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2. 360 the Business Transformation Journal No. 11 | August 20142 3. WELCOME360 the Business Transformation Journal No. 11 | August 2014DRIVERS3We tend to think that everything has already been said and written about project man-agement.Surely, there is nothing new. Knowledge of the subject is packaged into proj-ectmanagement courses, and certifications like those offered by PMI are prevalent.However, statistical findings concerning the success rates of medium and large proj-ectsare all the more astonishing. According to these statistics, every fifth project be-comesa black swan a project that exceeds its planned budget by an average ofmore than 400% and its duration by more than 200%. There is much speculation butonly few hard facts about the causes of such aberrations. This is primarily due to thereluctance of the people responsible for these projects to publish their experiences.It is particularly dramatic when mega projects develop into black swans. You haveprobably heard about them: Projects such as Berlins new international airport, Co-lognesnorth-south rail link, and Hamburgs Elbphilharmonie Hall. But the phenom-enonis not new. At 6.2 million marks, even the construction of Neuschwanstein Cas-tlebetween 1869 and 1886 cost more than twice of what was planned. In this edition, aformer mega project manager discusses the subject and we look into the causes of theblack swan phenomenon. Perhaps project managers of future mega projects like Stutt-gart21 and many other project managers can learn something from it (see page 54).Also in this edition we have another article on the topic of Shared Services. Using twocases studies, an in-depth analysis has been conducted, which provides some inter-estinginsights (see page 28). Besides, explaining by case studies from the areas oflean management and open innovation, we present the link established between Busi-nessTransformation Methodology and the Theory of Planned Behavior (see page 42).We also publish two articles on innovation and strategic realignment of business mod-els.In the first article, a resource-based view and a market-based view are consideredin terms of their synergies, and explained using a case study (see page 6). The secondarticle on the subject looks at aspects such as the role and behavior of a leadershipteam in strategic realignment (see page 16).In the final article, a case study carried out by the conglomerate Unilever describes itssuccessful digital transformation using Big Data and mobile applications, and estab-lishesa link with the digital capability model (see page 66).Happy reading and, as always, we look forward to your feedback.EDITORIALProf. Dr. Axel UhlHead of the BusinessTransformation AcademyLars A. GolleniaGlobal Head of SAPBusiness Transformation Services 4. METHODOLOGY | RESEARCH28 Next-Level Shared ServiceCenters: The Case of TwoMultinational CompaniesFind out what drives two blue-chip compa-niesto implement Shared Services Cen-tersand what capabilities are needed.Marco Fischer, Thomas Ltke Siestrup,Stefan Rder, Axel Uhl, Frank Keuper,Tom Bangemann42 Theory of Planned BehaviorHow can the Theory of Planned Behaviorbe effectively applied in business transfor-mationprocesses? Discover how to builda bridge from psychological research tobusiness transformation practice.Manfred Mhlfelder, Uwe Klein, HeikoFinn, Patrick Blume360 the Business Transformation Journal No. 11 | August 2014OVERVIEW4DRIVERS6 Business ModelDevelopment & InnovationSuccessful innovation comes withan underlying successful businessmodel. Learn how to develop onewith an agile and iterative approach.Julia Doll, Uli Eisert16 Key Aspects of Strategyand Leadership forBusiness TransformationCompanies are moving into a cus-tomer-centric organization. Throughthe role of leadership, find out how tobest embrace this challenge.Gerhard Gudergan,Achim Buschmeyer 5. CASE STUDY54 Success and FailureFactors for Mega ProjectsDiscover the lessons learned fromthe A380 expansion plant and theElbphilharmonie projects.Hartmut Wegener, Axel Uhl66 Unilever: Implementingthe Real-Time, DigitalEnterpriseWith examples, learn how IT technol-ogyhas enabled Unilever to innovateand grow business.Marc Bchet, Thomas Ltke Siestrup,Axel Uhl, Henk-Jan Hulshof360 the Business Transformation Journal No. 11 | August 2014COMMUNITY3 Editorial80 Portraitsof the BTA membersMarc Bchet, Gerhard Gudergan,and Ramesh Siva82 Book ReviewBig Data at Work: Dispelling theMyths, Uncovering the Opportunitiesreviewed by Oliver Kohnke83 EventsReview of past BTA trainings andinformation on upcoming events88 NewsNews from BTA Hubs and partners91 Publication DetailsOVERVIEW5 6. 360 the Business Transformation Journal No. 11 | August 20146AbstractBusiness model innovation becomes increasingly more important. It is without doubt the most power-fuldriver for competitive advantage in todays economy and has started to outshine product innova-tion.There are many cases in which a changing market environment requires an innovative businessmodel that can sustain market leadership.After several years of business model innovation research and the application thereof, SAP provides asystematic, iterative approach to identify the appropriate business model. The approach is suitable forindustries and for businesses of any size. It interrelates with other well-known approaches such as De-signThinking or Lean. Together they offer a meaningful and solid foundation for any business.To better understand the approach, a use case is used to show step by step how it successfullyturned a cloud business into a cloud of insights. 7. BUSINESS MODELDEVELOPMENT &INNOVATIONA Strategic Approach to BusinessTransformationEven the best companies cannot sustain themselves by simply focusing on productinnovation. To succeed, companies have to evolve their business model innovationskills. In this article you will learn how business models can be developed andevaluated based on an agile and iterative approach.by Julia Doll and Uli Eisert360 the Business Transformation Journal No. 11 | August 2014DRIVERS7The increasing difficulty to differentiatebased on services and products has ledto significantly greater interest for busi-nessmodel innovation in research andpractice (Chesbrough, 2007; IBM, 2012).Today, it is well understood that busi-nessmodels are decisive for a compa-nyslong-term success or failure andare probably the most powerful driver forcompetitive advantage (Johnson et al.2008). Nevertheless, there is still a strik-ingdiscrepancy within most companiesbetween the degree of awareness aboutthe importance of Business Model De-velopmentand Innovation (BMDI) andits implementation (Bucherer et al. 2012;Chesbrough, 2010).What is needed is a systematic approachto continuously develop and improve thebusiness models of a company and tocome up with business model innova-tionswhenever it makes sense. Compa-nieshave to maintain and develop theirbusiness models with the same profes-sionalismand seriousness as they dofor their product and service portfolio.Hence, processes, organizational struc-tures, and accountability need to ensurethat each business unit and, if required,even every single product or service isembedded into an appropriate businessmodel. Appropriate means that undergiven internal and external conditionsthe most promising model is chosen andthat risks are mitigated by a comprehen-sivevalidation of the underlying assump-tions.This will ensure that the economicviability of the unit and the entire enter-priseis ensured in the best way possible.BMDI: The Silver Bullet for EconomicViability?Most scholars and practitioners todayagree that successful innovations shouldsatisfy three perspectives: technical fea-sibility,human desirability, and economicviability (Brown, 2008; IDEO, 2012). Like-wise,products or services already in themarketplace are only successful if theirquality lives up to users expectations,users want to use them, and buyers arewilling to pay for them. While technicalfeasibility and product quality had beenthe focus of developers, engineers, and 8. 360 the Business Transformation Journal No. 11 | August 20148product managers for quite some time,Design Thinking was a break-throughapproach to successfully focus on hu-mandesirability and to ensure that us-ersare keen to use (and maybe own) aproduct. However, Design Thinking doesnot sufficiently focus on the buyers per-spective.It does not provide the requiredmindset as well as tools to systematical-lycover economic viability and to makesure that buyers are willing to pay a giv-enprice (this might be more obvious inB2B industries where buyers and usersare often different people). We believethat Business Models Development andInnovation is the missing piece to coverthe economic viability dimension (see fig-ure1).Business models specify the core logicof a firm because they describe how val-ueis created and delivered to the cus-tomersand how the value is captured forthe producer or provider (Osterwalder etal. 2005). If used in the right way, busi-nessmodels also capture the competi-tiveadvantage of a company. In a verypragmatic way, they combine the market-basedview and the resource-based viewof the firm, which makes them a greatunit of analysis that is an ideal basisfor a systematic development of businessactivities.Some people might think that businesscases and business plans are sufficientto ensure economic viability for a newproduct, business field or even compa-ny.Both are necessary; nevertheless, ifdone without a systematic developmentof the appropriate business model be-forehand,they will neither ensure that themost promising approach is chosen northat the underlying assumptions are suf-ficientlyvalidated.Only a systematic, iterative approach toBusiness Model Development & InnovationDesign ThinkingBusiness ModelDevelopment &Innovation (BMDI)(Lean) EngineeringIllustration by Tobias Hildenbrand based on IDEO, 2012Fig. 1: BMDI:Themissing pieceBox 1: How was BMDI developed?The approach was developed by SAP based on extensiveresearch in collaboration with the University of St. Gal-lenand practical experience from dozens of internal proj-ects.It takes into account well-known concepts such asthe Business Model Canvas (Osterwalder, 2005), Busi-nessModel Patterns (Gassmann, 2013) or Lean Start-Up (Ries, 2011; Blank, 2013).The approach was standardized and validated by coach-ingmultiple teams at SAP with innovative products facingmarket entry or established products with insufficient suc-cess.After several effective projects, we started to consultSAP customers as well as HANA start-ups and Social Im-pactstart-ups. 9. Network ViewPartner Network Customer Network Competition360 the Business Transformation Journal No. 11 | August 2014DRIVERS9identify the appropriate business modelsuch as the BMDI approach provides ameaningful and solid foundation to calcu-latebusiness cases and develop businessplans (see box 1). In addition, it guidesyou to a model that allows full exploita-tionof ideas and capabilities, regardlessof whether this model is highly innovative,totally new or just the adaption of a prov-en,existing business model or somethingin between.Business Model DescriptionBusiness models can only be leveragedas an appropriate unit of analysis if theused description model allows to illus-trateand convey the business logic ina highly condensed and easy-to-under-standmanner. This explains the successof the Business Model Canvas from Al-exanderOsterwalder as the de-factostandard for business models, at leaston the practitioners side. It uses nineelements to describe a business mod-el(Strategyzer, 2011). We call the can-vasthe enterprise view of the businessmodel (see figure 3 on the next page)and complement it with a network viewthat allows it to describe the relevantnetwork and interrelations around theenterprise (see figure 2). This helps sig-nificantlyto understand dependenciesin complex business models and to en-surethat competition is always consid-eredwhen the business model is devel-oped.Without a systematic developmentof the approriate business model be-forehand,business cases and plans arenot sufficient to ensure economic viabil-ity(Eisert, 2013).What is BMDI in a Nutshell?The art of BMDI is to turn the baseline(see box 2 on the next page) into an ap-propriatemodel that is, under given in-ternaland external conditions, the mod-elthat ensures economic viability in thebest way possible. In order to accomplishthat, the team has to go through differentactivities, such as analysis, design, val-idation,implementation, execution, andscaling. However, it will never be a se-quential,linear process. It must be tai-loredto the specific challenges of theMy Company My Cust omers My Partners My CompetitionFig. 