When we talk about ‘analytics’, most of us tend to think that it is reserved for the top management. However, analytics should not be reserved for the chosen few at the top, but for all employees, cutting across various departments within an organization. Unfortunately, the reality is that top management in most companies keep analytics for themselves. This results in limiting the thinking capability of employees, keeping problem-solving and innovation at a minimal level. This creates a ‘thinking gap’ that organizations must avoid.
During the pre-internet era, most ‘analytical thinking’ was done by teams directly under management. But today, the best source for the best metrics that help management make the right decisions at the right time are found with employees working at the bottom of the pyramid. Enabling them with high-end analytical tools and techniques creates the potential for bringing out the critical thinking and innovative problem-solving for which all businesses yearn.
However, even today, analytics lacks enterprise-wide penetration in most organizations, according to a recent study done by SAP. This creates that thinking gap referred to earlier.
Closing the Thinking Gap
According to the study, achieving this enterprise-wide penetration of analytics tools become the responsibility of the IT group. IT must extend analytics to the widest possible base of business users in order to deliver the insights management requires to achieve better and faster decision-making.
Simultaneously, management must begin the effort to build a data-driven culture. Ensuring that business decisions are based on real-time data is crucial to achieving organizational objectives. To this end, arming your employees with analytical tools under a self-governance structure controlled by IT ultimately leads to far-reaching results. Many companies today are rapidly moving towards a single version of the truth where the business users are more aligned with the company strategy.
I think it is time for us to embrace a data-driven culture as well. What do you think? Let me know.
At Phoenix, we help companies become intelligent enterprises. Reach out to me if you wish to learn more about our services.
SARASOTA, FL, March 14, 2019/ PRESS RELEASE — Phoenix Business Inc. (DBA Phoenix Business Consulting or Phoenix Team), is proud to announce the recognition bestowed by SAP as an SAP Gold Partner in the SAP PartnerEdge program. SAP Gold Partner status is an achievement reserved for an elite group of value-added resellers offering the latest in technology solutions from SAP including SAP S/4HANA, SAP S/4 HANA Cloud, SAP HANA, SAP Business ByDesign, SAP Ariba, and SAP Analytics Cloud.
SAP elevates partners to SAP Gold Status after achieving value points from excellent customer references, business execution and performance, solution expertise, consultant qualification and certification. The rigorous process showed that Phoenix Business Consulting constantly exceeds customer expectations and received high Net Promoter Score marks from their clients.
Hanif Sarangi, President and CEO, is honored with this achievement. “We are grateful for this recognition from SAP. We take great pride in our ability to deliver excellent customer experiences in our implementation, production support, and application management services.” said Sarangi, “We are pleased our commitment to excellence has been recognized after more than 20 years in the business and over 100 successful implementation projects in the Public Sector, Utilities, and Consumer Product Manufacturing industries. “
Director of Business Operations, Vikas Pathak, added that, “Our greatest asset is our people – knowledgeable, client-focused, and results-oriented. Our consultants are experienced professionals and true experts in their fields. Providing outstanding client service is a core element of our engagement approach and support methodology. By working closely with our clients to thoroughly understand their technical, functional, and business environments, we deliver tailored solutions to meet, and often exceed, their expectations.”
Perhaps not known to all, Phoenix Business Consulting is one of the first SAP public sector consulting firms who focused on implementing SAP to State, Local and Educational (SLED) institutions. Joe Thompson, Director for S4 HANA solution and Integration Architect, said, “We will continue to support SAP in developing public sector solutions and ensure that best practices are incorporated in new releases especially S4 HANA Cloud. As one of the go-to partner in the SLED space, we believe we have the responsibility to protect the interest of our clients and add value to SAP by lending our knowledge in Funds Management, Grants Management, and Budget Planning.”
As an SAP Gold Partner, the Phoenix Team will have access to a wide range of tools and solutions for its clients and partners. JL Diaz, Director for Business Development and Channel Management, said “The Gold Partner status is a significant milestone that will help us deliver unparalleled value and mutual business success for our customers and support partners. We are inspired by the new doors and opportunities this new status will open in the future.”
