Podcast: The Importance of Innovation in a Post-COVID Era

This is an episode of the SAP ANZ Best Run Podcast that I recently recorded with Rushenka Perera, Head of Marketing, SAP ANZ. We discussed why businesses should be innovating to combat global disruptions as well as some examples of how businesses are benefiting from their innovation projects

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ANZ podcast edited transcript

Rushenka: Hello everybody and welcome to today’s edition of the Best Run Podcast brought to you by SAP. Today we’ve got a boomerang speaker. I’ve got Timo Elliott with me in the studio and Timo was last on this show in 2020. Today we’re going to be talking about innovation in the post-COVID era. Timo, we’re really pleased to have you on our shores because Timo actually isn’t even based in Australia. Tell us a little bit about yourself.

Timo: I am French. I live in Paris. Yes, it’s been a long way to get here, but I’m very glad I did. In fact, I landed at 7 a.m. on Sunday morning and by 9.30 I was surfing at Manly. So that was already a great opportunity for me here.

My role at SAP is I’m an Innovation Evangelist. That involves working with customers on the leading edge of innovation, gathering the lessons learned and then sharing that with as many people as possible so that we can all be more successful.

And you were telling me before you’ve been to 60 countries with SAP.

I’ve been with the SAP for around 31 years now, always working in innovation roles closely with customers on the latest generation of technology.

Fabulous. Timo, can you please start by telling us what has brought you to our shores?

I’m here to present at the Gartner Data and Analytics Conference. I did a session at the start of this week on basically putting the business back into business analytics. And then yesterday we had a great session covering innovation for the public sector.

Over the last two years, we’ve obviously been embroiled in the pandemic and hopefully that’s come into a close, fingers crossed. So why don’t you give us some of your observations about what we’ve seen over the last couple of years with businesses trying to navigate through that disruption?

Well, the most interesting thing for me, of course, is that it vastly accelerated innovation because companies had to in order to survive. They had to digitalize any manual processes. They couldn’t rely on people coming to the office. They had to do things in new ways. I was talking to a customer, Decathlon, they’re a large retail sports retailer in Paris. And the Chief Value Officer put it to me this way: he said, “nothing is impossible anymore.” In other words, they had a lot of innovation planned, but because of the pandemic, all of the barriers that normally would have taken years to overcome, they were able to do very quickly because the initiatives they had were absolutely necessary in order to be able to keep doing business.

So that’s the most exciting part of it — the move to e-commerce, people buying online, more sustainable products and so on. But the other thing that happened is that because people were in a hurry to innovate, they ended up doing it in silos. And I recently saw some data from IDC that showed that a couple of years ago, around 25% of organizations said that their way of doing innovation was in islands of innovation — so the vast majority of them said they had a more strategic approach. And unfortunately, those numbers have gone down—people innovated in a silo because they didn’t have time to do it in a more strategic way. And so now it’s only about 50% of organizations that say that they have a strategic approach.

So, unfortunately: there’s lots of innovation. But because of all these new silos, it’s actually harder to do even more innovation in the future.

Yeah, and I imagine with those silos, it’ll be slower as well because everyone’s working in isolation and therefore, to actually progress faster is going to be slower.

Everybody wants to innovate faster. That’s the number one thing that everyone wants to do. And all of the analysts are in agreement with what that looks like. It’s about having a solid information foundation and then a more flexible set of building blocks so that people can put together new applications more quickly and easily in terms of services. But of course, getting to that new way of working is not as easy as it sounds. Absolutely.

And in your travels, you would have talked to a number of leaders across businesses. So give us some insights into what their concerns are, what their questions are to you about innovation.

I’d say that one of the things that has changed at least because of the pandemic again was new ways of working. People were agreeably surprised to find that they’re able to do big go live projects for big strategic business application changes. Even with everybody working from home, everything 100% remotely. And of course, now we can all meet face to face, but people are retaining some of those benefits. So that’s been great. We are innovating faster because we don’t have to spend as much time in face to face meetings. We can do it remotely. We have employees around the world and so on. So that’s been one of the biggest benefits. I think the ongoing concerns are such that the pandemic hopefully, fingers crossed, is starting to ebb mostly behind us in most regions of the world. But of course, it’s not like there aren’t other problems in the world. So there the supply chain problems are continuing. In Europe, we have a horrible war. There are that’s resulted in high energy costs everywhere. We have the inflation, the threat of recession, the existential threat of global climate change, extreme weather events. I understand here in Australia, there’s been a lot of flooding and forest fires.

All of that is creating a new atmosphere of uncertainty. The people want to be able to create foundations for their organization to be able to react faster because they don’t know what’s coming. So the key is flexibility and agility and the technology foundations that support that. And those companies that did actually innovate over that Covid era, they were able to differentiate themselves even more in whatever industry they’re in. So for those companies that didn’t, what’s your viewpoint on what they should be doing to looking to do to innovate?

