Heroes, History, And Marketing: A Game Plan For A Winning Hockey Fan Experience

Fred Isbell

SAP NiemiAs I recently wrote in Episode II: The Hockey Fan Experience Reawakens, the hockey fan experience is more than just a fan’s in-person experience at a game. Take my recent trip to the 2016 NHL Winter Classic, for example. During the matchup between my hometown Boston Bruins and the Montreal Canadians (the Habs), I saw many dimensions of the fan experience first-hand – from the actual game to sponsorships, branding, in-arena multimedia visuals, coverage, and broadcasting.

As a marketer, this made think: What defines a hockey fan and how is it changing and evolving?

Fan loyalty and the hockey experience

Without a doubt, knowing how to play hockey improves the fan experience. Although I had a non-traditional introduction to the game, I have learned so much about hockey that I can now teach and explain the sport with second-nature ease. After nearly 45 years, I appreciate the game a hundred-fold more having watched, learned, coached, and played it. I also am far more aware of the nuances of the sport as well as the business, its marketing aspects, and more.

From my perspective, a hockey team is very similar to a services organization. Teams draft, acquire, and develop players based on their roles and team needs and engage in a season schedule that consists of individual projects and engagements. As our services practices and teams deliver projects with clients, their ultimate win is customer satisfaction and the impact of a truly collaborative group effort. So it’s not surprising that sports and hockey teams – like service engagement teams – have invested so much in analytics to measure and optimize their talent investments.

Fans follow their favorite players, purchase and wear their favorite players’ and teams’ jerseys, and track their favorite players’ success with statistics across a truly digital experience. Fans are loyal based on location and geography; the overall brand, history, and imagery; and specific players that comprise a team’s lineup.

At the same time, there are interesting variations that are fueled by technology and digital disruption.

The fan experience goes beyond borders…

Ask any sports fan what the most iconic trophy in all of sports is. Europeans would likely name the World Cup for soccer, but many sports fans in North America cite the Stanley Cup. In its own right, the Stanley Cup is a rock star and has its very own brand persona. Phil Pritchard and his colleagues from the Hockey Hall of Fame in Toronto accompany the cup wherever it travels, and it even gets its own airplane seat.

I had the chance to meet Phil when the Stanley Cup and a collection of the NHL trophies were displayed in Boston for the 2016 NHL Winter Classic and came north to FMI Cup Trophiesthe Manchester Monarchs Trophy Night. The Mark Messier Leadership, Conn Smyth playoff MVP, the Calder AHL trophy the Monarchs had just won, and many others were also there – along with three Boston Red Sox MLB championship trophies to round out this incredible fan experience. When it was time to post the photos of the Monarchs fans with the cup, it was done through the cloud. No trees were killed to print anything, and smartphone pictures made it onto social media far quicker.

This experience is confirmation that we are living in an era of real-time everything for sports. Approximately 70% of fan communication with key sources of information and commerce is done with a mobile device, which is absolutely amazing.

…and it’s going digital

I was reminded of this magic not too long ago when our SAP New York office did a “fantasy skate” event at Madison Square Garden with the New York Rangers. As a sponsor of the first-level SAP Concourse, we were given a tour FMI NYR MSG January 2016of the renovated facility – from the main concourse to the suites and ultra-modern press area high above the ice. As proof that sports and entertainment are becoming digital, the experience at Madison Square Gardens featured a video kiosk powered by SAP HANA and a press box with multimedia networking hookups and more.

What does this have to do with marketing? Everything. The NHL fields a product: hockey games with teams comprised of hockey players. They play under a team brand as well as the NHL master brand while chasing after an iconic award with a brand of its own. Each player has their own personal brand, and all of them are inextricably tied to the overall brand of both the team and the NHL.

But there’s much more here. Maintaining team historical information, the NHL statistics Web site powered by SAP HANA is expanding to include all information dating back to the inception of the league – available on demand anytime, anywhere, and on any device.

Bonus: See how the NHL uses SAP Customer Engagement and Commerce (CEC) solutions for marketing, including SAP hybris and SAP HANA Enterprise Cloud.  

Digitalization and digital transformation are sweeping through all sports and hockey, and the NHL is but one example. We are in the midst of a revolution that will make everything more fun and our memories even more vivid. What an exciting time to be a hockey fan!

Learn more about statistics powered by SAP and SAP HANA. Read Phasing into Analytics: The NHL and SAP Innovate their Statistical Database.

Explore exciting new developments in sports marketing. check out the Center of Business Insight brief The Future of Sports Marketing: Play Locally, Think Globally, Drive Loyalty.

