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How Under Armour’s Digital Transformation Will Improve Your Health

David Trites

Many great companies are born by solving a singular, widespread problem. For Under Armour, that singular problem was sweat.

The innovative, moisture wicking athletic undergarments and apparel on which the company was founded have completely changed the way athletes dress and perform. Now the company is innovating digitally to solve a health data problem and improve the way people live.

“Think about the fact that you know more about your car than you know about your own body,” said Kevin Plank, the founder, chairman, and CEO of Under Armour, during his keynote speech at Retail’s Big Show in New York City.

Plank is right. When we get in our cars we have a dashboard that tells us how much gas we have and how long it will last. We know the oil and tire pressure, how far the car has traveled, the engine temperature, and more. And if one of those indicators gives us a warning, we do something about it quickly so the car doesn’t break down.

But when we wake up in the morning, what kind of dashboard do we have about our current health and wellness? What kind of warning do we get if we haven’t slept enough? Is our recent food and water intake going to get us through the next few days we have planned or are we going to break down? Do we need more or less exercise, and what adjustments should we take when we don’t feel well?

It would be nice to have all those answers at our fingertips. It would also be great to track all that data over time, analyze trends, and compare it with other datasets. We could see if we were on track to achieve our health goals or facing potential medical issues in the future. And it would be a gold mine of information for our doctors to analyze during and in-between visits.

Connected fitness

Under Armour’s vision to address this problem is called “connected fitness.” It’s a big idea with many facets and data points. It connects your body, apparel, activity level, and health into a single app that makes it simple to manage and analyze your data. Plank feels this is a good role for Under Armour to play and will ultimately make it a better company for the consumer. “When we think about our competition we aren’t worried about the next shoe that someone is going to build, we are thinking about the competition that doesn’t exist yet and we are thinking about it from a digital perspective,” said Plank.

To achieve connected fitness, Under Armour had to completely revamp its digital strategy. “Three years ago our digital strategy consisted of a single website,” said Plank. Now the company has 25 e-commerce sites globally and plans to launch five more in 2016. It has also put a strong mobile strategy in place. On Black Friday in 2015, mobile accounted for 28% of sales, up from 19% the year before, and Plank doesn’t see that trend slowing down. And most importantly, for the vision of connected fitness, Under Armour acquired a few technology-based fitness companies like MapMyFitness that had very large communities of people keeping track of their fitness and activity levels on mobile apps.

Acquiring fitness tracking companies gave Under Armour the technology leadership and engineering expertise it needed, as well as access to 160 million registered users. “It’s the largest digital health and fitness community by a factor of a lot,” said Plank. And it is growing rapidly. Every day 150,000 people download an Under Armour app. How the company engages with the community is a key part of its strategy.

The goal is to combine all the apps, data, and users into one health and fitness tracker app called Under Armour Record. It will connect with any wearable device and enable you to monitor and manage your sleep, fitness, activity, nutrition, weight, and how you feel overall. Users can analyze the data over time and share and compare themselves against other datasets as they see fit. “The problem with wearables before was that they may have been able to track your steps or sleep, but there was no call to action. There was no ability to compare your data with anything or anyone else to help make yourself better,” said Plank.

Big Data improves customer experience

Combining the data in Under Armour Record with customer purchase history will help the company service its customers better. It will see fitness and health trends emerge in real time. It will be able to identify and react faster to customer needs based on actual activity and offer a more personalized product assortment and buying experience.

“In 2015 we had more than 2 billion workouts logged into our system. And I can tell you empirically that the average run is 3.116 miles. This type of data helps us make informed decisions,” said Plank.

For example, there are 800,000 people tracking their running shoes in Under Armour’s system. Past data shows that running shoes start to break down after 400 miles, which increases the chances of injury. To help prevent injury, Under Armour can send notifications to people, letting them know it’s time to replace their shoes when the app shows they’ve passed 400 miles.

The data in the system also shows Under Armour that there is a walking trend happening in Australia right now. Could anyone at company headquarters in the United States predict that was going to happen? Doubtful. But now Under Armour can plan and react better. It can localize its marketing and get merchandising and products to the right place at the right time.

