openSAP

Digital Transformation and Its Impact

WEEK 1, UNIT 1
00:00:12

Hello and welcome to this openSAP course Digital Transformation and Its Impact. My name is
Sven Denecken and I am SAP's Global Vice President for Cloud Solutions.

00:00:23

Next to focus on cloud strategy, I much appreciate the intensive contact with key customers
and partners via co-innovation engagements.

00:00:32

Those are a valuable sources to find out and sense the trends within the market, to confirm
and influence what we do and to determine what still needs to be done.

00:00:42

I will present this course together with my distinct colleague Bert Schulze who is Vice
President for Co-Innovation.

00:00:49

Before we start, I would like to introduce you to the concept of this course.

00:00:54

This openSAP course consists of four learnings weeks plus an additional week for our final
exam.

00:01:02

Each week, there will be a number of short and comprehensive videos, similar to the one you
are watching now.

00:01:09

At the end of each video, there will be a self-test to help you to measure your learning
progress.

00:01:16

And after each week we will have an assignment that will be graded and is counting towards
your record of achievement.

00:01:24

Furthermore, there is an online portal available to you so you have the chance to collaborate
and communicate with us and fellow students, but also to discuss and ask questions.

00:01:35

But now, let's start with Week 1, Unit 1: Defining Digital Transformation

00:01:45

Strategists love statistics, but they often throw them at you and leave you to figure it out.

00:01:51

In this course we would like to make it a clear link, especially as we discuss the why before the
how.

00:01:59

There is an unprecedented pace of change that is causing the market to shift.

00:02:04

With a continuously growing middle class and more and more people actively using social
networks, the personal and business world is evolving.

00:02:15

But also millennials play an important role in driving change and causing businesses to be
disrupted.

00:02:22

This generation grew up with technology around them and they are highly connected, social
and always mobile.

00:02:31

This generation will not use applications that aren't easy to use, easy to consume and
beautiful.

00:02:39

But here are my top three. I: According to analysts by 2016 think that 75 percent of all IT
purchases will be cloud-based or hybrid.

00:02:52

Number II: New companies with innovative ideas and competing against all known companies
within the market, just think of Uber, Airbnb and Tesla.

00:03:04

Number III: Businesses realize the need for change, transformation and innovation in order to
avoid disruption.

00:03:14

The consequences are dramatic; there is a rapid state of change.

00:03:21

At the heart of this change is, of course, service-oriented economy, best represented by the
emergence of cloud computing.

00:03:32

Let's drill deeper into this rapid status of change.

00:03:36

A few years back, smartphones were not the norm and who has a smartphone used to be the
question to ask. That's no longer the case.

00:03:45

Today, smartphones are a commodity and almost everyone has one but this single device has
disrupted millions of companies.

00:03:55

Before the smartphone, we had a camera to take pictures, an alarm clock, a navigation system
in our car and a video recorder.

00:04:04

Now, all of this is combined in one device and millions of companies who produced those
products before were disrupted.

00:04:12

Moreover, smartphones enabled millions of applications, which means that you now... well we
can do everything with a blink of an eye,

00:04:23

be it ordering a taxi, checking a menu at a restaurant, making an appointment and connecting

with people all around the world.

00:04:32

Also the line between work and home is blurring more and more, and smartphones have
become a daily product of our lives

00:04:40

and probably even unimaginable to live and work without one. However, this means the lines
between work and home are blurring more and more.

00:04:53

Innovation is consumed almost transparently, and smartphones make one thing clear: We
want things now.

00:05:01

As businesses have become increasingly complex, individual consumers have become

exponentially more powerful. Why?

00:05:09

A consumer in today's network economy can perform tasks that only businesses could do five
years ago.

00:05:17

An individual can create their own advertisement for free, and it has the potential to be viewed
more times online than a traditional TV commercial would ever be watched.

00:05:31

An entrepreneur can have a big idea, create a business plan and raise capital to launch it
online.

00:05:38

A single comment about a news article can become more influential than the publication itself.

00:05:45

It has become much simpler for individuals to do significant things. Technology and networks
have made this possible.

00:05:55

It is clear to see that technology is disruptive. With this we need to talk about digital
transformation. Let us first define digital transformation.

00:06:07

Driven by the combination of ever-growing digitization and evolving consumer demands,

00:06:14

digital transformation is the use of new technologies to drive significant business

improvements.