FMI MSG SAPFred Isbell is the senior marketing director and head of thought leadership Service & Support Marketing at SAP.

Join Fred online:, and SAP Services Hub



About Fred Isbell

Fred Isbell is the Senior Director of SAP Digital Business Services Marketing at SAP. He is an experienced, results- and goal-oriented senior marketing executive with broad and extensive experience & expertise in high technology and marketing. He has a BA from Yale and an MBA from the Duke Fuqua School of Business.

The Future Of Supplier Collaboration: 9 Things CPOs Want Their Managers To Know Now

Sundar Kamak

As a sourcing or procurement manager, you may think there’s nothing new about supplier collaboration. Your chief procurement officer (CPO) most likely disagrees.
Forward-thinking CPOs acknowledge the benefit of supplier partnerships. They not only value collaboration, but require a revolution in how their buying organization conducts its business and operations. “Procurement must start looking to suppliers for inspiration and new capability, stop prescribing specifications and start tapping into the expertise of suppliers,” writes David Rae in Procurement Leaders. The CEO expects it of your CPO, and your CPO expects it of you. For sourcing managers, this can be a lot of pressure.

Here are nine things your CPO wants you to know about how supplier collaboration is changing – and why it matters to your company’s future and your own future.

1. The need for supplier collaboration in procurement is greater than ever

Over half (65%) of procurement practitioners say procurement at their company is becoming more collaborative with suppliers, according to The Future of Procurement, Making Collaboration Pay Off, by Oxford Economics. Why? Because the pace of business has increased exponentially, and businesses must be able to respond to new market demands with agility and innovation. In this climate, buyers are relying on suppliers more than ever before. And buyers aren’t collaborating with suppliers merely as providers of materials and goods, but as strategic partners that can help create products that are competitive differentiators.

Supplier collaboration itself isn’t new. What’s new is that it’s taken on a much greater urgency and importance.

2. You’re probably not realizing the full collective power of your supplier relationships

Supplier collaboration has always been a function of maintaining a delicate balance between demand and supply. For the most part, the primary focus of the supplier relationship is ensuring the right materials are available at the right time and location. However, sourcing managers with a narrow focus on delivery are missing out on one of the greatest advantages of forging collaborative supplier partnerships: an opportunity to drive synergies that are otherwise perceived as impossible within the confines of the business. The game-changer is when you drive those synergies with thousands, not hundreds of suppliers. Look at the Apple Store as a prime example of collaboration en masse. Without the apps, the iPhone is just another ordinary phone!

3. Collaboration comes in more than one flavor

Suppliers don’t just collaborate with you to provide a critical component or service. They also work with your engineers to help ensure costs are optimized from the buyer’s perspective as well as the supplier’s side. They may even take over the provisioning of an entire end-to-end solution. Or co-design with your R&D team through joint research and development. These forms of collaboration aren’t new, but they are becoming more common and more critical. And they are becoming more impactful, because once you start extending any of these collaboration models to more and more suppliers, your capabilities as a business increase by orders of magnitude. If one good supplier can enable your company to build its brand, expand its reach, and establish its position as a market leader – imagine what’s possible when you work collaboratively with hundreds or thousands of suppliers.

4. Keeping product sustainability top of mind pays off

Facing increasing demand for sustainable products and production, companies are relying on suppliers to answer this new market requirement.

As a sourcing manager, you may need to go outside your comfort zone to think about new, innovative ways to collaborate for achieving sustainability. Recently, I heard from an acquaintance who is a CPO of a leading services company. His organization is currently collaborating with one of the largest suppliers in the world to adhere to regulatory mandates and consumer demand for “lean and green” lightbulbs. Although this approach was interesting to me, what really struck me was his observation on how this co-innovation with the supplier is spawning cost and resource optimization and the delivery of competitive products. As reported by Andrew Winston in The Harvard Business Review, Target and Walmart partnered to launch the Personal Care Sustainability Summit last year. So even competitors are collaborating with each other and with their suppliers in the name of sustainability.

5. Co-marketing is a win-win

Look at your list of suppliers. Does anyone have a brand that is bigger than your company’s? Believe it or not, almost all of us do. So why not seize the opportunity to raise your and your supplier’s brand profile in the marketplace?

Take Intel, for example. The laptop you’re working on right now may very well have an “Intel inside” sticker on it. That’s co-marketing at work. Consistently ranked as one of the world’s top 100 most valuable brands by Millward Brown Optimor, this largest supplier of microprocessors is world-renowned for its technology and innovation. For many companies that buy supplies from Intel, the decision to co-market is a strategic approach to convey that the product is reliable and provides real value for their computing needs.