2: Networkview (adaptedfrom SAP SE/CCBY 4.0) 10. Enterprise ViewHow? What? Who?360 the Business Transformation Journal No. 11 | August 201410project and it has to be flexible enoughto take into account all the insights thatwill be gained along the way. That is whyBMDI is a highly iterative and agile ap-proach.Its beauty is the combination ofsimplicity and flexibility with powerfulmethods. BMDI offers four types of iter-ationthat allow project teams in any giv-ensituation to identify and carry out theactivities needed to develop their modelinto the right direction.The Four Types of IterationWe distinguish four basic ways to sys-tematicallydevelop a business model.All of them follow the diverge/convergeprinciple that has proven to be success-fulin Design Thinking. First the team cre-atesoptions, then it synthesizes its in-sightsand chooses the most promisingoption(s). For each type of iteration wehave developed a set of methods whileleveraging good industry practices (seefigure 4).Analyze & Improve: During this itera-tion,parts of the business model are an-alyzedin more detail to improve the busi-nessmodel based on the gained insights.This can be done in various areas, a fewexamples are:Analyze customer needs in detail andimprove the value proposition to bet-teraddress themAnalyze competitors and improve thevalue proposition to increase uniqueaspectsAnalyze partnering options and im-proveyour needed key activities andresources accordinglyBusiness Model Development & InnovationValue CreationValue CaptureBox 2: It All Starts with the BaselineTo develop the business model, the first exercise should al-waysbe to describe a baseline for the following activities.This is straightforward, when a business model already ex-ists,which is not as successful as expected or under pres-surefrom the competition. In this case the current state ofthe business model is the baseline. However, even if youare in a very early stage, e.g. for new product ideas or start-ups,it is important to describe the baseline. In this case allideas, thoughts, and assumptions, regardless to which ex-tentthey are completed or validated, should be taken intoaccount, to reflect the current thinking and create a com-monground for the team working on the business model.CompetitionWhy?My Company My Customers My Partners My CompetitionFig. 3: Enterpriseview (adaptedfrom BusinessModel FoundryAG/CC BYSA 3.0) 11. Diverge Converge360 the Business Transformation Journal No. 11 | August 2014DRIVERS11Box 3: The Right Team and MindsetBesides the four types of iteration described in this article,the BMDI approach is also about the right team set-up andmindset. The team has to unite various perspectives; so di-versityis important. In addition, there is a need to accessexperts (e.g. pricing, legal issues), stakeholders for valida-tion(in particular customers), decision makers as well assponsors. The right mindset is very similar to the one need-edin Design Thinking projects (e.g. openness and endur-anceare key).Analyze customer experience and im-provecustomer relations accordinglyAnalyze key activities to reduce relat-edcostsChallenge & Change: If there are val-idtriggers (opportunities or threats) tochallenge the business model base-lineat any point in time, a design chal-lengeis formulated and dedicated ide-ationmethods are used to come up withdifferent alternative business model op-tions.While some methods rather facil-itatesystematic ideation for incrementalimprovements, others are more suitedfor creative ideation that might bring updisruptive, out-of-the-box alternatives. Inany case, the team has to cluster ideasand finally has to decide which changeswill be used for subsequent processing.Test & Verify: Each business model isbased on several assumptions that im-plyrisks if they turn out to be wrong.That is why crucial assumptions shouldbe tested and validated at an early stagewith limited effort. Usually assumptionsare made regarding customers issues,needs, and wants, as well as their will-ingnessto pay. Also, assumptions canbe made regarding appropriate chan-nels,capabilities of key partners, andthe company itself. These assumptionsshould be derived out of the businessmodel and the risks involved need to beevaluated in order to figure out which as-sumptionsshould be tested in which se-quence.The Lean Start Up literature(Ries, 2011) provides many insights as tohow these assumptions can be validateddepending on the maturity of the project.Key elements are the Build-Measure-Learn cycle, and the MVP (Minimal Vi-ableProduct) concept to minimize theinvolved effort, as well as actionablemetrics that should ensure some objec-tivitythroughout the test. Depending onBaseline Appropriate, ValidatedBusiness ModelCreate Choices Make ChoicesPartner Network Customer Network CompetitionPartner Network Customer Network CompetitionEvaluate &DecideTest &VerifyChallange &ChanceAnalyze &ImproveFig. 4: BMDI in anutshell 12. 360 the Business Transformation Journal No. 11 | August 201412Business Model Development & Innovationthe results of the test, either an assumptionis confirmed and the team can move on,or changes are required, sometimes sig-nificantones, so called pivots.Evaluate & Decide: To figure out whichof the different business model optionsare most promising, these have to beevaluated both qualitatively and quanti-tatively.For the overall evaluation two di-mensionsare decisive: impact vs. easeof implementation. Impact summariz-esall the relevant criteria that allow as-sessmentof the potential impact (includ-ingrevenue potential) of the businessmodel. Ease of implementation summa-rizesall related efforts (including costs)and risks. The evaluation criteria and itsrelative weight have to be project-spe-cificbecause stakeholders might look atvery different aspects. However, the twodimensions can be depicted in a simpledecision matrix to illustrate the consoli-datedfeedback of various stakeholdersand experts to simplify decisions. Thequantitative evaluation can be done byderiving a business case out of the re-spectivemodel. Therefore, all revenuestreams related to the addressed cus-tomergroups are estimated based onrevenue models, price points, and num-berof customers/deals. In addition, allcosts related to value creating and deliv-eringactivities, resources, and partner-ingare estimated and summarized. Fur-thermore,towards the end of the projectthe favored business model is evaluat-edin detail to provide the decision mak-erswith a solid foundation for furtherplanning or investment decisions.Specifics of Complex Business ModelsIn two-sided or multi-sided businessmodels, more than one customer groupneeds to be convinced because there isa crucial relationship between the cus-tomergroups. The best-known examplesfor these types of models are platform-basedbusiness models such as Airbnbor Google Search. For these models youhave to create a win-win-win situation be-causevalue needs to be created for allcustomer groups even those that do notpay anything (such as the end user of asearch engine). This gets even trickierif the model is subject to so-called net-workeffects. Network effects are pres-entif the value of the model depends onthe amount of other customers also us-ingit and can appear within one customergroup (direct) or across customer groups(indirect network effects). Network ef-fectsare extremely beneficial for theowner of the business model as soon asthe required critical mass is reached, i.e.when the adoption of the product or ser-viceis self-sustaining (Mahler and Rog-ers,1999). However, until critical mass isachieved, the network effects are hinder-ingthe adoption and success of the busi-nessmodel. Investments as well as someendurance are needed to be success-fulin the end. As a consequence, BMDIsupports the systematic development ofstrategies that can be used to accomplishcritical mass.Box 4: Project Description Helix NebulaIn 2012, science organizations such as the European Or-ganizationfor Nuclear Research (CERN), the EuropeanMolecular Biology Laboratory (EMBL), and the EuropeanSpace Agency (ESA) teamed up with IT service compa-nies,such as Atos, CloudSigma, Interoute, and T-Systems,to establish a federated European cloud known as HelixNebula (HN).The evaluation criteria and itsrelative weight have to be project-specificbecause stakeholders mightlook at very different aspects.A win-win-win situation has to becreated because value needs to becreated for all customer groups eventhose that do not pay anything. 