00:06:22

This includes capitalizing on new opportunities as well as effectively transforming existing

businesses.

00:06:30

Let us look at the factors without which digital transformation would be impossible to achieve.

00:06:37

The cloud layer, Internet-as-a-platform or Cloud Computing: To run a successful digital

transformed organization you will need a cloud environment.

00:06:48

It is scalable, flexible, elastic and cost-efficient. Without cloud layer you will not achieve the
required automation and orchestration for the next layer:

00:06:59

The data layer, Big Data and Analytics. Both, structured and unstructured data is streaming
into your data bank,

00:07:08

be it rational database, a relational database or non-relational datasets.

00:07:14

This is essential, for example, your sales, marketing, customer service, R&D and product
divisions

00:07:22

to get the right information out of this data in order to transform data into essential business
insights.

00:07:30

Then the devices layer, mobility: We have officially entered the post-PC era.

00:07:37

We work and use several devices simultaneously and it is now only going to intensify with
wearable devices

00:07:45

such as smart glasses, smart watches, SmartTags. So it's going to impact all of us.

00:07:53

And last but not least, the network layer. I would love to call it Collaborative Computing:

00:07:59

This is part of the exercise layer that creates a vibrant marketplace for your employees,
partners, suppliers, vendors, customers - existing and potential - and the public.

00:08:12

It is designed for internal and external collaboration to optimize your business processes.

00:08:18

The consequences are dramatic, to all of us. And if you are in an IT-related role, here is what
needs to be done:

00:08:27

To do this, CIOs have to move from a survival role like managing tasks to a revenuecontributor role.

00:08:35

This is the new world, the CIO's focus is fundamentally changing because the businesses are
changing.

00:08:44

Managing the traditional IT scope is no longer sufficient. Instead, new priorities need to be
tackled.

00:08:50

For the CIO to stay relevant, he or she needs to embrace these changes or become relegated
to a pure non-strategic operational role.

00:09:01

CIO's need to re-think their strategic purpose within the organization and then start a journey
to achieve this strategic purposes.

00:09:11

But what is digital transformation really about? Or did we just simply digitize old behaviors?

00:09:19

Just copying the old patterns and augment them or maybe even disrupt them with new
technology is not transformation or innovation.

00:09:30

If businesses want to outpace the disruption that is happening in the market, they need to
equip themselves with technology that will help them adapt to change quickly.

00:09:44

Companies need to achieve digital transformation based on disruptive technology to gain

higher competitiveness.

00:09:52

And in the units to come we will drill into each of those aspects.

00:09:59

This concludes the first unit of Week 1.

00:10:02

We have given you a quick overview of the course and what you expect to learn in the next
weeks.

00:10:09

You should have understood that change is inevitable and forcing companies to change or
risking to being disrupted.

00:10:17

Also you should know the definition of digital transformation

00:10:20

and how important it is to just not copying an existing framework but instead innovating and
making use of previously not used technologies.

00:10:32

In the next unit we will focus on challenges that come with transformation of business. I'm
looking forward to seeing you there again.

WEEK 1, UNIT 2
00:00:12

Welcome to Week 1, Unit 2. In the first unit we gave you a quick overview about the course
structure

00:00:19

and defined digital transformation as the use of new technology to drive significant business
impact.

00:00:26

Today, we will focus on Transformation or Disruption: What are the challenges?

00:00:34

The fight for scarce resources contending with disruptive digital business models create new
pressures.

00:00:41

From a technology angle: Social Collaboration. Mobile. Real-time. It's changing the world
rapidly.

00:00:49

It is not only flooding us with new information that we must access, digest, analyze faster than
ever before.

00:00:58

But it is also enabling new business models and competitors that are fundamentally shaking
the roots of entire industries.

00:01:06

Remember what happened to companies that you used to work with, consume products five
years ago?

00:01:12

Think of them and then give some thought to what you think about new payment upstarts like
Square or services like Pinterest?

00:01:21

Or crowdfunding services like Kickstarter? New disruptive models are often based on the
opportunities of the digital transformation.

00:01:31

What will they do to your customer expectations? What new pressures will they put on your
businesses?

00:01:40

And how will you adapt yourself and your business? You will need to reach to new markets,
satisfy new empowered customer,

00:01:49

control new risks, comply with new regulations at the same time, and lead fast with an as-aservice attitude.