6. Suppliers get to choose their customers, too

Increased competition for high-performing suppliers is changing the way procurement operates, say 58% of procurement executives in the Oxford Economics study. Buyers have a responsibility to the supplier – and to their CEO – to be a customer of choice. When the economy is going well, you might be able to dictate the supplier’s goods and services – and sometimes even the service delivery model. When times get tough (and they can very quickly), suppliers will typically reevaluate your organization’s needs to see whether they can continue service in a fiscally responsible manner. To secure suppliers’ attention in favorable and challenging economic conditions, your organization should establish collaborative and mutually productive partnerships with them.

7. Suppliers can help simplify operations

Cost optimization will always be one of your performance metrics; however, that is only one small part of the entire puzzle. What will help your organization get noticed is leveraging the supplier relationship to innovate new and better ways of managing the product line and operating the business while balancing risk and cost optimization. Ask yourself: Which functions are no longer needed? Can they be outsourced to a supplier that can perform them better? What can be automated?

8. Suppliers have a better grasp of your sourcing categories than you do

Understand your category like never before so that your organization can realize the full potential of its supplier investments while delivering products that are consistent and of high quality. How? By leveraging the wisdom of your suppliers. To be blunt: they know more than you do. Tap into that knowledge to gain a solid understanding of the product, market category, suppliers’ capabilities, and shifting dynamics in the industry, If a buyer does not understand these areas deeply, no amount of collaboration will empower a supplier to help your company innovate as well as optimize costs and resources.

9. Remember that there’s something in it for you as well

All of us want to do strategic, impactful work. Sourcing managers with aspirations of becoming CPOs should move beyond writing contracts and pushing PO requests by building strategic procurement skill sets. For example, a working knowledge in analytics allows you to choose suppliers that can shape the market and help a product succeed – and can catch the eye of the senior leadership team.

Sundar Kamak is global vice president of solutions marketing at Ariba, an SAP company.

For more on supplier collaboration, read Making Collaboration Pay Off, part of a series on the Future of Procurement, by Oxford Economics.


Sundar Kamak

About Sundar Kamak

Sundar Kamak is the Vice President of Products & Innovation at SAP Ariba. He is an accomplished Solutions Marketing and Product Management Execuive with 15 + year's broad experience in product strategy, positioning, SaaS, Freemium offering, go-to-market planning and execution.

Transform Or Die: What Will You Do In The Digital Economy?

Scott Feldman and Puneet Suppal

By now, most executives are keenly aware that the digital economy can be either an opportunity or a threat. The question is not whether they should engage their business in it. Rather, it’s how to unleash the power of digital technology while maintaining a healthy business, leveraging existing IT investments, and innovating without disrupting themselves.

Yet most of those executives are shying away Businesspeople in a Meeting --- Image by © Monalyn Gracia/Corbisfrom such a challenge. According to a recent study by MIT Sloan and Capgemini, only 15% of CEOs are executing a digital strategy, even though 90% agree that the digital economy will impact their industry. As these businesses ignore this reality, early adopters of digital transformation are achieving 9% higher revenue creation, 26% greater impact on profitability, and 12% more market valuation.

Why aren’t more leaders willing to transform their business and seize the opportunity of our hyperconnected world? The answer is as simple as human nature. Innately, humans are uncomfortable with the notion of change. We even find comfort in stability and predictability. Unfortunately, the digital economy is none of these – it’s fast and always evolving.

Digital transformation is no longer an option – it’s the imperative

At this moment, we are witnessing an explosion of connections, data, and innovations. And even though this hyperconnectivity has changed the game, customers are radically changing the rules – demanding simple, seamless, and personalized experiences at every touch point.

Billions of people are using social and digital communities to provide services, share insights, and engage in commerce. All the while, new channels for engaging with customers are created, and new ways for making better use of resources are emerging. It is these communities that allow companies to not only give customers what they want, but also align efforts across the business network to maximize value potential.

To seize the opportunities ahead, businesses must go beyond sensors, Big Data, analytics, and social media. More important, they need to reinvent themselves in a manner that is compatible with an increasingly digital world and its inhabitants (a.k.a. your consumers).