13. Earth observation data from ESA canbe very valuable to oil companiesin order to predict landslides nearpipelines.360 the Business Transformation Journal No. 11 | August 2014DRIVERS13How BMDI Transformed a CloudBusiness into a Cloud of InsightsHelix Nebula (HN) cloud suppliers (seebox 4) faced several challenges, such asaddressing a new market segment calledbig science, pressure on prices due to ap-parentlylow-cost in-house solutions, andbuilding up an innovative partner ecosys-temwith usually competing companies.Major competitors such as Amazon WebServices (AWS) offered cloud services atextremely low prices. The fact that someof the customers already used AWSwas reason enough to accelerate mar-ketentry. At that point, the major remain-ingquestion was if HN could, against allodds, beat AWS based on pricing, or if avalue proposition tailored to the needs ofscience could be found?In Analyze & Improve, we started byinvestigating related industries, exist-ingand potential competitors, as well aspartner ecosystems with their drivers andobstacles. Further, we analyzed the cus-tomerside, the public sector, and specif-icallythe needs of big science. For this,multiple interviews with public institutionsand the customers themselves were con-ducted.We found that science organiza-tionstend to have many publicly fund-edIT resources, which are maintainedby non-profit organizations. If HN couldintegrate these resources with the com-mercially-offered solutions, it would offera previously non-existing flexibility to themarket. This value proposition would setHN apart from AWS. However, based onthe very restricted budget of science or-ganizations,prices would still have to bevery low. Having this in mind, the chal-lengefor the supply side was to create avaluable business out of this ecosystemwithout just covering its costs.Focusing on this design challenge weconducted several workshops with HNsuppliers in Challenge & Change to de-velopmultiple potential business mod-els.Since the establishment of a not-yet-existing cloud ecosystem requiredroom for innovation, many creative meth-odswere applied to inspire innovativeideas. A second challenge was to over-comecoopetition issues, in order to en-ablesmooth business operations of theproposed ecosystem. For this, multiplebroker roles were determined that wouldenable interaction between suppliers andbuyers based on business and technicalprocesses.In Evaluate & Decide these businessmodels were evaluated by experts atSAP and HN suppliers. The result wasa business model roadmap, with a finalbusiness model that goes beyond ge-nericcloud computing by creating valuenot only for science, but also for busi-ness,government, and society based onthe analysis and aggregation of Big Databrought to the cloud by science organi-zations.For example, earth observationdata from ESA can be very valuable to oilcompanies in order to predict landslidesnear pipelines. This extension allows sci-enceorganizations to consume cloudservices for free by providing valuableKey Learnings It is not enough to rely on product innovation. Oftenproducts fail, if they address the market with the wrongbusiness model. Business models can be systematically developed andevaluated based on an agile and iterative process thatensures economic viability. Business models are probably the most powerful driverof competitive advantage and should be managed as itis done with product portfolios. Business cases by themselves are insufficient if they donot build on a validated business model. Business model development and innovation combinedwith Design Thinking and lean offers a meaningful andsolid foundation for businesses. 14. 360 the Business Transformation Journal No. 11 | August 201414Business Model Development & Innovationdata to the cloud and to open up a majorrevenue stream for HN suppliers by giv-ingroom for innovative services. More-over,it could help nations and cities pro-tecttheir citizens based on early warningsystems. The growing ecosystem of re-searchorganizations collaborating in thecloud allows for the aggregation of near-lyall conceivable scientific knowledge inone cloud. Thus, it enables not-yet-exist-inginsights based on inter-organization-aland international research.Business Model Developmentand Innovation is relevant acrossindustries and for businessesof any size.To fill the cloud with data, the design ofa profitable business model that pro-videscloud services tailored to the enor-mousdemand of big science was re-quired.In this field the major competitorwas AWS. We had defined a clear differ-entiationby integrating non-profit partnersoffering publicly funded resources to Eu-ropeanbig science organizations. Howev-er,HN still needed to compete on price.Hence, we conducted a business case tocompare HN prices to CERNs in-housecosts and AWS prices. The results spokefor themselves. HNs prices beat AWSsprices and partly CERNs in-house costs.Assuming that CERN moves to the cloudgradually while HN reaches economiesof scale, this is a perfectly valid startingpoint. Therefore, we had proven econom-icviability, not only by offering a uniquevalue proposition but also by providinga financially attractive alternative to in-housesolutions for science organizations.The final challenge to tackle was theroadmap to critical mass in order to es-tablishthe final business model. For this,we worked closely with one of the majorflagships, namely ESA, in order to cre-atesuitable steps for implementation.We carefully considered a first potentialniche to start with, which would make useof the satellite earth observation data al-readyincorporated into the HN cloud.Based on this niche, the market would beexpanded into other fields, based on dataenrichment in the cloud. The proposedsteps, amongst others, were to build upa lively community with the first ecosys-tem,to facilitate partner co-innovationand complementation in order to enrichthe platform along the way, as well as toenable the exchange between partnersand customers. Based on the proposedbusiness model roadmap and the road-mapfor critical mass, the Helix NebulaMarketplace was rolled out in May 2014.This use case showed us the specif-icneeds of partner ecosystems goingthrough the process of business modelinnovation. Specific focus must be giv-ento the needs of each partner, provid-ingeach of them with a suitable businessmodel underlying the common businessmodel of the ecosystem as a whole.ConclusionConsulting customers and start-ups hasproven that the BMDI approach is rele-vantacross industries and can be appliedto challenges faced by businesses of anysize. In order to succeed, companies willhave to realize that BMDI should be grant-edas much importance as product inno-vation.The ultimate goal is to establish astandardized BMDI process in each com-pany,in which the business models im-plementedare managed similarly to theproduct portfolio of the company.Learn more about: The approach is integrated into SAP innovation approach.To receive further information on training and consulting services, contactPeter Mittemeyer (peter.mittemeyer[at]sap.com). 15. 360 the Business Transformation Journal No. 11 | August 2014DRIVERS15ServiceAUTHORSJulia Doll is a Project Lead for Business Model Innovation at SAP Switzerland. She hascoached several projects regarding analysis, design, and evaluation of business models.During her career at SAP, starting in 2007, she has worked on several projects around theglobe. Julia holds a Master of Science from the University of Mannheim, Germany and aMaster of Business from the University of Queensland, Australia.ju.doll[at]sap.comDr. Uli Eisert built up a SAP research lab at the University of St. Gallen and is heading aresearch & innovation team that is currently focusing on Business Model Development &Innovation (BMDI) as well as new approaches leveraging smart management of intangi-bleassets. He published various journal papers and articles on innovation managementand BMDI. Before his current position, he was heading the global PLM solution manage-mentat SAP and worked as a consultant and project manager for SAP implementations.He holds degrees in mechanical and industrial engineering as well as a PhD in businessadministration.uli.eisert[at]sap.comREFERENCES Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review, 91(5), 63 72. Brown, T. (2008). Design Thinking. Harvard Business Review, June 2008, 84 92. Bucherer, B., Eisert, U. and Grassmann, O. (2012). Towards Systematic Business Model Innova-tion:Lessons from Product Innovation Management. Creativity and Innovation Management, 21(2),pp.183-198. Chesbrough, H. (2007) Business model innovation: its not just about technology anymore. Strategy& Leadership, 35(6), 12 17. Chesbrough, H. (2010). Business Model Innovation: Opportunities and Barriers. Long Range Plan-ning,43(2 3), 354363. doi:10.1016/j.lrp.2009.07.010. Eisert, U. (2013). SAP: Bringing Economic Viability to the Front End of Innovation. In O. Gassmann& F. Schweitzer (Eds.), Management of the Fuzzy Front End of Innovation. Berlin: Springer Verlag. Gassmann, O., Frankenberger, K., & Csik, M. (2013). Geschftsmodelle entwickeln: 55 innovativeKonzepte mit dem St. Galler Business Model Navigator. Carl Hanser Verlag GmbH Co KG. IBM. (2012). Leading Through Connections. Highlights of the Global Chief Executive Officer (CEO)Study. Somers, New York. IDEO (2012). Human Centered Design, An Introduction, 2nd Edition. Available from: http://www.ideo.com/images/uploads/hcd_toolkit/HCD_INTRO_PDF_WEB_opt.pdf [Accessed 19.12.2012]. Johnson, M., Christensen, C., and Kagermann, H. Reinventing your business model. Harvardbusiness review 86.12 (2008): 57 68. Mahler, A., & Rogers, E. M. (1999). The diffusion of interactive communication innovations and thecritical mass: the adoption of telecommunications services by German banks. Telecommunicationspolicy, 23(10), 719 740. Osterwalder, A., Pigneur, Y., & Tucci, C. L. (2005). Clarifying Business Models: Origins, Present,And Future of the Concept. Communications of the AIS, 16(1), 125. Ries, E. (2011). The Lean Startup. 1st ed. New York: Crown Business. Strategyzer (2011). Business Model Canvas Explained. [video] Youtube. 16. 360 the Business Transformation Journal No. 11 | August 201416AbstractWe are at the beginning of a new era in which traditional industries are transforming the ways theyact and operate significantly. Many firms are starting to move towards a customer-centric organiza-tion,to think about new business models or to think about the digitalization of the economy and whatthis could mean for their business. Even though the need to change is obvious and the willingness tosucceed is evident, many transformations still fail. Looking at emerging technologies such as the dig-italization,we can even draw a more pessimistic picture. Nearly 70% of all companies do not have aclear strategy on how to integrate digitalization with the elements of their business. For the future, weneed to think of transformation in a systematic and a highly integrated way. Consistency in strategyand design will be as important as specific and complementary leadership styles and governance. 17. KEY ASPECTS OFSTRATEGY AND LEAD-ERSHIPFOR BUSINESSTRANSFORMATIONHow different styles of leadership and management behaviors, integrated in aholistic framework, pave the road to a successful transformation.by Gerhard Gudergan and Achim BuschmeyerFundamental changes in theenvironment force business totransform with an approachfocused on both new strategyand incremental development.360 the Business Transformation Journal No. 11 | August 2014DRIVERS17The past few decades have been char-acterizedby a number of significant de-velopmentsthat came along with funda-mentalchanges in the way businessesoperate and are structured. Many com-paniesfaced the challenge to ques-tiontheir products, organizational formsand business models and continuous-lyadapt to new conditions in a shorttime. These developments are acceler-atedmassively as new markets, digitaltechnologies, and the green economyare driving for new positioning and newbusiness models. Digitalization, sustain-ability,and servitization the phenom-enonof positioning and differentiatingthrough solutions and services ratherthan on physical products in individual-izedand global markets, are consideredto be the main forces to transform (Cap-gemini,2012; Kiron et al. 2012; Deloitte,2013). Irrespective of their size, organi-zationsare required to adapt more thanever to an increasingly dynamic and vol-atileenvironment. Mastering change isof the utmost importance (Malhotra andHinings, 2013).Taking the Chance and IntegratingNew Business Design and ChangeIn contrast to mere adaptation processesand continuous developments, transfor-mationis the reshaping and conversionof an existing order in terms of a pat-ternchange so that old structures andbehaviors are abandoned and replacedby new ones. The mentioned driverspose new and complex challenges tocompanies and at the same time givenew opportunities for businesses. Or-ganizationschallenge their actual statein order to maximize their effectivenessthroughout the business (Cowan-Saha-dath,2010). However, numerous stud-ieshave shown that the implementationof transformation initiatives do not bring 18. 