Transcript
of a BriefingsDirect podcast on how cloud is sparking new business
models and new forms of engagement with employees, customers, and
suppliers.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: SAP.
Dana Gardner: Hi, this is
Dana Gardner, Principal Analyst at
Interarbor Solutions, and you're listening to
BriefingsDirect. Our podcast today explores the expanding impact that
cloud computing is having as a strategic business revolution -- and not just as an IT efficiency shift.
Over the past five years, the impetus for cloud adoption has been primarily about advancing the IT
infrastructure-as-a-service (IaaS)
fabric or utility model, and increasingly seeking both applications and
discrete IT workload support services from Internet-based providers.
But
as adoption of these models has unfolded, it's become clear that the
impacts and implications of cloud commerce are much broader and much
more of a benefit to the business as a whole as an innovation engine,
even across whole industries.
Recent research shows us
that business leaders are now eager to move beyond cost and
efficiency gains from cloud to reap far greater rewards, to in essence,
rewrite the rules of commerce.
We're here today with a
panel of experts and practitioners of cloud to unpack how modern
enterprises have a unique opportunity to gain powerful new means to
greater business outcomes. So with that, please join me in welcoming our
guests,
Ed Cone, the Managing Editor of Thought Leadership at
Oxford Economics. Welcome, Ed.
Ed Cone: Good morning, Dana.
Gardner: We're here as well with
Ralf Steinbach, Director of Global Software Architecture at
Groupe Danone, the French food multinational based in Paris. Welcome, Ralf.
Ralf Steinbach: Good afternoon, because it is afternoon here.
Gardner: And we're here also with
Bryan Acker, Culture Change Ambassador for the
TELUS Transformation Office at TELUS, the Canadian telecommunications firm. Welcome, Bryan.
Bryan Acker: Thanks for having me.
Gardner: And we're also here with
Tim Minahan, Chief Marketing officer for
SAP Cloud and Line of Business Solutions. Welcome, Tim.
Tim Minahan: Hey, Dana, it's great to be here.
Gardner: It seems to me that business, at its simplest definition,
is a series of inputs transformed by processes and value adds, and then a
set of outputs.
Now that's grossly simplified, but
this is all governed internally by systems of record, cycles of learning
and, many times, innovative processes, based on
intellectual property
and research. Ed, you've been doing recent research there at Oxford
Economics, and so how is cloud now able to address this entire business
meta process, rather than just some discrete parts like systems of
record?
Questions on the cloud
Cone:
Dana, we did
a survey for SAP last year, and that became the basis for
this program. We went out to 200 executives around the world and asked
them that question, not quite so elegantly phrased as you did, but "What
are you doing in the cloud? Are you still looking at it for just
process speed, efficiency, and cost cutting?"
The numbers that came back were really strong in
terms of actually being a part of the business function. Beyond those
basics, cloud is very much part of the daily reality of companies today.
We
saw that the leading expectation for cloud to deliver significant
improvement was in productivity, innovation, and revenue generation. So
obviously process, speed, efficiency, and cost cutting are still very
important to business, but people are looking to cloud for new lines of
business, entering new markets, and developing new products.
In
this program, what we did was take that information and go out to
executives for live interviews to dive deep into how cloud has become
the new engine of business, how these expectations are being met at
companies around the world.
Gardner: And we'll
be speaking to some of those in just a few moments at Danone and TELUS,
but before we get to the nitty-gritty of how you do this, I'm still
interested in why cloud commerce is evolving to a higher value. So Tim at SAP
Cloud, how you are using this shift? Are businesses doing this
intentionally, or are they basically being forced by what's happening
around them?
Minahan: Increasingly, as was just indicated, businesses are moving beyond the IT efficiencies and the
total cost of ownership (TCO) benefits of the cloud, and the cloud certainly offers benefits in those areas.
But really what's driving adoption, what's moving us
to this tipping point, is that now, by some estimates, 75 percent of all
new investments are going into the cloud or
hybrid models.
Increasingly, businesses are viewing the cloud as a platform for
innovation and entirely new engagement models with their customers,
their employees, their suppliers and partners, and in some cases, to
create entirely new business models.
Just think about what cloud has done for our personal lives. Who would have thought that
Apple, a few years ago, would be used to run your home. This is the
Apple Home
concept that allows you to monitor and manage all of your devices --
your air-conditioning, your alarm, music, and television -- remotely
through the cloud.
