Episode 77: Optimizing How People Work, Achieve and Excel

An AI-enabled cloud ERP would be the team of colleagues who can help business users like our buyer to do their job more easily, efficiently and effectively to ensure continuous company performance, resilience and growth. I'm Richard Howells and in this week's episode I'll be chatting with Elizabethis Pontoni about people and how to optimize people's work, how to improve their abilities and how they can excel in this digital age. So Elizabeth, maybe you can introduce yourself quickly and your role at your company? Sure, thank you. Hello everyone. My name is Elizabeth Pontoni. I'm from Rome, Italy and I lead service offerings around enterprise transformation based on ERP packages for capjamini group. Cap technologies are the heart of it and I also have a passion for talents. So I also lead the strategic learning and certification initiatives in our SAP practice. So maybe we can start with an easy question to start with. What are the business challenges that companies face today as they look to digitize their operations? Well, seems to be an easy one. Maybe not super short, my eyes. We all see how fast the market environment is evolving and how fast technologies evolve too. So if you think of all well established companies who are in the business since many years, they build their strengths on a predictable market, on clear people's skills. Now take for instance a buyer in an automotive company 10 years ago. Here she would have a well established base of suppliers of components for the automotive industry with well established communication channels, EDI exchanges, long term contracts, agreed schedules. Now the car has become an electronic device. The sustainability regulations create new needs for stability requirements. There is new competition from pure electric vehicles, very agile, fully digital companies, huge cost pressure to stay competitive. The buyer would need to significantly change the supplier base, taking into account the new electric car technology, but also much more electronics in general, software. And all these elements evolve at the pace, which is completely different from the old style technologies of the cars. So this requires complete new skills. They keep change also. There are also constraints coming from geopolitical tensions and other similar crises that require much bigger flexibility in sourcing strategies, fast reactions to avoid delays in the supply chain. So in this kind of context, also the applications that support the business have to change radically to cope with this new market scenario. And they also need to keep changing to keep the pace of the change in the market. So our poor buyer has a difficult life, right? That change has been speeded up considerably. The clock speed of change has happened so fast in the last few years as well. And we hear a lot about companies looking to do a digital transformation. So why are you seeing companies embarking on this digital transformation now? Why in the cloud? Yeah, good question. Clearly cloud technologies are the right answer to many of the challenges I just mentioned before. And especially related to the core applications that help managing the business, the technology evolution is ensured by the software vendor when you are in the cloud. And the interaction with the partner ecosystem is much easier. The access to market data is easier also. And this helps having the right insights to take faster decisions. The still our buyer would like to spend most of its time in finding the right supplier negotiating the best price, not really dealing with constantly evolving applications to run the business. So I strongly believe that technology has to make people life easier. And sometimes we forget about it because we are excited by the potential of the technology in solving complex problems. We overengineer solutions that nobody is able to use, right? In England business users, like our friend in procurement, in the right use of applications and make them simple and intuitive is key for the success of a transformation to cloud. And AI has strongly stepped in as the tool that can make this really happen. Mm-hmm. Maybe we can bring people into the discussion I want to do. On the buyer that you've been using as an example. I heard capjamilite present recently and they talked about unleashing human ingenuity and intelligent business. So what does that mean? This unleashing human ingenuity and tying it to an intelligent business? What does it mean in the context of today's fast-changing digital landscape? I mentioned AI because this is one of the enablers of that concept. So the way we see AI is more to augment people rather than replace. As many people ask me if a job would be more with all this AI around, right? And I always do the same example. Would you imagine ten years ago that there would be a job called Drone Pilot? I wouldn't certainly. That's an example to say that new technologies may drop some jobs because they make those jobs less relevant, but on the other hand they can also create new jobs. I tend to see the technology as augmenting human capabilities rather than replacing. And there is actually multiple ways in which AI can be leveraged in a human-centric transformation. I would say, first of all, it accelerates the transformation itself. So there are a number of tools already in the market and we have developed a number of them as well that help accelerate the delivery of projects that are part of a transformation program. Think, for instance, of scripting meetings, summarizing meetings, creating specs, generating code out of a spec, creating data for testing, creating test scripts based on the most critical scenarios, all of that can be produced using AI. And this means that on one side the work of the user is less heavy and on the other hand the transformation lasts shorter time frames. The second way AI can help in transformations is really making the work of the business users more efficient, more effective. Let them focus really on what makes the company successful in the market rather than reconciling data or spending time in analyzing such data. This is where really AI helps a lot. So it's about making processes very efficient and high quality of outcomes as well. And finally, the third way in which AI helps is in reducing the risk and increasing the company resilience because it allows to simulate scenarios. And so you can prepare your response plans before the disruption occurs. So it means the company will become more resilient in crisis. So these are all the ways I see AI augment human capabilities. Who would have thought that all of those hours that my kids spent playing on gaming devices could be a job movie, the future being a drone pilot? I love your comment as well on AI augments, people not