360 the Business Transformation Journal No. 11 | August 201418the desired result (Capgemini, 2012; De-loitte,2013; Daruvala et al. 2012).Three out of four transformation initia-tivesfail. The main reason stems fromeither focusing on the new strategy anddesign of an organization in a fast mov-ing,reengineering manner or focusingon evolutionary organizational devel-opmentand incremental change. Thefirst approach neglects the effort need-edto integrate organizations and individ-uals.The second does not account forthe fundamental shift of patterns in struc-turesand behaviors needed to under-goa transformation and does not sup-portthe speed, which is needed to adoptthe changes. It is obvious that integrat-edapproaches are needed to success-fullytransform.Two major challenges to be consideredinseparable are at the core of every stra-tegicinitiative (Mller-Stewens, 2005;Schuh, 2006):1. In the dynamically changing econ-omy,the configuration of new andcomplex organizational forms andbusiness models will be the majorchallenge for future business. Thus,achieving consistency in design andcharacteristics of the new organiza-tionstructure including strategy, tech-nologies,skills, activities, and behav-iorsis one objective of transformationmanagement. This aspect refers towhat is the matter with the transfor-mationon a strategic and operation-allevel.2. The paths and related manageri-alprocesses a company has to gothrough and establish will be crucialto implement an innovation and totransform the organization. Hence,the second objective of transforma-tionmanagement is institutionaliz-ingthe integration of the organiza-tionand the individual on all levels ofthe organization, from top manage-mentto the team level. This is donethrough a comprehensive system ofgovernance, information and com-municationstrategies, as well as pro-gramand project management. Thisaspect refers to how the transforma-tionon a strategic and operational lev-elis achieved.What Does Technology EnabledTransformation Mean for Organiza-tions?Without any doubt, one of the promisingdevelopments in the last few years is theconcept of Big Data. Big Data refers tothe ever-increasing volume of data thatis handled by companies through dataanalytics in order to generate value outof it. The diversity of data sources ischaracterized by a mix of structured andunstructured data with complex relation-shipsbetween them. In addition to thevariety of sources, the volume of datain recent years has exploded. The dig-itallandscape increasingly shapes howorganizations create business and howthey deal with building their Big Dataanalytics capability. Accordingly, com-paniesmust transform their structures,Key Aspects of Strategy and Leadership for Business TransformationBuilding Big Data digital capabilitycan only be achieved by shiftingpower to people who have theappropriate personal capabilitiesand deal with decisions generatedby Big Data analytics. 19. 360 the Business Transformation Journal No. 11 | August 2014DRIVERS19processes, and behaviors to match thenew capabilities and the evolving busi-nessstrategies.Galbraight takes the example of BigData to outline the tremendous chang-escompanies have to manage when en-teringthe digital age (Galbraight, 2014).For many companies, this is a challeng-ingstep. Nearly 70% of all companies donot have a clear strategy on how to inte-gratedigitalization with the elements oftheir business (IBM, 2014). Implement-ingBig Data analytics capability will becrucial for customer-oriented companiesin order to ensure that future growth intoexisting or new markets is possible. Thenew insights stemming from proper an-alyticswill generate new revenues andcreate opportunities for new business-es.If so, companies need to increasetheir strategic emphasis on Big Data bybuilding digital capability. This can onlybe achieved by shifting power to peoplewho have the appropriate personal capa-bilitiesand deal with the decisions gen-eratedby Big Data analytics. Inherently,this implies a change in power structure,which is needed to fully embed the BigData analytics capability within the or-ganization.These changes in the orga-nizationalstructure are vital to deal withincreasing speed of cross-functional de-cision-making processes and concen-tratingthe responsibility accordingly.What Does Transformation Meanfor the Managements Perception ofChange?In classical organizational change theo-ries,change is mostly initiated from with-inthe company. By involving people at alllevels of the organization, a high level ofintegration can be achieved. In addition,high commitment of resources is requiredto effectively implement the transforma-tionprocess. However, change manage-mentapproaches are often characterizedby a lack of acceptance and resistance 20. Key Aspects of Strategy and Leadership for Business Transformationconsistent pattern changeprocessesstructuresbehaviorengagement and harmonizationexperiments, prototypescanvas and roadmappingIntegration ofOrganization andIndividual360 the Business Transformation Journal No. 11 | August 201420from employees, which results in difficul-tiesin implementing solutions. Conse-quently,the achieved results lag behindthe original expectations. This demon-stratesthat besides having a plan on howto conduct the change process, many or-ganizationsfail to effectively implementchange processes and make them suc-cessful.What does it mean for the man-agementof transformations? How shouldmanagers act and react?During transformation, leaders underes-timatethe impact of issues identified bytechnology and how this might really im-pactbusinesses. Transformation man-agementcalls for awareness with dif-ferentissues, namely how to deal withnew business development and significantchange in culture, structures, process-es,and behavior. Taking the case of BigData, it is important to set out a strategythat covers all aspects and this is morethan making use of a new analytical ap-proach.Big Data will likely change thepower structure within the different func-tionsand business units. For Big Data,this could mean that a digital leader willchampion the transformation processin order to ensure that the function isstreamlined throughout the organizationand supported by various units. Rebal-ancingthe power structure means thatdecision-making is increased in speed.Information and decision processes arechanging. For the Big Data scenario, thismeans that real-time decisions are moreimportant. They need to be integrat-edinto the companys processes andstructures to keep pace with the rapidlychanging environments of the digital age.What does this example, which outlinesthe transformative power of a technologysuch as Big Data, mean for the manage-mentperception of change? The changeis tremendous in organizational struc-tures.Existing structures of power will bequestioned through the informed imple-Fig.1: BusinesstransformationframeworkefficiencyImplementation and stabilizationlearningqualificationsocializationOrchestrationCommunicationMotivationIntegratingstructuresTransformationStrategyIncreasingEffectivenessTransformationDesignEnablingEfficiencyTransformationDeliveryEstablishingSustainableResultsGovernance &LeadershipExisting structures of power will bequestioned through the informedimplementation of a technology;management will be part of aparadigmatic change. 21. Charismatic leadership, a behavior ofenvisioning, energizing and enabling,is needed to mobilize an organizationtowards the transformation.360 the Business Transformation Journal No. 11 | August 2014DRIVERS21mentation of a technology. Managementpractices and the management itself willbe the objective of transformation and assuch, the management is likely to be partof a paradigmatic change.Framework for Business Transfor-mationSimilarly, as business strategies have tofit in a highly dynamic and non-determin-isticenvironment, the transformation it-selfhas to fit and be consistent to a fastmoving and non-deterministic environ-ment.Building on the insight that onlysystemic and integrated managementapproaches will lead to successful trans-formations,which are accomplished intime and effectively, we introduce a holis-ticframework to transformation. To helpcompanies successfully change their or-ganizationalstructure and behavior, thetransformation framework (see figure 1)deals with the broader issue of howtransformations are initiated and how theeffectiveness of strategic initiatives canbe sustainably ensured. In the followingdiscussion, we choose to focus more onthe issues of governance and leadershiprather than on modelling the structuresand processes of the future business.Leadership Charismatic, Instrumen-tal,or Both?We have reviewed more than 100 cas-eson business transformations. In morethan 45 of these case descriptions, suc-cessfactors of the individual case werediscussed. Based on our findings, man-agementbehavior and leadership is con-sideredto be the most important successfactor in business transformations beforestructures, culture or specific roles in thetransformation. The aspect of leadershiphas received considerable attention overthe years in management literature. Sur-prisingly,the more specific aspect of lead-ershipin transformation has attracted afar lower level of serious attention. Thereare many debates on leadership styles.As a basis for our discussion, we use thecharacterization of Tushman and Nadler,who distinguish between charismaticand instrumental leadership (Nadler andTushman, 1990). Charismatic leadershiprefers to a style characterized by the spe-cificbehaviors of envisioning, energiz-ing,and enabling. Envisioning refers tothe creation and articulation of a compel-lingpicture of the future. It involves set-tinghigh expectations and having peo-plebelieve that it is possible to succeedin pursuit of the vision. The leader has tobehave and communicate consistentlyaccording to the vision as well. Energiz-ingis the second component. The ques-tionis how energizing is achieved andhow do leaders act differently in order tomobilize people. The most common pat-ternsto energize include demonstratingpersonal excitement, looking for person-alcontact with a large number of em-ployees,and expressing confidence insuccess by seeking and celebrating suc-cessfulsteps forward. The third compo-nentis enabling. It helps people performin the face of a challenging task by meansof expressing confidence in people, em-pathizing,and offering personal support.There is an agreement that charismaticleadership is needed to mobilize an or-ganizationtowards the transformation.However, is it sufficient to accomplishthe transformation? Effective leadersof transformation need to be more thancharismatic and we believe that there isanother type of leadership that accountsfor a successful transformation. Tuchmanand Nadler (1990) have introduced thistype as instrumental leadership.Instrumental leadership focuses on mak-ingsure that individuals in the seniorteam and throughout the organizationbehave in ways pended for change to beimplemented. Moreover, it does not focus 22. 