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Marco Hoppenbrouwer: Fueling Growth Through Data-Driven Culture

With remote work expected to become a mainstay in the foreseeable future, IT and business leaders are looking at new ways to ensure that their employees are equipped with the necessary critical insights needed to make business decisions.

One of the key approaches is to develop a data-driven culture: the utilization of emerging technologies to drive business value, pushing an organization to be insight-driven as opposed to gut-feeling and operating in the dark.

Marco Hoppenbrouwer, Chief Data Officer for Global Functions & Finance at Shell, understands the value of data to drive value for businesses in today’s modern landscape. In this interview, Hoppenbrouwer shares his insights on how the chief data officer (CDO) role has evolved and why a data-driven culture is a necessity for corporations.

 

The Power of Digital and Data and The CDO’s Role

To compete in an age of rapid acceleration, companies need to be data-driven, but the transition from a feeling- to a fact-based organization is not an easy path. With only 24% of companies truly fostering data-driven cultures, it is up to the CDO to push the initiative of cultivating data technology in a business.

However, before CDOs can achieve that, Hoppenbrouwer points out why the components of Digital and Data are important for a business and what the focus needs to be for CDOs to streamline the transition towards a fact-based organization.

 

How has the role of the chief data officer (CDO) evolved in today’s data-driven culture?

 

Let me first set the scene as to why digital and data are so important for any business and one cannot do without the other:

The energy transition and digitalization are two mega-trends that affect the world in the coming decades. Both are expected to have a profound impact on the way everyone lives their lives.

Digital technologies can play a key role in the transition to a lower-carbon future. Furthermore, we see a rapid increase in digital products, services, and processes coupled with increasing expectations for a seamless digital experience from both our customers and employees. 

Digital is not new, but what’s different is the availability of technology, data, and capabilities that are growing at an exponential rate. Digital is also one of the few processes that require quality data as input to be successful. 

I’ve seen projects fail because a Proof of Concept was successful as it was run on manipulated datasets but this was not the reality in the field when the solution was to be deployed.

Maximizing the benefits of digital technology is heavily dependent on the readiness of an organization and its workforce, meaning:

  • It is key to upskill the workforce with new tech skills
  • The entire organization needs to be data-savvy

This also means that if the organization cannot keep up, it will rapidly be taken over by a competitor that leverages digital technologies and can deliver a more compelling value proposition faster and at a lower price point. A good example of digital disruption is SpaceX which disrupted the entire launch industry.

As to how this answers your question, the role of the CDO has changed from an information & compliance management role into a strategic value generator role. With digitalization and the emergence of the CDO, data is now at the forefront and is seen as a key-value driver that drives business outcomes.

 

What role should the CDO play in streamlining the transition to a fact-based organization?

 

There are three key areas the CDO should focus on:

  1. Accelerate digitalization and drive business value from data, meaning:
    • CDO knows how data enables the business strategy and what value it can drive
    • CDO knows what data is needed, who owns it, where it’s mastered, whether it can be trusted, and how it can be accessed
    • CDO formalizes roles & responsibilities for Data Management
  2. Increasing organization’s data literacy so that:
    • employees understand the importance and their role in data management, including data quality beyond their line of business. For example: if the quality of data you create is not good enough for downstream usage by another line of business, you create a problem in the value chain.
    • employees have the technical skills to drive value from data through citizen developer tools such as the Microsoft Power Platform. This can be achieved through developing role-based learning paths, setting up a community of practices for sharing key data-related best practices, and running DIY boot camps or Hackathons.
  3. The CDO should strive for data-based decision-making by ensuring that the required analytics & insights are timely available in the decision-making process
 

Eyeing The Potential and Opportunities of Data-Driven Culture

The field of data analytics has consistently grown, in terms of acceptance and importance, and will play a critical role as a decision-making resource for executives in modern companies. 

Gartner predicts that by 2024, at least 30% of organizations will invest in data and analytics platforms, increasing their business impact for trusted insights and encouraging new efficiencies. As such, CDOs must take the initiative in fostering data technology as an organizational asset for digital transformation.

But, what are the challenges and how should CDOs approach this transition?

Hoppenbrouwer delves into the main points of how the CDOs should facilitate the data strategy for an organization, and the perspective needed to overcome the challenges of digitalization in a post-pandemic market. 

 

With data having the potential to transform functions into a high business impact model, what initiatives should the CDO take to help this transition?

 

Ensure that there is a data strategy for each line of business. This helps pave a clear roadmap for the usage of data, the business value it enables, and the capabilities required to deliver this value.

Secondly, businesses will need to get the data into good shape, meaning:

  • Identify data ownership and resolve where ownership is unclear
  • Identify the data that matters, which means not all data, only the critical data
  • Make data issues transparent, such as data quality & remediation or master data management & replication
  • Embedding of data quality management in daily operations for data that matters
  • Drive fit for purpose improvements

Lastly, there needs to be a focus on upskilling the employees on data skills.

 

Are there challenges for the adoption of data technology skills and culture? How has the pandemic affected these challenges?

 

There are many challenges and plans that have been impacted, but I prefer to look at the opportunities.

I am heading our European Data & Analytics community and normally we hold local and focused events on specific data topics. These can be lunch & learn or deep dives on how to start on the AI journey, sharing best practices from a recent analytics project, etc. 

Due to the pandemic, we organized virtual sessions. These events offer the opportunity for staff to virtually meet other colleagues outside their daily routines and join with D&A communities in larger events across the organization, such as data literacy programs or DIY boot camps.

At the same time, the pandemic has accelerated the business’ digitalization plans, putting much more emphasis on data enablement. As a result, it has increased the need for Data, Data Strategy, Data Governance, Data Quality, Data Skills, and Data Capabilities in the organization.

 

People At The Core of Data and Digitalization

The explosion of available data has given corporations the potential to fuel a new era of fact-based innovation and new ideas through solid evidence. All this culminates in improving operations, clear strategies, and better ways to satisfy customers. 

Yet for many organizations, a strong data-driven culture still remains elusive with data rarely being the foundation for decision-making.

What makes it hard for corporations to be data-driven?

The answer lies beyond data technology. It is about kickstarting the culture at the very top through leadership that sets expectations and decisions anchored in data. The lack of data awareness is something that Hoppenbrouwer believes is one of the major pitfalls for those in leadership roles.

Not all employees are sufficiently aware of the importance of data for the organization. People have learned to store certain data, but they are not really sure why this is important and what other departments do with it.

As a result, data provided by one department to another is often incomplete or contains errors on more than one. Supplementing or correcting this leads to additional work and additional costs. It’s key for employees to understand the data value chain and the role they play in it.

 

What pitfalls should the CDO be aware of when pursuing a data-driven culture?

 

Culture is made up of people, and changing a culture means you need to get a change going with the people. People don’t change naturally unless there is a reason to do so.

Everybody wants to deliver their digitalization strategy due to the value it enables and this is a key catalyst to improve data culture. 

However, data is a foundational enabler, and data responsibilities were considered an add-on to the day job without recognition for good performance in data-related activity.

Leadership needs to change here and needs to step up, from the top, all the way to the supervisors on the shop floor.

What can the leadership do to make these changes? Some examples include:

  • Publicly speaking about the role and importance of data 
  • Clearly articulate how data enables the business strategy and the value it unlocks
  • Data roles & responsibilities need to be formalized AND effort recognized
  • Visibly recognizing the good work done in the organization to get the data right
  • Sharing of success stories and lessons learned
  • Encouraging staff to become more data literate, through sponsoring data literacy events, citizen data science boot camps, and inclusion in personal development plans

Ultimately, the CDO plays a key role here in supporting the leadership to drive change through the organization.

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Digital Healthcare: How Is Technology Transforming Health?

In a post-pandemic world, it’s clear that the need for digital transformation in healthcare has become important. A survey done by McKinsey with 213 European physicians claims that more than 50 percent believe that telemedicine will be a significant part of a modern healthcare system. 

With the digital healthcare revolution underway in European nations, it’s evident that hospitals and clinics will need to adapt to emerging technologies and integrate digital health solutions as part of their strategy. 

But what is digital healthcare? And how is technology transforming healthcare?

In this article, we take a look at some of how hospitals and clinics are integrating health digital solutions, how digitalization is used to fill the healthcare skill gap, and why data will be a significant tool in the care industry.

 

Adoption of Digital Technologies In Hospitals

Europe has been facing unprecedented pressure within the healthcare system and the pandemic has shown that despite the improvement in quantity and quality of care, there is still a gap in efforts toward digitalization.

This is in part, due to several challenges such as bureaucracy in healthcare and the costs of technology for organizations to implement digital technologies.

However, it does not mean that digital technologies are not being experimented with and utilized at all. In fact, due to the pandemic, certain countries are accelerating their adoption of digital and telemedicine solutions to help improve the quality of healthcare services provided.

One such example is Portugal’s use of the ePatient system for centralized and real-time patient data management. ePatient allowed clinicians to monitor and communicate with their patients remotely if they were not able to be present. 

 
 

This adoption of a digital healthcare solution has made home care easier for healthcare professionals in Portugal as they can communicate with each other over the application.

