The movie “Moneyball” depicted how baseball executives were using statistics to predict outcomes, and allocating resources accordingly. Rodolpho Cardenuto, appointed president of SAP Americas in January 2013, foresees a similar approach in the business world as companies gain insights from big data.
“The only difference is that they used past statistics. The real insight is how to predict outcomes,” Cardenuto says. “I think it’s going to be a bigger revolution in business than in any sport.”
The challenge is transforming big data into actionable items. Making use of data involves taking it from infrastructure to information and then to insight. The information is already being collected, it’s a matter of how to derive useful insights from what has been gathered, Cardenuto says.
“It’s about how to get insights from the big data. We can accumulate as much information as we want. You can feed information from all over the place — social media, archives or systems — but how do you get insights from that?” he says. “Big data is about how to transform that information into something useable for the business.”
The volume, variety and velocity of data continues to grow exponentially — a compound annual growth rate of 45 is anticipated through 2015, Cardenuto says. Combined with rapid decreases in storage costs, companies are now able to store vast amounts of data.
Here’s how SAP, with its HANA database management system, is leading the charge to take that data and present relevant results to enable real-time business decisions.
Defining the parameters
Before devising a plan based on the data, you have to determine what data to focus on.
SAP employs data analysts and engages with customers to understand how they want to market to consumers so they can make the jump from big data to insights.
As an example of how that is accomplished, Cardenuto cites oil and gas companies that are SAP customers. They have wells that provide 50 terabytes of information. Using the SAP HANA application, the companies can analyze that information to determine the most cost-effective and productive way to operate the well.
“They have sensors. They can get the information they want. But the important thing here is transforming this information into insights to better utilize this well’s potential,” Cardenuto says.
Another client, a retailer in Mexico, analyzes data once or twice a week to see which products are selling, he says. That data is used to manage logistics and deliver products to stores.
“If I have a TV set that is selling in one store, I can reroute my logistics, my supply chain, to deliver more TV sets to that specific store and from other stores where they are not as much of a bestseller,” Cardenuto says.
While the same process had been followed previously, the cycle took up to three days to complete. That lag meant that there was no guarantee that there would still be the same product demand, particularly if the item were part of a current promotion, Cardenuto says.
“Now they can do that in real time,” he says. “Only with real-time HANA can they do that.”
Another SAP product, Precision Marketing, which used to be called Precision Retailing, is an application that pools historical consumer data. For example, Wal-Mart could use it to find what products customers purchased and at what time.
It can also provide detailed information about customers such as a female between the ages of 25 and 30, with or without children, employed or not, even whether a person prefers organic foods.
Of course that sort of information appeals to retailers, but it has also been used by a transit agency in Montreal, Canada, Cardenuto says.
Cardenuto envisions data analysis being taken a step further to determine why there was more demand in one region in order to predict future demand spikes. He says such predictive modeling is definitely on the way.
Along with big data and real-time insights, Cardenuto sees cloud computing and simplification as two trends that will be the focus of CEOs in 2014.
“The cloud is enabling customers to have access to new innovation as well as a return on their investment in technology faster than ever before, in weeks instead of years,” Cardenuto says.
That means businesses that adopt cloud technology can redirect those returns to investments in other technologies and business models that fuel innovation and growth.
“The cloud can be an important catalyst in any enterprise. It offers a simpler delivery model to accelerate the adoption of innovation,” Cardenuto says.
Simplification is important because complexity is a significant challenge that businesses face today, according to Cardenuto. Whether it’s in business processes or user experience, complexity slows everything down and results in longer business cycles, frustrated users and unhappy customers.
There are more mobile connected devices than there are people, making it critical to develop a simple user interface that provides a personal experience, he says.
“We have made simplification our focus. We are simplifying everything, so our customers can do anything,” Cardenuto says. “With technologies like cloud and HANA as a platform to tackle big data and integrate across applications, businesses can achieve faster innovation.”
Finding inspiration for innovation
Innovation is key for any company, but where do you look for inspiration?
At SAP, executives pay attention to research coming out of universities, venture capitalist investment areas and startup companies. They also work with customers to better understand how technology changes can help them improve business processes.
“We also leverage design thinking to ensure our solutions are user-centric, so users get maximum value from them,” Cardenuto says.
Before being named president of SAP Americas, Cardenuto had served as president of SAP Latin America for five years and established SAP as an innovation provider of choice for companies of all sizes in a variety of industries.
Cardenuto says SAP works directly with customers on new products, finding companies that are willing to adopt technology that is in the prototype phase.
“If we find ourselves with something that grows and appeals to more and more customers, we commercialize it,” he says. “We could say it’s a learn, build, measure, learn methodology.”
That timetable for the process continues to shrink as technology evolves.
“Through process simplification, we are doing this faster and faster. In fact, we can take innovations from concept to market in as little as five months — that’s as fast as leading startups,” Cardenuto says.
Adapting to millennials
Perhaps an even bigger challenge than tackling big data or continuing to innovate is adapting to the impact millennials, typically defined as those born between the early 1980s to the early 2000s, are having in the workplace.
Cardenuto says that’s the biggest challenge he’s faced in his career as a leader and one every business has to tackle, regardless of industry.
“Leaders in every industry and sector are also confronting it,” he says. “It’s about a fundamental change that is taking place in the workplace and the marketplace, as millennials emerge as the largest generation since the baby boomers.”
Within 15 years, millennials will represent 75 percent of the global workforce and will have amassed the greatest purchasing power in history at $2.45 trillion worldwide.
“As our current and future employees and bosses, and present and future customers, their impact transcends numbers: It’s about how they embrace technology and the digital world,” Cardenuto says.
Millennials are highly mobile and social, which is driving employers at many businesses to rethink traditional models.
“They are probably the most educated generation ever and are already shaping corporate culture. How you hire, retain and engage them is both a challenge and an opportunity,” Cardenuto says. “That is why I am intensely focused on putting the best strategies in place to fit our early talents.”
Company leadership needs to ensure that it attracts and motivates millennials, he says.
“We have put programs in place that expose young, high potential employees to diverse business situations and allow them to be bold, innovative and engaged. We mentor and are reverse-mentored by them. We strive to keep our workforce flexible, and enable them with our best training programs,” Cardenuto says.
Millennials, with their understanding of and comfort with technology, will be an important part of teams leading innovation and shaping the future of companies.
“Above all, we try to listen and learn from their ideas, beliefs and contributions — how they use technology, push to crowdsource ideas, and expect it all to run faster, smarter and more sustainably,” Cardenuto says. ●
- Transform information to insights.
- Understand customers so you can provide solutions.
- Adapt your business model to address millennials.
The Cardenuto File:
Name: Rodolpho Cardenuto
Company: SAP Americas
Born: Sao Paulo, Brazil
Education: He received a bachelor’s degree in electronic engineering from Centro Universitário da FEI (Faculdade de Engenharia Industrial) in Sao Paulo, Brazil, an executive MBA from the Business School Sao Paulo (BSP) and a master’s in international business from the University of Toronto.
What was your first job and what did you learn from it? About 25 years ago I was a systems analyst at a bank in Sao Paulo, working the night shift —11 p.m. to 7 a.m. I worked at night and went to school during the day; my first class started at 7:30 a.m. Getting to class on time was a challenge, so I saved up to buy my first motorcycle. Aside from developing a longstanding passion for riding motorcycles and learning to get by on very little sleep, my first job taught me the importance of hard work, perseverance and disciplined time management.