360 the Business Transformation Journal No. 11 | August 201422on mobilizing people through excitementto change their goals and aspirations.An important role of instrumental leader-shipis to build competent teams, clari-fybehavior, and institutionalize measure-ments.Also, it is important to implementrewards and sanctions in a way that indi-vidualsperceive that behaving and actingconsistently with the change is a key fac-torfor them to achieve their own valuesand goals. According to expectancy the-oriesof motivation, individuals will per-formbehaviors they perceive instrumen-talto achieve valued outcomes. In thiscontext, leadership concentrates on cre-atingconditions that motivate desired be-havior.Instrumental leadership involvesthree elements: structuring, rewarding,and controlling. With structuring, theleader invests time in building teams withthe skills required to implement the trans-formation.This not only includes settinggoals, roles, and standards, but also im-plementinga detailed plan that specifieswhat people should perform. Rewardingincludes managing rewards dependingon the degree that the behavior is consis-tentwith the transformation. Controllingencompasses the creation of systemsand processes to measure and monitorbehavior, as well as results and proac-tivelyinitiate corrective actions.In practice, however, it appears that suc-cessfultransformation requires bothtypes of leadership. The charismatic com-ponentis needed to mobilize and gener-ateenergy; the instrumental componentis needed to guide people in a structuredway towards new behavior to achievenew goals. The complementarity of bothcomponents seems to play an importantrole, but it is unlikely to find both char-acteristicsat the same time with a sin-gleleader. Exceptional persons, who arefew, will be able to simultaneously incor-poratethe two different characteristics.In most cases, an alternative to escapethe dilemma created by these charac-teristicsis to develop leadership teams,which bring together the different skillsto successfully transform. An emphasison both characteristics is needed, giventhat leadership is a critical success fac-tor.However, a third leadership behaviorcalled consequence is indispensable. Inthe many cases that we analyzed, conse-quenceis considered to be the most cru-cialleadership behavior.Do You Have Consistent Goals andStrategies?A charismatic leader has the talent to in-spirepeople to achieve exceptional re-sults.There is no doubt that this is oneof the important skills needed to accom-plisha successful transformation. How-ever,what if the leader does not have avision of the future state of his businessor the amount of clarity required? Whatif the manager does not know what thetransformation really implies and meansfor the entire organization? The worst thatcould happen is that the whole organiza-tionis following enthusiastically and runsinto a given direction until people real-izethat they are on the wrong path. In or-derto avoid this, the leadership team hasto develop a precise picture of the futurestate and develop a set of consistent strat-egies.One needs to take into account thecomplexity of business, which is inherentto every transformation. Thus, a holisticand interdisciplinary perspective is need-ed.A transformation involves coping withthe complexity and dynamics of new tech-nologies,new positioning and businessand, their impact on the entire organiza-tion.One single person could not handleKey Aspects of Strategy and Leadership for Business TransformationInstrumental leadership involvesthree elements: structuring,rewarding and controlling.Successful transformation requirescharismatic, instrumental, andconsequence behavior. 23. Strategic profiles focuses onconsistency in key managementdimensions and allows developing ashared understanding of the futurestate among managers.360 the Business Transformation Journal No. 11 | August 2014DRIVERS23this on his/her own. The engagement ofdifferent stakeholders from the top man-agementis crucial to make use of all theexisting knowledge in the organization.For each stakeholder, the different ob-jectivesunderpinning the transformationhave to be specified and the related strat-egieshave to be outlined. It is very impor-tantthat these strategies are consistentas it is the consistency in strategies thatmakes a transformation successful. Onlyan organization designed consistent-lywithin its core dimensions will performsuccessfully. Despite the importance ofthis fundamental principle, we doubt thatin most transformations, the leadershipteam undertakes the challenging task toprove strategies for consistency. As a re-sult,transformations might end up in in-dependentsilo programs, which optimizethe performance of a single unit but willmost likely never sum up to the transfor-mationas envisaged. What is an appro-priateinstrument used to engage stake-holdersfrom different management areasand used to develop a consistent sharedmodel of a strategy implemented at a lat-erstage with its dedicated programs? Weconsider the concept and method of stra-tegicprofiles developed by Bleicher to bevery helpful. It focuses on consistency inkey management dimensions and allowsdeveloping a shared understanding of thefuture state among managers. The basicidea is to identify dichotomic options foreach partial strategy. One extreme refersto a stabilizing strategy, which results inremaining in the existing position. The oth-erextreme refers to a renewing strategyto achieve the state new to the organiza-tion.The lines between the extremes buildthe scales used to evaluate different strat- 24. Leistungserstellung HierarchieProductsupporting360 the Business Transformation Journal No. 11 | August 201424Key Aspects of Strategy and Leadership for Business Transformationegies according to their reach out andconsistency. As servitization is one of themajor drivers of transformation in the pro-ductionindustry, we have taken an ex-amplefrom this area to illustrate the con-cept.Figure 2 illustrates the consistencyin management activities for four impor-tantactivities associated with the shift ofa companys orientation from a product toa solution business. Differentiation strat-egy,solution concept and configuration,solution marketing and communication,and finally the solution design activity aredimensions to be integrated. The illus-tratedintegration means that all of theseactivities have to be changed simultane-ouslyand consistently. This simultane-ousand consistent shift is the prerequi-siteto successfully implement a solutionorientation within a producing company.An unbalanced change in organizationaltransformation processes will cause ten-sionand the failure of the initiative (Schuhand Gudergan, 2009).Do You Focus on Fast Results and onSustainable Performance?If yes, then think about what distinctchange strategies you chose whenstructures, processes, and behaviorshave to be transformed in your organi-zation.There are different ways to imple-menta business goal and it is importantto be clear which dominant mechanismis used to transform in a sustainable way.Research has shown that leaders needto increase their awareness that a dif-ferentiatedapproach to transformationalchanges is necessary. As every transfor-mationis unique, there is no one-size-fits-all solution when it comes to a spe-cificchange management style. Since nomanagement style is effective in all sit-uations,leaders need to apply differentchange management leadership stylesLeaders need to apply differentchange management leadershipstyles ranging from participative todirective according to the varyingnature of the transformation.Fig 2: Strategicprofiles for serviti-zation:A systemview on consistentchangeZielsystemProductorientedSolution communicationand marketingmanagers.Solution concept andDifferentiation strategy configurationSolution designCustomer needssupportingInside outCustomer-value-drivenProduct, price,place, promotionValue-oriented4P + peopleand process 25. Transformations last on averagebetween three to five years, giventheir strategic importance, they haveto be institutionalized and have anappropriate governance structure.360 the Business Transformation Journal No. 11 | August 2014DRIVERS25according to the varying nature of thetransformation. The characteristics ofthe transformation are important to de-terminehow to handle the transforma-tionprocess. There are different possibil-itiesranging from participatory inclusionof members of the organization to com-mandingfrom top management. A par-ticipativeand evolutionary style in whichemployees are included in the design pro-cessleads to better internalization of theincremental changes and creates a senseof ownership. In contrast, a directive stylemight result in short-term success that inthe long-term eventually increases resis-tanceand frustration from the workforce.Then again, some transformations oc-curabruptly and need to be implementedquickly. In this case an inclusive changestrategy might not be the best solutionas the transformation is time-sensitive.Research suggests that transformationsat the corporate level need more direc-tionfrom executives when repositioningthe organization. However, once the ba-sisfor organizational renewal is in place,the strategies can be mixed and partic-ipativechange management style canbe incorporated, leaving it to the respec-tivedepartments or divisions to shapethe reorganization. To manage corpo-ratechange, the context of the situationdetermines the style. Effective organiza-tionaltransformations therefore demandmanagers that reject rigid responses andinstead are open for flexible and mind-fulresponses. The measures used toachieve a successful transformation do 26. Key Aspects of Strategy and Leadership for Business Transformationof course also depend on the culture ofthe organization. The corporate valuesdecide if a certain style is considered tobe appropriate and ultimately determinesits effectiveness. A comprehensive ap-proachto organizational change accom-modatesthe use of means collabora-tiveto coercive at varying degrees toachieve change. These strategies are infact complementary rather than incompat-ible.Their usefulness depends on the par-ticularcircumstances in which the trans-formationis shaped. Leaders have to gobeyond personal value preferences whenselecting an organizational change strate-gyand