The more Under Armour knows about its customer’s fitness habits and health, the better it can serve them. “We are building, in partnership with SAP, something we call the single view of the consumer. This will truly tie together the fact that, if we know someone went on seven hikes last summer, they may want to look at our new hiking shoes,” said Plank. Having that type of personalized information will open up many opportunities to improve the customer experience.

The vision of connected fitness and the Under Armour Record app isn’t about technology or sportswear. It’s about improving people’s lives. It’s a complete system that includes a tight relationship and constant communication with consumers. “If we know how people feel when they work out, we can better understand how their needs are met,” said Plank. That will make life easier and better for customers and keep Under Armour on its staggering growth curve.

Long-term loyalty is still less about digital transactions and more about emotional affinity with your brand. For more, see Customer Relationship Status: It’s Complicated.

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About David Trites

David Trites is a Director of SAP Global Marketing. He is responsible for producing interesting and compelling customer stories that will humanize the SAP brand, support sales and marketing teams across SAP, and increase the awareness of SAP in key markets.

IoT Can Keep You Healthy — Even When You Sleep [VIDEO]

Christine Donato

Today the Internet of Things is revamping technology. IoT image from American Geniuses.jpg

Smart devices speak to each other and work together to provide the end user with a better product experience.

Coinciding with this change in technology is a change in people. We’ve transitioned from a world of people who love processed foods and french fries to people who eat kale chips and Greek yogurt…and actually like it.

People are taking ownership of their well-being, and preventative care is at the forefront of focus for both physicians and patients. Fitness trackers alert wearers of the exact number of calories burned from walking a certain number of steps. Mobile apps calculate our perfect nutritional balance. And even while we sleep, people are realizing that it’s important to monitor vitals.

According to research conducted at Harvard University, proper sleep patterns bolster healthy side effects such as improved immune function, a faster metabolism, preserved memory, and reduced stress and depression.

Conversely, the Harvard study determined that lack of sleep can negatively affect judgement, mood, and the ability retain information, as well as increase the risk of obesity, diabetes, cardiovascular disease, and even premature death.

Through the Internet of Things, researchers can now explore sleep patterns without the usual sleep labs and movement-restricting electrode wires. And with connected devices, individuals can now easily monitor and positively influence their own health.

EarlySense, a startup credited with the creation of continuous patient monitoring solutions focused on early detection of patient deterioration, mid-sleep falls, and pressure ulcers, began with a mission to prevent premature and preventable deaths.

Without constant monitoring, patients with unexpected clinical deterioration may be accidentally neglected, and their conditions can easily escalate into emergency situations.

Motivated by many instances of patients who died from preventable post-elective surgery complications, EarlySense founders created a product that constantly monitors patients when hospital nurses can’t, alerting the main nurse station when a patient leaves his or her bed and could potentially fall, or when a patient’s vital signs drop or rise unexpectedly.

Now EarlySense technology has expanded outside of the hospital realm. The EarlySense wellness sensor, a device connected via the Internet of Things, mobile solutions, and supported by SAP HANA Cloud Platform, monitors all vital signs while a person sleeps. The device is completely wireless and lies subtly underneath one’s mattress. The sensor collects all mechanical vibrations that the patient’s body emits while sleeping, continuously monitoring heart and respiratory rates.

Watch this short video to learn more about how the EarlySense wellness sensor works:

The result is faster diagnoses with better treatments and outcomes. Sleep issues can be identified and addressed; individuals can use the data collected to make adjustments in diet or exercise habits; and those on heavy pain medications can monitor the way their bodies react to the medication. In addition, physicians can use the data collected from the sensor to identify patient health problems before they escalate into an emergency situation.

Connected care is opening the door for a new way to practice health. Through connected care apps that link people with their doctors, fitness trackers that measure daily activity, and sensors like the EarlySense wellness sensor, today’s technology enables people and physicians to work together to prevent sickness and accidents before they occur. Technology is forever changing the way we live, and in turn we are living longer, healthier lives.

To learn how SAP HANA Cloud Platform can affect your business, visit It&Me.

For more stories, join me on Twitter.