There's even the quasi business
B2B and
B2C models around
crowd sourcing and
crowd funding from folks like
Kickstarter or payment offerings like
Square. These are entirely new engagement models, new business models that are built on the back of this emergence of cloud,
mobile, and
social capabilities.
Gardner:
Right, and it seems that one of these benefits is that we can cross
boundaries of time, space geography, what have you, very easily, almost
transparently, and that requires new thinking in order to take advantage
of that.
Bryan, at TELUS as Culture of Change
Ambassador, are you part of the process for helping people think
differently and therefore be able to exploit what cloud enables?
Flexible work schedule
Acker:
One hundred percent. It's actually a great segue, because at TELUS we
have a flexible work arrangement, where we want 70 percent of our
employees to be working either from home or remotely. What that means is
we have to have the tools and the culture in place that people
understand, that they can access data and relevant information, wherever
they are.
It doesn't matter if they're at home, like I am
today, on the road, or at a client site, they need to be able to get the
information to provide the best customer experience and provide the
right answer at the right time.
So by switching from
some of the great tools we already offered, because collaboration is
part of TELUS’s cultural DNA, we've actually been able to tear down
silos we didn't even know we were creating.
We were
trying to provide all the tools, but now people have an end-to-end view
of every record for customers, as well as employees and the
collaboration involving courses and learning opportunities. They have
access to everything when they need it and they can take ownership of
the customer experience or even their own career, which is fantastic for
us.
Gardner: Ralf, at Danone, as Director of
Global Software Architecture, you clearly have your feet on the path
and you've seen how things have evolved. Do you see the shift to cloud
as a modest evolution, or is this something that changes the
game?
Steinbach: We've been looking at
cloud for quite sometime now. We've started several projects in the
cloud, mainly in two areas. One involves the supporting functions of our
business which is HR, travel expenses, and mail. There, we see a huge
advantage of using standardized services in the cloud.
In these functions we do not need any specifics. The
cloud comes standard and you can not change, as you can with SAP
systems. You can't adapt the code. But that is one area where we think
there's value in using cloud applications.
The other area where we really see the cloud as valued is in our
digital marketing
initiatives. There, we really need the flexibility of the cloud.
Digital marketing is changing every day. There's a lot of innovation
there and there the cloud gives us flexibility in terms of resources
that we need to support that. And, the innovation cycles of our
providers are much faster than they would be on premises. These are the
two main areas where we use the cloud today.
Cone:
Ralf, it was interesting to me, when I was reading through the
transcript of your interview and working on the case studies we did,
that it is even changing business models. It's allowing Danone to go
straight to the consumer, where previously your customer had been the
retailer. Cloud in new geographic markets is letting you reach straight
to the end user, the end buyer.
Digital marketing
Steinbach:
That's what I meant when I talked about digital marketing. Today, all
consumer product goods company like Danone are looking at connecting to
their consumers and not to the retailers as in the past. We're really
focusing on the end-consumer, and the cloud offers us new possibilities
to do that, whether it is via mobile applications or websites and so on.
One
thing that's important is the flexibility of the systems, because we
don't know how many consumers we'll address. It can be a few, but it
could be over a million. So we need to have a flexible architecture, and
on-premise we could not manage that.
Gardner:
It's interesting. When I listen to Ralf, I'm hearing agility and also
speed, speed of innovation. They can let those cloud services providers
be in the vanguard of things like energy, facilities, the process
speeds, the speeds and feeds, the nuts and bolts. The cloud makers are really in the
vanguard because their business model is based on a cost of operations
where they are going to seek those efficiencies constantly.
So,
Ed, the concept of speed seems to come up more and more. We're talking
about speed of innovation, agility, direct lines of communication to
customers and, of course, also
supply-chain direct communication speed as well. How prominent did you see speed and the need for speed in business in
your recent research?
We're really focusing on the end consumer, and the cloud offers us new possibilities to do that.
Cone:
Well, speed was important and it's speed across different dimensions.
It's speed to enter a new market or it's speed to collaborate within
your own company, within your own organization.
This
idea of taking IT and pushing it out to the people, to the customer, and
really to the line of business allows them to have intimate contact and
to move quickly, but also to break down these barriers of geography.