Some of those organizations are no longer around because unfortunately, a lot of businesses did fold with all of the lockdowns and it was really hard in a number of sectors. But the organizations that were able to innovate have survived, sometimes even thrived. E-commerce organizations are almost embarrassed about how well they’ve done during the pandemic period. Any advice to other organizations? I think one of the key things that has gone away, I hope, is that some organizations were a little complacent about, you know, why innovate? My business is stable. I don’t need to do anything differently. But that’s a little bit like standing on a down escalator. You’re slowly moving backwards compared to the rest of the environment. In order to stay still in modern business, you have to be walking up the down escalator. You have to put effort in because the environment around you is evolving. Customers have higher demands. Your employees have new expectations. Your competitors are upping their game. So you have to do a certain amount of innovation just to stay still.

Yeah, great analogy. Just in terms of where do people begin? So, you know, people usually think, oh, this is this great big thing that I have to tackle. It’s all too big. Can I put it to a side? But where would you advise people to begin?

It goes back to what the analysts are saying about this digital technology platform approach. So you have a core set of systems. So having a clean core in the cloud these days, because that means it’s much faster and easier to implement. What Gartner, for example, calls composable applications on top. So most of the organizations I talk to are on that journey. So they’re moved some of their systems to the cloud. They’re thinking about moving more. It’s never going to be 100% of the cloud. There’s always going to be some systems they want on premise. But thanks to those systems that are in the cloud, then they can start building the blocks of innovation on top. So a first step is often the ability to do more analytics in the cloud. It’s faster and more flexible. Organizations have invested a lot in technologies to allow more automation, allowing business people to get rid of the most boring parts of their jobs. And now there’s a huge new wave of solutions such as a low code, no code solutions where business people can start doing more of the innovation themselves.

And are you seeing differences in the sizes of organizations and industries in terms of who’s innovating?

It’s a really hard question to answer because there’s innovation everywhere. It’s not really an answer, but I’d say that the one thing that I’ve noticed is that innovation used to be really siloed by industry. The companies in a particular industry would look to that industry for for what to change and improve. Now it’s much more open. You know, banks are realizing that they can learn from retailers and retailers are learning that they can learn about the Internet of Things from manufacturing companies. So there’s a lot more transparency, a lot more sharing. And the average level of innovation awareness is going up. And the same is true across regions. Again, because everybody works remotely, because there’s so much transparency across the world, there aren’t really pockets anymore of industries that aren’t innovating. That said, clearly the businesses that are based on data tend to be the first to try things out. It’s harder to innovate in the physical world. You actually have physical assets. It takes a little bit longer. So things like banking or telecom, they’re often the first to try out new things because they don’t have to convert their factory.

It’s a good segue to our next section, which is technologies for innovation. So what are some of the technologies being used by businesses for their innovation projects?

The biggest and most exciting area for me, at least, is, as I mentioned, around no code and low code, because everyone wants to innovate faster. How do you do that? Well, one of the biggest opportunities is to accelerate innovation by letting business people do more of it themselves in their area of expertise without IT and technology being a bottleneck. So I talked to a customer a few weeks back who explained to me that he believes that his knowledge workers know exactly what’s going wrong in the business and they know what should be done to fix it. But they feel powerless. They feel like they’re at the mercy of the machine because they can’t fix it themselves. All they can do is point it out to a technology team. But that technology team, there’s never enough time. There’s never enough resources. There’s always a backlog. So, you know, the answer is no, we can’t. We don’t have time. Or yes, in a year’s time, we’ll get to look at it. Now, these new tools are becoming really powerful, where business people can create their entire applications and workflows and analytics and collect data themselves and model it and do it all themselves.

That’s a big opportunity. There are some dangers, because if you let anybody in your business do that, the result is probably going to be chaos. Not everybody is ready to be enabled. Everybody is going to recreate the wheel and get calculations wrong. So the right approach is not low code or no code or pro code, but co-code, where you have a combination of the technology teams putting into place the Lego bricks that reflect the different objects of the business, like a customer or an invoice and so on. Or it could be a block saying, take action, bill a customer, provide an offer to this prospect. And then the business people can take those blocks and use them and change the order and wire them up in different ways and have different authorizations and so on. In the knowledge that they’re going to do that in a way that isn’t going to be damaging for the system, it’s going to be scalable, it’s going to be compliant, follow all of the security laws and so on. Great. Now in your travels, you want to come across one that stands out. So is there a business innovation project that you could share with us without giving away any trade secrets?