00:02:00

Business can either transform by making use of the new technology and all the information
that comes from it or will get disrupted.

00:02:11

But what does the digital transformation done well really mean? What are the challenges we
need to master to digitally transform?

00:02:22

Digitizing was comprehensive but transformation often was spotty. Repeatability was missing.

00:02:32

Processes are and stay dynamic. Systems often are fragmented. Data silos we know do create
chaos.

00:02:42

And even worse, internal and external expertise networks are disconnected. We simply copied
the analog world.

00:02:52

However, as seen in the first unit, digital transformation is not about ripping apart an existing
and working system

00:03:01

and copying and replacing it into just the cloud or just applying new technology. It is much
more than that.

00:03:12

We need to prepare for the digitized world, best leading with cloud as the transformation needs
to be fast.

00:03:21

But why do we think is cloud such a core quality? It is because of the speed of innovation and
some key design principles which are applied if done right.

00:03:33

Solutions need to be designed for me as the end user. They need to be flexible and extensible.

00:03:41

They need to cater to repeatable topics and, last but not least, they need to be network-aware.

00:03:49

To truly transform we need to look for repeatable patterns via best practices and fast
innovations.

00:03:57

We need to connect the dots between people, processes, data and applications to get the full
picture.

00:04:06

There are critical questions to ask: basic design principles for solutions to master digital
transformation.

00:04:14

I would call them core qualities. Let's remember the example I gave you in the last unit.

00:04:22

The smartphone has brought a deluge of disruption in our lives, bringing change and challenge
to one industry after another at a staggering pace.

00:04:35

It has not only changed the way we interact with games and media, but it has even
transformed experiences in businesses like, for example, customer engagement.

00:04:46

Technology advances are disruptive so it is important to talk about digital transformation.

00:04:54

With the help of the four main factors - cloud, data, networks and devices - we came to
capitalize on new opportunities

00:05:04

as well as effectively transforming new existing businesses. Innovation is a game changer, but
we need to balance it out properly.

00:05:16

Another challenge going digital, it changed the way the businesses work.

00:05:22

There will be big efficiency gains so employees can refocus their efforts.

00:05:27

New ways to engage customers and employees, implementation of whole new business
processes.

00:05:35

Digital transformation should not be seen as a threat, but instead as a helpful tool

00:05:41

that supports the employee and helps him and her in daily business tasks.

00:05:47

New technologies, like real-time data and connectedness, allow for new innovations.

00:05:55

The Internet of Things will bring even more possibilities for new innovations.

00:06:00

But of course, with transforming and changing a business, there are some key challenges:

00:06:08

Challenge number one is the digital proficiency. Leaders will come across a number of
challenges.

00:06:16

First challenge: Recognize the different levels of digital proficiency.

00:06:22

Not everyone will adapt easily to digital transformation. Some may even resist.

00:06:28

Inertia, internal politics and defensive attitudes could all pose a problem.

00:06:35

To combat these use training workshops: Teach the usage and benefits of digital initiatives.

00:06:41

Challenge number two: Legacy systems. Legacy systems are another possible challenge. And
they are there.

00:06:50

Lack of integration makes the overall solution less efficient. Ripping and replacing is not a
good business case either.

00:07:00

So capitalize on what works and transform where you need more speed.

00:07:07

You can adopt cloud solutions that are still tied to existing systems.

00:07:12

Challenge number three: Security. Leaders must consider security. There could be a trade-off
between functionality and security.

00:07:23

But you need to strike for the right balance for your business and realize that preferences vary
and change.

00:07:33

Challenge number four: Jobs are becoming obsolete. Digital initiatives have implications.

00:07:40

It is predicted that about half of job categories may be taken over by machines or systems in
the next two decades.

00:07:49

Change will be disruptive. Restructuring of responsibilities is likely in order.

00:07:56

With the right education and training possibilities, employees can still add real value even
when their previous job is now automated.

00:08:07

We have seen many reasons why businesses should transform, for example: Increase of
efficiency,

00:08:14

better engagement of customers, faster, better insights, flexible for the end user just to name a
few.

00:08:24

However, as always, with change there are some challenges. We looked at the four
challenges:

00:08:31

Digital proficiency, legacy systems, security, and jobs becoming obsolete.