We did a case study with another large company,
Hero,
which is a large maker of motorcycles and two wheeled vehicles in
India. What they're doing with cloud- enabled customer-facing technology
is moving their service operation outside of dealerships into the
countryside, out across India. They go to parks and they set up what
they call service camps.
There, the speed element is
the speed and the convenience with which you are able to get your bike
serviced, and that's having a large measurable impact on their business.
So it is speed, but it is speed across multiple dimensions.
Gardner:
Tim, another thing that Ralf mentioned was standardization, of having
consistency in how the services are delivered to them so the business
can innovate at a higher abstraction.
It seems to me
that the cloud provider and their role in this, is at a higher
abstraction as well. As a provider of cloud services yourself with SAP,
how are you seeing the ability to standardize and make consistent and
automate processes and services in a way that then speeds up the general
business objectives?
New innovation
Minahan:
At the core, the cloud is really all about
unlocking new innovations, providing agility in the business, allowing
companies to be able to adapt their processes very, very quickly, and
even create entirely new engagement models, and that's what we are
seeing.
It is not just the cloud, though. This
convergence of cloud, big data, analytics, mobile and social, and
business networks really ushers in ultimately a new paradigm for
business computing, one where applications are no longer just built for
enterprise compliance or to be the system of record. Instead, they're
really designed to engage and empower the individual user.
It's
one that ushers in a new era of innovation for the business, where we
can enable new engagement models with customers, employees, suppliers,
and other partners.
We've heard some great examples here, but some others were very similar to the experience that Danone has seen.
T-Mobile is leveraging the cloud not to replace its traditional
systems of records,
but to extend them with the cloud, to create a new model for social
care, helping monitor conversations on its brand, and engage customer
issues across multiple channels.
This convergence of cloud, big data, analytics, mobile and social, and
business networks really ushers in ultimately a new paradigm for
business computing.
So not just their traditional
support channels, but Twitter and Facebook, where these conversations
are happening and really it is empowered them to deliver what has become
a phenomenal kind of “Cinderella-worst-to-first” story for customer
support and satisfaction.
Now, they're seeing first
time resolution rates that have gone from the low teens to greater than
94 percent. Obviously, that has a massive impact on customer
satisfaction and renewals and is all powered by not throwing out the
systems that they've used so long, but by extending them with the cloud
to achieve new innovations and then drive new engagement models.
Gardner: Tim, another factor here, in a sense, levels the playing field. When you move to the cloud,
small-to-medium-sized enterprises (SMBs)
can
enjoy the same benefit that you just described for example from
T-Mobile. Are you at SAP seeing any movement in terms of the size or
type of organizations that can exploit these new benefits? Is it
something only for big guy?
Minahan: No, it
certainly isn't something only for the big guy. Although what's
interesting, Dana, is that you and I have been around this industry for
quite some time and the original thought was that the cloud was the big,
democratized computing power.
It allowed SMBs to get
the same level of applications and infrastructure support that their
larger competitors have had for years.
That's certainly true, but it is
really the large enterprises that have been aggressively adopting this
on an equal pace with their SMBs.
All sizes of companies
The
cloud is being used to not only accelerate process efficiency and
productivity, but to unlock innovations for all sized companies. Large
enterprises like
UPS,
Deutsche Bank,
and Danone are using cloud-based business applications. In the case of
UPS and Deutsche Bank, they're using business networks to extend their
traditional supply chain and financial systems to collaborate better
with their suppliers, bankers, and other partners.
It's
being used by small upstarts as well. These are companies that we
talked about in the past like
Mediafly, a mobile marketing start-up. It's
using
dynamic discounting solutions in the cloud to get paid faster,
fund development of new features, and take on new business.
There's
Sage Health Solutions, a company started by two stay-at-home moms in
South Africa that is really grown from zero to a multi-million dollar
operation. That is all powered
by the leveraging the cloud to enable new business models.
Cone: To follow on with what
Tim said about the broad gamut of usage from company sites and also
earlier mentioning mobile, what we saw in our survey is that mobile is
of great importance to companies as a way of reaching their customers
for internal productivity as well. But reaching customers is actually a
higher priority and that comes down to the old adage: You have to fish
where the fish are.
The cloud is being used to not only accelerate process efficiency and
productivity, but to unlock innovations for all sized companies.