 

The Skill Gap In Digital Healthcare

With digital systems in place, hospitals and medical professionals will need to learn how to fully utilize these solutions to deliver care. However, many in the workforce, especially in the nurses’ field, are still lacking the skills and proficiency to handle digital healthcare solutions and technology.

Before organizations can scale up these digital systems, the digital divide and skill gap within the workforce need to be acknowledged. The workforce that delivers care to patients needs training and support to use new systems, and to use these technologies effectively to deliver high-quality digital care. 

How should organizations overcome this skill gap challenge?

Everything starts at the top and clear strategic directions from those in leadership roles to integrate and train the workforce to embrace new technologies and skills must be the priority. It’s important, however, that when investing in new systems, it needs to be guided by the organization’s long-term visions and account for sustainability.

Beyond that, investing and supporting educational initiatives that provide a platform for the workforce to develop these skills will be essential in filling the medical skill gap. One such initiative is the NURSEED program by a Danish collective company that seeks to address the nursing shortage and skill gap in Denmark through a digital platform.

 
 

Future of Health Is Digital and Data

Putting digital solutions in place and equipping the workforce with the necessary skills will lay the foundation for a digital healthcare revolution for many organizations. The next step is to fully embrace the healthcare digital transformation and understand the role of data analytics.

In recent years, big data tools have played significant roles in healthcare decision-making. This is in part due to the pandemic, which resulted in an enormous surge of health data being available, allowing for bigger and better analytics.

How can the health industry utilize these data?

Through descriptive, predictive, and prescriptive analytics, healthcare providers will have immediate access to necessary information, and improve overall efficiency. 

 

For healthcare professionals, this would mean improved predictive modeling that can alert them of potential risks of chronic illness or even self-harm. And on a larger scale, it can even predict outbreaks.

With predictive and prescriptive analytics, organizations can expect a reduction in overall healthcare costs by reducing appointment no-shows, preventing equipment breakdowns, decreasing fraud, and even managing supply chain costs.

Bottom line: better data leads to better healthcare.

 

Technology Is Transforming Healthcare

There is no doubt that the healthcare digital revolution is underway and technology will transform the solutions and approaches in modern care. The question is now whether organizations are changing fast enough to keep up with the demands of modern healthcare.

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The Top Worry In Cloud Security for 2021

The cloud is an environment full of potential. It provides easy access to technologies that simply weren’t available a decade ago. You can now launch the equivalent of an entire data center with a single command.

Scaling to meet the demands of millions of customers can be entirely automated. Advanced machine learning analysis is as simple as one API call. This has allowed teams to speed up innovation and focus almost exclusively on delivering business value.

But it’s not all unicorns and rainbows.

The assumption was that alongside this increased potential, the security challenges we see on-premises would grow as well. Teams should be struggling with zero days, vulnerability chains, and shadow IT.

It turns out they aren’t. At least those issues are nowhere near the top of their list of concerns. The top security challenge for builders in the cloud is very straightforward.

Their biggest challenge is making mistakes in the form of service misconfigurations.

 

Shared Responsibility

First, let’s look at the evidence around the initial assumption that people make about cloud security. They assume the cloud service providers themselves are a big risk. The data doesn’t support this at all.

Each of the big four cloud service providers; Alibaba Cloud, AWS, Google Cloud, and Microsoft Azure, have had two security breaches in their services over the past five years…combined. Now, before we get into each of these, it’s important to note that each of the big four has had to deal with tons of security vulnerabilities over this timeframe.

A large number of cloud services are simplified managed service offerings of popular commercial or open-source projects. These projects have had various security issues that the providers have had to deal with.

The advantage for us as users, and builders, is how operations work in the cloud. All operational work done in any cloud follows the Shared Responsibility Model. It’s very straightforward.

There are six primary areas where daily operational work is required. Depending on the type of service you are using in the cloud, your responsibilities shift. If you’re using instances or virtual machines, you are responsible for the operating system, the applications running on that OS, and your data. As you move to an entirely managed service, you are only responsible for the data you process and store with the service.

For all types of cloud services, you are responsible for service configuration. despite having a clear line of responsibilities, the providers offer many features to help you meet your responsibilities and adjust the services to suit your needs.

 

Cloud Service Provider Issues

Now, let us take a look at providers’ security issues over the past five years… the first one is from March 2020. In this case, Google Cloud paid out a $100,000 reward through their bug bounty program to a security researcher who found a privilege escalation issue in Google Cloud Shell.

This is a service that provides a browser-based interface to the command line of a virtual machine running in your account. Under the covers, this shell is simply a container running an application to provide the required access. The researcher noticed that they were able to use a socket connection in the container to compromise the host machine and escalate their access.

The root cause? A misconfiguration in the access to that socket.

The second example is from January 2020 and it involved a service offered in Microsoft Azure. Here an issue was reported in the Microsoft App Service offering. This vulnerability allowed an attacker to escape the expected boundaries of the service and access a limited-scope deployment server with elevated privileges.

The reason? A misconfiguration in the open-source tool used to provide this web app hosting service.

In both cases, the vulnerabilities were responsibly disclosed and quickly fixed. Neither issues lead to any reported customer impacts. Both of these cases were in higher-level cloud services. These are services that the provider’s teams built using other services on the platform. As a result, and in line with the shared responsibility model, they were at risk of a service misconfiguration.

Even hyper-scale providers face this challenge!

 

3rd Party Validation

There’s more evidence to support the fact that misconfigurations are the biggest issue in cloud security. Security researchers in the community who study cloud issues have all published findings that align with this premise. Whether from other security vendors or industry organizations, the findings agree: that 65-70% of all security issues in the cloud start with a misconfiguration.

Making it worse, 45% of organizations believe that privacy and security challenges are a barrier to cloud adoption.

Why is that worse?

When understood, the shared responsibility model makes it easier to maintain a strong security posture. Organizations should be pushing to move faster to the cloud to improve their security!

 

Direct evidence

However, surveys and targeted research projects only go so far. What does the publicly available evidence say? Here’s a list of some of the most visible cloud security breaches in recent years;

 
 

If you filter out all the reports of cloud hacks and breaches to remove incidents that were not cloud-specific—so those where the issue wasn’t related to the cloud, the service just happened to be there—over two billion sensitive records have been exposed through a breach in cloud security.

Let’s take this further and remove every single breach that wasn’t due to a single misconfiguration.

Yes, single. One wrong setting. One incorrect permission. One simple mistake…caused all of these breaches.

That leaves the Capital One breach. This more complicated event was caused by …two misconfigurations and a bug. An in-depth analysis of this breach shows that the bug was inconsequential to the overall impact which was 100 million customer records being exposed.

What’s more, is that Capital One is a very mature cloud user. They are a reference customer for AWS, they’ve been a huge advocate of the cloud within the community and were the incubator for the very popular open-source security, governance, and management tool, Cloud Custodian.

This is a team that knows what they are doing. And yet, they still made a mistake.

 

Pace of Change

That’s really what misconfigurations are. They are mistakes. Sometimes those mistakes are oversights, and other times an incorrect choices made due to a lack of awareness.

It all comes back to the power made accessible by the cloud. Reducing these barriers has had a commensurate increase in the pace of innovation. Teams are moving faster. As these teams mature, they can maintain a high rate of innovation with a low failure rate.

In fact, 43% of teams who have adopted a DevOps philosophy can deploy at least once a week while maintaining a failure rate of under 15%.

Critically, when they do encounter a failure, they can resolve it within the day…more impressively 46% of those teams resolve those issues within the hour. But, as we know, cybercriminals don’t need a day. Any opening can be enough to gain a foothold creating an incident.

What about teams that aren’t at this pace? Well, the other 57% of teams, the majority of which are large enterprises, often feel that their lack of pace provides protection. Moving cautiously in the cloud allows them to take a more measured approach and reduce their error rates.

While this may be true—and there’s no evidence to support or disprove this assumption—change is still happening around them. The cloud service providers themselves are moving at a rapid pace.

In 2020, the big four hyper-scale providers released over 5,000 new features for their services. For single cloud users, that means almost 2 new features a day…at a minimum. For the growing set of multi-cloud users, the pace of change only increases. So even if your team is moving slowly, the ground underneath them is shifting rapidly.

 

Goal of cybersecurity

Now the goal of cybersecurity is actually quite simple. The goal is to ensure that whatever is built works as intended and only as intended. In a traditional on-premises environment, this standard approach is a strong perimeter and deep visibility across the enterprise.

That doesn’t work in the cloud. The pace of change is too rapid, both internally and with the provider. Smaller teams are building more and more. Quite often, by design, these teams act outside of the central CIO infrastructure.

This requires that security is treated as another aspect of building well. It cannot be treated as a stand-alone activity. This sounds like a monumental task, but it’s not. It starts with two key questions;

  1. What else can this do?
  2. Are you sure?

This container running the code creates the financial reports. What else can it do? Can it access other types of data? Are you even sure it’s the right container?

This is where security controls provide the most value.

 

Top pain points to address

Most of the time when we talk about security controls, we talk about what they stop. Using an intrusion prevention system can stop worms and other types of network attacks. Anti-malware controls can stop ransomware, crypto miners, and other malicious behaviors.