Here are a few companies that understand the importance of digital transformation – and are reaping the rewards:

  1. Under Armour:  No longer is this widely popular athletic brand just selling shoes and apparel. They are connecting 38 million people on a digital platform. By focusing on this services side of the business, Under Armour is poised to become a lifestyle advisor and health consultant, using his product side as the enabler.
  1. Port of Hamburg: Europe’s second-largest port is keeping carrier trucks and ships productive around the clock. By fusing facility, weather, and traffic conditions with vehicle availability and shipment schedules, the Port increased container handling capacity by 178% without expanding its physical space.
  1. Haier Asia: This top-ranking multinational consumer electronics and home appliances company decided to disrupt itself before someone else did. The company used a two-prong approach to digital transformation to create a service-based model to seize the potential of changing consumer behaviors and accelerate product development. 
  1. Uber: This startup darling is more than just a taxi service. It is transforming how urban logistics operates through a technology trifecta: Big Data, cloud, and mobile.
  1. American Society of Clinical Oncologists (ASCO): Even nonprofits can benefit from digital transformation. ASCO is transforming care for cancer patients worldwide by consolidating patient information with its CancerLinQ. By unlocking knowledge and value from the 97% of cancer patients who are not involved in clinical trials, healthcare providers can drive better, more data-driven decision making and outcomes.

It’s time to take action 

During the SAP Executive Technology Summit at SAP TechEd on October 19–20, an elite group of CIOs, CTOs, and corporate executives will gather to discuss the challenges of digital transformation and how they can solve them. With the freedom of open, candid, and interactive discussions led by SAP Board Members and senior technology leadership, delegates will exchange ideas on how to get on the right path while leveraging their existing technology infrastructure.

Stay tuned for exclusive insights from this invitation-only event in our next blog!
Scott Feldman is Global Head of the SAP HANA Customer Community at SAP. Connect with him on Twitter @sfeldman0.

Puneet Suppal drives Solution Strategy and Adoption (Customer Innovation & IoT) at SAP Labs. Connect with him on Twitter @puneetsuppal.



About Scott Feldman and Puneet Suppal

Scott Feldman is the Head of SAP HANA International Customer Community. Puneet Suppal is the Customer Co-Innovation & Solution Adoption Executive at SAP.

From E-Business to V-Business

Josh Waddell, Pascal Lessard, Lori Mitchell-Keller, and Fawn Fitter

Some moments are so instantly, indelibly etched into pop culture that they shape the way we think for years to come. For virtual reality (VR), that moment may have been the scene in the 1999 blockbuster The Matrix when the Keanu Reeves character Neo learns that his entire life has been a computer-generated simulation so fully realized that he could have lived it out never knowing that he was actually an inert body in an isolation tank. Ever since, that has set the benchmark for VR: as a digital experience that seems completely, convincingly real.

Today, no one is going to be unaware, Matrix-like, that they’re wearing an Oculus Rift or a Google Cardboard headset, but the virtual worlds already available to us are catching up to what we’ve imagined they could be at a startling rate. It’s been hard to miss all the Pokémon Go players bumping into one another on the street as they chased animated characters rendered in augmented reality (AR), which overlays and even blends digital artifacts seamlessly with the actual environment around us.

Believe the Hype

For all the justifiable hype about the exploding consumer market for VR and, to a lesser extent, AR, there’s surprisingly little discussion of their latent business value—and that’s a blind spot that companies and CIOs can’t afford to have. It hasn’t been that long since consumer demand for the iPhone and iPad forced companies, grumbling all the way, into finding business cases for them.

sap_Q316_digital_double_feature1_images1If digitally enhanced reality generates even half as much consumer enthusiasm as smartphones and tablets, you can expect to see a new wave of consumerization of IT as employees who have embraced VR and AR at home insist on bringing it to the workplace. This wave of consumerization could have an even greater impact than the last one. Rather than risk being blindsided for a second time, organizations would be well advised to take a proactive approach and be ready with potential business uses for VR and AR technologies by the time they invade the enterprise.

They don’t have much time to get started.

The two technologies are already making inroads in fields as diverse as medicine, warehouse operations, and retail. And make no mistake: the possibilities are breathtaking. VR can bring human eyes to locations that are difficult, dangerous, or physically impossible for the human body, while AR can deliver vast amounts of contextual information and guidance at the precise time and place they’re needed.

As consumer adoption and acceptance drives down costs, enterprise use cases for VR and AR will blossom. In fact, these technologies could potentially revolutionize the way companies communicate, manage employees, and digitize and automate operations. Yet revolution is rarely bloodless. The impact will probably alter many aspects of the workplace that we currently take for granted, and we need to think through the implications of those changes.

sap_Q316_digital_double_feature1_images2Digital Realities, Defined

VR and AR are related, but they’re not so much siblings as cousins. VR is immersive. It creates a fully realized digital environment that users experience through goggles or screens (and sometimes additional equipment that provides physical feedback) that make them feel like they’re surrounded by and interacting entirely within this created world.