Look
at what Danone is doing when they're setting up direct-to-customer
technologies and marketing. They're going into markets where people
don't necessarily have laptops or landlines. They're leapfrogging that
to a world where people have mobile devices.
So if you
have mobile customers, and as Tim said, think of the consumer
experience, that is how we all live our lives now. No matter what size
your company is, you have to reach your customers the way your customer
lives now -- and that is mobile.
Gardner: So
there's a standardization of process between larger companies and
smaller companies that is much greater now with the cloud. They can all
play off of the same rules when it comes to supply-chain processes or
business interactions as well as marketing and co-marketing.
But
at the other end of the spectrum, you can use a standardized approach
to deliver services out to any mobile endpoint. We're talking about
smart phones today, but we might be talking about sensors or
Internet of Things points that are not quite sophisticated as a phone, but are nonetheless
taking data and providing data back.
So, Ed, this all
boils down to greater collaboration, standardized, accepted
collaboration, SMBs with larger ones down to the actual mobile cell
phone or
smart phones.
Tell us a little bit about your research, how you have gone about it,
and how that new level of pervasive collaboration was demonstrated in
your findings.
Baseline information
Cone:
In terms of
the research, as I said, we went out to 200 execs around
the world and asked them a series of questions about what their
investment plans were. It was baseline survey information. What are you
doing in the cloud, how much of it are you doing, and what are the key
benefits that you're getting?
Then, as we went deeper
in this phase of the project, we found that collaboration has different
meanings. It can be collaboration within the company. It can be with
partners, which cloud platforms allow you to do more easily. It's also
this key relationship, a key area of collaboration between IT and the
business.
What we see in this research is that IT is
increasingly seen as a partner for the business as a way of driving
revenue via the cloud. But across the four regions that we surveyed --
North America, Latin America,
EMEA and
APAC
-- we saw a very high percentage of companies say that they see that IT
is emerging as a valued partner of the business, not just a support
function for the business. I think that's a key collaborative
relationship that I'm sure our guests are seeing in their own companies.
Gardner:
Just to be clear, Ed, this is
ongoing research. You're already back in
the field and you'll be updating some of these findings soon?
We're really interested to see how people are doing compared to the targets they set and what their new targets are.
Cone:
Yes, we're really excited about that, Dana. We
did this survey last year for SAP. Then, we jumped in about a year later using those numbers
and did these in-depth research interviews to look at the use of the
cloud to drive business. This summer, we're refielding the survey to see
how things have changed and to see how the view of the future has
changed.
We ask a lot of questions about where they
are now, and where they think they'll be in three years. We're really
interested to see how people are doing compared to the targets they set
and what their new targets are. So we will have some fresh numbers and
fresh reports to talk to you about by Q3 or Q4.
Gardner: Let us look into those actual examples now and go back to Bryan at
TELUS.
Acker: I have a tangible example that might help express the value of
collaboration at TELUS and something that people don't think about, and
that is safety.
We have a lot of field technicians who
are in remote areas, but have mobile access. A perfect example is that
we can go into situation where a technician may be a little unsure of
what to do in a situation and it's potentially unsafe.
Because of the mobile access and the cloud, we've enabled them to quickly record a video, upload it directly to our
SAP Jam system,
which is our collaborative tool suite that we use, and share it with a
collection of other technicians, not just the person they can call.
Safer situation
What
happens is then people can say this is unsafe, you need to do X, Y and
Z. We can even push them required training, so they can be sure that
they're making the right decision. All of a sudden, that becomes a safer
situation and the technician is not putting themselves at risk. This is
really important because people do not think of those real, tangible
examples. They often feel that they're just sharing information back and
forth.
But in terms of what we are doing and where we
are going, I sit in HR, and we're trying to improve the business
process. We now have all of our information, the system of record, an
integrated learning management system (LMS), our ability to analyze
talent, so we make the correct hires.
We now trust the
information implicitly and we're able to make the correct decision,
whether it means customer information, recruiting choices, hiring
choices, or performance choices.
Now, we're in a
situation where we're only going to maximize and try to leverage the
cloud for even more innovation, because now people are singing from the
same choir sheet, so to speak.
We now trust the information implicitly and we're able to make the
correct decision, whether it means customer information, recruiting
choices, hiring choices, or performance choices.
We
have access to the same system or record of truth, and that's the first
time we've had that. Now, recruiting can talk to learning, who can talk
to performance, who can talk to technicians and we know they all get a
consistent version of the truth. That is really important for us.
