IoT is changing the fundamentals of business: Rajesh Kumar, CMO, SAP India

In an era of consumerization, it has become critical for the CMO to have a deeper understanding of the impact of the connected consumer on enterprise value propositions and marketing practices, says Rajesh Kumar, CMO, SAP India, in an interview with Dataquest.

Edited excerpts:

1. What is the future of the CMO in a market of empowered customers, Big Data and the Internet of Things?

In a competitive business environment, CMOs today are going through a radical transformation, driven by multichannel customer choices, data analysis and marketing technology. The accelerating pace of change is creating a wide range of potential new priorities for chief marketers—leading change efforts across the whole corporation, playing a more active role in shaping the company’s public profile, helping to manage complexity, and building new capabilities within (and even outside of) the marketing department. It has become critical for CMO to have a deeper understanding of the impact of the connected consumer on enterprise value propositions and marketing practices

The importance of marketing as a strategic focus area for the business will be such that I see the CMO emerging into the bell weather of the company. Those CMOs who move from good to great will enroll support from their CIOs to use technology as an enabler in the business and stay in control of the sweeping changes. They will take on a more significant role within the executive team as they become more accountable for customer facing initiatives. At the same being close to the customer and already having a pulse of the customer will enable them to leverage many opportunities for leadership within the company.

2. In 2012, Gartner had boldly predicted that CMOs will spend more on IT than CIOs by the year 2017? From your experience, have you seen this shift happening?

The prediction was based on a very simple truth which is that a CMO can no longer delegate technology issues/spends. The rapidly changing market landscape demands that they understand and embrace technology. Whether it is to connect with an always on consumer who expects the same level of engagement in the offline or online world or to leverage Big Data for improved and targeted marketing campaigns, the CMO needs to work in close conjunction with the CIO to direct spends on technology. So rather than a shift, I foresee the CMO enrolling the support of the CIO to make technology purchases and thus bolstering the overall tech spend within a company. Many companies are also creating the role of Chief Digital Officer who promises to drive the digital agenda within an organization and unify Marketing and IT efforts of the business.

3. What in your view, are some of the top challenges for marketers? How can technology help in solving some of these challenges?

Some of the key challenges CMOs face today where technology is a great enabler include:

Managing data for actionable insights: According to the Cisco Visual Networking Index, global IP traffic will reach one zettabyte per year in 2015. With these data volumes—plus the structured data contained in internal corporate systems managing data is a huge challenge for most companies.

I’d like to give you an example here of Asian Paints – with a team of 1,200 sales representatives connected to a network of more than 40,000 dealers and distributors who market the company’s well-known brands in more than 65 countries, Asian Paints was dealing with an exponential amount of data. Analyzing sales trends and other key performance indicators for such humongous data quantities started becoming a challenge with the then IT architecture thereby greatly limiting data access, visibility & usability. This was the time when SAP’s real-time analytics tool- SAP HANA came in handy! Asian Paints leveraged the near-line storage (NLS) functionality of SAP IQ software to store the data more affordably, enabling real-time analytics, and dramatically streamlining data-intensive tasks.

Logging onto where the customer is: Customers are increasingly moving between the online and offline worlds. According to a study by Vantiv, a US based payment processing and technology provider, more than a third of customers today see an item in-store, compare prices on a mobile app and then go online to complete the purchase. Another half are researching and purchasing online and simply picking up the product in-store. Marketers today face the challenge of logging onto where the customer is. Technology can help marketers develop and hone their omnichannel capabilities to be able to provide a consistent experience to customers across channels.

4. In this new era of digitization, how has SAP positioned itself to be more relevant to digital marketers?

When looking across digital marketing channels, the CMO in 2015 needs to have an excellent grasp on digital marketing. Advancements in mobile technology and the proliferation of social channels have given consumers the ability to connect and access information at any time, and their attention is more fragmented than ever. So it is very important for marketers to have a deep understanding of how the customers are going to consume media.

In this era of digitization when customers are keen to blend multiple channels, our new omni-channel solution, the hybris marketing platform is a perfect fit. The hybris marketing platform provides a business complete visibility to communicate, engage and do commerce with customers wherever they are. All large retail companies are currently talking to us for this solution. The country’s retail giant, Future Group announced their association with hybris last year in September to converge their digital and physical channels.

5. How can marketers do location based marketing without being intrusive? Can you give us some examples?
I recently came across extremely interesting information with respect to this trend. According to a study by Accenture, nearly two-thirds of online shoppers would trade increased privacy for more personalized offers from retailers, as long as they are given options on how their personal data is used. This here should be the principle that guides most location based marketing initiatives today.

Successful location based marketing initiatives will be those that are able to identify a real customer need at that particular moment and tailor fit a solution that appeals to the customer. Take for example you receive a message on your mobile with a discounted offer from your preferred brand as soon as you walk into a retail store you generally frequent.  Wouldn’t this offer appeal to you? This is possible and can be done.

SAP has a Precision Retailing solution that can help retailers create personalized offers in real time by combining the consumer’s shopping context and location with the company’s knowledge of the consumer’s profile, preferences and purchase history along with in-store product availability. As you can imagine such location based marketing initiatives are a win-win for both customer and marketer.

6. How are you leveraging technology trends like IoT in your marketing strategy?
IoT is changing the fundamentals of business all together.  We are not merely looking at doing things incrementally because of this technology proliferation but in fact re-imagining our future. Indeed, the Internet of Things is taking connectivity up from just mobile phones to our everyday objects. Most research bodies indicate anywhere between 50-75 billion web enabled devices by the year 2020 creating a universe of intelligence everywhere.

Since we work with so many Fortune 500 companies at SAP, our current dialogues with them are about a very exciting future – it is the next level of growth as companies think of the revolutionary ways in which they can monitor, analyze and automate processes.

We recently unveiled a Hyperconnected Asia Showcase in Singapore, showcasing some of our real life examples of IoT applications across different industries from Healthcare, to Sports to Retail. Whether it’s helping the Hamburg Port of Authority optimize the flow of goods and direct traffic better or creating connected cars with BMW, in particular helping drivers navigate vehicles to available parking spaces more efficiently, and personalizing and delivering promotional offers for fuel or food to drivers based on their actual driving route, SAP is helping customers gain from an increasingly connected world.

7. Can you give us some examples of your clients from the marketing function who have benefited from using your solutions?

There are several examples on this. I would want to mention a few here:

Hungama Digital Services, a leading digital advertising and marketing promotion agency uses SAP’s Social Media Analytics Application by NetBase to capture actionable customer insights in real time. Not only has this streamlined online reputation management for Hungama’s clients but it has also brought about 35% in time saving as a result of better team collaboration and control.

With Asian Paints, SAP HANA and IQ platforms have facilitated in zeroing in on markets and dealers that are experiencing service issues in the moment, rather than relying on historical data crunching over a span of weeks.

With Future Group’s Big Bazaar, our omni-commerce technology solution allows customers to view the retailer’s complete inventory thereby gaining access to products online that cannot be made available at physical stores. Customers can order products online and collect the packaged order from the nearest store. Also, if a product ordered at a store is out of stock, the customer can get the product delivered at home when available. The use of this solution is helping Big Bazaar penetrate deeper in the market without the cost of adding new physical stores to its portfolio.