Shaping the Digital Enterprise (eBook)

Gerhard Oswald heads the Product Quality & Enablement Board area and is a member of the Executive Board of SAP SE. Oswald joined SAP in 1981. He was instrumental in developing the sales support network for the SAP R/2 software, responsible in particular for quality control. He then assumed responsibility for quality control in the development of the SAP R/3 software. From 1987 to 1993, Oswald was a member of the project management team responsible for conceiving, developing, and delivering SAP R/3. Following the completion of this project in 1993, Oswald was appointed to the SAP Extended Management Board. In 1994, he assumed responsibility for the SAP R/3 Services division, and was appointed as a member of the SAP Executive Board in 1996. SAP Active Global Support was founded under Oswald's leadership, heralding an era of continuous improvement of innovative support offerings which have demonstrated SAP's thought leadership in the industry. Oswald began his IT career at Siemens AG, where he was an applications consultant for SAP R/2 business processes from 1977 to1980. He holds a degree in business administration from the University of Applied Sciences, Mainz, Germany. Michael Kleinemeier is a member of the SAP Executive Board of SAP SE. He leads the Digital Business Services organization. He was appointed to the Executive Board on November 1, 2015. Kleinemeier has held various leadership positions at SAP. In 2013, he was appointed President of the region Middle and Eastern Europe (MEE), where he was responsible for all market activities and the entire SAP product portfolio in this region. From 2010 to 2012, he was Head of Global End-to-End Services. In this capacity, Kleinemeier was responsible for driving sales and market adoption of SAP’s latest solutions. In parallel he served as Head of the DACH region (Germany, Austria, and Switzerland). In 2007, Kleinemeier was appointed Head of Industry Solutions and Corporate Officer of SAP. From 2001 to 2007, he was Managing Director of SAP Deutschland. During that time, he was also President of the former EMEA Central (DACH and the Benelux countries) sales region. From 1989 to 1999, he held key positions in sales, consulting, and training at SAP. From 1999 to 2001, Kleinemeier was Board member of itelligence AG, an SAP partner company. Kleinemeier holds a degree in commercial management from the University of Paderborn. 

Foreword 6
Chapters in the Cross-Industry Trends Section 6
Chapters in the Industry-Specific Trends Section 7
Chapters in the Use Cases Section 8
Editors´ Preface 10
Contents 14
Part I: Cross-industry Trends 16
Digitalize or Drown 17
1 Digitization: Drivers, Objects, and Impacts 17
1.1 Drivers of Digitization 19
1.2 Objects of Digitization 22
1.3 Impacts of Digitization 25
2 Digitalization: Digital Innovation and Transformation 28
2.1 Strategic Questions and Mistakes 29
2.2 Digital Service Portfolio 30
2.3 Digital Innovation and Transformation Framework 31
2.3.1 Customer Centricity 31
2.3.2 Leadership and Strategy 32
2.3.3 Business Models, Including Offerings 33
2.3.4 Processes 33
2.3.5 Structure and Governance 34
2.3.6 People and Skills 35
2.3.7 Culture 35
2.3.8 Technology Foundation 36
Key Learnings 37
References 37
The Business Consequences of a Digitally Transformed Economy 42
1 Modern Drivers of Change 42
2 Hyper Connectivity 44
2.1 Attributes of a Hyper-Connected World 44
2.2 Impact of Hyper Connectivity 46
2.2.1 People 46
2.2.2 Businesses 47
2.2.3 Communities 47
2.2.4 Sensors 48
3 Supercomputing as Foundation for a `Digitized Core´ 49
3.1 Leveraging Capabilities of a Digitized Core: The Business Impact 50
3.1.1 Efficiency Dimension 51
Accelerate Execution 51
Automate Process Steps 51
Digital Out-Tasking 52
3.1.2 Effectiveness Dimension 52
Speed up Signal to Action 53
De-Layer Processes 53
Raise Process Intelligence 54
3.1.3 Agility Dimension 54
Increase Process Flexibility 54
Increase Organizational Agility 55
Assimilate Process Innovation 56