For every security control, we have a list of things it stops. This is excellent and works well with subject matter experts…a.k.a the security team.

Builders have a different perspective. Builders want to build. When framed in the proper context, it’s easy to show how security controls can help them build better.

Posture management helps ensure that settings stay set regardless of how many times a team deploys during the week. Network controls assure teams that only valid traffic ever reaches their code. Container admission control makes sure that the right container is deployed at the right time.

Security controls do so much more than just stop things from happening. They provide answers to critical questions that builders are starting to ask.

“What else can this do?”. Very little thanks to these security controls.

“Are you sure?” Yes. I have these controls in place to make sure.

When built well and deployed intelligently, security controls help teams deliver more dependable, easier-to-observe, and more reliable solutions.

Security helps you build better.

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Smart Manufacturing: Die Zukunft der Industrie?

Johann Hofmann, Founder von ValueFactoring® bei MR Maschinenfabrik Reinhausen GmbH zählt mit über 30 Jahren Berufserfahrung als Experte im Bereich Industrie 4.0 und Digitalisierung. Schon zu Beginn seiner Karriere hat er für sein Unternehmen den digitalen Weg bereitet und ein Assistenzsystem für die digitale Hochleistungsfertigung entwickelt, für das er mit dem Industrie 4.0 Award ausgezeichnet wurde. 

Der charismatische Maschineningenieur hilft heute EntscheidungsträgerInnen dabei, Sicherheit und Know-how rund um Digitalisierung und Industrie 4.0 zu erhalten. In diesem Interview zeigt er uns auf, wie der Stand im Smart Manufacturing heute in Deutschland ist und wo es noch Verbesserungsbedarf gibt. 

 

New Normal in der Industrie 4.0

Wie hat der aktuelle Normalzustand, das „New Normal“, die Aussichten für Industrie 4.0 verändert? Sind die Hersteller auf dem richtigen Weg in Bezug auf die nötige Digitalisierung?

 

Es geht um Hersteller von vernetzungsfähigen Produkten. Die Werkzeugmaschine oder der Werkzeugschrank ist zum Beispiel ein vernetzungsfähiges Produkt. Diese Produkte sind auch als Assets im Sinne von Industrie 4.0 bekannt. Und ebendiese Assets müssen zu Industrie 4.0 Komponenten werden, damit das Ganze funktioniert.

Dazu braucht jedes Asset eine Verwaltungsschale. Die Verwaltungsschale ist im Prinzip Teil des Digital Twins (Digitaler Zwilling). Damit wird die Vernetzung vereinfacht, so dass wir von diesem „Gefrickel“ wegkommen, das beim Vernetzen von Dingen oftmals entsteht. 

Beim Drucker hat das ja wunderbar funktioniert. Wenn wir heute unter Windows 10 einen neuen Drucker installieren, steckt man den ein und der installiert sich von selbst. So etwas stelle ich mir auch bei Werkzeugmaschinen vor. Doch dazu müssen die Hersteller von diesen vernetzungsfähigen Produkten eine Industrie 4.0 Komponente ausliefern, also nicht nur das Produkt selbst, sondern auch den digitalen Zwilling, wie die Verwaltungsschale. Dann sind sie auf dem richtigen Weg.

 

Veränderungen durch das New Normal

Hat das New Normal, dieser neue Normalzustand, in den letzten Monaten viel verändert oder war das von Anfang an Thematik?

 

Worüber ich eben gesprochen habe, ist nicht die Wirklichkeit, sondern eine Wunschvorstellung. Das muss sich erst Schritt für Schritt über alle Asset-Hersteller ergeben. Die Hersteller von vernetzungsfähigen Produkten halten sich aktuell zurück, weil es noch keine Software gibt, die damit umgehen kann. Gleichzeitig halten sich die Software-Hersteller zurück, weil es noch keine vernetzungsfähigen Produkte gibt, die eine Verwaltungsschale mitbringen. 

Da muss die Industrie 4.0 Plattform noch richtig Druck auf die gesamten Hersteller ausüben und ein Regelwerk kreieren, damit das in Gang kommt. Dieser „Normalzustand“ ist also noch nicht da, ist aber ein „gewünschter“ Normalzustand irgendwann in der Zukunft.

 

Wie fortgeschritten ist dieser Plan denn schon? Kannst du uns eine Einschätzung geben?

 

Das ist branchenabhängig. Unterschiedliche Branchen sind also unterschiedlich weit. Und ich habe das Gefühl, dass die Branche, in der ich unterwegs bin, die diskrete Fertigung, am weitesten hinterher hinkt. Aber das ist nur eine persönliche Einschätzung (lacht).

 
Wünschen Sie sich weitere aufschlussreiche Diskussionen? Treffen Sie Johann Hofmann und andere BranchenexpertInnen auf unserer nächsten Veranstaltung IndustryForum Smart Manufacturing.
 

Zukunftsausblick: Augmented Reality, Wearables und Cloud

Gibt es andere aufstrebende Technologien, die Hersteller im Auge behalten sollten? Welche Herausforderung gibt es bei der Einführung solcher Technologien?

 

Da fallen mir auf einen Schlag drei Technologien ein. Zum einen wären das die Datenbrillen, also Augmented Reality über Datenbrillen. Diese Technologie kränkelt aber ein bisschen. Wir hatten vor Jahren schon mal einen Versuchsballon zum Umrüsten von Maschinen über eine digitale Brille gestartet, bei der man den Arbeitsraum dann digital sieht. Das lief jedoch noch nicht ganz reibungslos, deshalb wurde das Projekt erstmal auf Eis gelegt. Trotzdem habe ich dahingehend eine große Erwartungshaltung. Mit jeder neuen Version einer Datenbrille wird es sicherlich besser und umfangreicher. 

Überholt werden könnte diese Technologie von Wearables, also am Körper tragbare Computer, wie beispielsweise eine Smart Watch oder Datenhandschuhe. Hier wird sicherlich eine Zeit kommen, bei der der Meister durch eine Fertigungshalle läuft, dabei auf seiner digitalen Uhr Informationen von einer Werkzeugmaschine bekommt, die gerade irgendein Problem hat. Das wird bestimmt Standard in der Zukunft werden. 

Die dritte Technologie ist die Cloud. Vor Jahren war ich ein größerer Fan der Cloud. Das hat jetzt ein bisschen abgeflacht, weil all unsere Kunden in der Fertigungsbranche Angst vor der Cloud haben. Doch das Thema sollte unbedingt weiterverfolgt werden. Es gibt Branchen, die sind komplett in der Cloud, zum Beispiel Amazon. Aber genau in unserer Branche hinkt man da ein bisschen hinterher, wir müssen aber am Ball bleiben.

 

Die Wichtigkeit von Digital Twins im Smart Manufacturing

Der Digital Twin ist bei den Herstellern immer beliebter geworden um mit Start-Ups wie Tesla Schritt zu halten. Wie sollten ältere, alteingesessene Fabriken die Einführung eines Digital Twins angehen?

 

Aus der Sicht des Anwenders ist die Frage einfach zu beantworten. Wenn eine Fabrik etwa eine neue Maschine, einen Werkzeugschrank oder ein anderes Produkt bestellt, sollte sie vom Hersteller einen Digital Twin fordern. Es soll also nicht nur die Maschine, sondern auch der digitale Zwilling geliefert werden. 

Und das kann ich vom Hersteller verlangen, da ich als Käufer auch eine gewisse Macht habe. Wenn ich diese Macht nutze, dann werden alle Hersteller mit der Zeit ganz sachte dazu gezwungen, den digitalen Zwilling zu liefern. Und daran scheitert es ja momentan. Dazu fällt mir ein Beispiel ein: 

Vor ca. 15 Jahren, als ich die Werkzeugdatenbanken aufgebaut habe, hatten wir kein Bild bzw. eine Grafik dazu. Wir mussten nebenbei Studenten beschäftigen, die uns die Grafiken für die Werkzeuge gezeichnet haben. Damals habe ich unseren Einkäufer also darum gebeten, bei jedem Kauf in den SAP Datensatz reinzuschreiben, dass das Werkzeug UND eine Grafik geliefert werden müssen. Wenn eines davon nicht geliefert werden sollte, zahlen wir auch nicht. 

Natürlich war das damals in der Werkzeugbranche erst einmal ein Riesenaufschrei, ist heute aber Standard. Wer heute ein Werkzeug kauft, bekommt selbstredend eine Grafik dazu. Jeder der also Produkte kauft, kann beim Hersteller Druck aufbauen. Jetzt jedoch müssen wir nicht nach der Grafik verlangen, sondern nach dem Digital Twin. Wenn das jeder fordert, kann man sich den Zugzwang ausmalen, der plötzlich bei den Herstellern herrschen würde.

 

Das fehlt also noch. Aber ist es auch umsetzbar und realistisch?

 

(Lacht) Wir müssen das halt erst einmal probieren. Es gibt ja viele Hersteller, die bereits einen Digitalen Twin liefern, aber teilweise noch nicht vollständig. Die Industrie ist da auf jeden Fall auf einem guten Weg, aber eben noch nicht am Ziel. Um dieses Ziel jedoch schneller zu erreichen, können Einkäufer diesen Druck bei den Herstellern aufbauen.