00:08:37

Now can you think of companies that digitally transformed themselves and have overcome
those challenges

00:08:45

or companies that have struggled along the way?

00:08:50

In this course we will hear more about digital transformation done right.

00:08:56

Thank you for listening and learning about the challenges that could come with digital
transformation.

00:09:03

Unit 2 of the first week should have given you an overview of the benefits, as well as the
challenges of digital transformation.

00:09:12

Please remember there is an online forum that you can ask any question and communicate
and collaborate with us and your colleagues.

00:09:21

In the next unit we will focus on the four different elements that digital transformation consists
of.

00:09:29

Looking forward to see you then.

WEEK 1, UNIT 3
00:00:12

Welcome to Week 1, Unit 3. In the last unit we have looked at a few challenges that
businesses have to overcome.

00:00:21

And hopefully, you have used the online forum to post some questions.

00:00:26

Now, the four key challenges to master the digital transformation are: Digital proficiency,
legacy systems, security, and jobs becoming obsolete.

00:00:37

After discussing Transformation or Disruption: What Are the Challenges in the last unit, we will
now dive deeper and focus on the four elements of digital transformation.

00:00:50

Let's recap the definition of digital transformation first.

00:00:55

Driven by the combination of ever-growing digitization and evolving consumer demands,

00:01:02

digital transformation is the use of new technologies to drive significant business

improvements.

00:01:10

This includes capitalizing on new opportunities as well as effectively transforming existing

businesses, and technology that enables it.

00:01:20

Let's briefly also recap the environment we find ourselves in and how the very real
convergences of those four trends are reshaping businesses today.

00:01:33

And when we talk about cloud, it is less about the cloud as a deployment platform per se,

00:01:40

but rather the transformational changes that we are experiencing now are due to a very real
convergence of these four trends happening at once.

00:01:53

We do see a perfect storm for technology innovations: The convergence of cloud and
commoditization of cloud - means cheap,

00:02:03

the pervasiveness of mobile like empowered users, networks which are connecting like never
before inside and outside the enterprise,

00:02:13

and big data - massive amounts of data including dark data brought to light and available for
analysis.

00:02:22

Those are reshaping the future of business and acting as a catalyst to empower individuals as
employees, consumers, and as partners to increase their reach and relevance.

00:02:36

As studies show, more than 60 per cent of CEO's expect 15 to 50 of their earnings growth in
the next 5 years

00:02:46

to come from technology-enabled business innovations.

00:02:53

The world today interacts differently, and will change ever faster.

00:02:59

All of these new customers, co-workers and friends interact much differently than they did just
a few years ago. Even you interact differently today.

00:03:11

Think about it: How many of you have checked your email today and how often?

00:03:16

Who has received a text message today? How many of you have checked Facebook or Twitter
and are doing that while listening to me? So who has shopped online this week?

00:03:27

When you get right down to it, we live in a networked world, one that connects us to
communities of people and help us learn, live and consume better.

00:03:40

This is not just a consumer phenomenon but also an enterprise one. Our constituents are
mobile.

00:03:49

They conduct more and more activities via a growing number of mobile applications. They ask
questions, share answers, and collaborate via social and business networks.

00:03:59

All of this is creating a big bang of data explosion. More information has been created in the
past 18 months than since the beginning of recorded history.

00:04:11

And we're moving so fast that this data on customer preferences, markets, spending, you
name it will double again in the next 18 months.

00:04:21

And all of these capabilities - mobile apps, social and business networks, analytics - are being
powered by a new deliver mechanism:

00:04:30

The cloud, basically everything as a service.

00:04:35

It is clear to see that technology is disruptive. This is precisely why we need to talk about
digital transformation and the four elements that build the foundation.

00:04:48

More than ever, entire businesses need to have digital transformation in mind as technology
and business are intertwined.

00:04:58

In this new world, the CIO's focus is fundamentally changing because the businesses are
changing.

00:05:05

Managing the traditional IT scope is no longer sufficient. Instead, new priorities need to be
tackled.

00:05:13

For the CIO to stay relevant, he or she needs to embrace these changes or become relegated
to a pure non-strategic operations role.

00:05:24

CIO and IT departments need to re-think their strategic purpose in the organization and start a
journey to achieve the strategic purpose.

00:05:34

And the IT role has definitely shifted: Now, IT is the enabler of technology through the
business, if done right,

00:05:43

which task is to align all lines of businesses and operational processes. You will hear more
about the role of IT in a later unit.

