Fred Isbell SAPinsider Projects 2016 Session: Making a Business Case for Cloud and Digital Transformation

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 0Internal
Fred Isbell
Senior Director
SAP Digital Business Services Marketing
Building a Business Case for Cloud and
Digital Transformation
Issues, Considerations, and Best Practices

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 1Customer
Agenda
 Market Context
 Innovation Adoption 101 and Digital Transformation
 Navigating Digital Transformation Technologies
– Third Platform, Nexus of Forces and Digital Transformation
– Background, Customer Successes, & Project Considerations for Cloud, Social, Big Data
and The Internet of Things (IoT)
 Best Practices for Making a Business Case for Innovation
 Wrap-up

Market Context:
Making a Business Case for the Cloud
The “Third Platform” (IDC) Digital Transformation
The “Hype Cycle” (Gartner)Innovation Adoption
The Internet of Things (IoT)
Customer Challenges
IDC predicts IoT to reach
$1.7B in 2020 from
$655B in 2014

Innovation 101 & Digital
Transformation

Business Context
The Pace of Change is only Accelerating
0% 10% 20% 30% 40% 50% 60% 70%
Pace of Change (%)
Q: Has the pace of change increased
for your organization?
No, Not at All Yes, I Think So Absolutely
33%
61%
6%
Source: Incite Marketing Customer Study, 2015

Audience Quiz
Who Pioneered These Innovations?
First Fortune 500 Web Site
First Internet Firewall
First Internet & TCP/IP Networking
First VPN/Internet Tunneling Software
First Internet Search Engine
First use of “Business Intelligence” (BI)

Innovation Adoption 101
The Model & Segmentation
Innovation Adoption:
• A model that classifies
adopters of innovations
based on their level of
readiness to accept new
ideas
• Innovative adoption
characteristics are assigned
to groups -- all innovations
go through a predictable
process before becoming
widely adopted.
• The groups consist of early
adopters, early majority, late
majority, and laggards
Source: dictionary.com
Source: Rogers, G. Moore, MIT Sloan/CAP Gemini, Wikipedia
“Crossing the chasm”
Early adopters achieve:
+9% revenue creation
+26% impact to profitability,
+12% market valuation

Innovation Adoption 101
Time to Innovation Adoption
Source: Rogers, Moore, McKinsey, Wikipedia
• Inflection point (curve begins to slow)
= point of “critical mass”
• Key -- get there quickly, whether users
or product volume, etc.
• Failure to “cross the chasm” (Geoffrey
Moore) or reach critical mass =
doomed to a smaller, sub-optimal
market and much smaller market
share
Source: “No ordinary disruption”, McKinsey, May 2015
The “Need for Speed” has never been greater

The Hype Cycle: riding the “roller coaster” of innovation
The hype cycle is a branded
graphical presentation
developed and used by
American information
technology (IT) research and
advisory firm Gartner for
representing the maturity,
adoption and social application
of specific technologies. The
hype cycle provides a graphical
and conceptual presentation of
the maturity emerging
technologies through five
phases
Source: https://en.wikipedia.org/wiki/Hype_cycle

Why Do We Need to Respond to New Technology and
Innovations?
"Innovation has created a digital
economy and digitization is
affecting all businesses and all
industries. So how do you make
this transition to digital? Simple.
Every business in here today is
in a state of transformation”.
Bill McDermott, CEO
May 2015

Digital Transformation – A Definition

Digital Transformation
The common issues we hear

SAP Digital Business Framework

Navigating Innovation
Technologies

My Innovation Journey & Navigation
IBM 3270
Terminal
c.1982
Compaq
“Portable”
c. 1983
Tech
Stack
c.2015
Desktop,
Laptop &
iPAQ PDA
c. 1998

IDC Perspective
Adoption of 3rd Platform Technologies
Enterprises are using 3rd platform technologies to create value and competitive
advantage through new offerings, new business models, and new relationships
Source: IDC

SAP and the Transition to the Third Platform
Innovation Solution Accelerators
SAP and the Transition to the
3rd Platform
“SAP, in its 40-year history, has made the
journey from the 1st Platform (mainframes) to
the 2nd Platform (client/server) and is laying
the groundwork to shift to the 3rd Platform.
SAP now delivers a growing portfolio of 3rd
Platform applications. In support of these
offerings, SAP also provides a set of targeted,
fixed-priced, and scoped packages called SAP
Rapid Deployment solutions to address the
challenges for organizations in transitioning to
the 3rd Platform.”
Henry Morris, Senior VP, Worldwide Software and
Services Research, IDC
Source: IDC

Gartner Perspective
The Nexus of Forces
• “The Nexus of Forces is the
convergence and mutual
reinforcement of social,
mobility, cloud and information
patterns that drive new
business scenarios.
• Although these forces are
innovative and disruptive on
their own; together they are
revolutionizing business and
society, disrupting old
business models and creating
new leaders.
• The Nexus is the basis of the
technology platform of the
future.”
Source: Gartner