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About Christine Donato

Christine Donato is a Senior Integrated Marketing Specialist at SAP. She is an accomplished project manager and leader of multiple marketing and sales enablement campaigns and events, that supported a multi million euro business.

Zhena’s Gypsy Tea Brews Sustainable Growth On Cloud ERP

David Trites

Recently I had the pleasure of hosting a podcast with Paula Muesse, COO and CFO of Zhena’s Gypsy Tea, a small, organic, fair-trade tea company based in California, and Ursula Ringham from SAP. We talked about some of the business challenges Zhena’s faces and how the company’s ERP solution helped spur growth and digital transformation.

Small but complex business

~ERP helped Zhena’s sustain growthZhena’s has grown from one person (Zhena Muzyka) selling hand-packed tea from a cart, into a thriving small business that puts quality, sustainability, and fair trade first. And although the company is small its business is complex.

For starters, tea isn’t grown in the United States, so Zhena’s has to maintain and import inventory from multiple warehouses around the world. Some of their tea blends have up to 14 ingredients, and each one has a different lead time. That makes demand-planning difficult. In addition, the FDA and US Customs require designated ingredients be traced and treated a certain way to comply with regulations.

Being organic and fair trade also makes things more complicated. Zhena’s has to pass an annual organic compliance audit for all products and processing facilities. And all products need to be traceable back to the farms where the tea was grown and picked to ensure the workers (mostly women) are paid fair wages.

Sustainable growth

Prior to implementing its new ERP system, Zhena’s was using a mix of tools like QuickBooks, Excel, and paper to manage the business. But to sustain growth and ensure future success, the company had to make some changes. Zhena’s needed an integrated software solution that could handle all facets of the business. It needed a tool that could help with cost control and profitability analysis and facilitate complex reporting and regulatory requirements.

The SAP Business ByDesign solution was the perfect choice. The cloud-based ERP solution reduced both business and IT costs, simplified processes from demand planning to accounting, and enabled mobile access and real-time reporting.

Check out the podcast to hear more about how Zhena’s successfully transformed its business by moving to SAP Business ByDesign.

 This article originally appeared on SAP Business Trends.

Building a successful company is hard work. SAP’s affordable solutions for small and midsize companies are designed to make it easier. Simple to install and use, SAP SME Solutions help you automate and integrate your business processes to give real-time, actionable insights. So you can make decisions on the spot. Find out how Run Simple can work for you. Visit sap.com/sme.

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About David Trites

David Trites is a Director of SAP Global Marketing. He is responsible for producing interesting and compelling customer stories that will humanize the SAP brand, support sales and marketing teams across SAP, and increase the awareness of SAP in key markets.

Data Lakes: Deep Insights

Timo Elliott, John Schitka, Michael Eacrett, and Carolyn Marsan

Dan McCaffrey has an ambitious goal: solving the world’s looming food shortage.

As vice president of data and analytics at The Climate Corporation (Climate), which is a subsidiary of Monsanto, McCaffrey leads a team of data scientists and engineers who are building an information platform that collects massive amounts of agricultural data and applies machine-learning techniques to discover new patterns. These analyses are then used to help farmers optimize their planting.

“By 2050, the world is going to have too many people at the current rate of growth. And with shrinking amounts of farmland, we must find more efficient ways to feed them. So science is needed to help solve these things,” McCaffrey explains. “That’s what excites me.”

“The deeper we can go into providing recommendations on farming practices, the more value we can offer the farmer,” McCaffrey adds.

But to deliver that insight, Climate needs data—and lots of it. That means using remote sensing and other techniques to map every field in the United States and then combining that information with climate data, soil observations, and weather data. Climate’s analysts can then produce a massive data store that they can query for insights.

Meanwhile, precision tractors stream data into Climate’s digital agriculture platform, which farmers can then access from iPads through easy data flow and visualizations. They gain insights that help them optimize their seeding rates, soil health, and fertility applications. The overall goal is to increase crop yields, which in turn boosts a farmer’s margins.