 

Die fünf Naturgesetze der Digitalisierung

Was sind die größten Herausforderungen für Fabriken bei der Anwendung von Digital Twins als Teil ihrer bestehenden Prozesse? Was können Hersteller tun, um diese Herausforderungen zu meistern?

 

Ich beschäftige mich mittlerweile seit 33 Jahren mit der Digitalisierung. Dabei haben sich immer die gleichen Herausforderungen herauskristallisiert. Wenn ein Projekt gekränkelt hat oder gescheitert ist, war das immer eine von fünf Herausforderungen, die nicht vernünftig angepackt worden ist. Diese fünf Herausforderungen nenne ich die „fünf Naturgesetze der Digitalisierung“. Diese muss man abarbeiten, damit solche Projekte auch gelingen können. 

Das erste Naturgesetz ist: Menschen mitnehmen. Klingt erst einmal ganz banal, aber wenn die MitarbeiterInnen nicht wollen, wird das Projekt immer scheitern. Man muss Menschen also von dem Projekt begeistern. Da gibt es eine Metapher, die man vor allem auf Konferenzen häufig hört: Wenn du ein Schiff bauen willst, erzähl den Leuten nicht, was sie alles für den Bau benötigen. Erzähle ihnen nur von der Schönheit des Meeres. Dann wirst du auch das beste Boot bekommen, das du dir vorstellen kannst. 

Das zweite Naturgesetz ist: Wenn man einen schlechten analogen Prozess digitalisiert, dann bekommt man einen noch schlechteren digitalen Prozess. Analoge Prozesse müssen also schon vorher schlank und einfach gemacht werden. Dazu eignen sich LEAN-Methoden hervorragend. Also LEAN einführen und leben, das ist das zweite Naturgesetz der Digitalisierung und somit auch eine Herausforderung.

Das dritte Naturgesetz sind Stammdaten. Viele Projekte scheitern an unvollständigen Stammdaten. Diese müssen vollständig und fehlerfrei sein. Wenn du beispielsweise mit einem Navigationssystem durch Deutschland fährst, dann sind die Landkarten die Stammdaten. Wenn ich nun in ein neues Industriegebiet fahre, und mein Navi diese neue Landkarte noch nicht kennt, dann fehlen mir hier die Stammdaten. 

Das vierte Naturgesetz ist: Die Konnektivität im Brown-Field herstellen. Wir leben und arbeiten ja alle in einem Brown-Field. Green-Field wäre eine nagelneue Fabrik mit nagelneuen Maschinen und Werkzeugen. Doch das hat keiner. Wir alle haben einen historisch gewachsenen Maschinenpark. Wir haben also einen maschinellen Zoo an unterschiedlichen Maschinen, die 24 Stunden am Tag und 365 Tage im Jahr stabil vernetzt sein müssen. Wenn ich diese Konnektivität nicht erreichen kann, kann ich alles andere auch nicht schaffen. 

Das fünfte Naturgesetz ist: Offene Ökosysteme. In unserer Branche soll man nicht nach einer eierlegenden Wollmilchsau suchen, denn die ist Illusion. Die Lösung sieht so aus: Die digitale Fabrik besteht aus verschiedenen, eigenständigen Öko-Systemen, in deren Zentrum ein planendes META – System sitzt, Stand heute ist das das ERP System. Unterhalb dieser META Ebene befinden sich die jeweiligen ÖKO Systeme mit ihren domänenspezifischen Abläufen und Prozessen. Wie z.B. eine Feinsteuerung, ein Warehouse System, ein CAQ System, ein PLM System, ein Shopfloor System, etc. Die Interoperabilität dieser Systeme ist dabei ein entscheidendes Kriterium für deren Auswahl. Die richtige Orchestrierung der einzelnen Ökosysteme bringt den echten Mehrwert der Digitalisierung.

Das sind die fünf Herausforderungen, die man erst einmal meistern muss, bevor man überhaupt mit der KI den nächsten großen Sprung machen kann. Ohne das bringt auch ein Digital Twin nichts. Wenn es dafür keine Basis gibt, dann ist der Digital Twin auf verlorenem Posten.

 

Nachhaltigkeit in der Industrie 4.0

Aufgrund von Megatrends, wie dem Klimawandel, ist die Nachhaltigkeit für die Infrastruktur von größter Bedeutung. Welche wichtigen Änderungen nehmen Hersteller vor, um mit den Nachhaltigkeits-Vorschriften Schritt zu halten?

 

(Lacht) Jetzt hast du ein Riesenthema aufgemacht. Was heißt denn Nachhaltigkeit überhaupt? „Die natürliche Regenerationsfähigkeit der beteiligten Systeme gewährleisten“. Am Beispiel der Forstwirtschaft heißt das etwa, nicht mehr Holz zu fällen als nachwachsen kann. Schneide ich einen Baum ab, muss ich einen Baum anpflanzen, der auch irgendwann abgeholzt werden kann. Das ist Nachhaltigkeit. 

Aber was bedeutet das für uns in der Produktion? In den Produktionshallen würde das bedeuten, dass nicht mehr Rohstoffe verbraucht werden als Rohstoffe nachwachsen können, wie beispielsweise seltene Erden, Erdöl oder Eisenerz. Das geht aber nicht. Diese Aussage („geht nicht“) verwende ich äußerst selten. In diesem Fall hat das allerdings Millionen an Jahren gebraucht, um überhaupt zu entstehen. Die ganze Nachhaltigkeits-Thematik ist in der Fertigungsbranche also eher scheinheilig, weil es sowieso nicht geht. 

Wir beuten die Erde aus, bis sie kollabiert. Punkt. Das ist das Problem, das wir alle auf diesem Planeten haben. Was sollen die Hersteller jetzt also machen, um einigermaßen etwas richtig zu machen? 

Sie könnten in energieeffiziente Anlagen investieren, damit auch der CO2-Ausstoß reduziert wird. Auch könnten Reisezeiten minimiert werden. Durch die Coronavirus-Pandemie habe ich so viel Reisezeit eingespart, das kann man auch nach Corona noch beibehalten. Zudem sollte Home-Office – soweit möglich – auch nach der Pandemie ermöglicht werden. So wird jeden Tag der Weg ins Büro gespart, und damit auch Sprit. 

Ein Beispiel: Manche fertigen ein goldenes Lenkrad mit Lenkradheizung, während andere einen Tesla bauen. Nicht das goldene Lenkrad sollte optimiert werden, sondern es sollte an den richtigen Stellen weiterentwickelt werden. Aber ob das Elektroauto für den Klimawandel wirklich so gut ist, ist eine völlig andere Diskussion. 

Eine weitere Methode, die bei der Nachhaltigkeit helfen könnte, wäre die Just-in-Time-Produktion. In meinem Studium im Jahr 1989 wurde das sehr stark thematisiert. Hier heißt es: Das beste Lager ist kein Lager. Der beste Transport ist kein Transport. Es könnte also direkt in die Montage produziert werden, statt erst einmal ins Lager und von dort aus wieder weiter transportiert zu werden. Das ist zwar eine uralte Methode, aber die könnte durchaus nachhaltig sein.

 

Ist das eine realistische Methode? Setzen dies Hersteller vielleicht sogar schon um?

 

Die Automobilindustrie setzt das großartig um. Sitzhersteller zum Beispiel fahren ihre Sitze in kein Lager, sondern direkt an die Montagelinie im Autowerk und vor dort werden sie Just-In-Time montiert. So gut, wie das die Autoindustrie hinbekommt, bekommt das keine andere Branche hin. Da gibt es für unsere Branche noch viel Optimierungs-Potenzial.

 

Richtig auf die Zukunft vorbereiten

Inwiefern können Zukunftsszenarien EntscheidungsträgerInnen helfen, ihre Pläne zu verfeinern und Strategien zu entwickeln, um sich auf die Zukunft vorzubereiten?

 

Zukunftsszenarien helfen EntscheiderInnen immer nur dann, wenn sie die Zukunft auch richtig vorhergesagt haben. Sonst kann es sein, dass Pläne entstehen, die das Ganze nicht verfeinert, sondern ruiniert haben. Wenn ich von einem komplett falschen Szenario ausgehe, dann treffe ich ja die komplett falschen Entscheidungen. 

Dazu fällt mir immer der Komiker Karl Valentin ein. Er hat folgendes gesagt: „Prognosen sind schwierig, besonders wenn sie die Zukunft betreffen“ (lacht). 

Aber bei Zukunftsfragen kann ich trotzdem eine Hilfestellung geben, wie beispielsweise die fünf Naturgesetze der Digitalisierung. Diese haben sich über Jahrzehnte als Basis für richtige Entscheidungen bewährt und haben auch noch in der Zukunft Gültigkeit. Wenn man sich daran orientiert, kann man eigentlich keinen großen Fehler machen.  Wenn Sie diesen QR-Code entschlüsseln, dann finden Sie dazu eine wertvolle Hilfestellung, in der meine Erkenntnisse aus 33 Jahren Digitalisierung komprimiert dargestellt werden: 

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Hartung Wilstermann: Surviving Disruptive Trends Through Change and Adaptation

Major industries of the world experienced a massive shift due to the pandemic with many corporations navigating through the disruptive scenarios hoping to achieve growth and recovery in a post-pandemic landscape. 