reject the idea of a universally ap-plicableDo You Have an InstitutionalizedStructure to Govern Transformation?How long does a transformation take? Itdepends will be the answer you get andit is the right answer as it really dependson the scope and the contingencies, bothinternally and externally, which determi-natesthe duration of a transformation. Weanalyzed 100 transformations and foundthat most transformations take betweenthree to five years on average. With thisinformation and given the strategic im-portanceof any transformation, it seemsnatural and evident that transformationsneed to be institutionalized. Moreover, anappropriate governance structure has tobe implemented. So, to what extent doesyour organizations structure and com-municationprocesses encourage thetransformation progress? To answer thisquestion, different aspects have to beconsidered. Governance here encom-passesthe management activities thatdetermine the organizational structures,decision making processes, informationflows, and communication efforts relat-edto a transformation. Specific manage-mentactions include: establishing crossboundary committees, which integrate allstakeholders; designing a steering sys-tem,which breaks down actions from theprogram level to the project and team lev-eland vice versa; initiating and fosteringcommunication campaigns and a flowof regular communication; encouragingexchange on best practices and bench-markingbetween programs and projectsand sharing information and success.360 the Business Transformation Journal No. 11 | August 201426Key Learningschange strategy. New technologies and market demands initiate tremendous need for transformation in organiza-tionaland process dimensions and question existing structures of power in companies. Existingmanagement practices and the management itself will be the objective of transformation. In order to master transformation, integrated approaches are needed to focus simultaneously onthe strategy and new design of a future organization when initiating and orchestrating the change. In order to achieve the desired results by changing patterns of an organization, consistency in stra-tegicand structural dimension is the major design principle. A comprehensive approach to leadership style to fit with the objectives and situations in transfor-mationsis needed. Charismatic and instrumental leadership styles have to be used at the same time and manage-mentbehavior has to switch between collaborative and coercive depending on the specific situ-ation,as these styles and behavior are in fact complementary. Leaders thus have to go beyondpersonal value preferences when selecting an organizational change strategy and reject the ideaof a universally applicable leadership style in transformations. A comprehensive governance structure is needed to insure for information flow and feedbackwithin the structures and roles and finally steer the overall transformation. 27. 360 the Business Transformation Journal No. 11 | August 2014DRIVERS27ServiceAUTHORSDr.-Ing. Gerhard Gudergan has a master in mechanical engineering and a PhDfrom RWTH Aachen University. He has been the head of the Business Transforma-tiondepartment at FIR at RWTH Aachen University. Since 2009, he has been thehead of business unit research at FIR. Before this, he has established and run thedepartment of service management and is the founding head of the service scienceinnovation lab at RTWH Aachen Campus. His current focus is on business transfor-mationin the context of business model innovation and digitalization.gerhard.gudergan[at]fir.rwth-aachen.deAchim Buschmeyer has a master in business administration and economics from Uni-versityof Hagen. Since 2012, he has been project manager at FIR at RWTH AachenUniversity. Achim Buschmeyer is deputy head of the Business Transformation depart-ment.His current work is focusing on business model innovation and servitization in pro-ductioncompanies and the related transformation strategies.achim.buschmeyer[at]fir.rwth-aachen.deREFERENCES Bleicher, K. (2011). Das Konzept Integriertes Management. 1st ed. Frankfurt/Main [u.a.]: Campus-Verl. Capgemini (2012). Transformation Trends 2012: Accelerated Change is the New Norm, Oslo:Capgemini Consulting. Capgemini, The Economist Intelligence Unit (2007). Trends in Business Transformation: Survey ofEuropean Executives. Cowan-Sahadath, K. (2010). Business transformation: Leadership, Integration and Innovation A Case Study, Changes & Projects, vol. 28(4), pp. 395 404, 2010. Daruvala, T., Sengupta, J., Dietz, M. ,Voelkel, M., Hrle, P., Windhagen, E. (2012). The TripleTransformation: Achieving a Sustainable Business Model. Hrsg.: McKinsey & Company. Deloitte (2013). Driving Change Five Questions Every Bank Must Answer to Justify a CoreTransformation. Deloitte Developemnt LLC, London. Galbraight, J. R. (2014). Organizational Design Challenges Resulting from Big Data. Journal ofOrganization Design. Vol. 3(1), pp. 2 13. IBM (2014). IBM Global CxO Study 2014. [online] Available from: https://www.ibm.com[Accessed 05.07.2014]. Kiron, D., Palmer, D., Phillips, A.N.U., Kruschwitz, N. (2012). What Managers Really Think AboutSocial Business. MIT Sloan Management Review, vol. 53, Nr.4, S.50 60. Malhotra, N. and Hinings, C.R. (2013). Unpacking Continuity and Change as a Process ofOrganizational Transformation, Long Range Planning, pp. 1 22. Mller-Stewens, G. and Lechner, C. (2005). Strategisches Management. 3rd ed.Stuttgart: Schffer-Poeschel. Nadler, D.A. and Tushman, M.L. (1990). Beyond that Charismatic Leader: Leadership and Organiza-tionalChange. California Management Review, 77 97. Schuh, G. and Gudergan, G. (2009). Service Engineering as an Approach to Designing IndustrialProduct Service Systems. In: Proceedings of the 1st CIRP Industrial Product-Service Systems (IPS2)Conference. Cranfield: Cranfield University Press, pp.1 7. Schuh, G. (2006). Change Management Prozesse strategiekonform gestalten. Springer, Berlin. 28. 360 the Business Transformation Journal No. 11 | August 201428AbstractKeeping pace with rapid changes in the business environment is a herculean task for executives world-wide.For more than two decades the Shared Service Center approach promised lower back officeprocess complexity, reduced transaction costs, increased service quality and higher internal customersatisfaction. However, empirical studies revealed a significant gap between the impact and utility of theShared Services approach. Through Finance Shared Service Center case studies with two multinationalcompanies, we identified several transformation and innovation action areas attracting increasing atten-tion,in line with the Digital Capability Framework concept. 29. NEXT-LEVEL SHAREDSERVICE CENTERSWhat Capabilities Do You Need: The Case ofTwo Multinational CompaniesHave you read our previous articles on Shared Service Centers (SSCs)? To continueour SSC research journey, we conducted detailed case studies to deeper under-standhow transformation and innovation capabilities can make the difference forFinance Shared Service Centers.by Marco Fischer, Thomas Ltke Siestrup, Stefan Rder, Axel Uhl, Frank Keuper,and Tom Bangemann360 the Business Transformation Journal No. 11 | August 2014METHODOLOGY | RESEARCHWithin the last decade, the changing 29role and tasks of Shared Service Cen-ters(SSCs) and consequently of FinanceShared Service Centers (FSSCs) indi-catethat there has been a notable shiftfrom efficient-oriented (F)SSCs to effi-cient-and effective-oriented (F)SSCs (Ke-uperand Oecking 2008, p. 488). In thisregard, Boos (2013, p. 136) points out ef-fectiveness-related non-financial as-pects,while Stegemann et al. (2013, p. 44et seq.) highlights increasing standardiza-tionand flexibility as a goal for the financework stream of a multinational corpora-tion.In a recent study, PWC (2012, p. 14)found that quality improvements are seento be the most important reason to estab-lish(F)SSC structures. However, in manycompanies cost-cutting reasons domi-nate.Cost reductions result from labor ar-bitrage,consolidating heterogeneous ITlandscapes, and process standardizationand optimization (Lueg, 2013, p. 7).Previously, we found that practitionersare often faced with strategic, techno-logical,and cultural barriers (Roeder etal. 2013). In retrospect, some of the up-comingbarriers could have been avoid-edthrough having a clearly defined stra-tegicscope, and a corresponding projecttransformation scope at an earlier maturi-tylevel.We conducted detailed case studies withtwo multinational companies (MNCs)(see box 1 on the next page for rease-archdesign). Our research revealed thatimplementing the FSSC approach is fun-damental.Multi-dimensional finance andaccounting transformation processes, par-ticularlyimproving (internal) customercentricity, enable knowledge workers toperform their tasks more effectivelybased on operational and IT excellence.To verify, we used the Digital Capabili-tyFramework (DCF), which aims to helpcompanies analyze their transformation po-tentialand give guidance to leverage busi-nessand technology innovations as a re-searchframework (see figure 1 on the nextpage).Case Study Corp ACorp A is a multinational corporationheadquartered in Germany and is one ofthe worlds largest electronics and elec-tricalengineering companies. Establish-inga Shared Services Organization ona global level was a promise to decreaseadministrative costs while increasingquality, compliance, and transparency 30. 1 2 3 4 5(F)SSC Transformation Capability1 2 3 4 5(F)SSC Innovation Capability1 2 3 4 51 2 3 4 51 2 3 4 5(F)SSC Operational Excellence1 2 3 4 5ENABLERS GOALSLegend: Level 1: None/Initial Level 2: Reactive Level 3: Defined Level 4: Managed Level 5: Excellent360 the Business Transformation Journal No. 11 | August 201430Next-Level Shared Service Centersthrough bundling, harmonizing, standard-izing,and partially automating widespreadnon-strategic administrative tasks. Thecaptive Shared Services Organization ofCorp A offers a broad service portfolio in-cludingaccounting and finance services,human resource services, supply chainmanagement services, and more.The finance and accounting SSC ofCorp A comprises of more than 2,000full-time equivalents (FTEs). The mainobjective is to optimize costs for the entirecompany. In the first stage, the financeand accounting SSC developed out of re-gionalinitiatives, and in 2006 it becamea global unit and the dedicated in-houseservice provider. After transferring localtransactional accounting services into theShared Services structure, in 2008/2009,the management board gave the man-datefor a company-wide optimizationproject in the area of administrative tasks.Finance was one of the core areas. Con-sequently,the board launched a financebundling program that included severalwork streams (e.g. governance and con-trolling,transactional accounting, finan-cialservices, taxes, and selected supportactivities). The Chief Financial OfficerFig.1: Overviewof the digitalFSSC capabilityframeworkBox 1: Research Design and Case StudiesThe data in this article was gained during 2013, through in-depthdiscussions with executives from two MNCs in Ger-manyand Switzerland who are responsible for the financeand accounting SSC unit. For confidentiality reasons, thetwo MNCs will be identified as Corp A and Corp B. Theywere chosen as interview partners due to their diverseFSSC maturity level. While Corp A has had more than adecade worth of experience in implementing and runningSSC structures, especially in finance and accounting, CorpB started its FSSC journey in early 2013.