Climate is at the forefront of a push toward deriving valuable business insight from Big Data that isn’t just big, but vast. Companies of all types—from agriculture through transportation and financial services to retail—are tapping into massive repositories of data known as data lakes. They hope to discover correlations that they can exploit to expand product offerings, enhance efficiency, drive profitability, and discover new business models they never knew existed.

The internet democratized access to data and information for billions of people around the world. Ironically, however, access to data within businesses has traditionally been limited to a chosen few—until now. Today’s advances in memory, storage, and data tools make it possible for companies both large and small to cost effectively gather and retain a huge amount of data, both structured (such as data in fields in a spreadsheet or database) and unstructured (such as e-mails or social media posts). They can then allow anyone in the business to access this massive data lake and rapidly gather insights.

It’s not that companies couldn’t do this before; they just couldn’t do it cost effectively and without a lengthy development effort by the IT department. With today’s massive data stores, line-of-business executives can generate queries themselves and quickly churn out results—and they are increasingly doing so in real time. Data lakes have democratized both the access to data and its role in business strategy.

Indeed, data lakes move data from being a tactical tool for implementing a business strategy to being a foundation for developing that strategy through a scientific-style model of experimental thinking, queries, and correlations. In the past, companies’ curiosity was limited by the expense of storing data for the long term. Now companies can keep data for as long as it’s needed. And that means companies can continue to ask important questions as they arise, enabling them to future-proof their strategies.

Prescriptive Farming

Climate’s McCaffrey has many questions to answer on behalf of farmers. Climate provides several types of analytics to farmers including descriptive services, which are metrics about the farm and its operations, and predictive services related to weather and soil fertility. But eventually the company hopes to provide prescriptive services, helping farmers address all the many decisions they make each year to achieve the best outcome at the end of the season. Data lakes will provide the answers that enable Climate to follow through on its strategy.

Behind the scenes at Climate is a deep-science data lake that provides insights, such as predicting the fertility of a plot of land by combining many data sets to create accurate models. These models allow Climate to give farmers customized recommendations based on how their farm is performing.

“Machine learning really starts to work when you have the breadth of data sets from tillage to soil to weather, planting, harvest, and pesticide spray,” McCaffrey says. “The more data sets we can bring in, the better machine learning works.”

The deep-science infrastructure already has terabytes of data but is poised for significant growth as it handles a flood of measurements from field-based sensors.

“That’s really scaling up now, and that’s what’s also giving us an advantage in our ability to really personalize our advice to farmers at a deeper level because of the information we’re getting from sensor data,” McCaffrey says. “As we roll that out, our scale is going to increase by several magnitudes.”

Also on the horizon is more real-time data analytics. Currently, Climate receives real-time data from its application that streams data from the tractor’s cab, but most of its analytics applications are run nightly or even seasonally.

In August 2016, Climate expanded its platform to third-party developers so other innovators can also contribute data, such as drone-captured data or imagery, to the deep-science lake.

“That helps us in a lot of ways, in that we can get more data to help the grower,” McCaffrey says. “It’s the machine learning that allows us to find the insights in all of the data. Machine learning allows us to take mathematical shortcuts as long as you’ve got enough data and enough breadth of data.”

Predictive Maintenance

Growth is essential for U.S. railroads, which reinvest a significant portion of their revenues in maintenance and improvements to their track systems, locomotives, rail cars, terminals, and technology. With an eye on growing its business while also keeping its costs down, CSX, a transportation company based in Jacksonville, Florida, is adopting a strategy to make its freight trains more reliable.

In the past, CSX maintained its fleet of locomotives through regularly scheduled maintenance activities, which prevent failures in most locomotives as they transport freight from shipper to receiver. To achieve even higher reliability, CSX is tapping into a data lake to power predictive analytics applications that will improve maintenance activities and prevent more failures from occurring.

Beyond improving customer satisfaction and raising revenue, CSX’s new strategy also has major cost implications. Trains are expensive assets, and it’s critical for railroads to drive up utilization, limit unplanned downtime, and prevent catastrophic failures to keep the costs of those assets down.

That’s why CSX is putting all the data related to the performance and maintenance of its locomotives into a massive data store.