3.2 Impact on Value Creation 56
3.2.1 From Changing Processes to Changing Business Models 56
4 Cloud Computing 57
4.1 Cloud Delivery Models 57
4.2 Cloud Computing and the Subscription Economy 59
5 Smarter World 60
5.1 Key Innovations for Smarter World 60
5.1.1 Smart Products 60
5.1.2 Smarter Robots 62
5.1.3 Smarter Printing 63
5.1.4 Artificial Intelligence 64
5.2 Implications of Smarter World 66
6 Cyber Security 66
6.1 Four Cyber Security Elements 66
6.1.1 Securing Data 67
6.1.2 Securing Interactions 67
6.1.3 Securing Identities 68
6.1.4 Partner with Trusted Suppliers 69
6.2 Impact of Cyber Security 70
7 Implications 71
7.1 Digitize the Core 71
7.2 Digitize the Mindset 73
8 Conclusion and Key Learnings 76
Key Learnings 76
References 77
It´s Not Just About Technology: The People Side of Digitization 81
1 Digitization as Technology Driven Organizational Change 81
2 Organizational Implications of Digitization 83
2.1 Current Challenges of Digital Transformation Programs 83
2.2 Six Theses on Organizational Implications of Digitization 85
2.2.1 Thesis 1: Digitization Changes the Way of Working 85
2.2.2 Thesis 2: Digitization Increases the Dynamic of Change 86
2.2.3 Thesis 3: Digitization Requires New Skills and Competencies 87
2.2.4 Thesis 4: Digitization Requires New Forms of Leadership 88
2.2.5 Thesis 5: Digitization Requires New Organizational Capabilities 89
2.2.6 Thesis 6: Digitization Changes the Organizational Culture 90
3 Managing Organizational Change in Digital Transformation 91
3.1 Align Leadership 93
3.1.1 Create Urgency for Digitization 93
3.1.2 Develop a Compelling Digital Vision 94
3.1.3 Ensure Role Modeling of Top-Management 94
3.2 Mobilize the Organization 95
3.2.1 Assess the Organizational Implications of Digitization 95
3.2.2 Promote Digitization via Communication 96
3.2.3 Build a Network of Digital Champions 96
3.3 Build Capabilities 97
3.3.1 Build Digital Skills and Competencies 97
3.3.2 Offer Test and Learning Opportunities 97
3.3.3 Leverage HR Practices 98
3.4 Ensure Sustainability 98
3.4.1 Adapt the Formal Organization 98
3.4.2 Align KPI and Incentive Systems 99
3.4.3 Monitor the Digital Adoption Process 100
4 Organizational Change Management in a Digital World 100
Key Learnings 101
References 101
Antithetic Leadership: Designers Are Different, Business People Too 104
1 Introduction 105
2 Filling the Vacuum 105
3 An Example: The Business Transformation Services Consultancy Group at SAP 107
4 Antithetic Leadership: The Ideal Management Principle for a Design Team in a Business Environment 110
4.1 Key Capabilities: The Best Way to Organize and Manage Designers 111
4.1.1 Management Must Be Able to Relate to Each Individual Employee 111
4.1.2 Forget About Conventional, Quantifiable Measures of Performance 112
4.1.3 Designers Perform Better in Small Teams 112
4.1.4 Embrace the Differences that Make a Difference 112
4.1.5 Irritation Comes Before Innovation 113
4.1.6 Tool or Toy: It´s the Designer´s Call 113
4.1.7 Celebrate Failure, but Don´t Get Used to It 113
4.1.8 Know the Rules and When to Break Them 114
4.1.9 Reward Differently 114
4.1.10 New Paths in Further Education and Professional Development 114
5 Applying Antithetic Leadership in the Field: Successful Customer Projects 115
6 Conclusion and Key Learnings 116
Key Learnings 117
References 117
Digital Culture: Why Strategy and Culture Should Eat Breakfast Together 119
1 Overview 119
2 Culture as the Ultimate Game-Changer for Going Digital 121
2.1 Digital Culture 121
2.2 The SAP Journey Toward Digital Integration with CEC and BTS-ESPE 123
2.3 What We Did: X-Change on Change and Culture Workshops 125
3 Conclusion and Key Learnings 127
Key Learnings 128
References 129
Designing Business Models for the Digital Economy 131
1 Overview 132
2 BMDI: SAP Business Model Innovation Methodology 133
2.1 Importance of Business Model Innovation 133
2.1.1 Business Model Representations 133
3 Structured Approach to Digital Business Model (Re-)Design 135
3.1 Digital Key Elements 135
3.2 `Digital Value Drivers´ 138