For Hartung Wilstermann, Executive Vice President Battery Systems of Webasto Group, the journey towards achieving growth is to understand one simple truth: change and adapt.

In this interview, Wilstermann discusses and explores a wide range of topics such as the future workplace, the megatrends that the automotive industry needs to know, and how all of it comes back to the need for change and adaptation.

 
Want more insights on the automotive industry from Hartung Wilstermann? Join him and many other industry leaders in Management Events’ IndustryForum Automotive event in Germany.
 

Understanding The Post-Pandemic Landscape and Challenges

It’s safe to say that everything changed due to the pandemic and with the economies opening back through rampant vaccination, corporations are preparing future scenarios to keep up with business growth in 2021 and beyond.

However, Wilstermann believes that the focus should not be on creating scenarios or predicting the outcomes of the future. Rather, what is important is for organizations to understand that reacting and being flexible to situations that arise should be the priority.

 

What is your outlook on the European automotive industry in the latter half of 2021?

 

My personal opinion here is, let’s not try to find the right scenario for the future. Instead, understand that whatever you have planned, will come differently.

Of course, you can have plans and scenarios, either internally or through different companies that are analyzing and predicting what will happen in the industry. However, if you look at the past year, they have all been wrong.

Nobody foresaw Corona(virus), and nobody was prepared for the crisis.

It is not that important to predict or analyze what will come. It is more important to be able to react to whatever will come. So for me, the answer is, whatever happens, we need to be prepared to react and be flexible to the situation.

Be flexible, have your scenarios but expect it will come differently.

 

What about post-pandemic challenges for the European automakers? Will it be different?

 

Again, it’s not new and there will always be new changes and challenges. Our whole life is nothing but changes and currently, there are several big changes in society that corporations need to keep an eye on; namely, autonomous driving, connected vehicles, and e-mobility.

These are well-known megatrends that we need to focus on, that is clear. 

But for the European automakers, the challenges are the same as it was in the past. They need to adapt to new realities, be it to jump into services, invest in e-mobility, or autonomous mobility. 

This is my key point here. Corporations must react faster to the changes because the changes are occurring faster and faster.

 

Interconnected Industry Megatrends, Climate Influences, and The Speed of Change

2021 kickstarted a global effort to bring COVID-19 under control through massive vaccination and a reenergized global agenda towards climate change. There is no question that 2021 will be a year of transition, but how has it affected the megatrends amongst major industries and the automotive industry in particular?

Wilstermann highlights that many facets of the automotive industry’s megatrends have shifted towards sustainability and e-mobility, in addition to digital transformation, and how change is at the core of all these megatrends.

 

What are the key megatrends or changes that will drive growth for the European automotive industry?

 

The big ones are the well-known ones. You have digitalization, which can be a megatrend and a source for change.

And then you have e-mobility, which for me, is something which I have believed in 15 years ago and is now coming through. And the e-mobility trend will not just be batteries, it will be a global trend, for all the mobility that we have on earth. Like aviation, automotive, and marine mobility.

Another megatrend is the speedup of changes. The speed of change is a megatrend itself because it influences all of our challenges and pushes organizations to adapt. The world has become closer and globalization has shown how connected we are on a global scale.

And when one industry goes down, it influences the rest of the industry as well.  A virus can influence the production of chips and the supply chain, which shows how fully integrated and highly connected our industries are.

Yes, organizations are reacting to this, by getting more local. But we need to get faster. To react and still be calm when we experience changes. 

And of course, we also need to adapt to climate change. It is something which we can see, and is happening now. Climate change will influence the way we need to think, the way we need to act, so, I would also call it a megatrend. 

It might not be one which we like to have, but it is happening. It is a megatrend we need to understand and realize it is there. It will influence our way of thinking, of acting, and therefore the industry.

 

The New Balance of Future Workplace and The Roles of Leadership

The pandemic has disrupted the structure of the workplace as more and more corporations have adapted to the idea of mobile work offices. However, finding the balance for the future workplace is a question that many leaders within the automotive industry are struggling to answer.

For Wilstermann, the focus should not be on finding a single solution or a sweeping generalization on what the “next-normal” workplace will be for an organization.

But rather, to adapt and change as necessary, create a new balance that works for the culture of the company and at the same time, having those in the leadership roles lead the way for these changes.

 

What will the “next-normal” workplace look like and how can organizations achieve it?

 

The “next-normal” is something we cannot predict. But, we can create it.

We can create it by understanding what are the needs of the workplace, and what are the changes.

For example, before COVID-19, most companies were reluctant to have mobile offices. Now, we’ve all understood that mobile offices are possible because we were forced to do it.

Will we stay completely with mobile offices? Of course not. 

There needs to be some kind of balance where we will integrate this new change into the new workspace. Yes, there are a lot of different solutions depending on the department, but the new reality will be a very diverse one.

Each area, each department, each team, needs to find its balance and adapt it to the changes that will come up. So this, for me, will be a new reality. It is much more flexible and more reactive to the needs of the customers, the employees, the industry, and the megatrends.

 

What role should those in leadership roles play to help transition into a diverse workplace?

 

For me, the most important part of leadership is to lead people, and sometimes also results. This also means that you need to create an environment where people can do their jobs.

And being in that leadership role means setting an environment that allows people to adapt individually and react quickly to changes.

Leading, or being in a leadership role, does not mean setting a goal and waiting until somebody reaches those goals. It means creating an environment that allows people to adapt, fast and individualized, to their needs while still being part of the team.

This is what I would call, real leadership. It is setting the environment for people so that they can find their solutions. Not setting solutions, or defining what the “next-normal” will be, how it looks, or how it will work.

 

Adaptation Is Key In Organizational Structures And Embracing Change 

Corporations are constantly in search of the perfect organizational structure that will help align their vision and drive growth, especially in today’s volatile market. 

With major industries within Europe pushing towards Sustainable Development Goals (SDGs), corporations are scrambling to find and develop the necessary elements needed to overcome the disruptive changes coming due to sustainable initiatives. 

But as Wilstermann points out, there is no “perfect” solution or structure, and that companies must react and evolve constantly to the changes that occur within the industry.

 

How should organizations structure themselves to overcome disruptive changes such as Sustainable Development Goals (SDGs)?

 

I would say it is very important to first understand the history of the company, the mindset, and the culture of the company. 

There is no one organizational setup that is the best as there are many elements that you need to take into account, such as the culture, product, and even the size of the company. 

The only consistent element that I see the same for every organization is the need for change and adaptation to the megatrends, the society, your customers, and the competition.

The best setup is to have a continuous improvement and change of the organization and not assume that the organization you have now will be the same for the next ten years.

If you’re open to changes, you will be able to find the perfect organization for this point in time, in this situation, the environment you are in, and for your industry. And tomorrow, it will be a different one. 

But, if you’re open to adapt, you will find another setup.

Of course, it all depends on different factors such as region, product, history. Adapting to all of these factors and elements will lead to a temporarily optimized organizational structure.

 

What advice would you give to organizations on overcoming changes from disruption?

 

Let me share a personal experience from when I was in the Philippines for one year. 

Coming from Germany where everything was structured. Safety was, for me, having insurance, enough money, and all these things which were related to planning and stability. 

Then going to the Philippines, and seeing how different it was. I came back with a different understanding of what feeling safe meant. 

It was not having money, insurance, a car, plans, and so on.

I came back with the understanding that feeling safe means having the confidence of being able to deal with every upcoming change. 

Do not try to avoid changes and replace them with plans, which will never come true. Rather, it is necessary to adapt to the future, deal with all the changes that come from disruption, and keep pace with the speed of the changes.

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Lokke Moerel: Digital Sovereignty and the Changing Landscape of AI & Privacy Laws

As we enter the second half of 2021, it’s becoming evident that societies worldwide embrace digital transformation as part of their everyday lives. This is backed by the fact that half of the world now uses social media and at least 4.66 billion people around the world now use the internet.

However, as societies become more digitized, the vulnerabilities that come with it also increase. From malware attacks that rose by 358% to a significant increase in risk of successful ransomware attacks due to remote working during Covid-19, to difficult-to-combat online conspiracy theories of the anti-vax and anti-5G movements, stimulated by Russian infiltration.

Lokke Moerel, professor of Global ICT Law at Tilburg University and member of the Dutch Cyber Security Council, shares her insights into the need for digital sovereignty within the EU and how AI and privacy laws are changing rapidly due to digitization.

 

Accelerating Digital Sovereignty across Europe

 

In today’s increasingly digitalized landscape, more and more users feel the need to keep their data safe and are willing to leave popular platforms, such as Whatsapp, based on a change of privacy terms.

With 92% of Western data being kept in the US, EU nations have realized the need to adopt a joint strategy on how data is controlled and shared. While fostering the Digital Single Market is needed for innovation to thrive, effective safeguards must be placed to protect users in a data-driven world.