replaces them because I strongly believe that we need to embrace AI, to improve efficiency, to improve productivity and the examples that you gave us spot on. So maybe you can give some advice on how organizations can foster a culture that empowers the workforce, improves productivity and drives human-centric transformation in this digital age. Absolutely. And as I mentioned earlier, we never have to forget about the individuals in a transformation and people because these are the elements that make a transformation succeed or fail. Regardless how wood is the technology that is implemented. If people are not on board and are not well enabled and prepare programs fail. First of all, it's important to identify the key impacted roles and functions when there is a change in a process of a or a new business model that is established. And what's so equally important is to identify the stakeholders that can support the change and the ones that will fight the change, right? So that you can manage their expectations, you can address their challenge with the Recommunication Enablement Blends, you can document key decisions, measure sentiment, all elements can be collected and managed with digital features as well. And this is why we have decided to also create a platform to digitally manage the change in a transformation and also have plans build the based on facts and traceable elements. So we call it then digital acceleration navigator, so it's like the name of a person, right? I order to name a person. And it's one of the key components of it is called Change of the Option Platform. It digitizes changes in a transformation with such kind of features. You mentioned that some people will fight change and it's funny, I've did a lot of implementations in my early career and you usually find that if you can convince that person that fights change, that this new process, this new technology is good for the business, then ultimately the biggest advocate. Absolutely. And there is a reason why they fight, so if you can address that reason and find the value for them as well, then you get another one who will support the program. So absolutely, it's very important to be aware of those elements for the success of the program at the end. That challenge and necessity of bringing the people with you when you implement new models, new business processes is critical and it's also critical when you talk about innovation. So what steps can companies take to enable continuous innovation by leveraging intelligence of technology and people? First of all, you need to think smart, right? You have to plan your transformation and the solutions that support it in a way that it's future proven. So architecture is key. Having an architecture that is open to change is really important. So it's the concept behind enterprise architectures completely changes, shifted from the, let's say, the ERP centric monolithic ones into composable architectures or cloud. And these kind of architectures are much more flexible, open to change. Of course, the overall integration becomes a much bigger topic. So it needs to be thought in the right way. I would say on top of the architecture and identifying the technical solutions, there are other elements you mentioned as well, right? Processes for sure. It's important to focus on the ones that drive the value for the enterprise and identify the elements that make the company unique in the market and then focus the investments on those elements. The other important one is data, right? So how good is your data? And do you have the right data governance considering that data will flow among multiple applications and you want at the end to have consistency and the right outcome? Do you all need all the data you have in your system? That's another good question because in the cloud word, the more data you have, the highest is the cost, right? So having a smart way to plan how you manage your data and historical data is an important thinking in a transformation. How good is the data? Should you go for an exercise to clean it? Usually, one of the tasks that drives the timeline of a transformation. So our recommendation is to start looking into data 12 months before the transformation actually starts. So you have enough time to clean, to reorganize, to establish the right ownership and governance around that and to reduce the size as well. And then of course people, what skills need to be developed, which personas are impacted? What kind of impact do they have? What changes, journeys to design to ensure they will be ready once the transformation will be alive? So processes, data, architecture, people, all key areas to watch and my big recommendation is to start thinking upfront to all those elements and not rush into the transformation without having good plans on all of these elements. I could not agree more with that because if you start off not knowing where you're going to go, if you don't have a good plan, how do you know when you get there? If you've got bad data, all your business decisions are made with an erroneous foundation to start with. I wanted to go back to some of the business challenges that we talked about earlier. And some of the biggest things that we've talked about over the last four or five years is that supply chains and businesses need to be more resilient, they need to be more scalable and increasingly, and depending on which geography you're talking, this for right or wrong reasons becomes more important than it could be more sustainable. So why is it important for businesses to develop a resilient, scalable and sustainable operating model? And what advice do you give on helping companies achieve that? The ability to keep innovating your business is important. The sustainability is a big topic, especially in Europe, I have to say it's been driving a number of transformations as one of the main reasons for that. It's clear that when you focus on sustainability, you also focus on efficiency because at the end, reducing carbon footprint means to have a wise use of resources. It's good for the environment, that's good for business. Exactly. So there is always a double outcome from a sustainability focus, which is on the cost excellence. And vice versa, if you focus on cost excellence, you also have a better carbon footprint. And clients are raising the sustainability topics. We often build our solutions and process models considering sustainability KPIs embedded in the design. So you design a process already having as a KPI not only a certain performance of the process. It could be, I mean, time to market or time to for execution or a number of errors, etc., but also what KPIs in sustainability, this process impacts and what's your target. So having the two views helps in achieving the two results of cost excellence and sustainability at the