“We are then applying predictive analytics—or, more specifically, machine-learning algorithms—on top of that information that we are collecting to look for failure signatures that can be used to predict failures and prescribe maintenance activities,” says Michael Hendrix, technical director for analytics at CSX. “We’re really looking to better manage our fleet and the maintenance activities that go into that so we can run a more efficient network and utilize our assets more effectively.”

“In the past we would have to buy a special storage device to store large quantities of data, and we’d have to determine cost benefits to see if it was worth it,” says Donna Crutchfield, assistant vice president of information architecture and strategy at CSX. “So we were either letting the data die naturally, or we were only storing the data that was determined to be the most important at the time. But today, with the new technologies like data lakes, we’re able to store and utilize more of this data.”

CSX can now combine many different data types, such as sensor data from across the rail network and other systems that measure movement of its cars, and it can look for correlations across information that wasn’t previously analyzed together.

One of the larger data sets that CSX is capturing comprises the findings of its “wheel health detectors” across the network. These devices capture different signals about the bearings in the wheels, as well as the health of the wheels in terms of impact, sound, and heat.

“That volume of data is pretty significant, and what we would typically do is just look for signals that told us whether the wheel was bad and if we needed to set the car aside for repair. We would only keep the raw data for 10 days because of the volume and then purge everything but the alerts,” Hendrix says.

With its data lake, CSX can keep the wheel data for as long as it likes. “Now we’re starting to capture that data on a daily basis so we can start applying more machine-learning algorithms and predictive models across a larger history,” Hendrix says. “By having the full data set, we can better look for trends and patterns that will tell us if something is going to fail.”

Another key ingredient in CSX’s data set is locomotive oil. By analyzing oil samples, CSX is developing better predictions of locomotive failure. “We’ve been able to determine when a locomotive would fail and predict it far enough in advance so we could send it down for maintenance and prevent it from failing while in use,” Crutchfield says.

“Between the locomotives, the tracks, and the freight cars, we will be looking at various ways to predict those failures and prevent them so we can improve our asset allocation. Then we won’t need as many assets,” she explains. “It’s like an airport. If a plane has a failure and it’s due to connect at another airport, all the passengers have to be reassigned. A failure affects the system like dominoes. It’s a similar case with a railroad. Any failure along the road affects our operations. Fewer failures mean more asset utilization. The more optimized the network is, the better we can service the customer.”

Detecting Fraud Through Correlations

Traditionally, business strategy has been a very conscious practice, presumed to emanate mainly from the minds of experienced executives, daring entrepreneurs, or high-priced consultants. But data lakes take strategy out of that rarefied realm and put it in the environment where just about everything in business seems to be going these days: math—specifically, the correlations that emerge from applying a mathematical algorithm to huge masses of data.

The Financial Industry Regulatory Authority (FINRA), a nonprofit group that regulates broker behavior in the United States, used to rely on the experience of its employees to come up with strategies for combating fraud and insider trading. It still does that, but now FINRA has added a data lake to find patterns that a human might never see.

Overall, FINRA processes over five petabytes of transaction data from multiple sources every day. By switching from traditional database and storage technology to a data lake, FINRA was able to set up a self-service process that allows analysts to query data themselves without involving the IT department; search times dropped from several hours to 90 seconds.

While traditional databases were good at defining relationships with data, such as tracking all the transactions from a particular customer, the new data lake configurations help users identify relationships that they didn’t know existed.

Leveraging its data lake, FINRA creates an environment for curiosity, empowering its data experts to search for suspicious patterns of fraud, marketing manipulation, and compliance. As a result, FINRA was able to hand out 373 fines totaling US$134.4 million in 2016, a new record for the agency, according to Law360.

Data Lakes Don’t End Complexity for IT

Though data lakes make access to data and analysis easier for the business, they don’t necessarily make the CIO’s life a bed of roses. Implementations can be complex, and companies rarely want to walk away from investments they’ve already made in data analysis technologies, such as data warehouses.