“More than 60% of CEOs expect 15-50% of their earnings growth in the next 5
years to come from technology-enabled business innovations.”
McKinsey study, 2013
Innovation Technologies Will Drive Digital Transformation
Cloud
Abundance of cost-
effective computational
power and storage
Social
Connected business
and social networks
Big
Data
Real-time analytics
for behavioral and
predictive insights
Internet of Things (IoT)
Machine to
Machine communications
and sensor-based Data

Innovation Technologies: Cloud Computing
 Software as a Service
(SaaS)
 Platform as a Service
(Paas)
 Infrastructure as a Service
(IaaS)
 Business Process as a
Service
(BaaS)
 Public Cloud and Private
Clouds
 Collaboration & Business
Networks

Cloud Deployment Models

Opportunities & Project Considerations
Cloud Computing
 Utilize or build upon cloud technologies to
create business-relevant functionality
 Collaboration tools and integration are to key
simplifying processes
 Mobility is a key argument for and a driver of
cloud solutions
 Big data is synergistic with the cloud – much
of the use of big data originates in the cloud
 Digital marketing & Cloud integration is key
to making this happen
 Cloud computing is transforming the way that
application testing is performed – testing as
a service (TaaS?)
 Think about the business need and stress
how cloud helps you deliver against those
needs more effectively
Source: PAC 2013
“Cloud computing is
a game-changing
concept (and) is
really a way of
provisioning and
using technology,
not a technology in
itself!”
Cloud readiness
varies by region

SAP Customer Success: McLaren

SAP Customer Success
MIT
Migration to Suite on HANA in the
HANA Enterprise Cloud (HEC) builds
foundation for
 Real-time access to transactional data
 HANA Cloud Platform (HCP)
 SAP Fiori
 SAP S/4
Enable a flexible staffing model to
rapidly gain access to specialized
technical skills and quickly respond to
community needs
 Enable staff to focus on MIT-specific,
differentiated needs
 Disaster Recovery (DR) availability outside of
Boston metro area
 Improved performance

Innovation Technologies
Social Media and Digital Transformation
 Metcalfe’s Law: the value of a
network is proportional to the
square of the number of connected
users (a network’s value grows
exponentially)
 A variation Reed’s Law speaks
specifically to the utility obtained
from scaling social networks
 Pull versus Push
 Best Practices: Learn, Observe,
Listen, Jump in and Actively
Participate
 Blurs the line between work and
private life, get used to it, it’s not
going away!
“Social media spending is currently 11%
of marketing budgets and is expected to
grow to 14% in the next 12 months and
24% in the next five years.”
Duke CMO Study 2015

Social Media and Digital Transformation
 Embrace key enabling technologies: Cloud,
Big Data/ Analytics, Mobility, Social Media
and the ubiquitous Internet
 Enable the user/customer experience: Digital
products & services, digital sales and
marketing and Digital customer Interaction
 Drive a transformation of your Business &
Technology Strategy and build a culture of
innovation, participation and collaboration
 Enable collaboration across the enterprise
and beyond traditional enterprise borders
 Become strategic partner for the digital
transformation process and maintain
relevance by jumping in & supporting
“Successful digital transformation comes not
from implementing new technologies but
from transforming your organization to take
advantage of the possibilities that new
technologies provide.”
MIT Center for Digital Business
Source: PAC 2013

The Digitalist
 SAP platform for Thought
Leadership and Executive
Research
 BLOG contributions from internal
and external thought leaders
 New Executive Quarterly tablet
magazine
 Executive Research including
white papers, infographics and
more
 All shared & promoted through
social media marketing
 2M+ page views YTD, 900K
unique visitors
Executive Research
Executive Quarterly Thought Leadership
BLOGS
www.digitalistmag.com
Social Media Sharing

Innovation Technologies
Big Data and Analytics
 Navigating the Data and
Information Explosion
 Business Intelligence
 Rise of the Information Worker
 Real-Time Information Access
 Big Data on top of Next-
Generation In-memory
Database Technology is the
new “Killer App”
 Dashboards & Predictive
Analytics
 “Brave New World” of Sports
Mr. Data
Brent Spiner
“Father of BI”
Howard Dresner

Big Data and Analytics
 Add social media monitoring as new types of
data are becoming available (including web
user statistics, social media, etc.)
 Major opportunity for real-time data analytics
 Prepare for your Big Data deployments – start
by being in a “look-and-learn” mode
 Include business-oriented expertise in your
skill development
 Customer behavior analysis for the next wave
of e-commerce and social and digital
transformation
 Prepare for and embrace predictive analytics
and data science
“Ultimately, companies
are not looking for Big
Data solutions. They are
looking for business
outcomes. Service and
technology providers need
to solve business
problems”
Source: PAC