(F)SSC Customer Centricity(F)SSC Effective Knowledge Worker(F)SSC IT Excellence 31. Yesterday Today Tomorrow360 the Business Transformation Journal No. 11 | August 2014METHODOLOGY | RESEARCH31(CFO) of Corp A was sponsoring the pro-gramwith top management support.Following the mission that the servicesare provided in a professional, custom-er-oriented, quality-focused, transparent,and cost-competitive manner, Corp A de-velopeda strategic FSSC roadmap thatconsists of three phases: Lift and Drop,Change, and Innovate and Expand(see figure 2).Lift and Drop included all activities totransfer selected transactional account-ingservices to the FSSCs in order to ben-efitfrom cost advantages through laborarbitrage and bundling effects. As a con-sequence,the FSSCs had to manageprocesses with various levels of product-specificrequirements and resulting com-plexityand diverse IT systems. To providehigh-quality services at competitive pric-es,the finance and accounting SSC workson several SAP systems and a number ofdifferent non-SAP enterprise resourceplanning (ERP) systems, with various pro-cesses,settings, and workflows.The following Change phase has astrong focus on the optimization of het-erogeneouslifted and dropped pro-cessesby concentrating workflows andresponsibilities in a single organizationand executing processes by well-educat-edand trained staff. Additionally, furtherinitiatives in the field of process improve-ments,standardization and automationhave been kicked off.If the FSSC performs well, it should thinkabout new ideas and technologies thatmight be useful to generate further costreductions regarding transactional ser-vices,and also to identify and ramp up ex-pertise-driven services. Hence, the thirdphase called Innovate and Expand isseen as the next step in Corp As strate-gicroadmap. In this phase various topicshave to be considered (e.g. further auto-mation,in order to decrease manual pro-cesssteps; further reduce potential dailyerrors; boost process efficiency, and de-velopcompletely new, solution-orientedand/or end-to-end business models).Starting the journey, Corp A had de-finedclear goals in five focus areas forits finance and accounting SSC, to reachworld-class performance related to op-erationalexcellence, customer centrici-ty,and effective knowledge workers. Thefive focus areas are:Portfolio: First consolidate transac-tionalservices and then increaseadded value by expanding portfolioOperations: Improve operationalexcellence and globalized standard-Fig. 2: StrategicFSSC roadmap ofCorp AStrategic FSSC Roadmap of Corp ACost ImpactLift and DropStrategic ImpactInnovate and ExpandBusiness ImpactChange Process 32. 360 the Business Transformation Journal No. 11 | August 201432ized processesCustomers: Customer satisfaction onpromoter levelPeople: Strong service attitude andentrepreneurshipFinancials: First quartile cost positionin defined servicesThus far, the realized benefits of Corp Aare to successfully transfer the transac-tionalaccounting workload of more than300 entities to the FSSC. The FSSC re-alizedcost savings up to 35% p.a. primar-ilyby leveraging location advantages dur-ingthe comprehensive bundling program.Furthermore, user and customer satisfac-tioncould be significantly improved. Also,a prerequisite for the focus on financialsto get a first quartile cost position in de-finedservices is the ability to comparewith others. Therefore, Corp A started aproject with a strong focus on cost trans-parencyand benchmarking within thegroup and again outside.Moreover, Corp A built appropriate pro-cessesto foster innovation as it considersinternal and external innovation manage-mentas a key success factor for driving afuture FSSC at Corp A.Case Study Corp BCorp B is one of the biggest employersin Switzerland and consists of four divi-sions:passenger, freight, infrastructure,and real estate, plus steering and servicefunctions, such as finance, human re-sources,and IT.To support a more integrated businessmodel, to realize synergies, and to reducecosts significantly, the management boarddecided to change to a more centralizedcorporate structure in 2009. This includ-edbundling all transactional finance andaccounting activities. However, in con-trastto Corp A, cost effects through laborarbitrage were less relevant. Next to theFSSC, the company was also running aSSC for human resources and IT.The introduction of the FSSC was one ofmany building blocks of a large-scale fi-nancetransformation, and the first oneon the senior management boards ra-darto take life. The CFO took responsi-bilityfor the journey. The starting pointwas defined as follows: all transactional fi-nanceand accounting processes shouldbe transferred based on a clear activi-tysplit and consolidated in an internalShared Service unit. The whole trans-formationshould be easy to digest for allparties involved. said the interviewee ofCorp B.The four-stage FSSC roadmap (HighMaintenance, Stable, Highly Produc-tive,and Optimized) was chosen tosuccessfully drive the transformation(see figure 3). The FSSC program itselfwas divided into six subordinate projects:organization and transformation, finan-cialaccounting, management account-ing,personal and recruiting, change man-agement,and communication. Each washeaded by a subordinate project manag-erand in peak times about 50 internal ex-pertswere involved in the initiative. Thecore team consisted of approximately20 people. Internal accounting special-istscontinued to closely engage with proj-ectteam members providing expert ad-viceand assisting them with tailor-madeproblem solutions. A highly motivated andskilled team, accounting advisors for eachdivision, and a strong four-phase projectstructure (feasibility study detailed con-cepts realization implementation) werethe basis for the FSSC.Monthly, a steering committee (GroupCFO as the sponsor, Head Group Ac-counting,finance officers of retiring divi-sion,designated head of the future FSSCaccompanied by change managementand human resources) discussed the sta-tus,challenges, and next steps. The divi-sions,as retiring entities, were always in-tensivelyinvolved in the project course.Moreover, go-live coordinators per divisionwere appointed to be the link between theretiring entities (divisions) and the FSSC.After having started its operations suc-cessfullyin 2013, the FSSC is in the se-condstage (Stable) now and strives toenter the next one (Highly Productive) inQ2/2014.Next-Level Shared Service Centers 33. Yesterday Today Tomorrow360 the Business Transformation Journal No. 11 | August 2014METHODOLOGY | RESEARCH33As in Corp A, the FSSC of Corp B op-eratesas a cost center. The main effi-ciencydriver is a company-wide bun-dlingof decentralized, heterogeneous,less standardized finance and account-ingprocesses (e.g. general ledger, ac-countspayable, accounts receivable,fixed assets accounting, and manage-mentaccounting). The goal is to realizesignificant cost savings and run stableoperations after three months of go-live.Therefore, the FSSCs leadership teamis driving an operational excellence pro-gram(following the objectives) to lever-agethe service delivery teams:Customer focusPerformance awareness and visu-alizationregarding time, cost, andquality of service deliveryStreamlining the team organizationPlanning abilityStrengthen competencies for contin-uousimprovementStandardization of working proce-duresand systemsIn line with Corp A, the heterogeneousIT landscape has also been a big chal-lenge.Similar software modules werecustomized individually and to someextent, coded differently. Therefore, apragmatic approach has been taken tocontinue with existing systems and mi-norsteps have been taken to harmonizeIT systems.By saving 20% plus of FTE in accounting,the FSSC of Corp B has reached its keygoal, which was to run stable operationsafter three months of go-live. As to be ex-pected,backlogs increased significant-lyin the start phase of the FSSC but arenow under control in the range of a daysworkload. After only one year, the organi-zationaims at expanding its service de-liveryscope both in the finance and con-trollingareas.Regarding the role of innovation man-agement,executives of the FSSC differ-entiatebetween three types of innova-tion:business model extension, processextension, and innovating present pro-cesses(especially through technolo-gy).Currently, innovation management isnot a priority on the executives agendain the FSSC of Corp B. However, the in-tervieweesare aware that an innovationspirit should be developed and expectthis to become important when their in-ternalcustomer requirements and needsincrease.Fig. 3: StrategicFSSC roadmap ofCorp BStrategic FSSC Roadmap of Corp BHigh MaintenanceHighly ProductiveStableOptimizedFSSC of Corp B reached its keygoals by saving 20% plus of FTEin accounting and running stableoperations after three months. 34. 1 2 3 4 5Management Orchestration of individual disciplines: Guidelines, Leadership, Culture, Values, and Communication360 the Business Transformation Journal No. 11 | August 201434Findings and DiscussionIn both interviews we found that imple-mentingthe FSSC approach is an inte-gralpart of a fundamental finance and ac-countingtransformation process, wheretransformation and innovation manage-mentand the respective lessons learnedplay an important role.Corp A follows a strategic multi-dimen-sionalgoal setting approach with opera-tionalexcellence, customer centricity,and effective knowledge workers, whileCorp B primarily focuses on a one-dimen-sionalgoal setting approach with opera-tionalexcellence. In fact, operational ex-cellenceis the basis for the success of anFSSC at an early maturity level, leading,in most cases, to higher productivity andprofitability. Previously shown, next-lev-elShared Services Organizations mustkeep a strong focus on customer centric-ity,well-qualified and highly motivatedknowledge workers, and IT excellence. Amulti-dimensional goal setting approach,where all DCF goals are considered anddirected at the right time can be the pathto higher effectiveness. However, a pre-requisiteis to effectively and efficient-lymanage the two enabler capabilities:transformation and innovation.In the future, without an appropriate lev-elof these DCF capabilities and the ad-equateconsideration of the DCF goals, itwill be challenging for FSSCs to provideexcellent services at comparative costsand to support strategic company targets.Therefore, we recommend addressingtheir systematic build-up at an early ma-turitylevel.Enabler 1: FSSC TransformationCapabilityThe transformation capability as an en-ableris reflected in the Business Trans-formationManagement Methodology(BTM2). Based on our interviews andpractical experiences, we came to theconclusion that there is no generally ac-ceptedone-size-fits-all FSSC maturi-tymodel. Nevertheless, we identified thesame challenges within all different stra-tegicroadmap models and the need fora common, holistic, and cutting-edge ap-proachto manage major FSSC transfor-mations.The BTM2 (see figure 4) can encourageFSSC transformations to minimize risksand to increase their success rate, pro-vidingexecutive guidance and supportby bringing together the relevant disci-plines.Meta Management Mandate: Themost important success factor is a cleartop management mandate, and top man-agementcommitment. Without the stra-tegicalignment, on both the overall busi-nessand the finance strategy levels,active support from the top managementand the governance function, a SharedServices journey would be doomed.Next-Level Shared Service CentersMetaFig. 