Gardner:
Those are some excellent examples of how mobile enhances cloud. That
extends the value of mobile. That brings in collaboration and, at the
same time, creates data and analysis benefits that can then be fed back
into that process.
So there really is a cyclical
adoption value here. I'd like to go back to the cultural part of this.
Bryan, how do you make sure that that adoption cycle doesn't spin out of
control? Is there a lack of governance? Do you feel like you can
control what goes on, or are we perhaps in the period of creative chaos
that we should let spin off on its own in any way?
Acker:
That’s a great question, and I'm not sure if TELUS handles this in a
unique way, but we definitely had a very detailed plan. The first thing
we did was have collaboration as one of our valued attributes or one of
our leadership competencies. People are expected to collaborate, and
their performance review is dependent on that.
What
that means is we can provide tools to say that we're trying to
facilitate collaboration. It doesn't mean matter if you're collaborating
through a phone call, through a water-cooler chat, or through
technology. Our employees are expected to collaborate. They know that
it’s part of their performance cycle and it’s targeted towards their
achievements for the year. We trust them to do the right thing.
We
actually encourage a little bit of freedom. We want to push the
boundaries. Our governance is not so tight that they are afraid to
comment incorrectly or afraid to ask a tough question.
Flattening the hierarchy
What
we're seeing now is individual team members are challenging leadership
positions on specific questions, and we're having an honest and frank
discussion that’s pushing the organization forward and making us make
the accurate correct choice at all time, which is really encouraging.
Now, we're really flattening our hierarchy and the cloud is enabling us
to do that.
Gardner: That sounds like a very
powerful engine of innovation, allowing that freedom, but then having it
be controlled, managed, and understood at the same time. That’s
amazing. Ed, do you have any reactions to what Bryan just said about how
innovation is manifesting itself newly there at TELUS?
Cone:
When we spoke to TELUS, I was intertested in that cultural aspect of
it. I'm sure the guys on the call would disagree with me on a technical
level, but we like to say that technology is easy, and culture is hard.
The technology works, and you implement it and you figure that out, but
getting people to change is really difficult.
The
example that we use in the case study, SAP on TELUS, was about changing
culture through
gamification, allowing people to learn via an online
cloud-based virtual game. It was this massive effort and it engaged a
huge number of employees across this large company.
It really shifted the employee culture, and that had an impact on customer service and therefore on business performance
It
really shifted the employee culture, and that had an impact on customer
service and therefore on business performance. It’s a way that the
cloud is moving mountains and it’s addressing the hard thing to change,
which is human behavior and attitudes.
Minahan:
Dana, I'd add to that. We talk about the convergence of these different
technologies in cloud, social, and mobile and ultimately we had this
convergence going on in technology that we talked about all the time.
There is massive
change going on in the workforce and what constitutes the workforce.
Bryan talked about how there is a
leveling of the organization, doing away with the traditional
hierarchical command and control, where information is isolated in the
hands of a few, and the new eager employees doesn’t get access to
solving some of the tough problems. All that’s being flattened and
accelerated and powered by cloud and social collaboration tools.
Also,
we're seeing a shift in what constitutes the workforce. One of the
biggest examples is the major shift in how companies are viewing the
workforce. Contingent and
statement of work (SOW)
workers, basically non-payroll employees, now represent a third of the
typical workforce. In the next few years, this will grow to more than
half.
It’s already occurring in certain industries,
like pharmaceuticals, mining, retail, and oil and gas. It's changing how
folks view the workforce. They're moving from a functional management
of someone -- this is their job; this is what they do -- to managing
pools of talent or skills that can be rapidly deployed to address a
given problem or develop a new innovative product or service.
These
pools of talent will include both people on your payroll and off your
payroll. Tracking, managing, organizing, and engaging these pools of
talent is only possible through the cloud and through mobile, where
multiple parties from multiple organizations could view, access,
collaborate, and share knowledge and experiences running on a
shared-technology platform.
Customer is evolving
Acker:
That extends quite naturally to the customer. The customer is evolving
faster than almost anything and they expect 24x7 access to support. They
expect authentic responses and they now have access to just as much
information as the customer service agent.
