SuccessConnect 2014: View to the Future of Digital Business

What is Happening?

At the SuccessConnect event in Las Vegas this week, Saugatuck was able to speak with more than a dozen customer attendees along with key executives from SuccessFactors and SAP, including SFSF co-founder and CTO Aaron Au, Chief Marketing Officer / SAP Cloud and Line of Business Tim Minahan, and Sven Denecken, Global VP Cloud Solutions and Co-Innovation at SAP.

Throughout all of our conversations, three key threads emerged regarding Cloud, HR solutions and strategy, and SAP itself as follows:

  • Concerns: We found it fascinating that none of our customer conversations touched on Cloud concerns – including security. No mentions were made about data security and privacy in the Cloud. Instead, discussions tended to focus on the specific, tactical concerns relative to any new software deployments, namely integration, data migration, and time to completion. This is another powerful sign that the “Cloud experiment” truly is over.
  • Strategy and Modularity: We found no one with an actual “Cloud strategy” in regards to their Cloud procurement approach. Instead, businesses are building on, enhancing and extending business processes and management with a variety of solutions. In our conversations there was no hint of a broad enterprise movement toward Cloud-based solutions exclusively. Consistent with the broader Cloud HCM segment, many customers are retaining existing systems in certain areas such Learning, Payroll, or Performance Management, while others are using the modularity to extend their on-premises core HR solutions with additional SuccessFactors Modules like Recruiting, Talent Management, and Workforce Analytics. All indications are that current SFSF customers are planning on embracing fully hybrid deployments in their HR systems, and that while complex integrations are far from being a solved problem, SFSF’s implementation partners and 3rd party integration vendors like Dell Boomi, and Informatica are able to make the complexity manageable.
  • Maturity: Our conversations with customers here at SuccessConnect, and with enterprise IT and LOB leaders globally, continue to indicate that, while nowhere near its final form and capabilities, Cloud has matured enough that its perceived and real risks are equivalent to those of most other mainstream forms of IT. That means that Cloud can be acquired and managed as would most other forms of Business IT, even as it enables and catalyzes business transformations.

In short, we’re learning to manage Cloud as it should be – a key Business IT component and catalyst. Next, and soon, we must learn to manage business change, as our Business IT continues to transform. Continue reading

Apple Watch and iPhone 6 Lead The Way for IOT Adoption

Today Apple announced a new line of iPhones, the long rumored Apple Watch, and their long-rumored payments system Apple Pay, which is built off of NFC capabilities, coupled with their Touch ID system. Amid the announcements, one thing was absolutely clear across all the devices, and services, that Apple announced: The Internet of Things is here, and Apple is leading the way.

Across the new devices, the presence of more sensors, chips, and processors points to how device and application makers like Apple and its App Ecosystem are focused on gathering, processing and reacting to more real-world inputs. Already iPhones are an impressive array of sensors for such a small package, and the new iPhones add an NFC chip, a gyroscope, a barometer, as well as the new M8 Motion processor, designed to help App Developers take advantage of all these new motion tracking chips without overloading the processor and draining the battery life. Additionally, the Apple Watch adds additional sensors to the ecosystem, an additional accelerometer, a heart rate Monitor, a gyroscope, an NFC chip, and a haptic feedback chip. With multiple overlapping capabilities between iPhone and Apple Watch, app developers will have an even more complete picture of how you are interacting with your environment, and how to appropriately interact with you.  Continue reading

Call for More Nominations: Saugatuck’s Beacon Awards for Business Innovation

What firms do you know that have innovated, improved themselves, and profited from Digital Business initiatives? Tell us about them, so we can tell the world about them through the 2014 Beacon Awards for business innovation.

Every year, the Beacon Awards recognize user enterprises that have re-thought, re-invented, or built new businesses, created new opportunities, or reshaped the future of their company, their markets, and their customer/partner ecosystems through the innovative use of Cloud and other digital technologies.

Past winners have implemented creative mobility strategies that improve customer engagement, cultivated new software development approaches that improve business operations, and developed software+services that productize internal operations into industry-beneficial solutions.

Now through September 30, 2014, you can nominate your firm, your customers, or your partners. Click HERE for more information and for details on how to submit a nomination.

Nominations must be submitted via email to Continue reading

Workday Update – HCM in Full Stride, Financials Gaining Traction

Last week we had the opportunity to get briefed by Workday on its Workday 23 release, with a focus on its Financials suite. On Friday, I also took the time to fully absorb the transcript from Workday’s second quarter fiscal 2015 earnings call, as published by Seeking Alpha (good read – highly recommend).

It is clear that the company remains on a tear, as it reported second quarter revenues of $186.8 million, up 74 percent from a year ago – with “anticipated total revenue of approximately $760 million to $770 million” for the year (up 62-64 percent year-over-year), and subscription revenues ranging from “$592 million to $602 million, reflecting year-over-year growth of 67 to 70 percent.” Total derived billings for the year are anticipated “to be approximately $940 million to $960 million.” That is right – nearly $1 billion!

There is little doubt that the HCM product line continues to drive the boat, with an expanding arsenal of add-on products (e.g., recruiting) that is significantly increasing the average contract value per customer. Workday now reports that it has over 700 HCM customers, which is a good jump up from the 500 + reported at the analyst event associated with Workday Rising last September. On the HCM side they clearly can now scale to the largest of enterprises, having announced Bank of America as a new customer with 300,000 seats.