Lokke goes into detail about how the current situation has exacerbated the need for digital sovereignty in the EU, particularly for the Netherlands as advised by the Dutch Cyber Security Council.

 

Europe has been focusing on digital sovereignty and recently, the Dutch Cyber Security Council issued public advice that the digital sovereignty of the Netherlands is under pressure. What does digital sovereignty mean?

 

We are one of the most digitalized societies and this has been accelerated by the Corona crisis. Within no time, people worked from home, and children were schooled online. It was amazing to see how quickly we were up and running again. However, every upside has downsides and we saw new vulnerabilities and dependencies. 

  • A tremendous increase in the activities of cyber criminals abusing the vulnerabilities due to remote access to systems when people worked from home.
  • Foreign states stealing COVID-19 research
  • Flaws in privacy and security of video tooling.
  • More data on children are in the clouds of non-EU providers due to the increased use of digital teaching tools.
  • The dependency of the Netherlands on social media platforms for combating misinformation and the lack of control from the government to combat it.

The core message of the public advice of the Council is that our digital dependencies are now so great that the digital sovereignty of the Netherlands is under pressure. This goes further than guaranteeing the cybersecurity of our critical IT systems and the data generated with these systems. We also need to maintain control over our essential economic ecosystems and democratic processes in the digital world.

 

Can you give us examples of how digital sovereignty (or lack of it) can affect the economic ecosystems and democratic processes?

 

Examples of essential eco-systems:

Lack of control over critical technologies will result in new dependencies. For example, without proper encryption, we will not be able to protect the valuable and sensitive information of our governments, companies, and citizens. Current encryption will not hold against the computing power of future quantum computers.

We will therefore have to innovate now to protect our critical information also in the future. This is not only relevant for future information, but also current information. Do not forget that foreign states systematically intercept and preserve encrypted communications in anticipation that these may be decrypted at a later stage. 

To be able to make large-scale use of data analysis using AI, enormous computing power is required (which requires cloud computing) as well as access to large quantities of data, which will require combining data in specific industry sectors (such as health), which is currently difficult.

Efficient access to harmonized data and computing infrastructure will become the foundation for the Dutch and European innovation and knowledge infrastructure. Maintaining control over this is an essential part of our strategic autonomy.

Examples of democratic processes: When the state is not in control over the election process, due to targeted misinformation and systematic infiltration of social media by foreign states to influence citizens, our digital sovereignty is at stake.

We see that digital sovereignty is very high on the EU’s agenda. For our neighbor Germany, for example, it is Chefsache. In the Netherlands, however, we mainly respond to cyber threats in a technical and reactive manner. We respond in crisis mode. 

The council thinks it is high time for a more coordinated and proactive approach, starting with ensuring three basis facilities: sovereignty-respecting cloud for secure data storage and data analysis, secure digital communication networks, and post-quantum cryptography.

 
Want more insights on cybersecurity? Join industry leaders and C-suites from top 500 companies and gain exclusive insider knowledge at Management Events’ 600Minutes Cyber Security in Belgium.
 

CISO and Their Roles in Digital Sovereignty

 

At the core of digital sovereignty issues is the need to safeguard information assets for European countries.

As the Netherlands continues to build upon its Dutch Digitalisation Strategy 2.0 and integrate more cloud-based technologies within its economic ecosystems and democratic processes, it is up to chief information security officers (CISO) to be aware of what it all means for an organization and how it affects its cloud strategies.

 

What does digital sovereignty mean for the CISO?

 

Most governments and companies will have a corporate cloud policy. I see that these policies really try to address the direct requirements of a specific cloud project. 

When deciding whether to bring services to the cloud, the company will weigh up the benefits of public cloud (better security, better functionalities) on a project-by-project basis against the specific dependencies and security issues in the project in question.

However, considerations of loss of sovereignty are not taken into account. As a result, for each project, the decision can be justified, but ultimately these decisions together do threaten our sovereignty, where in the future you want to be able to process data across cloud solutions for example (an example of The Tragedy of the Commons).

I think it is important for CISOs to be aware of all the EU initiatives to increase our digital sovereignty.

 

What should they be aware of in terms of initiatives?

 

GAIA-X: many people think that the GAIA-X project, is about setting up a European cloud infrastructure. GAIA-X is, however, not about creating Europe’s own vertical cloud hyperscalers. It is also not about keeping the non-EU cloud services providers out or keeping all data within the EU. It is about achieving interoperability between cloud offerings by setting common technical standards and legal frameworks for cloud infrastructure and services. 

This form of interoperability goes beyond the portability of data and applications from one vendor to another to prevent vendor lock-in; it really concerns the creation of open APIs, interoperability of key management for encryption, unambiguous identity, and access management, full control over storage and access to data, etc.

Worth keeping track of I would say.

European Data Spaces: data spaces intended to unlock the value of European data for innovation. 

The aim is to create common data spaces for certain sectors with common interests (e.g., for health data and governments) so that the scale of data required for innovation for this group can be achieved.

 

Looking Into AI and Its Purpose in Cyber Security

 

As remote working conditions and digital processes continue to become the norm for users and organizations, cyber attacks are becoming increasingly prevalent. 95% of cybersecurity breaches are a result of human error and as the information security market is expected to reach $170 billion in 2022, the cost of digital attacks can be enormous.

AI has always been seen as a silver bullet for organizations to combat cyber-attacks and increase resilience in areas where a majority of human error lies. However, Lokke describes the potential and possibilities of AI as both good and bad, depending on how it is utilized.

 

What scares you the most regarding the seemingly endless possibilities of AI?

 

Like all technology: AI is not good, it is not bad, but it is also not neutral. 

To start with, AI is as good as the purpose for which it is used. In the cyber context, this means that we really should keep ahead of the bad guys. 

New technologies play an increasingly crucial role in cyber resilience. If we are not on top of new technologies like AI and encryption, this will result in new vulnerabilities and dependencies. An example here is that with AI, bad actors can detect and exploit vulnerabilities automatically and on a large scale.

However, AI is also expected to make it possible to automatically detect and patch vulnerabilities. I am currently involved in a research project, to investigate what options there are to facilitate real-time security patching by suppliers.

 

Privacy Laws in The EU and Its Future

 

With digital sovereignty being top-of-mind for EU nations and the increased awareness of data privacy among the public, governments and regulators understand that there is a need for comprehensive privacy laws that protect both users and businesses.

From California Privacy Rights Act to the ever-evolving GDPR, more and more data protection acts are being introduced and implemented across the globe. Moerel shares her views on how privacy laws will continue to shift and change to adapt to the new digital landscape and what global privacy laws mean for an organization.

 

In what ways do you see privacy laws changing in the future?

 

Every week there is a new privacy law being adopted somewhere in the world. By now there are about 130 countries with omnibus ‘GDPR style’ privacy laws. Everybody heard about the Californian Privacy Rights Act, but less well known is that by now, 20 other U.S. states have introduced privacy bills. 

In the EU we now have the draft proposal of the European Commission for an AI regulation and it is not a risky prediction to say that – like what happened with GDPR – other countries will also look at this draft and start preparing their own legislative proposals.

The way to deal with a myriad of global rules is to implement a very robust company-wide security and privacy protection program. After all, compliance with the law is a baseline where you cannot go under. Do a proper job and you do not have to worry about compliance. 

In the end, it is about trust more than compliance. 

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4 Critical Skills Of Banking Leaders Today

The banking industry is known for constantly innovating and evolving to meet customer demands and requirements in different financial climates. In 2020, banks were forced to make years’ worth of revamps to technology and business models in a short amount of time.

Crucial skills for leadership in banking

Strong leadership in banking is crucial in these post-pandemic times as it could make or break the entire organization. Here are 4 critical skills all banking leader needs to hone to navigate today’s everchanging financial landscape.

 

Forward-thinker

 

Visionary leaders are always on the lookout for new opportunities to elevate their organizations, especially during times of crisis. Since the pandemic hit, the banking industry quickly embraced technologies such as cloud computing, wearables, and AI chatbots, to enable a frictionless digital banking experience for customers.

Shanker Ramamurthy, Global Managing Partner, Banking for IBM states that cloud computing and artificial intelligence (AI) will continue to be key tech focus areas in 2021. “For the foreseeable future, banking will operate in a hybrid, multi-cloud world. Most financial institutions are in the process of transitioning parts of their workload from their data centers into a private cloud and into multiple public clouds.“

It’s worth noting that a major part of the banking technology vision now focuses on the use of blockchain, as it has the potential to solve the drawbacks in traditional SWIFT bank transfer and the client identification system.

 
Keep up with the latest banking trends at our exclusive events in the Netherlands, Sweden and Germany.
 

Technological literacy

 

A bank’s survival depends on how quickly it could respond to consumer needs by leveraging technology to update legacy systems and help employees adapt to working in the new normal.

Hugo Nájera Alva, Head of Business Development at BBVA Bancomer, shares that it is important for leaders to always be ahead of emerging technological trends.” Competitors are no longer financial institutions, but technology players,” he says. To get ahead of the competition, banking leaders must think outside of the portals of the finance mindset.