Without
mobile, if you can't connect with those customers and be factual, you're
in trouble. Your customers are going to reply in social-media channels
and in public forums, and you're going to lose business and you're going
to lose trust with your existing customers as well.
Minahan:
I fully agree. The only addition to that is that they also expect to be
able to engage you through any channel, whether it’s their mobile
phone, their laptop, or in some cases, directly face to face, on the
phone, or in a retail outlet and have the same consistent experience and
not need to reintroduce who they are and what their problem as they
move from channel to channel.
Gardner: Clearly we're seeing how things that just
weren’t possible before the cloud are having pervasive impacts on
businesses. Let’s look at a new business example, again with Danone.
Ralf, tell us a little bit about how cloud has had strategic
implications for you. You have many brands, many lines of business. How
is cloud allowing Danone to function better as a whole?
The cloud is definitely the best option for us to start these new businesses and connect to all consumers.
Steinbach:
We have a strategy around digital marketing and, as you know, we're
operating in almost every country in the world. Even though we're a big
company, locally, we're sometimes quite small. We're trying to build up
new markets in emerging countries with very small investments in the
beginning. There, the cloud is definitely the best option for us to
start these new businesses and connect to all consumers.
Money
matters, even for a big company like Danone. That’s very important for
us. If you look at Africa, there are completely different business
models that we need to address.
People in Africa pay
with their mobile phones. Some sell yogurt on a bicycle. Women pick up
some yogurt in the morning and then they sell them on the road. We need
to do businesses with these people as well. Obviously, an
enterprise resource planning (ERP) system isn't able to do that, but the cloud is a much better adapted platform to do this sort of business.
Gardner:
Again, instances where cloud is enabling things that simply couldn’t
have been done with spreadsheets, email ,and sticky notes. So very
interesting. Now, it’s one thing to look at the impacts of cloud, and
we've certainly demonstrated that there are new benefits and that
provides a challenge.
Ed, how do you compare doing
something that's never been done before to something in the past that
therefore create a metric of success to measure what you're doing? Is
there anything in your research so far that helps organizations
understand the value of cloud, some of these instances that we’ve been
talking about that put into business terms. The C-suite likes to look at
numbers. How do we measure innovation?
Metrics lacking
Cone:
We're doing some research on another program right now on that very
topic for a non-SAP program. That is showing us that metrics for success
on basic things like
key performance indicators (KPIs) for progress of migration into the cloud are lacking at a lot of companies. Basic
return on investment (ROI) numbers are lacking at a lot of companies.
We're
really old school. To go back to your definition of what a business is,
we think it’s an organization that’s set up to make money for
shareholders and deliver value for stakeholders. By those measures, at
least by dotted line, the key metrics are your financial performance?
Are you entering, as we mentioned before, new markets and creating new
products?
So the metrics we're seeing that are cloud
specific aren't universal yet. In a broader sense, as cloud becomes an
everyday set of tools, the point of those tools is to make the business
run better, and we are seeing a correlation between effective use of the
cloud and business performance.
Gardner: Tim, any thoughts on measuring innovation, qualifying and
quantifying it? Isn't data analytics a new currency that we need to
bring to the table when we think about the fruits of doing this kind of
elaboration.
There are entirely new engagement models and business models that the companies hadn’t even thought of before.
Minahan:
Certainly. What the cloud, mobile, and social bring to bear in addition
to new collaboration models is that they kick off an unbelievable
amount of new information, and oftentimes not in a structured way.
There's a need to aggregate that information and analyze that in new
ways to detect and predict propensity modeling on your customers, your
supply chain, and your employees. Progression and development are
extremely powerful.
I think we’ve just scratched the
surface. As an industry, we provided the channels through which to
collaborate, as we heard today. There are entirely new engagement models
and business models that the companies hadn’t even thought of before.
Once you have that information, once you have that connectivity, once
you have that collaboration, you can begin to investigate and trial and
error.
To answer your question about measurement on
this, yes, we need measurement of the business process and the business
outcome. Let’s not forget why companies adopt technology. It’s not just
for technology sake. It’s to effect the change. It’s to effect more
efficiency, greater productivity, and new engagement capabilities.
Measuring
the business benefit is what we're seeing and what we’re advising our
customers to do. And rather than just measuring, are we tracking towards
an adoption of having more cloud in our infrastructure portfolios.
