balance between customization and standardization, and a culture that enables transformation and innovation.”

Aligning business to technology is vital

In an era of dynamic business change, long-time market leaders will be those companies that align business to technology for continuous transformation. Experts agree this is the only path to faster, more meaningful innovation that makes a big difference for the customer.