4: DCF trans-formationcapabili-tyconsists of BTM2dimensionsEnablementProgram/ProjectManagementCompetence &TrainingManagement(Organizational)ChangeManagementProcessManagementIT TransformationManagementRiskManagementValueManagementStrategyManagementDirection(F)SSC Transformation Capability 35. FSSC executives should focus oninnovations from the beginningof the journey.360 the Business Transformation Journal No. 11 | August 2014METHODOLOGY | RESEARCH35Strategy Management: The decision toestablish a Shared Services structure ismade when a company suffers from de-creasingcompetitiveness and cost pres-sure.Based on positive experiences withthe implementation of a FSSC describedin the first case, we can conclude thatcompanies should consider the SharedServices concept in times of prosperity.Acting instead of reacting has good pros-pectsfor success.Value and Risk Management: FSSCs asinternal cost centers must justify them-selveswith regard to cost savings andquality improvements. In contrast to oth-erimplementation projects, generatedsavings have to be shown quickly. Werecommend that key performance indi-cator(KPI) systems should be designedearly in a Shared Services journey on thebasis of effective and efficient process-es.Also, cost savings should not be thehighest priority in Shared Services im-plementations.Process Management ServiceScope: Furthermore, it is essential toclearly split activities between donatingand receiving entities. The intervieweesrecommend to establish a formal devi-ationrequest and approval process. Asa basis, processes should be clearly de-finedand described before the imple-mentationof a FSSC starts.Program/Project Management Staffand Resources: Establishing and opti-mizingShared Service structures needtop educated and highly motivated teammembers at all levels in order to succeed.This applies to the project managementand to the specialists in the headquartersand Shared Services Centers. A broadvariety of expertise is required rangingfrom business development to risk man-agement,communication, controlling,tax, IT, process, and quality managementexperts. Moreover, it is important to im-plementa stable project management or-ganization.IT Transformation Management: It isobvious that processes should be clearlydefined and described prior to a SharedService implementation. Processes shouldbe modeled and managed equally to ben-efitfrom savings at a faster rate. Havinga single ERP platform commonly seenas a success factor is not always a pro.In some cases it might even be mislead-ingas it is assumed that the ERP systemis customized and used equally in all busi-nessunits. In practice, systems and soft-wareare often configured or used differ-ently,which leads to a lack of relevantfundamentals for effective test measures.Change Management: During the start-ingphase, continuous communicationwith all relevant stakeholders in- and out-sidethe SSCs is a necessity. It is impor-tantto communicate with future manage-rialstaff, as their business and leadershipskills are essential. Also, it is essen-tialto develop and offer challenging ca-reerpaths to win the war for talents. Inboth cases change management aspectsplayed a decisive role. Therefore, theymust be considered early on rather thanwhen it comes to a mission-critical situa-tion.The establishment of advisors withboth discipline-specific know-how andchange management expertise as de-scribedin the second case may be useful.Competence & Training Management:(F)SSCs will have to establish adequateworking conditions, develop clear job pro-files,develop challenging career pathsto attract talented people, and retain em-ployees.This will become particularly im-portantwhen it comes to an extension ofthe service scope towards non-transac-tional,know-how-intensive processes(e.g. Big Data analytics) or to the build-upof centers of expertise. Our recommen-dationis to develop knowledge trans-ferplans, a mid- and long-term-orientedskills profile and a skills portfolio manage-mentapproach. 36. 1 2 3 4 5360 the Business Transformation Journal No. 11 | August 201436Next-Level Shared Service CentersEnabler 2: FSSC Innovation CapabilitySuccessfully achieving continuous andlong-term innovation presupposes cer-tainconditions. These include an effec-tiveinnovation process involving cus-tomersand/or thought leaders (externalexpertise), an open-minded company cul-tureand an appropriate working environ-ment(see figure 5).In our first SCC study we investigated thestatus quo of innovation capabilities in se-lectedSSCs (N = 11; Roeder et al. 2013).The majority of SSC executives (73%)confirmed that process innovations havehigh importance and according to thatthey have investment budgets for respec-tiveprojects. Surprisingly, more than 70%of the respondents stated that they did nothave a process innovation strategy, eventhough process innovations are expectedto:Reduce costsMinimize throughput timesImprove process and output qualityImprove (internal) customer as well asemployee satisfactionImprove process and output transpar-encyImprove compliance levelImprove risk managementWith all the results and findings in mind,we expect business model innovationsand technology innovations to play an im-portantrole for next-level Shared ServiceOrganizations, which aim to improve itseffectiveness and efficiency simultane-ously.In practice, innovation is often seenas a stage at the end of the maturity curve.However, in our view there is no reason tostart innovation activities at a higher ma-turitylevel, therefore, we follow the idea toparallelize innovation activities. FSSC ex-ecutivesshould have a strong focus on in-novationsfrom the beginning of a sharedservices journey.Rather than making the most out of a pro-cessas-is, interdisciplinary teams of pro-cessowners, IT experts, and (external)business transformation consultantsshould think about a fundamental processre-design using state-of-the-art meth-ods(e.g. Design Thinking) and technolo-gies(e.g. in-memory, analytics, mobile,cloud). Managers should also look at tech-nologyinnovation, including formulating aShared-Service-specific process innova-Fig. 5: DCF innova-tioncapability(F)SSC Innovation CapabilityAdequate innovation process Internal and external innovation expertiseInnovation culture Innovation working environmentFor the next level of SSC,interdisciplinary teams should thinkabout a fundamental process designusing state-of-the-art methods andtechnologies. 37. tion strategy and a technology innovationstrategy. Accordingly, adequate strategyexecution and monitoring measures haveto be implemented.Furthermore, reaching a higher innovationcapability level requires appropriate orga-nizationalstructures as well as an effectiveintegration of various innovation sourc-es.The FSSC of Corp B only uses inter-nalcompany sources, whereas the FSSCof Corp A combines research results fromboth internal and external sources.We are convinced that building up appro-priatetransformation and innovation capa-bilitiesenables FSSC executives to keeppace with a higher level of service com-plexityas a result of growing customersneeds regarding effective and efficientservice delivery.ConclusionIt is obvious that both MNCs significant-lybenefit from the Shared Services con-ceptfor their finance and accountingfunctions. Nonetheless, there are somenotable differences regarding the strate-gicapproach between both MNCs. Fur-thermore,there is no need for a general-lyaccepted maturity model. The DCF andthe BTM2 implies all relevant transforma-tionand innovation aspects executivesshould keep in mind to implement and runa FSSC successfully.Operational excellence is only a condi-tiosine qua non, to drive a multi-dimen-sionalcustomer centricity, effective knowledgeworkers, operational and IT excellence.Hence, the DCF and BTM2 should becombined and all DCF goals should beconsidered ab initio when planning andexecuting the strategic FSSC roadmap.Along the strategic FSSC roadmap, earlyconsideration of multi-dimensional goalsgives way for long-term benefit realizationand expansion of the FSSC concept.Our recommendation is to formulate aninnovation capability build-up strategy,which defines specific goals, resourc-es,responsibilities, timelines, and stra-tegicpartners. This implies both to beaware of the growing importance of pro-cess-(e.g. in-memory, mobile, cloud) and im-plementingThe most important point is to considerprocess as well as technology innovationas common activity through the wholeShared Services journey and not only asa part of the last maturity level.360 the Business Transformation Journal No. 11 | August 2014METHODOLOGY | RESEARCH37Key Learningsgoal setting approach, includingand technology-based innovationsan innovation-friendly culture. The next generation FSSC concept will allow companies to benefit from a higher level of effec-tivenessand efficiency within their finance function. However, there is no generally accepted andpractically applicable FSSC maturity model available. Our two cases have shown that there is anecessity for guidance and a holistic capability framework. Implementing the FSSC approach is an integral in the fundamental finance transformation pro-cess,particularly in improving (internal) customer centricity, enabling knowledge workers to per-formtheir tasks more effectively based on operational and IT excellence. These goals can bereached by a FSSC through successfully managing two enablers: the transformation and innova-tioncapability. The transformation capability is influenced by top and middle management support, a clear projectmanagement framework, a cooperative and committed project team (internal and external), strongchange management at an early stage, and target-oriented communication. A key challenge fornext-level FSSC is to improve their innovation capability. This involves awareness of process- andtechnology-based innovations (e.g. in-memory, mobile, cloud) and implementing an innovation-friendlyculture. Along the strategic FSSC roadmap, considering multi-dimensional goals at an earlystage gives way for long-run benefit realization and expansion of the FSSC concept. 38. 360 the Business Transformation Journal No. 11 | August 201438Next-Level Shared Service CentersServiceAUTHORSMarco Fischer is a Senior Business Transformation Consultant within the SAP BusinessTransformation Services organization in Switzerland. He has a track record of more thanten years of overal