3.3 Digital Business Model Design Methodology 138
4 From Business Model to Service Design 141
4.1 Deconstructing a Digital Business Model: QSR Example 141
4.2 Service Design Principles 142
4.3 Service Design Building Blocks for the QSR Example 143
4.3.1 Persona Development 143
4.3.2 Customer Journey Map and Service Blueprint 143
5 Conclusion and Key Learnings 145
Key Learnings 145
References 145
Part II: Industry-Specific Trends 147
The Unbanked Don´t Need More Brick and Mortar Banks 148
1 Introduction 149
2 The Market 150
2.1 Cash 150
2.2 Technology Diffusion in Africa 151
2.2.1 Hardware 152
2.2.2 Software 152
2.3 M-Pesa 153
3 The Challenges that Limit the Growth of Today´s Mobile Financial Services 154
3.1 Interoperability 155
3.2 Regulation 155
3.3 Cost 156
4 The Solution 156
4.1 The Blockchain as an Asset Layer 158
4.2 Drawbacks: The Bitcoin Blockchain Is Not the Ideal Transaction Medium 158
4.3 The Decentralized Transaction Layer 159
5 The New Era of Mobile Financial Services 159
5.1 Benefits for Governments 160
5.2 Small- and Medium-Sized Enterprises 161
5.3 Benefits for the Individual 161
5.4 Disrupting Current Technologies 162
6 Conclusion and Key Learnings 162
Key Learnings 163
References 163
Digital Supply Chain Management Agenda for the Automotive Supplier Industry 166
1 Introduction 166
2 Supply Chain Challenges and Trends in the Automotive Supplier Industry 167
3 Digital Supply Chain Management 168
3.1 Dimensions of a Digital Supply Chain Management 170
3.2 Technological Innovations Relevant for Supply Chain Management 171
4 Digital Supply Chain Management Use Cases 171
4.1 Digital Customers 172
4.2 Digital Logistics and Inventory 174
4.3 Digital Production Systems 175
4.4 Digital Supplier 176
4.5 Digital IT and Technology 177
4.6 Digital Performance Measurement 177
5 Digital Supply Chain Management Agenda 178
6 Conclusion and Key Learnings 180
Key Learnings 180
References 181
Value of Lifecycle Information to Transform the Manufacturing Industry 182
1 Introduction 183
2 Background 186
2.1 Industrial Product-Service Systems 186
2.2 Product-Service Lifecycle Management 187
2.3 Information Linkage and Exchange 188
2.4 Organizational Ambidexterity 189
3 Research Model and Approach 190
4 Empirical Analysis 192
4.1 Survey Results 193
4.2 Statistical Findings 193
5 Best Practices and Management Guidelines 195
5.1 Information Creation for Product and Service Offerings on the Basis of Engineering Efforts 196
5.2 Training and Qualification for Service Personnel 196
5.3 Service Delivery 196
5.4 Analyzing and Optimizing Service Delivery 197
5.5 Management Guidelines for Information Acquisition, Analysis, and Usage 197
6 Conclusion and Key Learnings 200
Key Learnings 201
References 201
Part III: Use Cases 204
Creating a Market Analytics Tool that Marketers LOVE to Use: A Case of Digital Transformation at Beiersdorf 205
1 Introduction 206
2 The Context: Digital Innovation at Beiersdorf 207
3 The Project: Developing a Global Market Share Analysis Solution 208
3.1 The Product 208
3.2 The Approach: Design Thinking 210
3.3 The Approach: Co-Innovation 214
3.3.1 Stakeholders Won´t Wholeheartedly Participate in Customer Co-Creation Unless It Produces Value for Them 214
3.3.2 The Best Way to Co-Create Value Is to Focus on All Stakeholders´ Experiences 215
3.3.3 Stakeholders Must Be Able to Interact Directly with One Another 215
3.3.4 Companies Should Provide Platforms that Allow Stakeholders to Interact and Share Their Experiences 216
3.4 The Process 216
4 The Effects: Changing How Beiersdorf Works 217
4.1 Culture 217
4.2 Organization 218
4.3 Process 219
4.4 IT 221
4.5 Sourcing 222
5 Conclusion and Key Learnings 222
Key Learnings 223
References 224
Taking Digital Innovation into the Field of Infectious Diseases: The Case of SORMAS 226
1 Introduction 227
2 Background 228
3 Situation Faced 229
4 Action Taken 231
4.1 Starting with Design Thinking 231
4.2 Processes 232
4.3 Architecture 234
4.4 Mobile Applications 235
4.5 Test Development 236
4.6 Training 238
5 Results Achieved 239