00:05:55

As mentioned earlier in this series, Digital Transformation, we have four key building blocks:
Cloud, mobile, data, and networks.

00:06:06

Together, they drive the shift to a new way of business. Let us have a quick overview, and we
will drill deeper in the next unit.

00:06:18

Cloud computing: Cloud computing means freedom, efficiency, and innovation.

00:06:25

With the cloud, businesses can focus on their core businesses with better collaboration and
always up-to-date solutions.

00:06:33

The cloud is scalable, flexible and accessibility which brings connectivity across the world.

00:06:41

In short, cloud stands for simplicity, time to value and speed of innovation.

00:06:49

Let's look at data. And it's not only about big. It is about using the right data in the right context

00:06:57

which means smarter decisions, new opportunities, and ultimately a big competitive
advantage.

00:07:04

In short, the right data stands for predictive insight driven by business strategy, new product
strategies, and new consumer relationships.

00:07:16

Let's have a look at mobile. Mobile takes the freedom and connectedness of the cloud further
by allowing greater access.

00:07:27

The days of hauling laptops around are mostly over. Tablets and smartphones can be equally
functional. And mobile is for all businesses.

00:07:39

In short, mobile stands for the adaptability for the 21st century workforce, everything doable
from anywhere.

00:07:50

Let's look at networks. With over 1.3 billion people on social networks today, it is not a surprise
that networks play a large role in digital transformation.

00:08:03

Networks provide the platform for people, employees, and customers to share their
experiences, access content, and other services, and do their job better.

00:08:15

In short, networks inside and between enterprises enable the hyper-connectivity fueled by
digital communities

00:08:24

and social collaboration plus enabling the collaboration beyond the boundaries of an
enterprise.

00:08:33

As conclusion, the four key elements of digital transformation are cloud, mobile, data, and
networks.

00:08:43

These four building blocks make digital transformation possible for all businesses. Good news,
that technology is available today.

00:08:51

So best is to adopt early to enable new insights, new innovations, and new ways to interact
within and beyond your business.

00:09:02

This is the end of our third unit in Week 1. Next time we will look at Digital Proficiency. Thank
you and see you then.

10

WEEK 1, UNIT 4
00:00:12

Welcome to Week 1, Unit 4. Last time we have looked at the four elements of digital
transformation: Cloud, mobile, data and network.

00:00:22

Today we will cover digital proficiency and how it impacts the transformation.

00:00:29

Users today are more demanding than ever, now that they expect the same streamlined
experience that they get from Google or Amazon within their enterprises.

00:00:39

Instant value, mobile functionality and user-friendly interfaces are necessities, not just bonus
features.

00:00:48

Businesses must act accordingly or risk facing disruption.

00:00:53

Even business-to-business companies have to rethink themselves as business-to-business-toconsumer enterprises,

00:01:01

which essentially means understanding their customer's customers. It is necessary to survive

in the everything-as-a-service economy.

00:01:11

The customer wants things fast, conveniently and always available.

00:00:18

To put your big decisions in context, let's examine the mega forces you must now contend
with.

00:01:26

First, the markets, customers and partners we reach will look a heck a lot of different.

00:01:33

The middle class will raise to 5 billion people in emerging markets like for example Brazil,
Chile, Malaysia, India, and China.

00:01:43

And you want to market there. This new middle class will come armed with different cultural
biases and new ideas.

00:01:52

They will put increased pressures on natural resources. In fact, we're already seeing this with
countries like China and Russia and other markets

00:02:01

buying up key resources from oil to grain to gold. They may not live in big homes or drive fancy
cars.

00:02:09

Most of them will never own a PC. But they will be technology-savvy and mobile.

00:02:17

In fact, three billion of them will be connected and running much of their daily lives from their
smartphones.

00:02:24

At the same time, this emerging middle class will create a new segment of customers that
represent extensive growth opportunities for your business.

00:02:34

But the markets will need to be engaged and served in different ways.

00:02:40

Consequently, every aspect of your business strategy and execution, manufacturing, supply
chains, and employee base, are and will become stretched and overloaded.

00:02:52

Think about what you will do to adapt to capitalize on this opportunity.

00:02:59

But there are differences from the customer point of view and the employees point of view.
However, let's look at both sides.