Digital banking has undeniably been one of the largest technological shifts in the finance industry. Banks are expected to grow digitally even more in 2021 and present the following trends:

  • Personalization: Consumers want instant access to information about their finances to make informed financial decisions with the impact of the pandemic. Future financial products should be customized to their needs to drive engagement and loyalty.
  • Automation: Banks will set up more autopayment features to make it easier for customers to pay bills on time and help them reach their savings goals.
  • Real-time payments: The use of cash will slowly dwindle this year with the rise of contactless payments and e-wallets.

Technology is the game-changer in modern banking institutions. A keen eye on the latest trends and technologies will enable leaders to gear up for forthcoming challenges in the industry, simultaneously introduce new solutions to existing problems and revolutionize the banking experience at large.

 

Adaptability and Agility

 

Banking leaders need to adapt to current times and grow a mindset rooted in flexibility and agility. Many aspects of banking are in a state of flux— the viability of the branch bank model, future technological adoptions and changing customer demands, among others. Stepping out of tradition is vital given the rise of disruptions such as fintech start-ups, cryptocurrency and banking-as-a-service (BaaS).

According to Ramamurthy, “70% to 80% of all the bank tech spend is for middle and back-office operations. Maybe 20% is spent on the front end, what we call the customer-oriented, multi-channel ecosystem.” The banking of tomorrow will invert that ecosystem, as technology will be primarily used to service customers and their respective needs.

There will also be a focus on cybersecurity given the abundance of sensitive data collected in digital banking. Deloitte’s 2020 Digital Banking Report revealed that organizations are prioritizing investments in privacy and security solutions more than any other technology.

 
Don’t miss out: Connect with like-minded finance leaders at our banking-focused events in the Netherlands, Sweden and Germany.
 

Strong Empathy and EQ

 

Banking leaders must not lose sight of the most important asset of their organizations, which is their employees. The mental health and wellbeing of employees have been brought to the forefront as the negative effects of the pandemic have taken a toll on many emotionally and physically. Immediate branch closures, shrinking revenue and preparation for a hybrid work environment are huge changes that can cause a lot of stress — potentially affecting job engagement and productivity in the long run.

A good banking leader should be able to help his employees regulate and navigate these emotional challenges. According to Gartner, 68% of organizations have already introduced at least one new wellness benefit to help improve their employees’ mental health. Additionally, banking leaders must restructure working environments to prioritize job satisfaction. For employees to deliver an effective customer experience, they should have a work culture where employee experience is given due importance.

The transformation of leadership in banking is defined by these four skills for banking leaders, and is essential to guide employees and customers into the future of banking.

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Breaking Down Silos in Insurance With No-Code Technology

In recent years, Insurers have sought to digitalize their processes and improve their customer experience, making it more seamless and tailored to the needs of today’s digital consumers. Many large incumbents have partnered with insurtechs and invested in technology platforms to digitalize their selling or claims management process, establish virtual payment options, or improve their websites’ usability with chatbots.

While digitalizing parts of the customer journey was a great initial step, it did not address the industry’s core problem. That is, adopting a truly digital-first mindset, rather than offering unchanged products with an online quote and bind journey and putting band-aid solutions on outdated business models.

 

Silos Across Business Lines and Distribution Channels

 

Purchasing insurance products is a cumbersome process, and most customers utilize both offline and online channels to research their options and gather the necessary information before they are confident of making a purchase.

For this reason, digitalizing processes in insurance companies should not be seen as a replacement for the existing agency model. On the contrary: digital technology should help insurers to automate standard processes and enable the agent as they advise the client to add an extra layer of personalized services. From a productivity perspective, digital technology can free up the human workforce to focus on more value-added tasks and extend the capability of selling insurance at the point of sale or through non-traditional partners, let it be for valuables, travel, mortgage insurance, or SME risk covers.

As Manisha Bhargava, Head of Global Sales at Innoveo explains, “Consumers are merely covering their risk to insulate themselves, their families and their lifestyle from potentially disruptive events that may impact them financially. They are not seeking to buy “insurance”. Innovative Insurers should put their customer first as they build products, with the changing customer lifestyle at the center of their offerings.”

To achieve that, insurance companies have a lot of customer data on their hands. The trouble is that it is siloed across multiple legacy systems. For example, when it comes to the integration of online and offline distribution channels, a 2019 McKinsey survey concluded that in the vast majority of cases, insurance customers who switch between digital and non-digital channels still cannot continue their journeys online. In other words, even though many insurers have some type of lead routing from their landing page to their offline sales and service channels, due to the lack of channel integration, this usually remains a one-way street, leaving customers with a broken digital journey. Those who have compared product offerings online and then called an agent to seek in-person advice, no longer have the possibility to get back to the digital buying journey that they started in the first place.

 
Source: McKinsey & Company: Moving to a user-first, omnichannel approach, January 7, 2021.
 

Strong Demand for Digital-native Insurance Products

 

As E&Y points out, the penetration rate of both life and non-life insurance segments already had a declining tendency years before COVID-19, especially in the USA. The number of policies sold has fallen, as products that were once attractive to consumers no longer meet their needs.

Traditionally, large insurance carriers operate with separate business lines, based on the type of risk that they cover. This operational logic does not reflect our current lifestyle, where we make decisions in a digital space and expect to have instant access to information. As consumers are getting used to seamless online journeys like ordering products on Amazon or signing up for Netflix based on their individual preferences, it is logical that they would expect the same, sophisticated experience when looking for insurance coverage online.

Despite the increasing demand for digital-native products, the percentage of insurers who offer more complex insurance products for purchase online remains low, according to another recent McKinsey research for the European market. McKinsey also finds that approximately 66 percent of insurtechs specialize in select parts of the value chain, such as data collection, while less than 10 percent aim to disrupt the full business model. If we add the fact that most of the industry still relies on face-to-face interactions, we can see that there is a huge opportunity for digital disruptors and those who are willing to embrace new technology.

 

The Relevance of No-Code for Insurers

 

To maximize customer lifetime value and increase conversion rates, it is key to reduce the complexity of the buying journey for customers and agents alike, and this is where no-code platforms come into play. If an agent or broker wants to scale his business, it is no longer sustainable that three different customer calls’ data would land in three different CRM systems. To connect the dots across those data silos, insurance companies need software that could sit on top of all their legacy systems.

“Because of hard-coded legacy systems that incumbents depend on for specific product lines, their adaptability is painful and expensive. A no-code platform like Innoveo Skye® has a pivotal role in making this digital transformation smooth and incredibly fast”, Manisha Bhargava argues. “When you adopt a broader, turn-key solution like Innoveo’s no-code platform, an insurance product becomes nothing but a data model. And the moment you abstract the process this way, you will be able to make systematic improvements and break silos across the whole value chain.”

Overall, no-code platforms present an untapped opportunity for the insurance industry. With Innoveo Skye®, insurers can have all their business lines, agents, brokers, and customers in one platform, creating an omnichannel experience. The platform also lets them configure private and public channels and define which functionality is available to each one of them, which provides the flexibility to combine and package various products for their customers.

If insurance companies truly want to get closer to their customers and cater to their needs, then it is crucial to increase the frequency of touch with their end customers and understand that they are looking for an effective, secure, and easy way to cover their risk. They want products that offer holistic coverage, and they expect insurance providers to be proactive in risk prevention, by using the data available in their possession.

In the words of Manisha, “True digitalization in insurance means to deliver on the 5Es (excite, educate, enable, execute and empower the buyer) through the buying journey without the need for any physical interaction.”

Written by Barbara Péterfi, Content Marketing Manager, and Manisha Bhargava, Head of Global Sales at Innoveo.

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Egmont Philips: Driving Growth and Digital Transformation

The chief marketing officer (CMO) role has always evolved with the market landscape. Egmont Philips, Marketing Director of DAS, believes that the time for change has come and executives now need to evolve their roles as CMO. 

What does that have to do with cooking?

In this interview, Egmont shares with us his perspective on how CMO roles have transformed to meet current markets, the challenges they face in strategizing transformation, and why you need to think like a cook.

 

Evolving The CMO Into a Digital-Driven Role

 

CMO has always encompassed numerous roles, from bottom-of-the-funnel lead generation and sales support to brand development. This has always set the role for failure as they lack the strategic, longer-term strategy of other C-level roles.

However, digitization has disrupted the traditional CMO position and has forced many executives to rethink what the term “CMO” means in today’s landscape. The effects of the pandemic are a catalyst for this development.

 

Has the role of the CMO changed dramatically since the pandemic? And is the change here to stay or for the short-term?

 

The role has changed. As a marketeer, you always need to anticipate, adapt, and change the organization. But some market developments went faster than planned. 

On one hand, digitization has a steeper development curve, which is good news for marketers. On the other hand, as platformication increases, this will lead to a faster shift of power based on customer ownership and causes many traditional players to rethink their business models.

With over 4 billion active users, the CMO needs to be able to bridge the gap between marketing and technology to successfully forge meaningful connections with its customers. Given the diverse platforms available and channels such as Clubhouse, catching the attention with the right content in the right context will require a shift from the traditional behaviors of marketers.

Of course, there are challenges when making that transition, and 2021 looks to be as challenging for the CMO as was the pandemic for businesses last year.