This is one of those ones where it’s just almost impossible for me to choose an example, because I mean, my job is to work with hundreds. But I did choose one. And so since we’re just talking about this theme of business user empowerment, one nice project was done by DHL, the packaging people, logistics. It was actually the business unit that put together an application using one of these new low code, no code tools. And it was designed, it’s a mobile application for the drivers of their trucks. When they go to start their shift, they first have to do a visual inspection of the truck to see if there’s any damage, a little bit like we do when we pick up a rental car. You check to see if somebody else has damaged it before. So this app allows you to take a picture of any damage you see, and then upload it to the core systems with some information about where the damage is and so on. And it’s a nice little attractive application, but what’s fascinating about it is that it was created without a single line of code. And without any of the core IT people having to deal with it, because it uses this interface that allows you to just literally drag and drop blocks.

There’s a block that says take photo. And then once you’ve taken the photo, you can say upload photo. You don’t have to deal with any syntax or anything complicated. So again, it’s unleashing the ability for business people to create these applications as long as those building blocks are correctly defined in the first place.

Great. So last question to you. So if you had a crystal ball, what do you think the technologies of the future would be and how would they drive innovation in business?

Let me go big picture on you. In general, whenever there are new technologies that change the way we do things in some significant way, we adopt the new technology in enterprises. But it takes a long time for us to really optimize the use of that technology. You may have heard of historical examples such as when factories moved when they were initially based around steam engines. So there’s a central engine with a whole series of complicated belts that would transfer the power to the rest of the factory. When electric power came along, that provided new opportunities to have many smaller electric motors. But because of some costs and habit and the cost of change, most factories just replaced the steam engine with an electric engine and did it the old way. And it took about 50 years, historians reckon, before that next generation of factories was actually built around these new opportunities of doing things in different ways. So I think we’re on that journey right now when it comes to cloud technologies. So cloud isn’t new. We’re adopting it. Organizations are doing it. But in many ways, we’re using it the way we did old technology.

For example, take data. So I’ve worked with data and analytics for the last 30 years or so. And for the most of that time, the number one step and data is the lifeblood of innovation. It’s absolutely crucial part of digital transformation. The first step was always to rip the data out of the existing systems and then move it to some dedicated analytics environment. And we did that because the technology limitations, you just couldn’t do the analytics in an operational system. The problem with that is it’s a bit like taking a tree and ripping it out of the forest and then trying to get it to grow in a different environment. You’ve lost the roots, the complex metadata and the business context of that information. So you can get it to grow in a different environment. It just takes huge amounts of time and effort. And it’s reckoned about like 80% of the effort of doing some sort of analytics project is the recreation of what you lost by moving the data there in the first place. So we’ve had data warehousing and then data lakes. And now there are vendors providing data lake houses and data clouds.

But it’s still that vision of step one, bring all the data into one place. But of course, in a cloud environment, that doesn’t make as much sense anymore because it’s all in the cloud. And we can move to a more connecting information rather than collecting information approach. And so you just don’t have to do it the old way anymore. And again, the analysts are responding to this. They have this notion of data mesh or data fabric, data orchestration and data pipelines. Where as much as possible, you leave the data where it already is with all of that rich business context and you bring it together as and when it’s needed in order to do some innovation. And this is enabling organizations that are adopting this kind of approach. It enables a way of dealing with innovation where you can do it at more of a business abstraction level because you can deal in the kind of business concepts that have already been defined in your core systems and combine those Lego blocks as you want. Instead of having to deal with columns of data and data extraction and so on. So that is people that can now do innovation based on business process and what business people care about, about KPIs rather than feeds and speeds.

And the other big benefit is because you’re dealing with this business objects, it’s also much closer. It’s easier to translate that to these new business technologists. These power users are going to be creating these composite applications. So that’s the big picture aspect. I think we need to accelerate that as organizations moving to this more business focused approach to innovation. Thanks to really leveraging the modern aspects of the cloud. The other thing I’d say, if you’re like real full on crystal ball, like way out there. The next level of this is one click innovation, where because it’s all in the cloud. You can, we already have technologies that allow you to peer into existing business processes and spot where there are potential problems. And we have big databases of benchmarks of how organizations handle this. So in theory, you could click a button, it would go and build a prioritized lists of the business process problems that it finds in your organizations compared to others. You’d select, okay, I’d like to do that one. And again, it’s all in the cloud. We have the best practice approaches from a vast ecosystem of providers who know how to do that really well.

Whether it’s AI powered invoicing or whether it’s new ways of establishing customer experiences using IoT, there are off the shelf technologies that exist. We should be able to just install them for you.You would click the button and it would just appear in your environment with like seamlessly with all of the existing systems that you’re already using. You wouldn’t have to concentrate on the technology and you can instead concentrate on the business and people and change management and culture aspects.

That makes a lot of sense to me as a business person. I think that would be a fantastic thing if we could actually get that going. So, Timo, it’s been great having you on the show. You always provide some great experiences and also insights into what we can expect. So thank you very much.

Thanks, everybody, for watching and listening today. And you’ve been listening to the best run podcast brought to you by SAP. You’ve been listening to the best run podcast brought to you by SAP.





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