What is Your Driver for Change?

April 13, 2017 Xavi Herce

The key to David Bowie’s longevity, along with many of his contemporaries, was his ability to reinvent himself. Bowie, just like any business, did not want to be disrupted and lose his ‘popular’ status. He changed and evolved his image over the years, from psychedelic to glam rock artist. This mitigated Bowie’s risk from competition in the global music market, where the ability to adapt to changing trends is critical for survival. It was his key to opening new doors.

In a series of blogs, starting with this installment, I will share some of my views and suggestions on different aspects that will influence your digital framework. From new value propositions and ROI payback calculation mechanisms, to measuring productivity and innovation, to take advantage of new hyper-scaling platforms.

Nowadays, we are exposed to commonly heard trends: digital, consumerization, one click culture, expectation economy and so on and so forth. I will try to put these phenomena into a business context to show how they are affecting us.

The Challenge

CEOs and CIOs face ongoing new challenges and need to bring IT and the business closer together. They need to work hand in hand to establish how new digital lines of business can quickly be created. Some of the most common situations that they will need to address are:

  • Legacy systems and CORE modernization
  • Integration capabilities
  • Hybrid environments (cloud & on premise)
  • Data quality (governance strategies)
  • Digital skill gap (HR)

My Takeaway: Digital transformation is first and foremost about people, helping these people to embrace the change. Protect your teams and don’t let them feel threatened.

The Value Levers

The first place to look for value, is within the organization’s existing assets. These are investments that the organization has already made in culture, expertise, and resources and they currently generate operating income for the firm. Bear in mind that most of the economic or business innovations stem from little ideas. These affect the way you organize your business, including the way you offer customer promotions for example.

  • Increase cash flow generated by existing investments
  • Improve operating efficiency
  • Reduce the tax burden
  • Increase the expected growth rate in these cash flows in the future
  • Increase the length of the high growth period

My Takeaway: When we talk about valuation, it is the way companies measure and manage their values. Companies create value by investing capital at rates of return that exceed their cost of capital. Companies thrive when they create real economic value for their stakeholders.

The Game Changer

From our experience, we find that companies are already aware of the current digitization trends and at an executive level they are embracing changes to adopt flexible and scalable models faster.

What you need to do is “Plan value generating projects early”

  • Value Discovery, strategy assessments.

Which areas within your company can you quickly bring value to? With today’s technology, you can apply data mining techniques to your processes to discover where you will get the best return on your investments. Ensure that you take feasibility and stakeholder value into account in this equation.

  • Validate; Fail fast, succeed fast.

Close the gap between business expectations and delivered value by embracing proof of concepts. With cloud technology and pre-assembled scenarios, you can quickly validate project feasibility.

  • Value Delivery, run simple.

Nowadays, we are all exposed to an avalanche of information: new products, new solutions, and new methodologies. We believe that one of the secrets for a successful transformation, is to have an integration strategy in place to minimize disruption whilst adopting innovations, enhancing your product feature, or implementing new best of breed tools for an optimal customer engagement experience.

Embrace the ch-ch-ch changes

“Ch-ch-ch-ch-changes
Turn and face the strange”

https://www.youtube.com/watch?v=zbnJo88kuP8

About the Author

Xavi Herce

As a VP in Solution Architecture at BackOffice Associates, Xavi is responsible for implementing S/4HANA and helping customers to adopt the latest innovations from SAP. He is passionate about making Digital Transformation really happen. With SAP Functional Business expertise and extensive experience in Finance and Logistics, he brings a wealth of SAP knowledge to customer engagements.

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