same time. And it all comes back to the data as well. Of course, typically in the ERP applications are where all the data that matter for the carbon footprint are generated. Right? So if you are able to track that in the individual transactions, you already have the right base to analyze what's your performance in terms of sustainability as well as in terms of business KPIs. Of course. That data is also very often in your suppliers ERP system and their suppliers ERP system as well and having that business network and visibility across your supply chain becomes very, very, very, very, very important. Absolutely. That's one of the advantages of cloud architectures is to connect with the ecosystem partners. So again, it's not only about supply chain and of course that's a great enabler for supply chain visibility across the ecosystem, right? But also in terms of sustainability. Of course, you need to take into account the carbon footprint of the products that you buy because this will be part of your sustainability footprint. Yeah. Absolutely. And cloud is a great enabler for that cloud applications. Yes, indeed. We've talked a little bit about AI already but I want to dig into that a little bit. How can companies best leverage a framework to harness the full potential of AI in their operations? We have a point of view there. Of course. I wouldn't have invited you on if you didn't have a point of view. Please cheer us on. First of all, a year of POX is finished. We don't do POX. We really embed AI as part of the design of solutions. And we take a very systematic approach by end-to-end process. So for instance, now we are looking into all possible types of automation we can do in order to cache and procure to pay. And automation can be with different tools. It could be RPA, it could be Embedded AI, it could be Custom AI, Agentec. So the combination of all of that is what can make the process really efficient and impactful. And of course, the other challenge we see in the adoption of AI is the proliferation of initiatives which are a little bit disconnected, right? Every team created their own AI tools. And that of course is not the optimal way for AI adoption. You need some guardrails, a company level, you need some rules to protect the data of the company, the IPs, etc. So we are helping to set up AI factories where all these frameworks are created, templates for proud, gardeners already embedded in the technologies, cost excellence, because again, this is an important factor. The costs of using AI can really go up very fast if you don't manage properly the technology, right? So this is what we see. I mean, the companies are starting to look into AI as a structure approach with clear rules and this helps of course scaling, keeping the costs under control, and also fulfill the regulations and reduce the risk, the cyber risks and the data protection for the company. You mentioned that you're working with a lot of customers, maybe we can get some examples of how data driven change management can unlock value for organizations. Do you have any real life examples that you can share? We do have many. I mean, I don't know if I can share the names, but there's a large beverage company in Europe that we are helping with their overall transformation. They are adopting our platform for change management. They consider this really a great enabler for their team to manage properly this aspect of the transformation. We have many others. We have more than 100 who are approaching the data driven change approach using our platform. Of course, as soon as we go through the journeys with them, we keep announcing the platform as well with their feedbacks and find the exciting new features with AI. To augment the features. It's right, AI can help in so many different ways and it helps us as well. Exactly. I feel so keep flowing here and we have released yourself with three months. I think we're only limited by our imagination sometimes, absolutely. How we can leverage AI. But let's go to keep it simple and make sure that we help people to leverage technology and make their life easier. People that listen to this podcast a lot, don't know what I'm about to say, but AI can't be a technology looking for a problem to solve. You've got to start with the business problem and then work out which technologies you need to leverage to solve that problem. And AI is quite often part of it. Absolutely. We've been through a lot of topics today as we come towards the end. Maybe I can get some advice from you. So what advice would you give businesses embarking on their digital transformation journey? Make sure that it's a success. As I mentioned before, first of all prepare upfront. So do the right thinking around all the dimensions I mentioned processes, data, architecture, technical depth. That's a great point to look at how many complex solutions do you have that can be simplified? How features in cloud solutions can replace your complex custom solutions. And you will be surprised, but in most cases we find out that 50% to 60% of the custom code developed in your piece of solutions is not used. And this drives me crazy because it's the most expensive piece of a transformation. And the one, but it gets upgraded every time a new release comes out. So it's really worth looking into that. And then of course people and adoption because many of these custom solutions are just because we didn't manage the change with people. So they just want to keep doing the same things they are used to. And not always the best way to do to get the same result. There may be other ways, right? But of course we are humans. We don't like to change. We want to be comfortable. So we need to make them comfortable in the new. Exactly. Yes. That's great advice. We're coming to the end of the podcast. We've been talking for almost half an hour. That's amazing. But I have one question I ask all the guests. So in a sentence or two, from your perspective, what's the future of ERP? An AI-enable cloud ERP would be the team of colleagues who can help business users like our buyer to do their job more easily, efficiently and effectively to ensure continuous company performance, resilience and growth. That's a great summary. Elizabeth, this has been a great conversation. Really interesting. I've really enjoyed it. Hopefully it hasn't been too painful for you as well. Not at all. I like these topics. It's my favourite argument. I thought we could have kept talking for another half hour if not longer. I wish you were. Thank you for inviting me. You're welcome and I'm sure you'll be invited back. And thanks everyone for listening. Please mark us as a favourite. You can get regular updates and information about future episodes. But until next time from the Elizabeth Eradai. Thanks for discussing the future of ERP. [BLANK_AUDIO]