AR, by contrast, is additive. It displays text or images in glasses, on a window or windshield, or inside a mirror, but the user is still aware of and interacting with reality. There is also an emerging hybrid called “mixed reality,” which is essentially AR with VR-quality digital elements, that superimposes holographic images on reality so convincingly that trying to touch them is the only way to be sure they aren’t actually there.

Although VR is a hot topic, especially in the consumer gaming world, AR has far more enterprise use cases, and several enterprise apps are already in production. In fact, industry analyst Digi-Capital forecasts that while VR companies will generate US$30 billion in revenue by 2020, AR companies will generate $120 billion, or four times as much.

Both numbers are enormous, especially given how new the VR/AR market is. As recently as 2014, it barely existed, and almost nothing available was appropriate for enterprise users. What’s more, the market is evolving so quickly that standards and industry leaders have yet to emerge. There’s no guarantee that early market entrants like Facebook’s Oculus Rift, Samsung’s Gear VR, and HTC’s Vive will continue to exist, never mind set enduring benchmarks.

Nonetheless, it’s already clear that these technologies will have a major impact on both internal and customer-facing business. They will make customer service more accurate, personalized, and relevant. They will reduce human risk and enhance public safety. They will streamline operations and smash physical boundaries. And that’s just the beginning.

Cleveland Clinic: Healing from the Next Room

Medicine is already testing the limits of learning with VR and AR.

sap_q316_digital_double_feature1_imageseightThe most potentially disruptive operational use of VR and AR could be in education and training. With VR, students can be immersed in any environment, from medieval architecture to molecular biology, in classroom groups or on demand, to better understand what they’re studying. And no industry is pursuing this with more enthusiasm than medicine. Even though Google Glass hasn’t been widely adopted elsewhere, for example, it’s been a big success story in the medical world.

Pamela Davis, MD, senior vice president for medical affairs at Case Western Reserve University in Cleveland, Ohio, is one of the leading proponents of medical education using VR and AR. She’s the dean of the university’s medical school, which is working with Cleveland Clinic to develop the Microsoft HoloLens “mixed reality” device for medical education and training, turning MRIs and other conventional 2D medical images into 3D images that can be projected at the site of a procedure for training and guidance during surgery. “As you push a catheter into the heart or place a deep brain stimulation electrode, you can see where you want to be and guide your actions by watching the hologram,” Davis explains.

The HoloLens can also be programmed as a “lead” device that transmits those images and live video to other “learner” devices, allowing the person wearing the lead device to provide oversight and input. This will enable a single doctor to demonstrate a delicate procedure up-close to multiple students at once, or do patient examinations remotely in an emergency or epidemic.

Davis herself was convinced of the technology’s broader potential during a demonstration in which she put on a learner HoloLens and rewired a light switch, something decidedly outside her expertise, under the guidance of an engineer wearing a lead HoloLens in the next room. In the near future, she predicts, it will help people perform surgery and other sensitive, detailed tasks not just from the next room, but from the next state or country.

Customer Experience: From E-Commerce to V-Commerce

Consumers are already getting used to sap_Q316_digital_double_feature1_images3thinking of VR and AR in the context of entertainment. Companies interested in the technologies should be thinking about how they might engage consumers as part of the buying experience.

Because the technologies deliver more information and a better shopping experience with less effort, e-commerce is going to give rise to v-commerce, where people research, interact with, and share products in VR and AR before they order them online or go to a store to make a purchase.

Online eyewear retailers already allow people to “try on” glasses virtually and share the images with friends to get their feedback, but that’s rudimentary compared to what’s emerging.

Mirrors as Personal Shoppers

Clothing stores from high-end boutiques to low-end fashion chains are experimenting with AR mirrors that take the shopper’s measurements and recommend outfits, showing what items look like without requiring the customer to undress.

Instant Designer Shows

Luxury design house Dior uses Oculus Rift VR goggles to let its well-heeled customers experience a runway show without flying to Paris.

Custom Shopping Malls

British designer Allison Crank has created an experimental VR shopping mall. As people walk through it, they encounter virtual people (and the occasional zoo animal) and shop in stores stocked only with items that users are most likely to buy, based on past purchase information and demographic data.

A New Perspective

IKEA’s AR application lets shoppers envisage a piece of furniture in the room they plan to use it in. They can look at products from the point of view of a specific height—useful for especially tall or short customers looking for comfortable furniture or for parents trying to design rooms that are safe for a toddler or a young child.