00:03:08

Customers act much different than they did just a few years ago. The rules of engagement
have changed.

11

00:03:15

Today's customer is more digitally connected, socially networked, and better informed.

00:03:23

These customers live their lives in the moment, updating their relationship status, interacting
with their friends

00:03:29

and sharing their likes and dislikes and opinions, in real-time, through the power of their mobile
devices.

00:03:37

They are literally changing the rules of engagement and, through that, becoming more
empowered.

00:03:43

So what does this mean, that this new empowered customer does to your business? Three
things really:

00:03:52

Your customers are smarter than you. These connected customers are not relying on you to
educate them on their products.

00:04:02

They know more about you and your brand and your competitors than ever.

00:04:08

They are getting their information from their peers and your existing customers through new
channels like LinkedIn and Twitter and Facebook.

00:04:15

Sales as we know is obsolete. 60% of the buying process complete before the first interaction
with Sales.

00:04:24

And your customers are less loyal. So, if you are lucky enough to win new customers you are
more likely to lose them.

00:04:34

With more choices and new disruptive business models, customers are increasingly disloyal.
60% are willing to switch brands for a better service.

00:04:45

And these dynamics of the new empowered customer hold true whether you're selling to the
end consumer or not.

00:04:53

If you're selling to other businesses, again, you must adapt your sales- and customer care
model to pro-actively identify prospects,

00:05:02

engage them early in the customer journey, consistently meet their expectations along the
way,

00:05:09

and earn their loyalty and trust through providing exemplary services which actually starts and
that cycle starts over and over again.

00:05:19

But not only customers are changing; even your employees are changing.

00:05:27

Employees are completely different. And if facing these new markets and customers weren't
challenging enough, you have this new challenge now.

00:05:35

Your workforce is different, totally different.

00:05:40

There is a new face of your new workforce. The millennials will comprise nearly half of the
workforce by next year and 75% by 2020.

00:05:51

These are digital natives. They've grown up with the Web and mobile. They live on social
platforms like Facebook and Instagram. They don't use email but What's App.

00:06:02

They are technology-savvy and are transforming traditional thinking on how and what
information we share, how we view brands, how we buy and consume, and how we work.

00:06:14

They are wired or rather unwired differently than we digital immigrants are:

12

00:06:21

They shun hierarchical command and control environments where only the top execs have
access to information.

00:06:30

They believe information should be free and are eager to share information and collaborate
with their co-workers, peers and partners.

00:06:39

They are more comfortable with coopetition.

00:06:44

They are catering and crowdsourcing their answers: An activity that many traditional
companies are highly uncomfortable with.

00:06:56

They are socially conscious and they rate working for a brand that gives them the sense of
purpose and pride over financial compensation.

00:07:03

And forget work-life balance. They view work as a key part of life, not a separate activity that
needs to be balanced.

00:07:13

By the way, regarding compensation they are pretty similar, but be aware that they need your
care as they will dominate your workforce soon.

00:07:24

And of course let us not forget: You will have five different generations in the workforce. You
need to make sure they collaborate well.

00:07:36

And there will be differentiation through the lever of the human potential.

00:07:43

A key message to us all: We can leverage the tools of the networked economy and tap into
minds everywhere on the planet to create differentiation.

00:07:53

We can leverage collaborative, crowd-sourced talent from anywhere and disaggregate and
democratize work.

00:08:00

We can invest in the new currency which is knowledge. So the key aspect is that we can
differentiate by unleashing the human potential.

00:08:14

And those potentials are products and services, brands, processes, and business models.

00:08:23

According to Ray Wang from Constellation Research, who made a great point that we should
not divide people by age,

00:08:31

instead categorize people by digital proficiency, since proficiency knows no age. He has five
levels of digital proficiency:

00:08:41

No. 1: Digital natives, those are those who grew up and are comfortable with digital.

00:08:48

2: Digital immigrants, which are adopters of digital, like me.

00:08:55

3: Digital voyeurs are those who cautiously recognize the digital shift.

00:09:01

And then: Digital holdouts which resist and ignore digital. And last but not least, no. 5: The
digitally disengaged who are those who give up on digital.

00:09:12

We would like to add one additional category - the digitally balanced.

00:09:19

This describes those who understand the use of technology but walk the middle ground
between naysayers and instant adopters.

00:09:27

Digitally savvy, but they weigh the costs and benefits of technology to decide the direction of
their digital initiative.