About Phoenix Business Consulting:
Phoenix Business Inc. (DBA Phoenix Business Consulting) is one of the nation’s leading niche SAP consulting services firms, serving organizations of all sizes and types. Since 1998, Phoenix Business Consulting has worked with numerous entities in the Public Sector and Private Sector. Headquartered in Sarasota, Florida with support offices in India, California, and Canada, we have built a global SAP ERP presence through a focused approach of helping clients transform their business processes and legacy infrastructure into modern, fully integrated solutions. Phoenix Business Consulting has a true passion for using Leading Business Practices and Public Sector Best Practices to implement SAP. This methodology reduces risk and provides a safe choice when choosing an ERP solutions provider. The employees and consultants of Phoenix Business Consulting are highly skilled and experienced in implementing, maintaining, and supporting the latest SAP solutions, which includes: Cloud ERP Solutions, SAP HANA, SAP S/4HANA, SAP Business ByDesign, SAP Ariba Solutions, SAP Ariba Snap, and Application Management Services. Utilizing and applying these SAP solutions enables our clients to better serve their constituents, employees, and shareholders.
To learn more about Phoenix Business Consulting visit www.phoenixteam.com
About SAP Company:
SAP is the market leader in enterprise application software, helping companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an SAP system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. Our end-to-end suite of applications and services enables our customers to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improves people’s lives. To learn more about SAP visit www.sap.com
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SAP, SAP HANA, BusinessObjects, SAP S/4HANA, SuccessFactors and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. See http://www.sap.com/corporate-en/legal/copyright/index.epx for additional trademark information and notices.
For more information about our services contact us at 1-888-690-0808 or email us here: Contact Us
Why should companies invest in ‘Intelligent Enterprise’ powered by SAP Business Suite in 2019?
2019 promises to unveil a slew of surprises from the technology and business perspectives. What we saw in 2018 was just a glimpse of the potential of technologies such as AI, Blockchain, Digital Core and Machine Learning. This year, though, is when those technologies begin to fulfill their potential. How? As organizations of all types brace themselves for the full force of the digital storm, these technologies taken together are expected to deliver the benefits derived from what experts are calling Experiential Transformation.
At its heart, experiential transformation is all about changing your customer’s mindset from ‘meh…’ to ‘WOW!’ A transformative event of this magnitude can only be triggered through powerful suggestive intelligence backed up by compelling data analytics and significant digital automation. As one might expect, this requires an investment of resources. However, the downside is that the companies who willingly invest the required resources in effective transformative technologies very often fail to realize the ROI coming from the value resulting from those investments. As a result, most businesses fall far short of their intended targets, in terms of both value and timing.
The reality is this: The rapid rate of technological evolution driving experiential transformation is forcing even the best organizations to develop new digital initiatives today. They do this in hopes of effecting that change in the customer mindset. Those readers who doubt this might want to review the following quote, taken from a survey conducted by SAP:
“72% of CEOs believe that the next three years are more critical for their company than the last 50.”
[From an SAP survey]
Do all companies need to transform?
In the digital age, three years go by in a flash and the old survivalist truism- adapt or die- is more real than ever before. Eventually, the cresting wave of digital and experiential transformations will compel businesses everywhere to reinvent themselves and evolve. The point, though, is that many industries feel the intense pressure from without and within to transform their business models now. To illustrate this, SAP AG categorized the various industries into High Winds, Severe Storm and Hurricane categories, which provides perspective on the digital storm and its effects.
Approximately 500 SAP customers were analyzed in ana effort to determine the focus and progress of their own digital transformations. This analysis grouped these companies into three categories: reimagine business model, reimagine process, and reimagine work. “Companies which are in the eye of the storm/hurricane are more focused on business model innovation. Others who are on the opposite end of spectrum are more focused on process innovations and employee experience.”