“There have been so many millions of dollars going to data warehousing over the last two decades. The idea that you’re just going to move it all into a data lake isn’t going to happen,” says Mike Ferguson, managing director of Intelligent Business Strategies, a UK analyst firm. “It’s just not compelling enough of a business case.” But Ferguson does see data lake efficiencies freeing up the capacity of data warehouses to enable more query, reporting, and analysis.

Data lakes also don’t free companies from the need to clean up and manage data as part of the process required to gain these useful insights. “The data comes in very raw, and it needs to be treated,” says James Curtis, senior analyst for data platforms and analytics at 451 Research. “It has to be prepped and cleaned and ready.”

Companies must have strong data governance processes, as well. Customers are increasingly concerned about privacy, and rules for data usage and compliance have become stricter in some areas of the globe, such as the European Union.

Companies must create data usage policies, then, that clearly define who can access, distribute, change, delete, or otherwise manipulate all that data. Companies must also make sure that the data they collect comes from a legitimate source.

Many companies are responding by hiring chief data officers (CDOs) to ensure that as more employees gain access to data, they use it effectively and responsibly. Indeed, research company Gartner predicts that 90% of large companies will have a CDO by 2019.

Data lakes can be configured in a variety of ways: centralized or distributed, with storage on premise or in the cloud or both. Some companies have more than one data lake implementation.

“A lot of my clients try their best to go centralized for obvious reasons. It’s much simpler to manage and to gather your data in one place,” says Ferguson. “But they’re often plagued somewhere down the line with much more added complexity and realize that in many cases the data lake has to be distributed to manage data across multiple data stores.”

Meanwhile, the massive capacities of data lakes mean that data that once flowed through a manageable spigot is now blasting at companies through a fire hose.

“We’re now dealing with data coming out at extreme velocity or in very large volumes,” Ferguson says. “The idea that people can manually keep pace with the number of data sources that are coming into the enterprise—it’s just not realistic any more. We have to find ways to take complexity away, and that tends to mean that we should automate. The expectation is that the information management software, like an information catalog for example, can help a company accelerate the onboarding of data and automatically classify it, profile it, organize it, and make it easy to find.”

Beyond the technical issues, IT and the business must also make important decisions about how data lakes will be managed and who will own the data, among other things (see How to Avoid Drowning in the Lake).

How to Avoid Drowning in the Lake

The benefits of data lakes can be squandered if you don’t manage the implementation and data ownership carefully.

Deploying and managing a massive data store is a big challenge. Here’s how to address some of the most common issues that companies face:

Determine the ROI. Developing a data lake is not a trivial undertaking. You need a good business case, and you need a measurable ROI. Most importantly, you need initial questions that can be answered by the data, which will prove its value.

Find data owners. As devices with sensors proliferate across the organization, the issue of data ownership becomes more important.

Have a plan for data retention. Companies used to have to cull data because it was too expensive to store. Now companies can become data hoarders. How long do you store it? Do you keep it forever?

Manage descriptive data. Software that allows you to tag all the data in one or multiple data lakes and keep it up-to-date is not mature yet. We still need tools to bring the metadata together to support self-service and to automate metadata to speed up the preparation, integration, and analysis of data.

Develop data curation skills. There is a huge skills gap for data repository development. But many people will jump at the chance to learn these new skills if companies are willing to pay for training and certification.

Be agile enough to take advantage of the findings. It used to be that you put in a request to the IT department for data and had to wait six months for an answer. Now, you get the answer immediately. Companies must be agile to take advantage of the insights.

Secure the data. Besides the perennial issues of hacking and breaches, a lot of data lakes software is open source and less secure than typical enterprise-class software.

Measure the quality of data. Different users can work with varying levels of quality in their data. For example, data scientists working with a huge number of data points might not need completely accurate data, because they can use machine learning to cluster data or discard outlying data as needed. However, a financial analyst might need the data to be completely correct.

Avoid creating new silos. Data lakes should work with existing data architectures, such as data warehouses and data marts.

From Data Queries to New Business Models

The ability of data lakes to uncover previously hidden data correlations can massively impact any part of the business. For example, in the past, a large soft drink maker used to stock its vending machines based on local bottlers’ and delivery people’s experience and gut instincts. Today, using vast amounts of data collected from sensors in the vending machines, the company can essentially treat each machine like a retail store, optimizing the drink selection by time of day, location, and other factors. Doing this kind of predictive analysis was possible before data lakes came along, but it wasn’t practical or economical at the individual machine level because the amount of data required for accurate predictions was simply too large.

