CIOs and Digital Disruption

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Timo ElliottSAP Innovation Evangelist

@timoelliott

CIOs and Digital Disruption

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Digital Business

But only 25% have a plan in place, and less than 15% are funding and executing a digital transformation plan.

– Digitalist Magazine, 2015

”

“ 90% of CEOs believe the digital economy will have a major impact on their industry.

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Executives Think Their Industry is Threatened…

Source: MIT Sloan Management Review 2015, Strategy, Not Technology, Drives Digital Transformation

76%

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…But Their Organizations Don’t Think It’s a Threat

Source: MIT Sloan Management Review 2015, Strategy, Not Technology, Drives Digital Transformation

56%

New Technology = Business Opportunity

@timoelliott

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Expectations Are High

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

”“

In the next five years, CIOs expect digital revenues to more than double, from 16% to 37%.

– Gartner, 2016

“ ”

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“What does digital business mean for your company and industry?”

CEO responses:

What IS Digital Business?

CEOs

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Digital Business

“Digital business is the creation of new business designs by blurring the digital and physical worlds”

13

IT Craftsmanship IT Industrialization Digitalization

IT provides innovations and new

capabilities

IT supports efficiency, effectiveness, and

integrity

Engage

Offer

Monetize

Adapt

Create

Ideate

Digital provides continual opportunities for growth, innovation,

and differentiation

The Third Era of Information Technology

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By 2020, information will be used to

reinvent, digitalize, or

eliminate 80%of business processes and products

from a decade earlier.

From The Back Office To The Business Models of Future

”

“

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Digital Transformation

NewCustomer Experiences

New Value Creation Models

New Business Models

Digital transformation is not about technology—it is about strategy and new ways of thinking.

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The Good News: IT is More Important Than Ever

The vast majority of CIOs (84%) agree that the role is becoming more important to their business.

– State of the CIO Report 2016 ”“

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The Bad News: CEOs Think CIOs Can’t Innovate

Almost half of CEOs describe CIOs as being out of touch with the business and unable to understand how to apply IT in new ways…

– Jill Dyché “The New IT”, 2015”“

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IT Overestimates Digital Transformation Success

Largely unsuccessful overall

Only somewhat successful overall

Successful in some areas but not in others

Very unsuccessful overall

Extremely successful overall

Non-IT IT

Very or Extremely Successful:75% of IT respondents60% of Business respondents

How successful have you been to date with your digital transformation initiatives?

Enterprise Management Associates study, 2015, tranformingIT.org

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DIGITAL TRANSFORMATION

To digitally disrupt yourself, you must disrupt your processes and your product.

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The Meteor is Coming…

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Series1

IT Controls Less and Less IT Spending

A DECADE AGO TODAY

70%

Series1 Series1

58% <50%

2017

“The trend toward business leaders making more decisions about IT spending is accelerating faster than CIOs have anticipated, highlighting the need to collaborate more with their LOB counterparts.”

— The State of the CIO Report, 2016

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“Do business people see you as Uber? Or the taxi company?”

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Who is Responsible For Digital Business?

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The Future of the CIO

Chief Innovation Officers

Chief Infrastructure Officers

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Embrace Shadow IT

Don’t fight back—be a co-conspirator…

“IT is too important to be left to the IT department, say Business Execs”

-Information Age

“Over 90% of business departments spend their own budget on IT, with sales and marketing among the top spenders”

—Forrester

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New Organizational Styles

”The days of a centralized controlled IT world are over just like the centralized state-run economy of the Soviet Union is a thing of the past”

—Forrester

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 31InternalFrom flying planes to being air-traffic controllers

“There’s nothing wrong with shadow IT, as long as you’re the one casting the shadow!”

-H. James Dallas, CIO Medtronic

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Reliability and Agility

“CIOs practicing bimodal IT are making a strategic mistake.”

—Forrester

“Customer experiences aren’t confined to a small subset of systems. Even simple purchases needs to reach back into fulfillment and billing systems.”

“Fast. Not two speeds.”

—Forrester

Suite

Applications

S/4HANA

DigitalBoardroomIcon

Analytics

C4A

BOBJ

ExtensionsApplicationsIoT

HANA Cloud Platform

(Micro-) Services

IoTPlatform

Identity Management

Business Network

CEC

Platform

HANAEnterprise

Computing Platform

any DB Hadoop

VoraDistributed Computing

Platform

SAP Platform for Digital Transformation

Workforce engagement

Digital Core

Supplier collaborationBusiness networks

Assets and the internet of things

Customer-experienceOmni channel

SAP HANA Platform

SAP’S 5 DIGITAL PILLARS

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Design Thinking

Understand

Ideate

Prototype

Test

Build

Deliver

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DIGITAL TRANSFORMATION

“It’s time to go fast; you cannot out-slow the competition.”

Sharyn Leaver, Forrester

Thank You!Timo ElliottVP, Global innovation Evangelist

Timo.Elliott@sap.com

@timoelliott