This article began by mentioning that 2019 will be a year of surprises. While many are still in their formative stages, here’s one surprise we believe is definitely going to manifest itself in the near-term: Lesser known companies that made their modest beginnings in 2017-18 are now more than ready to take on their larger competitors in 2019. The result? Many of these upstarts are going to win because they are already at work implementing the digital forces that drive effective experiential transformation.
Make no mistake about it: This fierce competition to transform the customer mindset to a WOW state is going to make or break many companies. Remember that 2018 saw the emergence of technologies like AI, ML and Blockchain, and 2019 is the year when many companies consolidate their building processes and systems, setting their customers on the journey to WOW!
Winning this combative competition comes down to a ‘battle of the swift.’ Can you transform your organization from its current state into an intelligent enterprise more quickly than your competition can? Many companies seeking a competitive edge are already investing resources in becoming the ‘Intelligent Enterprise,’ powered by SAP Business Suite on HANA. It’s an investment in future-proofing their organizations that also allows them to stay many steps ahead of the competition because today, it’s now or never!
What are your digital transformation imperatives? Please- share your perspective on digital transformation with us. Let’s make 2019 the most ‘connected’ year ever by sharing ideas and thoughts. We, at Phoenix, can be your trusted partners in delivering the experiential transformation that WOWs your customers.
By: Venkat Nanduri, Director
If your Public Sector organization has been considering implementing a new Enterprise Resource Planning system and you want to be sure to choose the best implementation partner for that project, there are four key considerations you must weigh in order to make the right choice.
Before getting to what those three considerations are, think about this: When you release that RFP, be aware that this is going to mean slogging through hundreds, if not thousands, of pages of text and graphics sent to you by well-meaning companies who are seeking your business. It’s the price you pay to find that right partner. The problem is that, once you cut through all that copy, every single one of those companies will have sent you what is essentially the same message: We are the best; Choose us! Be aware that there are discernible differences between potential implementation partners- but it takes a discriminating eye to identify those differences. This is where our four considerations come into play.
When you’re faced with making an important decision and all your potential partners sound the same, keep these four keys top-of-mind as you move through the selection process:
- First, understand who’s telling you the truth. By this, I don’t mean to imply that an ERP implementation firm would lie to you. What I mean is gauge the level of their sincerity. Does what they say go well with what they’ve written? Does their experience ring true? Are they as open about problems and issues as they are about successes and solutions? Do they tackle your toughest questions head-on, or do they deflect and talk around them? Do their recommended best practices sound like a laundry list, or knowledge gained through practical, and maybe painful, experience? Do their answers to your questions seem well-thought-out and considered? If your biggest issue makes you stop and think twice about it, it should have the same effect on the candidates. If the answer you get is always “No problem,” there’s a problem.
- Second, measure their understanding of your pain points. Let’s face facts- if everything were going well, you wouldn’t be considering releasing an RFP and spending lots of money on a new ERP system and software. Given this, you must be brutally honest in what is causing you make this move. Then listen closely to how your candidates respond. Do they continue to talk about how terrific their systems and services are? Or do they get down into the dirt with you and show an in-depth understanding of where you are and what you’re wanting to accomplish? If so, do their solutions that seem workable, reasonable and- best of all- capable of relieving your pain points by solving your problems? Or will they add to your pain with an implementation that goes south? You’ll know if you ask yourself this question: Are they telling me what they think I’d like to hear, or are they telling me what I need to hear? The gap between those two ends of the pitch spectrum is wide. You don’t want to end up in the middle- or worse yet, at the wrong end.
- If you are going to take the time to ask for references, then call those references. Yes, they may have glowing comments to make about that company- after all, they chose them for their project. That doesn’t mean you can’t have frank and open discussions with them. Ask them hard, probing questions about that candidate company. Ask what the best thing was about working with them- but remember to also ask what the worst thing was about that experience. Find out if they conducted themselves as if that customer was the most important client they’d ever had, or just another means to add to their revenue stream. Trust me- nine times out of ten, references have a story to tell, and they are waiting for someone to ask to hear it. Once you get references, ask the candidate firm if they have case studies. The good ones do.