The next step is for companies to use the insights gathered from their massive data stores not just to become more efficient and profitable in their existing lines of business but also to actually change their business models.

For example, product companies could shield themselves from the harsh light of comparison shopping by offering the use of their products as a service, with sensors on those products sending the company a constant stream of data about when they need to be repaired or replaced. Customers are spared the hassle of dealing with worn-out products, and companies are protected from competition as long as customers receive the features, price, and the level of service they expect. Further, companies can continuously gather and analyze data about customers’ usage patterns and equipment performance to find ways to lower costs and develop new services.

Data for All

Given the tremendous amount of hype that has surrounded Big Data for years now, it’s tempting to dismiss data lakes as a small step forward in an already familiar technology realm. But it’s not the technology that matters as much as what it enables organizations to do. By making data available to anyone who needs it, for as long as they need it, data lakes are a powerful lever for innovation and disruption across industries.

“Companies that do not actively invest in data lakes will truly be left behind,” says Anita Raj, principal growth hacker at DataRPM, which sells predictive maintenance applications to manufacturers that want to take advantage of these massive data stores. “So it’s just the option of disrupt or be disrupted.” D!

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


About the Authors:

Timo Elliott is Vice President, Global Innovation Evangelist, at SAP.

John Schitka is Senior Director, Solution Marketing, Big Data Analytics, at SAP.

Michael Eacrett is Vice President, Product Management, Big Data, Enterprise Information Management, and SAP Vora, at SAP.

Carolyn Marsan is a freelance writer who focuses on business and technology topics.

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About Timo Elliott

Timo Elliott is an Innovation Evangelist for SAP and a passionate advocate of innovation, digital business, analytics, and artificial intelligence. He was the eighth employee of BusinessObjects and for the last 25 years he has worked closely with SAP customers around the world on new technology directions and their impact on real-world organizations. His articles have appeared in articles such as Harvard Business Review, Forbes, ZDNet, The Guardian, and Digitalist Magazine. He has worked in the UK, Hong Kong, New Zealand, and Silicon Valley, and currently lives in Paris, France. He has a degree in Econometrics and a patent in mobile analytics. 

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The CIO’s Cheat Sheet For Digital Transformation

Richard Howells

You didn’t sign up for this, but your company needs you—desperately.

As CIO, you figured you’d merely lead your IT department. You’d purchase equipment and create new systems. You’d implement policies and procedures around device usage. You’d protect your enterprise from dangerous cyberattacks.

But with new, groundbreaking technologies emerging every day—from the Internet of Things (IoT) to machine learning—your role within the organization has changed. In fact, it’s growing in importance. You’re expected to be more strategic. Your colleagues now view you as an influencer and change-maker. You’re looked upon to be a driving force at your enterprise—one who can successfully guide your company into the future.

The first step in making this transition from IT leader to company leader is to team up with others in the C-suite—specifically the COO—to drive digital transformation.

Increase CIO-COO collaboration and prepare your enterprise for the digital age

The precise roles and responsibilities of a COO are difficult to pin down. They often vary from company to company. But two things about the position are generally true:

  1. The COO is second in command to the chairman or CEO of an organization.
  2. The COO is tasked with ensuring a company’s operations are running at an optimal level.

In other words, the COO role is vitally important. And as technology continues to become more and more essential to a company’s short- and long-term success, it’s crucial for the COO to establish a close working relationship with the CIO. After all, the latest innovations—which today’s CIOs are responsible for adopting and managing—will unquestionably aid an organization’s operational improvements, no matter their industry.

Take manufacturing, for instance. The primary duty of a manufacturer’s COO is to create the perfect production process—one that minimizes cost and maximizes yield. To achieve this, the COO must ensure asset availability, balance efficiency with agility, and merge planning and scheduling with execution. This requires using a solution that provides real-time visibility. It involves harnessing the power of sensor data and connectivity. It encompasses capitalizing on analytics capabilities that enable businesses to be predictive rather than reactive.