00:09:37

In IT and in business, it is important to have enough digitally balanced people, the right mix of

13

digital profiles.
00:09:47

With this, we finish the fourth unit of the first week.

00:09:53

As a summary, we have looked at how the employees and customers have changed over the
years and what it could mean for your business.

00:10:01

But we have also seen the different levels of digital proficiency,

00:10:06

and how important it is that your company has the right balance between digitally native,
balanced and digitally disengaged users.

00:10:16

I hope to see you for our next unit that will cover the topic of Digital Transformation and the
Cloud.

00:10:24

Thank you for your attention. And see you soon.

14

WEEK 1, UNIT 5
00:00:12

Hello and welcome back to Week 1, Unit 5 of our openSAP course on digital transformation.

00:00:19

We have previously learned the different types of digital proficiency, but we have also looked
at the different elements that digital transformation consisted of.

00:00:29

Today, we will look at Digital Transformation and the Cloud.

00:00:36

As one of the main parts of digital transformation, cloud gives you an innovative environment
that is easy to scale and adaptable to your needs.

00:00:46

It is about connecting the dots between people, processes, data, and applications.

00:00:52

You need to get the full picture inside and outside your organization. Technology at the end is
an enabler, not the mean.

00:01:01

But let's look at the questions that need to be asked best if you want to leverage the cloud at
its best.

00:01:08

Let's first look at the question: Is it repeatable?

00:01:13

Let's make a business example: Collaborative opportunity management.

00:01:20

If certain processes can be improved, enhanced and repeated leveraging best practices, then
it is a perfect fit for cloud.

00:01:27

You can bring it to the end user fast and leverage scale.

00:01:36

The next one is: Is it flexible? We might have over-digitized in the cloud,

00:01:43

and now need a cloud that lets you customize and cheat, leveraging a platform as a service
concept.

00:01:50

You want the speed of cloud but with the flexibility to differentiate and win.

00:01:55

So make sure you have it based on a real-time and adaptable platform so it can conform with
your needs.

00:02:02

But then you will probably ask yourself: Is the cloud designed for me and my needs?

00:02:09

We need to move away from products designed to cope with a process because of a system,
we need to turn solutions into a service.

00:02:19

The Me Web, which is best supported by templatized work patterns which allow me to get my
job done, fast and efficient.

00:02:28

And finally: Is it also network-aware? The answer is simple:

00:02:34

According to Ardent Partners, process automation can reduce transaction costs like, for
example, procurement by up to 75%,

00:02:45

and that benefit alone can justify the business case for network adoption.

00:02:53

We need to instantly wrap the networks of employees, customers and partners, experts around
the problem to solve for the opportunity to grasp.

00:03:04

Those four characteristics make the cloud tangible and effective and they enable true
transformation.

00:03:13

It is important for every business to recognize the potential of becoming an end user-focused

15

digital business.
00:03:20

Every company eventually will become a software firm. And the cloud is a great starting point
because it offers fast innovation.

00:03:30

It is tailored to specific business outcomes and it ties mobile, data and devices and networks
together.

00:03:37

Successfully navigating digital transformation is the way to success especially with increased
pace of disruption in a technology-driven world.

00:03:51

The key benefits of cloud computing for businesses are fast innovation, instant value tailored
to business outcomes,

00:03:59

tying mobile, data and network together, ultimate user-friendly solutions.

00:04:06

Cloud today is already changing the way businesses work. But what does this mean entirely
for you, in your new role?

00:04:16

You should be leading and you should be very clear that cloud often is a possibility to be faster
but also change your business.

00:04:28

It releases immediately. It is available to every consumer, every customer with no lengthy

upgrade cycles, no lengthy projects, and no long training required.

00:04:40

And with agile cloud platforms, you can quickly develop industry-, process-, or companyspecific extensions

00:04:47

to any application to achieve new, innovative business processes that advance your business.

00:04:54

In short, cloud is no longer Either-Or, it's not even And, it is And Better.

00:05:01

By extending your on-premise assets with the cloud, you can enable new business processes,
gain new insights, and unlock new value for your business, fast.

00:05:13

But the reality is hybrid, it is about the right mix, and your cloud strategy needs to cater to this
reality.

00:05:22

We know that your move to the cloud must be a thoughtful evolution.