- After reading their response to the RFP, conducting an interview and sitting through a demonstration of their proposed solution, ask yourself this important question: Were you being sold, or were you being convinced? Many companies employ polished sales people who sail easily through interviews and demonstrations- but it’s that firm’s ability to do the actual work of implementing the solution according to a solid, sound project plan that really matters.
In a world where everyone touts their uniqueness, the reality is that no firm is unique. As a Public Sector organization, your ERP requirements are many. Once you pick what you believe to be the right solution, you must be sure to select an implementation partner that’s been down the ERP project road before- preferably more than once. Of course, here at Phoenix, we believe that we are the Public Sector’s best choice for an implementation of a SAP ERP solution, and here’s why.
To find out more about Phoenix experience expertise and SAP ERP solutions, call us at 310.779.9132 or send an email to firstname.lastname@example.org. We’d be happy to answer any questions you may have and share our client case studies with you. Since 1998, we’ve provided high quality and successful SAP Public Sector ERP implementations and support services for over 70 clients. If you are a State, City, or County government, a Non-profit, an education institution, or a utility or transportation agency, we are here to help. Providing SAP Public Sector solutions is our singular focus, and has been for 20 years.
Preparing 1099 forms in SAP Business ByDesign
Use these six simple steps to save yourself time and tears!
January always comes quickly, and with it comes time once again to send out 1099 forms to vendors while you fill out and submit the 1096 form to the IRS. Honestly, it’s a time-consuming hassle. Finding a simpler means of completing this important task happen is a great way to start the new year.
Fortunately, SAP Business ByDesign handles these tasks with a minimum of effort. In just a few quick steps, ByDesign processes and prints your 1099s while it also processes and creates your 1096 file for submission to the IRS. Here’s how it works:
Step 1: Review the Withholding Tax reported
Go to Tax Management Work Center> Reports. Find the report Withholding Tax Items. Run the report to see the amounts reported by Supplier and Income Type (non-employee compensation, rents, etc.). NOTE: If there is no data is in this report, there may be an issue with the setup of the tax authority. Contact your implementation partner for assistance. Review your data. If the withholding tax is calculated correctly, proceed to Step 2. If an incorrect amount is reported to a vendor, make corrections by going to Tax Management Work Center>Manual Tax Entries>Withholding Tax Base Amount Entries. Select the New button and an entry screen opens. Make the adjustment and release.
Step 2: Preparing 1099 Forms
Go to Tax Management work center>Periodic Tasks> Withholding Tax Return Runs. Select New>Tax Return Run. The screen opens. Enter a description (for example, enter 2017 Almika 1099 Forms). Enter the Tax Return Arrangement ID. This should be the tax return arrangement for the tax return type, Miscellaneous Income (1099 Misc) – Form B. Enter the appropriate Dates. Save your entries, set it to Active and then Schedule. When the return runs, a message displays: Tax return run XX created successfully.
Step 3: Review the 1099 forms
Go to Tax Management Work Center>Tax Returns> Withholding Tax Returns. The tax return appears with a status of In Preparation. Use the Preview button to view the 1099 forms. If the forms are correct, enter Release and Print. The status of the return changes to Reported.
Step 4: Prepare the 1096 File
Go to Tax Management Work Center>Periodic Tasks> Withholding Tax Return Runs. Select New>Tax Return Run. The screen opens. Enter a description, something like 2017 Almika 1099File. Enter the Tax Return Arrangement ID. This should be the tax return arrangement for tax return type, Miscellaneous Income (1099 Misc) – File. Enter the appropriate Dates. Save. Set to Active. Schedule.
The system creates a tax return file. Go to Tax Management work center>Tax Returns> Withholding Tax Returns. The tax return is visible with a status of In Preparation. Use the View button to view the 1096 file. The Transmitter Control Code (TCC) is a required field so be sure to request the code from the IRS (see Step 5 below).