 

Achieving Sustainable Growth Through Data and Transformation Strategy

 

What are the major challenges you foresee in 2021 and how should the CMO overcome them?

 
  1. Growth via new business models: Digitization, platformication, the energy transition, and the need for a more inclusive world are trends that create new opportunities. It will also disrupt current business models. The speed of change is much faster than before and to succeed, the key will lie in the talents you hire and the business ecosystem you build to signal changes and develop new propositions.
  2. Resilience: For many industries, market dynamics have changed due to the pandemic. 

The way to overcome this is to develop scenarios. Use scenarios where you exaggerate variables. Think of ways to deal with extremes. This will fuel your creativity and it helps in decision-making for the short term.

While growth and resilience stand as the key priorities that Egmont highlights, there is also a growing awareness to develop sound customer experiences in both B2B and B2C markets.

The need to be an experience-driven organization is becoming important as more and more consumers (59% in a post-COVID-19 survey) are prioritizing customer experience in a post-pandemic world. 

Egmont delves into the reasoning as to why CMO is needed in this transformation and the approach that they should adopt.

 

Why is becoming an experience-driven organization increasingly important? And what is the CMO’s role in this transformation?

 

Many products have become commodities. The only way to differentiate is by building bespoke experiences, experiences that are built around a strong company purpose. The CMO is the chief experience design officer and is at the forefront of setting design criteria and building multidisciplinary teams around customer journey optimization themes.

 

How should the CMO strategize their marketing plans to improve and strengthen customer experience?

 

The struggle is often how to determine the ROI of investment in customer experience optimization and figure out how to allocate a budget. The recipe for strategizing CX is to use journey maps to pinpoint which part gets what KPIs and what investment is needed in capacity and budget. 

This allows for a simple overview that will help convince boards to invest.

As for the tools needed to help the CMO improve CX and strengthen the customer journey, there are a few emerging technologies that Egmont believes will be key for organizations to invest in.

 

What are the key tech tools that the CMO needs to focus on investing, especially in today’s “new normal” market?

 

RPA and digital assistants are most effective when used to automate processes that are of low value to the customer as well as to your company. Such as changing your address, categorizing and directing incoming emails to the right person, etc.

Data analytics are the real thing, no doubt that the CMO needs to invest in market intelligence, customer intelligence, and algorithms that help to personalize the customer experience and create higher conversion rates.

 

Reinventing the CMO role

 

Given the drastic change that industries around the world have experienced due to Covid-19, it is not shocking to think that the marketer’s role has changed alongside it. 

For Egmont, the title of the CMO has to be re-imagined, and he offers his advice on how marketers should approach the shift in marketing roles.

 

There have been talks in the industry about changing and re-inventing the CMO title in today’s “new normal” markets. In your opinion, what should it be changed to and why?

 

I am spreading the gospel of changing the CMO into Chief Customer Officer. Marketers do not only translate market developments and change customer behaviors into propositions. They have also become the orchestrators of customer journeys.

 

What is your advice for the CMO on how to prepare for the shift in marketing roles?

 

Maybe the most fundamental way to prepare is to change your self-image.

I see myself as an experimental cook. I build various propositions for several customers and personalize them by combining a basic set of ingredients in completely different dishes. Restaurants and food are like fashion. It changes every season. When it comes to experimentation with the ingredients, you need to be a bit of a chemist. 

I use this analogy when approaching market research, data analysis, creating propositions, and managing the team in the marketing kitchen.

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Das sind die Geheimnisse guten Managements

Die Managementweisheit des letzten Jahrhunderts geht auf keinen Geringeren zurück als Jim March, den unlängst verstorbenen Vater der modernen Organisationslehre. Bereits in den 1950ern proklamierte er, dass langfristig erfolgreiche Unternehmen sich sowohl der Suche nach Neuem – vornehmlich durch Ausprobieren – als auch der Prozessoptimierung und Effizienzsteigerung des bestehenden Geschäftsmodells widmen müssen.

 

Dass zwischen beiden Ansätzen ein Spannungsfeld besteht, ist offensichtlich. Für das erste braucht es eine Kultur mit Kommunikation quer durch die Organisation, in der Mitarbeiter frei von Druck, Ängsten und kurzfristigen Gewinnzielen experimentieren können. Effizienz hingegen fordert maximale Spezialisierung und Reduktion unnötiger Kommunikation.

 

Lösungsvorschläge an Topmanager für das eine wie das andere gibt es zuhauf. „Agiles Management“ und „Empowerment“ in dezentralisierten Organisationen auf der einen Seite; klassische Hierarchien – also gestaffelte Systeme von Autoritäten – auf der anderen. Und passend dazu die Beispiele von Morning Star, Spotify und The Valve für die erste, Siemens oder GM für die zweite Herangehensweise.

 

Allerdings lassen sich beide Ansätze vereinen. Nestlé mit Nespresso, der „Guardian“ online oder die i3-Entwicklung bei BMW stehen hier Pate für aus der alten Organisation herausgelöste unternehmerische Subeinheiten, deren formale Struktur die der Restfirma in vielerlei Hinsicht spiegelt, die aber unabhängig an den CEO berichten und eigene Freiheitsgrade nutzen können.

 

Allein bei dem Transfer der Best Practices hapert es gewaltig. Große Konzerne mit gelebten Hierarchien tun sich schwer mit Freiheit für „Intrapreneurship“ und „Start-up Ecosysteme“ – so schön das auch alles klingt. Und Start-ups schaffen oft nicht den Absprung von der Teamkultur zur skalierbaren Organisation für Expansion.

 

Selbst wenn morgen alle bei Siemens Sneaker tragen würden und es nur noch Scrum Master statt Chefs gäbe, würde daraus nicht die Transformation des Dinosauriers, geschweige denn die Avantgarde-Unternehmung. Und der Gründer im Anzug versteht noch lange nicht, wie Konzernbürokratien ticken.

 

Konzernchefs wie Gründer müssen und sollen aber auch nicht nur stumpf wählen zwischen Hierarchie oder Polyarchie. Sie müssen genau überlegen, in welchen der drei Kerndomänen des Managens – Dirigieren, Disputresolution und Design – sie ihre Autorität selbst ausüben und in welchen sie in die Organisation delegieren wollen.

 

Dirigieren beinhaltet die Festlegung, wer was tun soll; Disputresolution die Frage, wie Konflikte zu lösen sind; und Design die Frage danach, wie Arbeitsteilung in der Organisation aussieht. Werden alle Rechte zentral wahrgenommen, wird Effizienz maximiert und Innovation minimiert. Werden alle Rechte dezentralisiert, ist es umgekehrt. Alle Mischformen sind hier denkbar und können maßgeschneidert entschieden werden.

 

So wird sich mancher Konzern schwertun, es von heute auf morgen seinen Mitarbeitern zu überlassen, wie Aufgabenstrukturen aussehen sollen. Selbstentscheidung für bestimmte Auf‧gaben hingegen mag das Management zulassen. Genauso wie die Konfliktlösung im Team.

 

Initiiert und begleitet werden muss dieser Prozess von der Führungsspitze. Je nach Delegationsgrad, den diese wählt, um die Annäherung von Effizienz und Innovation zu managen, ergeben sich für das Topmanagment-Team diametral unterschiedliche Anforderungen. Abflachen von Strukturen erfordert Befähigung sowie Empowerment zur Selbstorganisation. Beim Einführen von Hierarchien in Gründerkulturen muss Mitarbeitern die Angst vor negativer Bewertung und Kontrollverlust genommen werden.

 
Markus Reitzig ist Professor für strategisches Management an der Universität Wien. Thomas Sattelberger war Personalvorstand der Deutschen Telekom und ist Bundestagsabgeordneter der FDP. (Foto: Universität Wien; Imago)

Selten trifft man auf CEOs wie damals Jürgen Weber in der Sanierungs- und Privatisierungsphase der Lufthansa oder Anant Badatiya von der Stallion Group, die als Führungspersönlichkeiten jeden denkbaren Bilderbuchspagat instinktiv meistern; die in jeder Managementdomäne streng führen und genauso auch delegieren können.

 

Ein Grund dafür liegt darin, dass die Natur uns mit sogenannten Persönlichkeitseigenschaften ausstattet, an denen wir nichts Grundlegendes ändern können. Überoptimismus etwa scheint großteils angeboren, und lässt einen so veranlagten CEO einfacher risikoreiche Innovationsprojekte angehen als andere, mit gutem wie mit schlechtem Ausgang.

 

Aber auch das gelernte Verhalten spielt eine Rolle, und so ist es wesentlich, dass CEOs in unterschiedlichen Organisationen Erfahrungen gesammelt haben – kleinen und großen, agilen und starren, effizienten und disruptionsgeforderten, bevor sie Spagate im Transformationsprozess erstmalig voll verantworten.

 

Nach Managern mit solcher Erfahrungsvielfalt und passendem Persönlichkeitsmuster müssen Aufsichtsräte suchen. Nach Kandidaten, die denjenigen Spagat sicher schaffen, den das jeweilige Unternehmen braucht.

Geschrieben von Markus Reitzig, Thomas Sattelberger.