00:05:27

A good strategy centers around leveraging the right mix of cloud - managed, which means
virtualized, outsourced, hosted or private cloud, and an on-premise technology.

00:05:39

You do have very specific challenges and your are looking to solve them.

00:05:46

But there are very specific investments you want to leverage.

00:05:50

Your starting point on this journey will help you to define the right mix and what is right for you.

00:05:55

Seamless process integration powered by pre-built standardized integration adapters for all
scenarios,

00:06:02

on-premise-to-cloud, cloud-to-cloud or cloud-to-3rd-party is a must. With this you can enable

new business processes

00:06:12

like, for example, social selling, social care, dynamic discounting, trading partner discovery,
employee and partner collaboration - you name it,

00:06:21

and of course insights like network intelligence, social analytics or labor benchmarks to unlock
the new value for your business, just to name a few.

16

00:06:31

And this solution should be running on a technology for real-time computing

00:06:38

and as cloud applications deployment for extensibility, a platform as a service approach

underneath.

00:06:47

Let me share some insights from the many co-innovation projects when it comes to cloud:

00:06:52

In the past year we have seen that best-run companies are shifting from ad-hoc spending on
point solution providers to investing in one orchestrated coherent platform:

00:07:05

One platform that can combine the right mix of cloud, on-premise, social, mobile and big data
technology.

00:07:13

That is what business velocity is all about. Still want more details? Let us look at an example.

00:07:21

If you are building a sales organization, you can take Sales and Recruiting because you need
to combine them anyhow. Add Learning and Travel to fully equip the sales team.

00:07:32

Or to power your service organization, you can take our Service, Procurement for the right
parts or contractors, and Employee Central to help to find the right experts.

00:07:44

Add Finance and Sales and you have all the building blocks of your enterprise landscape, all
digitally transformed by the cloud.

00:07:53

I hope you understand why cloud is so important in the process of digitally transforming
yourself.

00:07:59

We have seen the key benefits of the cloud: Fast innovation, instant value tailored to business
outcomes, ties mobile, data and network together, and it is user-friendly.

00:08:11

But we also understand that it is impossible for you to place your entire business on the cloud.

00:08:16

This is why hybrid models become the reality, as the right mix for you is important in order to
make your business successful.

00:08:27

So what would you put down to a napkin from this week?

00:08:33

To conquer disruption through the digital transformation, you need to look at technologies,
leadership strategies and best practices.

00:08:40

And with this create opportunities for innovation.

00:08:47

This was the final unit for the week. But let's quickly recap what we learned and what you
should know by now:

00:08:55

In the first unit, we had a look at the digital transformation and what it exactly means.

00:09:01

You should now understand and be able to describe it to any person who has never heard of
digital transformation before.

00:09:07

Secondly, we look at the benefits, but also the challenges that come with transformation of a
business.

00:09:15

Four key challenges were named: Digital proficiency, legacy systems, security, and jobs
becoming obsolete.

00:09:23

You can now explain those four challenges in more detail, I hope.

00:09:28

But not only the challenges, remember the benefits that come with transforming your business
and using new technologies.

17

00:09:35

Could you name at least three benefits? And could you come up with companies that were
facing those challenges

00:09:41

and have either failed to overcome them and as a result were disrupted, or that have
overcome them successfully and transformed?

00:09:52

In the third unit, we look at the four building blocks: Cloud, data, mobile and networks.

00:09:58

All of those elements play an important role in digital transformation. I hope you know why.

00:10:03

We have also looked at the digital proficiency and how a changing middle class means
changing customers and employees.

00:10:11

Please think of examples that have happened to you, either in work or personal life.

00:10:17

An example of how different customers are now than maybe five years ago, how the
employees have changed

00:10:24

or maybe even what you are doing on a daily basis that would not have been possible five
years ago if it wasn't for the digital transformation.

00:10:34

And today, the focus was laid on cloud and how the reality looks like. With this, we hope you
enjoyed the first week of this course.

00:10:46

Please remember, you have a weekly assignment to complete that is counting towards your
record of achievement at the end, your personal transformation.

00:10:58

If there are any questions or comments, please use the online forum. We are looking forward
to hearing and seeing you next week

00:11:06

when we will look at the four different building blocks in more detail as well as explain the role
that leadership plays while mastering the change.

00:11:17

Thank you very much and thank you for being curious.

18

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