Step 5: Request the TCC
Warning! Your Transmitter Control Code (TCC) is on FIRE! No, really…it is. Your TCC is on the IRS’s FIRE website. FIRE stands for File Information Returns Electronically. Go to the FIRE website and retrieve your TCC, using IRS Form 4419. It takes 45 days from the time you submit the request to get your TCC. If you use your TCC to file each year, it remains in effect, which means you don’t have to re-submit to retrieve it each year.
Step 6: Upload the 1096 File to the IRS website
Enter the TCC and release your tax return. The file is created and ready for uploading to the IRS website.
Uncertain about filing electronically? Don’t be. Test your electronic file at the IRS FIRE site. When you get the pass function file, you’re clear to send your actual file to the IRS FIRE site.
Using SAP Business ByDesign and following these few simple steps saves you time when it comes to preparing 1099 form and 1096 form. It’s just one more way ByDesign benefits smart organizations. That’s our opinion. What’s yours?
Find out more about how SAP’s Business ByDesign can help your organization be more effective and efficient by getting in touch with us. Send us a message today. Click here.
By: Teresa Blackwell, Director, SAP Business ByDesign Practice & Jay M. Winchester, Proposal Writer
Managing GASB 34 Compliance in SAP Business ByDesign
By: Teresa Blackwell, Director, SAP Business ByDesign Practice & Jay M. Winchester, Proposal Writer
With tax time rapidly approaching, we’ve been discussing how SAP’s Business ByDesign helps simplify an organization’s tax reporting burden. Today’s topic? Multi-GAAP reporting for Public Sector.
Entities that report under the Governmental Accounting Standards Board (GASB) rules must present financial statements according to two different bases of Generally Accepted Accounting Principles (GAAP) reporting: Full Accrual and Modified Accrual. This reporting requirement is based on GASB Statement 34, Basic Financial Statements – and Management’s Discussion and Analysis for State and Local Governments.
- Full Accrual accounting takes the long view. Financial events are recognized when they occur regardless of whether funds are available or received.
- Modified Accrual is focused on the short term and tracks closely to the budget. Funds are recognized when they are measurable and available.
The table below summarizes the key differences between these two versions of GAAP.
|Modified Accrual||Full Accrual|
|Accounts Payable||In the absence of an applicable modification, accounts payable are recognized in the fiscal year in which the agency incurs the liability.||Recognize a payable in the fiscal year in which the agency incurs the liability.|
|Prepaid Items||Prepaid items may be recognized using the purchases method (expensed when purchased) or the consumption method (held in inventory when purchased, expensed when consumed).||Consumption method: Recognize an asset when an item is purchased and an expense when an item is used or consumed.|
|Long-Term Liabilities – Current Portion||Recognize the liability as it matures or to the extent the liability is expected to be liquidated with expendable available financial resources.||Recognize the liability in the fiscal year in which the agency incurs the liability.|
|Long-Term Liabilities – Noncurrent||The portion that does not meet the criteria for recognition as a current liability is a noncurrent long-term liability.||Recognize the liability in the fiscal year in which the agency incurs the liability.|
|Revenues||Governmental funds recognize revenues as cash is received during or soon after the end of the year and when it is earned and both measurable and available (within 60 days).||Recognize the revenue in the fiscal year in which the agency earns the revenue and it is measurable. Availability is not a factor.|
|Expenditures||In the absence of an applicable modification, expenditures are recognized in the fiscal year in which they are expended or when they are subject to accrual. Accruals are recorded when they are expected to use expendable financial resources.||Fund expenditures are recognized in the fiscal year in which the agency incurs a liability. Adjustments may be needed to ensure the matching principle is followed.|
|Capital Asset Acquisitions||Recognize the expenditure at the acquisition date.||Recognize the cost of the asset and depreciate the value over the expected useful life of the asset.|
|Inventories||Inventory may be recognized using the purchases method (expensed when purchased) or the consumption method (held in inventory when purchased, expensed when consumed).||Consumption method: Recognize an asset when inventory is purchased and an expense when inventory is used or consumed.|
|Compensated Absences||Recognize a liability as payments come due each fiscal year on the occurrence of resignations or retirements.||Recognize the liability and the expense in the fiscal year in which the agency incurs the liability.|
|Claims & Judgments||Recognize a liability to the extent they are normally expected to be liquidated with expendable available financial resources.||Recognize the liability in the fiscal year in which the agency incurs the liability.|
Clearly, there are differences between the two bases of accounting. Many government entities and agencies take a two-step approach to this process. In Step 1, they maintain the general ledger throughout the year on the modified accrual basis. In Step 2, they then reconcile that view at year end or quarterly to the full accrual basis of accounting. There are tools available to assist with this reconciliation.