Painless Do-it-Yourself Instructions

Instead of forcing customers to puzzle over a diagram or watch an online video, companies will be able to offer customers detailed VR or AR demonstrations that show how to assemble and disassemble products for use, cleaning, and storage.

sap_Q316_digital_double_feature1_images4Operations and Management: Revealing the Details

The customer-facing benefits of VR and AR are inarguably flashy, but it’s in internal business use that these technologies promise to shine brightest: boosting efficiency and productivity, eliminating previously unavoidable risks, and literally giving employers and managers new ways to look at information and operations. The following examples aren’t blue-sky cases; experts say they’re promising, realistic, and just around the corner.

Real-Time Guidance

A combination of AR glasses and audio essentially creates a user-specific, contextually relevant guidance system that confirms that wearers are in the right place, looking at the right thing, and taking the right action. This technology could benefit almost any employee who is not working at a desk: walking field service reps through repair procedures, guiding miners to the best escape route in an emergency, or optimizing home health aides’ driving routes and giving them up-to-date instructions and health data when they arrive at each patient’s home.

Linking to the Hidden

AR technology will be able to display any type of information the wearer needs to know. Linked to facial identification software, it could help police officers identify suspects or missing persons in real time. Used to visualize thermal gradients, chemical signatures, radioactivity, and other things that are invisible to the naked eye, it could help researchers refine their experiments or let insurance claims assessors spot arson. Similarly, VR will allow users to create and manipulate detailed three-dimensional models of everything from molecules to large machinery so that they can examine, explore, and change them.

Reducing the Human Risk

VR will allow users to perform high-risk jobs while reducing their need to be in harm’s way. The users will be able to operate equipment remotely while seeing exactly what they would if they were there, a use case that is ideal for industries like mining, firefighting, search and rescue, and toxic site cleanup. While VR won’t necessarily eliminate the need for humans to perform these high-risk jobs, it will improve their safety, and it will allow companies to pursue new opportunities in situations that remain too dangerous for humans.

Reducing the Commercial Risk

sap_Q316_digital_double_feature1_images5VR can also reduce an entirely different type of operational risk: that of introducing new products and services. Manufacturers can let designers or even customers “test” a product, gather their feedback, and tweak the design accordingly before the product ever goes into production. Indeed, auto manufacturer Ford has already created a VR Immersion Lab for its engineers, which, among other things, helped them redesign the interior of the 2015 Ford Mustang to make the dashboard and windshield wipers more user-friendly, according to Fortune. In addition to improving customer experience, this application of VR is likely to accelerate product development and shorten time to market.

Similarly, retailers can use VR to create and test branch or franchise location designs on the fly to optimize traffic flow, product display, the accessibility of products, and even decor. Instead of building models or concept stores, a designer will be able to create the store design with VR, do a virtual walkthrough with executives, and adjust it in real time until it achieves the desired effect.

Seeing in Tongues

At some point, we will see an AR app that can translate written language in near-real time, which will dramatically streamline global business communications. Mobile apps already exist to do this in certain languages, so it’s just a matter of time before we can slip on glasses that let us read menus, signs, agendas, and documents in our native tongue.

Decide with the Eye

More dramatically, AR project management software will be able to deliver real-time data at a literal glance. On a construction site, for example, simply scanning the area could trigger data about real-time costs, supply inventories, planned versus actual spending, employee and equipment scheduling, and more. By linking to construction workers’ own AR glasses that provide information about what to know and do at any given location and time, managers could also evaluate and adjust workloads.

Squeeze Distance

Farther in the future, VR and AR will create true telepresence, enhancing collaboration and potentially replacing in-person meetings. Users could transmit AR holograms of themselves to someone else’s office, allowing them to be seen as if they were in the room. We could have VR workspaces with high-fidelity avatars that transmit characteristic facial expressions and gestures. Companies could show off a virtual product in a virtual room with virtual coworkers, on demand.

Reduce Carbon Footprint

If nothing else, true telepresence could practically eliminate business travel costs. More critically, though, in an era of rising temperatures and shrinking resources, the ability to create and view virtual people and objects rather than manufacturing and transporting physical artifacts also conserves materials and reduces the use of fossil fuel.

Employees: Under Observation

The strength of digitally enhanced reality—and AR in particular—is its ability to determine a user’s context and deliver relevant information accordingly. This makes it valuable for monitoring and managing employee behavior and performance. Employees could, for example, use the location and time data recorded by AR glasses to prove that they were (or weren’t) in a particular place at a particular time. The same glasses could provide them with heads-up guided navigation, alert employers that they’re due for a legally mandated break, verify that they completed an assigned task, and confirm hours worked without requiring them to fill out a timesheet.