6 Conclusion and Key Learnings 240
Key Learnings 242
References 242
A Journey of Digital Innovation and Transformation: The Case of Hilti 244
1 Introduction 245
2 The Journey 245
2.1 Decentral Operations 246
2.2 Global Integration 247
2.2.1 Establishing the Basis for Transformation: Global Processes and Data 247
2.2.2 Establishing Employees´ Support for Transformation: The `Cultural Journey´ 248
2.3 Modularity 250
2.4 Digital Take-Off 251
2.5 Digital Maturity 254
3 Conclusion and Key Learnings 255
Key Learnings 256
References 256
The Future of Automobility 259
1 Introduction 259
2 Understanding Innovation in Urban Mobility 261
2.1 Business Models for Mobility Services 262
2.2 Important Technological Advancements in Automobility 263
2.2.1 Digitization and Connectivity 264
2.2.2 Fully Autonomous Vehicles 264
3 Emerging Digital Mobility Concepts for Overcoming Car Dependency 265
3.1 Digital Carsharing 266
3.1.1 Mobility Concept Description 266
3.1.2 Case Study: smexx 266
Introduction 266
Use Cases 267
3.1.3 Business Model Analysis: smexx 268
3.1.4 Digital Carsharing Business Model Prototype 270
3.2 Digital Ridesharing 271
3.2.1 Mobility Concept Description 271
3.2.2 Case Study: TwoGo by SAP 271
Introduction 271
Use Case 272
Business Model Analysis 273
3.2.3 Digital Ridesharing Business Model Prototype 274
4 Designing Business Models for the Future of Automobility 275
4.1 Automobility on Demand 276
4.1.1 Mobility Service Description 276
4.1.2 Definition of the Business Model Prototype 278
4.2 Autonomous Vehicles 278
4.2.1 Mobility Service Description 278
4.2.2 Definition of the Business Model Prototype 280
4.3 Fleets of Shared Autonomous Vehicles 282
4.3.1 Mobility Service Description 282
4.3.2 Definition of the Business Model Prototype 282
5 Conclusion and Key Learnings 284
Key Learnings 285
Appendix 1: Three General Archetypes of Business Models for Innovative Mobility Systems (Based on Lerner et al. 2012) 286
Appendix 2: The P4C Business Model Framework Applied for the Analysis of Case Studies (Diagram by Authors) 287
References 287
What Co-Innovation Can Mean for Digital Business Transformation: Sharing and Managing Risk to Achieve IT Business Innovation 292
1 Reinvent to Succeed: The Need for Digital Transformation 292
2 Formation of Co-Innovation Approaches 294
3 SAP Co-Innovation Lab (COIL) 295
3.1 Co-Innovation-as-a-Service 296
3.1.1 Services 296
3.1.2 Defining Characteristics 297
3.1.3 Co-Innovation Results 297
3.2 COIL Process 298
4 Co-Innovation in Action: Three Exemplary Cases 299
4.1 Case 1: Element Five, Construction Industry Solution 299
4.1.1 Company 300
4.1.2 Situation Faced 300
4.1.3 Actions Taken 300
4.1.4 Results 301
4.1.5 Lessons Learned 302
4.2 Case 2: Augmented Reality: New Services through Digitalization 302
4.2.1 Company 302
4.2.2 Situation Faced 302
4.2.3 Actions Taken 303
4.2.4 Results 305
4.2.5 Lessons Learned 306
4.3 Case 3: Mtell/Rolta: Predictive Maintenance with IoT and SAP HANA 306
4.3.1 Company 307
4.3.2 Situation Faced 308
4.3.3 Results 308
4.3.4 Lessons Learned 309
5 Conclusion and Key Learnings 310
Key Learnings 311
References 311
Virtual Reality Goes Mobile in the Digital Age 313
1 Motivation 313
2 Background 314
2.1 Definition of Mobile Technology 314
2.2 Background on Virtual Reality 315
2.3 A Glimpse at Cross-Industry Applications 317
2.4 Three Sizes for Mobile VR Experiences 321
2.5 Summary of Background 322
3 Case Studies 323
3.1 Case #1: eMotion of Samsung Electronics Italia 323
3.2 Case #2: Biotechnology, Biogen 324
3.3 Case #3: Retail, Tommy Hilfiger by WeMakeVR 326
3.4 Summary of Case Studies 327
3.4.1 Summary of Business Challenges 328
3.4.2 Opportunities from Using Mobile VR 329
4 Implications and Future Outlook 330
4.1 Mobile VR as a New Channel for Consumer Digital Experience 330
4.2 New Ways to Increase Perceptual Value and Branding 331
4.3 Gaining Access to a Different Perspective 331
4.4 Future Outlook 332
5 Conclusion and Key Learnings 332
Key Learnings 333
References 333
Epilogue 335
Disclaimer 339