The
focus today is largely driven by the fact that the lines of business
are now more engaged in the buying decision and in shaping what they
want from a technology standpoint to help them enable their business
process. So the metrics have shifted from one of speeds and feeds and
users to one of business outcomes.
Gardner:
Bryan at TELUS in Toronto, you're closely associated with the human
resources productivity and the softer metrics of the employee
involvement and dedication that sort of thing. Are there any ways that
you can think of that cloud adoption and innovation, as we’ve been
describing, has this unintended set of consequences when it comes to
employee empowerment or that innovation equation? How do you view
measuring success of cloud adoption?
Simplifying the process
Acker:
To echo what’s already have been said, we've actually tried to simplify
the process as well. We’re not really concerned with how many users are
using the tool or how many conversations are happening. We measure our
customers success by the likelihood to recommend. Will a TELUS customer
recommend our services and products to friends, family, and peers?
We
measure internal success by our employee engagement metric. If the
customers are satisfied and the employees are engaged and fulfilled at
work, that means that we're probably moving in the right direction. We
can kind of reverse engineer to see what changes are helping us. That
allows us to take our information and innovation from the cloud and
inspire better behaviors and better process.
We can
say, "You know what, in this pocket we’ve analyzed that our customers
are likely to recommend it higher than anywhere else in Canada. What are
they doing?" We can look back through the information shared on the
cloud and see the great customer success stories or the great team
building that’s driving engagement through the roof.
We
can say, "This is the process we have to replicate and spread
throughout all of our centers." Then, we can tweak it for cultural
specifics. But because of that, we can use the cloud to inspire better
behavior, not just say that we had 40,000 users and 2,000 hits on this
blog post. We're really trying to get away from the quantitative and get
into the qualitative to drive change throughout the organization.
Gardner:
We're reaching the end of our time. I want to look a bit to the future.
What comes next? You can certainly make the argument that cloud
adoption as an IT function has been in effect for some years now and is
moving into maturity. But I think we can safely say as well that the
business exploitation of cloud models and effects is still rather new
and fresh.
And last but not least, it's about security. We take that really seriously.
So
we're still in an uncharted territory, and trying to think about where
this takes us next is interesting and exciting. Let’s start with Ralf.
Where do you see the impacts of cloud adoption in your business over the
next couple of years? What’s likely to take place there that you can
already start to see the glimmers of, the initial parts of?
Steinbach:
There are still some challenges in front of us. One of the challenges
is China. China is one of the biggest markets, but cloud services are
not always available or they're very slow. If your cloud solution is
hosted outside of China, there's a big problem. These are probably
technical challenges, but we have to find solutions with our partners
there, so that they can establish their services in China.
That’s
one of the challenges. The other is that that the cloud might change
the role of IT in our organization. In the past we owned the systems and
the applications. Today, the business can basically buy cloud services
with a credit card. So you could imagine that they won’t need us anymore
in the future, but that's not true.
As an IT
organization, we probably have to find our role inside the organization,
from just providing solutions or hardware to being an ambassador for
the business and to help them to make the right decisions. There are
still problems that will remain as the integration between different
applications. It doesn’t get easier in the cloud, so that’s where I see
the challenge.
And last but not least, it's about
security. We take that really seriously. If we store data, whether it's
employees or of our consumers, we have to make sure that that our cloud
providers have the same standards of security and there are no leaks.
That’s very, very important for us. And there are legal aspects as well.
We've just started. There are still a lot of things
to do in the next few years, but we're definitely going on with our
strategy towards the cloud and toward mobile. And, at the end of the
day, it all fits together. I think it was said before that it's not only
cloud, but it's the big data, collaboration, and mobile. You have to
see the whole thing as one package of opportunities.
Important challenges
Gardner:
Thank you, Ralf, for bringing us a bit back down to earth, when it
comes to cloud. We can certainly see the benefits, but there are still a
lot of important challenges to overcome along the way as well. Bryan at
TELUS, how do you see things unfolding? What do you think might be some
of the impacts a few years from now that we're only just starting to
realize?
Acker: On a more positive note, which
is just the other side of the coin, obviously the challenges are there,
but we're actually just starting to be able to experience the fact that
innovation at TELUS is moving faster than it used to. We're no longer
dependent on the speed at which our pre-assigned resources can make
change and develop new products.