However, even as these capabilities improve data governance and help manage productivity, they also raise critical issues of privacy and autonomy (see The Norms of Virtual Behavior). If you’re an employee using VR or AR technology, and if your company is leveraging it to monitor your performance, who owns that information? Who’s allowed to use it, and for what purposes? These are still open legal questions for these technologies.

Another unsettled—and unsettling—question is how far employers can use these technologies to direct employees’ work. While employers have the right to tell employees how to do their jobs, autonomy is a key component of workplace satisfaction. The extent to which employees are required to let a pair of AR glasses govern their actions could have a direct impact on hiring and retention.

Finally, these technologies could be one more step toward greater automation. A warehouse-picking AR application that guides pickers to the appropriate product faster makes them more productive and saves them from having to memorize hundreds or even thousands of SKUs. But the same technology that can guide a person will also be able to guide a semiautonomous robot.

The Norms of Virtual Behavior

VR and AR could disrupt our social norms and take identity hacking to a new level.

The future of AR and VR isn’t without its hazards. We’ve all witnessed how distracting and even dangerous smartphones can be, but at least people have to pull a phone out of a pocket before getting lost in the screen. What happens when the distraction is sitting on their faces?

This technology is going to affect how we interact, both in the workplace and out of it. The annoyance verging on rage that met the first people wearing Google Glass devices in public proves that we’re going to need to evolve new social norms. We’ll need to signal how engaged we are with what’s right in front of us when we’re wearing AR glasses, what we’re doing with the glasses while we interact, or whether we’re paying attention at all.

More sinister possibilities will present themselves down the line. How do you protect sensitive data from being accessed by unauthorized or “shadow” VR/AR devices? How do you prove you’re the one operating your avatar in a virtual meeting? How do you know that the person across from you is who they say they are and not a competitor or industrial spy who’s stolen a trusted avatar? How do you keep someone from hacking your VR or AR equipment to send you faulty data, flood your field of vision with disturbing images, or even direct you into physical danger?

As the technology gets more sophisticated, VR and AR vendors will have to start addressing these issues.

Technical Challenges

To realize the full business value of VR and AR, companies will need to tackle certain technical challenges. To be precise, they’ll have to wait for the vendors to take them on, because the market is still so new that standards and practices are far from mature.

sap_Q316_digital_double_feature1_images6For one thing, successful implementation requires devices (smartphones, tablets, and glasses, for now) that are capable of delivering, augmenting, and overlaying information in a meaningful way. Only in the last year or so has the available hardware progressed beyond problems like overheating with demand, too-small screens, low-resolution cameras, insufficient memory, and underpowered batteries. While hardware is improving, so many vendors have emerged that companies have a hard time choosing among their many options.
The proliferation of devices has also increased software complexity. For enterprise VR and AR to take off, vendors need to create software that can run on the maximum number of devices with minimal modifications. Otherwise, companies are limited to software based on what it’s capable of doing on their hardware of choice, rather than software that meets their company’s needs.

The lack of standards only adds to the confusion. Porting data to VR or AR systems is different from mobilizing front-end or even back-end systems, because it requires users to enter, display, and interact with data in new ways. For devices like AR glasses that don’t use a keyboard or touch screen, vendors must determine how to enter data (voice recognition? eye tracking? image recognition?), how to display it legibly in any given environment, and whether to develop their own user interface tools or work with a third party.

Finally, delivering convincing digital enhancements to reality demands such vast amounts of data that many networks simply can’t accommodate it. Much as videoconferencing didn’t truly take off until high-speed broadband became widely available, VR and AR adoption will lag until a zero-latency infrastructure exists to
support them.

sap_Q316_digital_double_feature1_images7Coming Soon to a Face Near You

For all that VR and AR solutions have improved dramatically in a short time, they’re still primarily supplemental to existing systems, and not just because the software is still evolving. Wearables still have such limited processing power, memory, and battery life that they can handle only a small amount of information. That said, hardware is catching up quickly (see The Supporting Cast).

The Supporting Cast

VR and AR would still be science fiction if it weren’t for these supporting technologies.

The latest developments in VR and AR technologies wouldn’t be possible without other breakthroughs that bring things once considered science fiction squarely into the realm of science fact:

  • Advanced semiconductor designs pack more processing power into less space.
  • Microdisplays fit more information onto smaller screens.
  • New power storage technologies extend battery life while shrinking battery size.
  • Development tools for low-latency, high-resolution image rendering and improved 3D-graphics displays make digital artifacts more realistic and detailed.
  • Omnidirectional cameras that can record in 360 degrees simultaneously create fully immersive environments.
  • Plummeting prices for accelerometers lower the cost of VR devices.