And there’s one particular platform that makes all of this—and more—possible.

Experience the sheer power of IoT

In a recent white paper, Realizing IoT’s Value — Connecting Things to People and Processes, IDC referred to IoT as “a powerful disruptive platform that can enhance business processes, improve operational and overall business performance, and, more importantly, enable those innovative business models desperately needed to succeed in the digital economy.”

According to IDC research:

  • 80% of manufacturers are familiar or very familiar with the concept of IoT.
  • 70% view IoT as extremely or very important.
  • 90% have plans to invest in IoT within the next 12 to 24 months.
  • 30% already have one or more IoT initiatives in place.

So while most manufacturers appear to be on the same page about the importance and urgency of adopting IoT technology, there are stark differences in the kind of value they believe it can provide.

Nearly one-quarter (22%) of companies view IoT as tactical, meaning it can solve specific business challenges. Nearly 60%, however, see IoT as strategic. These organizations believe the technology can help them gain competitive advantages by enhancing the current products and services they provide, reducing costs, and improving productivity.

One thing all businesses can agree on is that IoT is essential to spurring enterprise-wide digital transformation—particularly as it pertains to reimagining business processes and products.

Innovate your organization’s business processes

Companies are constantly on the lookout for ways to run their operations smarter. In recent years, IoT has emerged as one of the most formidable methods for achieving this. It paves the way for increasing connectivity and business intelligence.

So what’s the endgame to all of this? Process automation.

While fully automated business processes remain a pipe dream for many companies, plenty of manufacturers are already making great strides in transforming their existing business processes with IoT.

Here are just a few ways IoT is enabling process improvements:

  • Predictive maintenance: IoT offers manufacturers real-time visibility into the condition of an asset or piece of equipment through wired or wireless sensors. By taking a proactive rather than reactive approach to maintenance, businesses can reduce asset/equipment downtown, minimize repair costs, and increase employee productivity.
  • Real-time scheduling: IoT technology empowers manufacturers to evaluate current demand and capacity availability in the moment. This allows businesses to continuously modify production schedules, resulting in higher throughput levels, lower unit costs, and greater customer satisfaction.
  • Environmental resource management and planning: IoT-enabled sensors provide manufacturers with the ability to capture and analyze energy use. By applying cognitive technology across the enterprise, companies can take the proper steps to reduce energy consumption and promote more sustainable environmental practices.

Develop and deliver innovative products

Creating smarter business processes isn’t enough for companies today. They must aspire to develop more intelligent products, too. This capability can help modern-day enterprises provide greater value to consumers, increase revenue, and separate themselves from the competition.

IoT is tailor-made for helping businesses build innovative products. With greater connectivity between organizations and goods, manufacturers can go beyond merely producing products to producing products and selling as-a-service add-ons.

Here are few ways manufacturers are creating smarter products and experiencing greater business success with IoT:

  • Remote management: IoT enables businesses to continuously monitor the health of their products. With remote management, organizations can identify problems, implement corrective actions, and increase customer satisfaction.
  • Quality feedback loop: IoT-connected products keep design and service teams loaded with useful data. Based on the information they collect, manufacturers can continue to refine products and prevent potential product recalls.
  • Product as a service: IoT technology presents organizations with myriad revenue-generating opportunities. Selling as-a-service add-ons with products allows manufacturers to take advantage of more continuous revenue streams throughout product life cycles.

Forget best practices—embrace next practices

When it comes to a company’s digital transformation, the buck stops with its CIO. After all, the CIO is responsible for adopting and managing the cutting-edge innovations that enable organizations to fuel business growth and stay competitive.

But to achieve this, CIOs need to forget about best practices and instead embrace next practices.

IDC describes next practices as “innovative processes that enable businesses to remain successful in the evolving industry landscape and at the same time prepares them for future challenges and disruptions as the scale of innovation speeds up.”

Today, there’s no better way for a company to stay innovative and competitive than by adopting game-changing IoT technology.

Want to learn more? Download the IDC white paper.

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About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.