On the financials side, Workday is likewise gaining traction – reporting that it now has 100 customers for its Financial Management application. This is up from the roughly Continue reading

Beyond Apple, Cheap Mobility Catalyzes Digital Business Now

What is Happening?          

This Research Alert is being written on the eve of this year’s highly-anticipated Apple product announcements, which should include a new iPhone priced in the $700 range, along with one or more wearables that complement and extend the Apple ecosystem and revenue streams. Apple certainly has been successful with high-end smartphones, tablets, and associated devices and services, and as such, has helped to pioneer, promote, and shape growth in consumer and business mobility in a very high-profile manner.

What lurks further down the food chain from glossy i-devices is what enables and catalyzes business mobility for the vast majority of Boundary-free Enterprises™ and the accelerating trend toward Digital Business. Juxtaposed against Apple’s high-end rollouts comes news of a $99 smartphone selling out online in India in less than 5 seconds, while more than a dozen manufacturers promote sub-$50 smartphones, with more planning sub-$30 smartphones for developing markets within the next 12 months. Meanwhile, cheap-yet-functional tablets have so saturated business and consumer markets that pundits fear the form factor may have plateaued if not dead-ended in some markets.

We (almost) suddenly have billions of digitally-enabled users globally, with at least twice that many affordable and easily-used devices being used to perform and adapt daily life and business tasks into digital, Cloud-enabled marketplace realities. The net result? Cheap, “good enough” smartphones and other mobile devices, enabled and supported by Cloud-based functionality, are catalyzing a user-driven Digital Business reality well beyond that conceived by many, if not most, western enterprises and IT providers – and of which few are ready to take full advantage. Continue reading

Is Consistency Killing Your Security Profile?

There are enough security standards to cover the earth, many times over, and yet we are no more secure today than we were without the security checklists that have been developed over the past few decades.

We deploy the same PCs, laptops and servers throughout the enterprise. We encourage our employees to use the same mobile phones. We make sure our routers and switches work identically throughout the network. We make sure our security controls operate the same everywhere.

Hackers depend on our consistency and lack of attention to the human element. They know we are obsessively focused on consistency throughout IT operations, they depend on our exclusive focus on technology controls and procedures, and they know that our employees are easy bait for lures that seem irresistible. They also know that they can learn anything about our systems and controls they’d like. We place great emphasis on form, and not substance by continually referencing our standards and policies, and then publishing these to the world through our websites. We give our adversaries the tools needed for more effective reconnaissance and intelligence gathering. We pride ourselves on passing audits year in and year out, not paying attention to the fact that audits are not security. Continue reading

Digital Business Insights – CXO Field Notes

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Source: Saugatuck Technology

It’s the early days of Digital Business at most enterprises, with much left to learn and experience regarding how it is to be accomplished and success measured. No doubt, new strategies, skills and metrics are needed to realize the major promises of Digital Business. This includes successfully leveraging all of the tools associated with enhanced customer engagement, implementing new business and operating models, new customer targeting techniques and creating entirely new digital products, services and revenues, among other things.

As part of our ongoing research agenda, we recently reached out to more than a dozen senior IT, marketing and finance executives in our network and conducted deep-dive briefings around their Digital Business experiences, and best practice guidance.

Readers can listen to a podcast summary of one of these conversations in a recently published LENS 360 blog post – Executive Insights with Vinay Mehra, CFO at WGBH. Continue reading

Real Transformers: Digital Business Processes

Digital Business will impact every area of business, and have a transformative effect. Our most recent Saugatuck survey demonstrates that, while the need for change is well understood, the potential for widespread disruption really is not. Enterprise transformation—truly significant change–occurs for a variety of reasons, but has a fairly dismal record of success. It requires an overall vision, an implementation plan, and significant organizational support. Although some changes can be introduced gradually, the complexity of the change s means that it needs to be understood as a single process.

Data from Saugatuck’s recent Digital Business survey show a number of organizational impediments, topped by “Organizational willingness to change or evolve business processes.” This is significant in reinforcing the idea that Digital Business is a truly transformative trend – i.e., that it requires a significant organizational commitment, and is perceived as affecting numerous processes throughout the firm. It also places the time-honored concept of enterprise transformation, with its less than stellar history, in the spotlight.

1432MKT_Figure1  Continue reading

Holistic Costs for Cloud Adoption

In a recently published Strategic Perspective, Saugatuck offers guidance to Enterprise IT organizations striving to improve the services they deliver, and reduce infrastructure costs by adopting Cloud offerings. Saugatuck articulates that the charges levied by a Cloud provider may be outweighed by other costs. Thus, it is crucial to understand the holistic costs of Cloud adoption, including:

  • Charges Levied by the Cloud Provider for Basic and Optional Functions
  • Project Execution and Ongoing Management Costs
  • Costs Related to Cloud Efficiency and Automation

Continue reading

Digital Business Models and Monetization, Part 1 – Four Approaches Compared

Since the advent of the Net, there have been a number of different business models to monetize services and content that have evolved very little. We still have

  • Free and “Freemium”
  • Subscription
  • Metered
  • Revenue and Profit Sharing

Other business models are variants of these four. Of course, it’s fair to say that variances in these models can be competitive advantages, at least temporarily, if they increase convenience to customers, ensure repeat business, enable less costly payment processing or increase the average invoice amount.

However, monetization is never simple because business models aren’t simple. There are always proprietary wrinkles that each provider develops to enable a competitive advantage. Nevertheless, there are identifiable characteristics to the pricing permitted under each of these business models. Each offers advantages and disadvantages, and requires a thorough understanding of its strengths and challenges. Continue reading