IT can now look at it
from a more strategic point of view, which is great. Now, we're
maximizing quarterly releases from systems that are leveraging the input
from multiple companies around the world, not just how fast our
learning team can develop something or how fast our IT team can build
new functionality into our products.
We're no longer
limited by the resources, and innovation is flying forward. That, for
us, is the biggest unexpected gain. We're seeing all this technology
that used to take months or years to change now on a quarterly release
schedule. This is fantastic. Even within a year of being on our
cloud-computing system, we're so happy, and that is inspiring to people.
They're maximizing that and trying to push the organization forward as
well. So, that’s a real big benefit.
Gardner:
Tim Minahan, at SAP you have a unique vantage point, looking at many
different aspects of business technology and cloud. Do you have any
thoughts about where this can lead us in the next few years that we
haven’t yet hit upon, things you're just starting to see the first
really glimmers of it?
I think the biggest thing is that the cloud is going to unlock new business models and new organization models.
Minahan:
A lot of it has been touched on here. We're seeing a massive shift in
what the role of IT is, moving from one of deploying technology and
integrating things to really becoming business process experts.
We
talked a bit about the amount of data and the insights that are now
available to help you better understand and predict the appetites of
your customers to help you even determine when your machines might fail
and when it's time to reorder or set a service repair.
I
think the biggest thing is that the cloud is going to unlock new
business models and new organization models. We talked a bit about TELUS
and their work patterns, in which most of the workers are remote and
how they are engaging the field service technicians in the field.
We
talked about the growing contingent workforce and how the cloud is
enabling folks to collaborate, onboard, and skill up those employees,
non-payroll employees much more quickly. We're going to see your new
virtual enterprises. We're talking about
borderless enterprises that
allow you to organize not just pools of talent, but entire value chains,
and be able to collaborate in a more much transparent way.
We
mentioned before about Apple Home. You're beginning to see it with 3D
printers. It's this whole idea where more and more companies become
digital businesses. This isn’t just about on-the-channel commerce
providing a single customer experience across multiple channels.
It's
actually about moving more and more of what you deliver, the solutions
you deliver, the former products your deliver, to digital bits that can
be tested, experienced, and downloaded all online.
All of this is being empowered by this massive convergence of cloud, mobility, social and business networks, and big data.
What comes next
Gardner:
Last word to you, Ed Cone. Any thoughts about what comes next, something that could
not have been done before these cloud models emerged.
Cone:
To follow on what Tim said about the borderless enterprise, when we ask
people what’s in the cloud now and what’s going to be substantially
cloud based in three years, three of the highest growth areas were
innovation in R and D, supply chain, and HR. All of those go straight to
this idea that boundaryless digital enterprises are emerging and that
cloud will be the underpinning of these enterprises.
We're
working with Tim right now on a big global study about the workforce.
When I talk about culture and the way companies function internally, a
year ago, when we started this research, HR was the least likely
function of the ones we queried to be in the cloud, and it's going to
have massive growth in the next couple of years.
These stories start to converge of boundaryless and culture, all coming together via the cloud.
These
stories start to converge of boundaryless and culture, all coming
together via the cloud. That’s the segue to say that we're really
excited to see how these numbers look when we refield this survey this
summer, because that progress is snowballing and accelerating beyond
even what people thought it was the last time we asked them.
Gardner:
We’ll look forward to seeing that research and discussing it the next
time we get together. I appreciate that. I am afraid we will have to
leave it there.
You've been listening to a sponsored
BriefingsDirect podcast discussion on the expanding impact that cloud
computing is having at the strategic business level and not just as an
IT efficiency shift. And we’ve heard how companies like TELUS and Danone
are gaining refocused stability to extend processes and insights
broadly and affordably to their customers, suppliers and other partners
inside and outside of their organization.
So, please
join me now in thanking our guests, Ed Cone, Managing Editor of Thought
Leadership at Oxford Economics; Ralf Steinbach, the Director of Global
Software Architecture at Groupe Danone, the French food multinational in
Paris; Bryan Acker, Cultural Change Ambassador for
TELUS Transformation office at TELUS, the Canadian Telecom firm based
in Toronto, and Tim Minahan, Chief Marketing Officer for SAP Cloud and Line of Business Solutions.
And a big thanks lastly to our audience for joining us. This is Dana
Gardner, Principal Analyst at Interarbor Solutions. Don’t forget to come
back next time to BriefingsDirect.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: SAP.
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