There are limitations to this process:
- It’s a manual process requiring time and effort from key accounting staff.
- Reporting is limited. The full accrual reports can only be prepared after the reconciliation has been completed.
- Pro-active, long term decision making may be impeded. The modified accrual basis is short term by nature. If decision makers only see modified accrual basis reports, they may ignore the longer time horizons supported by reports based on the full accrual method.
Fortunately, SAP Business ByDesign comes with a solution built in. The account structure in ByDesign permits entities to set up multiple sets of books with different rules and features. These include:
- Different accounting rules – Modified or Full Accrual
- Different charts of accounts – some entities may report on one chart of accounts locally but report to a regulatory agency under a different chart of accounts. Examples might include utilities reporting to the Federal Energy Regulatory Commission (FERC), or a school district reporting to a state education agency.
- Different fiscal years – a city may have a trust or pension fund with a different fiscal year than the city.
Setting up this structure in ByDesign is easily accomplished during implementation. The result is that ByDesign’s financial users view reports based on any set of books. The rules for each set of books are defined at set up and each transaction is posted based on the rules. While the transaction is seamless to end users, it is viewable in the general ledger detail at any time.
Delivering the Benefits of Digital Transformation for Public Sector
By: Teresa Blackwell, Director, SAP Business ByDesign Practice, & Jay M. Winchester, Proposal Writer
A current hot topic in the IT world is the concept of digital transformation. This begs a fundamental question: What is digital transformation?
The Digital Transformation Definition
Typically, the digital transformation definition involves the fundamental changes resulting directly from the intelligent, across-the-board application of digital technologies like Artificial Intelligence (AI), Augmented Reality (AR) and Application Program Interfaces (APIs). From the humanist perspective, digital transformation refers to the application of these technologies to every segment and aspect of society, resulting in new innovations and creative answers to societal problems. It’s a grand and sweeping vision. However, for our purposes, we are going to take a few steps down from that perspective and in a series of blog posts, look at Digital Transformation for the Public Sector.
From this narrowed perspective, the digital transformation definition becomes more focused. Instead of using new technologies to enhance and support the way Public Sector work has always been done, these technologies are applied in ways that transform how work is carried out, enabling innovation and creativity while increasing effectiveness and efficiency. When managed properly and carefully, the benefits of digital transformation are many. When mismanaged or handled carelessly, the benefits of digital transformation diminish and organizational problems increase.
Examples of the Benefits of Digital Transformation
In a certain sense, and at the base level of day-to-day activities, digital transformation involves freedom from the inbox, achieved through the use of powerful applications to manage workflows. Those routine and often mundane day-to-day tasks are transformed through the application of defined rules. These rules remove the requirement for personnel to make a series of decisions in order to complete a task, which often slows the pace of completion while adversely affecting the quality of the work. Once workflow rules are applied, employees are free think strategically about fulfilling their responsibilities. They are also empowered to undertake the in-depth analysis that leads to better decisions and better results.