NHL.com
 Real-time Statistics w/ SAP HANA
Enterprise Cloud (HEC):
 NHL.com powered by SAP HANA
Enterprise Cloud, SAP analytics and
data visualization
 Goal: increase fan engagement &
deepen loyalty
 Includes new design, introduction of
enhanced statistics & visualization
capabilities
 Playoff prediction tool/bracket challenge
 Strong results:
– 98 years worth of NHL statistics
– 25% increase in new visitors since the
new stats section was launched
– 45% increase in time and engagement on
site NHL Customer Testimonial Video
“The Late One”:
NHL Stats:
0 GP, 0 G 0 A 0 Pts 0 PM

The Internet of Things (IoT)
 Massive amounts of data
from peoples, sensors &
devices – and growing
rapidly
 Gartner projects IoT will
increase nearly 30-fold from
about 900 million connected
devices in 2009 to more
than 26 billion by 2020
 IDC projects IoT spending in
2015 is expected to exceed
$1.7 trillion and 15 billion
devices and grow to $3
trillion and nearly 30 billion
devices by 2020
Source: IDC, Gartner, SAP 2015

Smart metering for a North American
leader in energy distribution
Honda R&D -- Connected cars & using
sensors and IoT for a sense-and-
respond paradigm to increase efficiency
Internet of Things (IoT)
Air as a service
Engine testing in real-time linking
testing applications to SAP analytics
Business & IT Outcomes

Making a Business Case for
Innovation

Making a Business Case for Innovation
Define the cost of what's not working:
 Examine inefficiencies
 Find areas for simplification
Move beyond the buzzwords to the heart of the
business problems:
 Get beyond “geek speak” (and SAPanese)
 Define the individual problems that the cloud can address
 Understand that the business case needs to be specific and
tied to an overall plan:
Define a path to success -- define what's wrong,
determine how to fix, and demonstrate why right
path to fix
Describe the current state, delineate a path to the fix
points and outline cost advantages and build a detailed
plan
3 Secrets to creating a business case for
cloud computing
http://www.infoworld.com/article/2619229/cloud-
computing/3-secrets-to-creating-a-business-case-
for-cloud-computing.html
http://www.digitalistmag.com/cio-
knowledge/2016/08/22/business-case-for-cloud-and-cloud-
solution-maturity-04410392

Navigate Digital Transformation with Leading & Innovative
Consulting & Systems Integrators (CSIs) & SAP Partners
 The Gartner Magic Quadrant (MQ)
report provides comparisons of
vendors’ products and services,
helping customers with vendor
selection by providing a detailed
analysis of products and services
 Gartner evaluates service providers
on their Ability to Execute and
Completeness of Vision
 SAP Service & Support is a leader in
the latest 2015 Gartner MQ for SAP
Services
 Click here for the latest report
Source: Gartner July 2015

Implement Solutions Quickly, Affordably, and Predictably
with Outcome-Based Services from SAP
 Deliver value throughout the
implementation and dramatically
reduce cost, risk, and time to value
 Achieve up to 40% faster time to value
with innovative implementation
approaches
 Get up and running quickly with rapid-
deployment solutions
 Accelerate project delivery with
outcome-focused methodology,
preconfigured processes and iterative
deployment

Run Live. Run Simple.
with SAP Digital Business Services
Digital Transformation Success Starts with Aligning Business and IT on
your Digital Business Strategy
www.sap-digital-business-
services.com/

Making Digital Transformation Possible (Video)

Where to Find More Information
• SAP Services Hub: www.sapserviceshub.com/h/
• SAP Services on SAP Community Network (SCN):
scn.sap.com/community/services
• SAP Digitalist: digitalistmag.com
• SAP Digital Business Services on sap.com:
www.sap-digital-business-services.com/

7 Key Points to Take Home
 Digital Transformation and Innovation are
the foundation for the future – starting NOW
 You must think differently and address a
new scale of users, devices, applications,
and data & content in a whole new way than
you are used to
 Look to SAP and customers and partners
for leadership examples and attend key
events such as SAPinsider, SAPPHIRE
NOW/ASUG, and SAP TechED to learn and
experience more
 Address the requirement for business
outcomes in your projects and make a solid
business case for innovation
 Live next-generation innovative solutions:
embrace and experience big data &
analytics and grow team collaboration with
cloud-based tools & solutions
 Subscribe to and read key sources of
Innovations and Thought Leadership such
as the SAP Digitalist and SAPinsider
magazine and on-line
 It’s a great time in the industry and our
careers to work with SAP solutions!

© 2016 SAP SE or an SAP affiliate company. All rights reserved.
Thank You!
Fred Isbell
Senior Director, Head of Thought Leadership and BMO
SAP Digital Business Services Marketing
fred.isbell@sap.com
www.sap.com/services
Twitter: Fmisbell
Facebook: Fred M Isbell
Linked In: www.linkedin.com/pub/fred-
isbell/0/827/903Edit

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