Companies in the emerging VR/AR industry are encouraging the makers of smartglasses and safety glasses to work together to create ergonomic smartglasses that deliver information in a nondistracting way and that are also comfortable to wear for an eight-hour shift.

The argument in favor of VR and AR for business is so powerful that once vendors solve the obvious hardware problems, experts predict that existing enterprise mobile apps will quickly start to include VR or AR components, while new apps will emerge to satisfy as yet unmet needs.

In other words, it’s time to start thinking about how your company might put these technologies to use—and how to do so in a way that minimizes concerns about data privacy, corporate security, and employee comfort. Because digitally enhanced reality is coming tomorrow, so business needs to start planning for it today. D!

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.



Leveraging Digital Twins To Breathe New Life Into Your Products And Services

Thomas Kaiser

Are you familiar with the concept of the twin paradox? In physics, the twin paradox is a thought experiment in which one twin stays on Earth while the other travels in a spaceship at a high speed for a period of time. According to the special theory of relativity, the second twin will return home measurably younger than the first.

In a similar way, the concept of the digital twin can accelerate your business and breathe new life into your products and services.

But the digital twin isn’t just a thought experiment. Gartner lists digital twins as a Top 10 strategic trend for 2017. It’s part of a broader digital transformation on which IDC says companies will invest $2.1 trillion a year by 2019.

Already, smart companies are using digital twins to better understand operations, get closer to customers, and transform their business.

Connecting real and virtual

A digital twin is a virtual representation of a real-world product or service. That could be anything from a toaster to industrial machinery to complex processes. The virtual representation combines three types of information: business data, contextual data, and sensor data.

Business data covers information such as customer name, location, and service-level agreements. Contextual data includes details such as ambient temperature, humidity, and weather events. Sensor data involves things like machine speed, operating temperature, and vibration.

Sensor data is key because, while companies have been using digital twins for years, it’s only with the Internet of Things (IoT) that they’ve become cost-effective. Gartner predicts that 6.4 billion things will be connected this year, a 30% jump over 2015. By 2020, at least half of all new business processes will incorporate IoT – transforming live data into new value.

Drilling down on digital twins

How does a digital twin work? Let’s say you manufacture industrial drills. A digital twin can help you understand how customers use your drill. The goal is to continuously improve the product to increase customer satisfaction and identify opportunities for new products and services.

For example, you might discover that your drill malfunctions in certain situations. That can enable you to improve product design. Or it can let you help customers modify the way they use the drill to avoid problems.

Or, you might discover that customers use your drill not only to make holes but also to cut materials. That might lead you to develop a new product that’s purpose-built for cutting.

Or, maybe you discover that while customers want holes made, they don’t necessarily want to purchase and operate a drill. So rather than sell drills, you might offer a hole-drilling service. In other words, instead of charging customers for machinery they operate, you charge them for holes drilled by machinery you operate for them. Some SAP customers have been quite successful in making this kind of leap from products to services.

Digital twins across industries

Digital twins aren’t just for manufacturers. Insurers can apply digital twins in offerings like usage-based car insurance. Retailers can track how customers navigate the store and interact with products on the shelves. Cities can model areas for things like smart lighting. Ports can monitor weather, shipping traffic, containers, and trains and trucks entering and leaving.

Digital twins cover the entire lifecycle of an asset or process. In fact, they can form a foundation for an end-to-end, closed-loop value chain for smart, connected products and services, from design to production, from deployment to continuous improvement.

The promise of continuous improvement is why it’s increasingly important to integrate digital technologies into all products. As you leverage your digital twin to identify opportunities for new or better features, you can implement those improvements quickly and cost-effectively through firmware updates.

Implementing digital twins involves four steps:

  1. Integrate smart components such as sensors, software, computing power, or data storage into new or existing products.
  1. Connect the product to a central location where you can capture sensor data and enrich that sensor data with business and contextual data.
  1. Analyze that data on an ongoing basis to identify opportunities for product improvements, new products, or even new business models.
  1. Leverage these digital insights to transform your company — for example, by reducing costs through proactive avoidance of business interruptions, or by creating new business opportunities.

Of course, while those steps are easy to list, they can require significant effort to achieve. But digital twins are becoming a business imperative. Companies that fail to respond will be left behind. Those that embrace digital twins have the opportunity to better understand customer needs, continuously improve their products and services, and even identify new business models that give them competitive advantage.

Consumer demand for virtual reality is changing how businesses manage and operate. Learn how to transition From E-Business to V-Business.