For example, where is the value in having a manager approve every invoice for an item that is purchased daily? An application built around real-world, day-to-day workflows enables the establishment of workflow rules that then govern the approval process. This then removes the manager from that process, enabling him or her to be re-tasked with analyzing these transactions to ensure items are purchased at the best possible price. If that same application is also built on best practices, that manager can then determine the effectiveness of the processes. He can then recommend changes required to increase that effectiveness, thus achieving greater efficiencies in the invoice approval and purchasing processes. He also is saving the organization money.
A typical issue faced by many Public Sector entities involves the sheer volume of legacy applications in place to facilitate the work involved in foundational areas like Human Resources, Finance, Supply Chain and so on. This usually results from the implementation of an application to handle one key task. Initially, this works well- as long as the focus of the organization stays the same. But how often does an organization remain stationary? As the needs and requirements of the organization evolve, other applications and work-arounds- many developed by employees who may or may not still be in the organization- are implemented to help facilitate new tasks and responsibilities. The end result is a complex web of technologies that may or may not ‘talk’ to each other. This in turn results in minimal effectiveness and decreased efficiencies. In the process of digital transformation, a strategic decision involves replacing this gigantic stumbling block with a single, module-based ERP solution designed and developed specifically to empower the organization to meet its growing requirements list, as well as the demands of its customers. If this ERP solution is cloud-based, there are even more gains available to Public Sector entities, including the ‘holy grail’ of budgeters everywhere: decreased IT spending
The Journey to Enterprise Digital Transformation
These are just two examples of how digital transformation impacts an organization, one at the task level and the other at the organizational level. Inherent in this transformative strategy is the promise of dramatic impacts and sweeping change across all aspects of an organization. While it’s a tantalizing vision, it’s important to remember two key concepts: First, enterprise digital transformation is a journey, and like any journey, its success depends on planning that identifies and targets specific areas requiring change. This likely means involving digital transformation consulting to help you define a digital transformation framework. Second, a crucial element in the success of your journey to digitally transform the way in which your organization works depends on the quality of the technologies driving those changes. Adopting the right digital transformation architecture is key.
Over the course of this seven-part series, we’ll dive deeper into both these concepts. We’ll also examine other factors that might hinder or help your progress from where you are today to where you want to be tomorrow. The promise inherent in the concept of digital transformation within Public Sector organizations is a powerful one that touches on every aspect of what you do, how you do it and- most importantly- why you do it. Digital Transformation also holds out the promise of another key benefit: Improving the digital customer experience.
Find out more about how SAP’s Business ByDesign delivers the benefits of digital transformation for your organization by getting in touch with us today.
How Public Sector Entities Can Turn Its Negative Impacts into Positives
Welcome to Part 2 of our series on Digital Transformation for the Public Sector. Today’s topic is dealing with digital disruption in a manner that turns its negative impacts into positives. Before we get to that, we need to define the term digital disruption.
Digital Disruption Definition
What does digital disruption mean? First, understand that digital disruption is a natural outgrowth of digital transformation. This makes escaping digital disruption impossible for any organization engaged in the battle to gain efficiencies and increase effectiveness. The cresting wave of digital disruption is going to wash over your organization, and there isn’t anything that can stop it.
While it sounds like dire straits, tagging the disruption as negative or positive depends on your perspective. If you’re skilled at turning lemons into lemonade, dealing with digital disruption is right up your alley. Here’s why: Although new or emerging technologies tend to disrupt the status quo, they also bring with them the promise of opportunity.
This idea is inherent in how this term is defined. The digital disruption definition found in the Gartner IT Glossary states that it is “…an effect that changes the fundamental expectations and behaviors in a culture, market, industry or process that is caused by, or expressed through, digital capabilities, channels or assets.” The blog for the Oxford College of Marketing defines our term this way: “Digital disruption is a transformation that is caused by emerging digital technologies and business models. These innovative new technologies and models can impact the value of existing products and services offered in the industry. This is why the term ‘disruption’ is used, as the emergence of these new digital products/services/businesses disrupts the current market and causes the need for re-evaluation.”
Examples of Digital Disruption
To see these definitions in action, let’s use Uber as an example. Most understand how Uber’s service disrupted the taxi industry- but not very many know that it also disrupted airports. Cab drivers haunt airports looking for fares, and most airports have agreements with the companies to pay for this privilege. To ensure airports get paid, the companies install transponders in their cabs so that taxi activity can be tracked.
However, when airport travelers started using Uber’s services, airports found themselves caught in a case of digital disruption. Since Uber drivers use their personal vehicles, transponders could not be installed in them, so driver activity couldn’t be tracked- and the airports couldn’t charge Uber. The IT team at San Francisco’s airport solved the problem by developing a system that detected Uber’s GPS app, used by every Uber driver. When an Uber car entered the airport’s perimeter, its presence was registered and its activity tracked. Uber was charged according to its agreement with the airport.
Here’s another example: In the Public Sector, many government entities are struggling to continue providing key citizen services in the face of dwindling funds. However, many are forced to either suspend or end important services, or raise the price of these services through increased taxes or outright fees. This causes citizens to seek out alternative providers, exactly the scenario that digital disruptors seek out. Why? Because there is a gap between what the citizenry wants and what the government provides. The technological advantages championed by disruptors enable them to establish fill the gap with new digital business models based on delivering value to customers through reduced costs, economies of scale and- the ultimate arbiter- improved customer experiences. They deliver the same or enhanced value as the government entities without duplicating the investment of capital, coping with seemingly endless regulatory requirements and overcoming the other burdensome impediments that bind many Public Sector entities.
Solving the Public Sector Dilemma
So what’s a well-intentioned Public Sector organization to do? How can it change digital disruption from a negative to a positive? Simple- embrace the change. Here are eight effective strategies to help with this effort:
- Don’t run from change; Face it. Change is coming. Organizations looking to improve their effectiveness and increase their efficiencies must understand that early adoption of new technologies is a way of life. Understand how digital disruption works in your favor. Challenge the assumptions inherent in the way your processes work.
- Don’t wait; Start moving forward today. The key here is to respond deliberately, not reactively. When you act, act strategically. Evaluate and refine everything you do. Plan how you’ll cope with change when it comes. Prepare now to take advantage of opportunities when they appear.
- Visualize how your best self serves your constituents. Take off the blinders, give yourself permission to dream big and focus on your constituency. Will new technologies solve their biggest issues and concerns? How? Are there new technologies enabling you to improve processes, deliver better service or reduce costs? If so, adopt them now.
- Reduced costs trump increased value nearly every time. The one near absolute of digital disruption is this: customer demand is driven through reduced costs. It is the single greatest attribute that almost every digital disruptor brings to the table.
- Benefit from the change. Think about the IT spend that bought those systems and servers running your organization’s ERP software and activities. If it were possible to remove that hardware, and the costs associated with service or upgrades, would you benefit financially? If so, say ‘hello’ to cloud-based ERP systems and ‘good-bye’ to all that hardware.
- Understand how the job must be done. Think in terms of inputs and what steps are essential to arriving at your desired outputs. Eliminate as many of the interim steps as possible. In the end, if a process does not add value, eliminate it.
- Understand the inherent trade-offs. Every opportunity for advancement comes with some trade-off. Identify those trade-offs. Realize when ‘just good enough’ is, well, just good enough. If providing 25% of a service enables substantial savings, then perhaps that 25% is just good enough.
- Partner with the change. As a Public Sector entity facing the prospect of digital disruption, realize that you don’t have to be a victim. There is an alternative: Partner with disruptors. Help level the playing field between older, established partners and new up-and-coming entities. Work to change laws and regulations that strangle innovation. Establish Public-Private partnerships when appropriate.
Coping with changes brought on by digital disruption is never easy. Finding ways to work through the disruption and seize the opportunities it provides is a crucial in determining the success of your digital transformation.
Find out more about how SAP’s Business ByDesign delivers the benefits of digital transformation for your organization by getting in touch here.
By: Teresa Blackwell, Director, SAP Business ByDesign Practice, & Jay M. Winchester, Proposal Writer