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How To Avoid A Personal And Supply Chain Massacre This Valentine’s Day

Richard Howells

Female clerk in a flower shopThe Saint Valentine’s Day Massacre is the name given to the 1929 murder of seven mob associates as part of a Prohibition-era conflict between two powerful criminal gangs in Chicago led by Al Capone and Bugs Moran.

While no mistake I could possibly make this upcoming holiday would result in such bloodshed, I’m willing to go to great lengths to avoid my very own Valentine’s Day massacre this year.

Here is a simple checklist I plan to follow to ensure a happy Valentine’s Day – with a look at the not-so-simple, behind-the-scenes supply chain workings required to avoid a massacre.

Say “I love you” with a card

Valentine’s Day is big business. In fact, around 190 million Valentine’s Day cards are sent annually, making it the second largest card-sending occasion, behind Christmas, according to figures from the Greeting Card Association.

When I go to my local pharmacy or specialty card shop, I am always amazed at the selection of cards available for the holiday, and I constantly have to wonder how the manufacturers ensure on-shelf availability across the hundreds of thousands of outlets spread across the U.S.

More and more, however, customers are seeking a more personalized approach to Valentine’s Day cards. Hallmark is a great example of a card company that is keeping up with this trend, introducing its specialty retail concept store HMK.

At HMK stores, shoppers can create unique, personalized gifts that reflect an individual’s sense of style, and these products carry a unique artistry coupled with the emotion typically found in a Hallmark-brand item. But with customized products, inventory planning is not that simple. These items call for a more demand-driven supply chain, requiring HMK to go from make-to-stock to engineer-to-order, with some of the engineer-to-order processes even taking place onsite.

In addition to physical cards, an estimated 15 million e-Valentines will be sent this year. After all, the card business is now an omnichannel one, and numerous sites exist that offer customers the ability to personalize a card and send it to a loved one.

Show love with a bouquet of flowers

I – like 75% of men, according to a survey conducted by Luth Research – plan to give flowers this Valentine’s Day. Along with Mother’s Day, Valentine’s Day is the most popular holiday for giving flowers, generating an estimated $100 billion worldwide for the industry. Approximately 180 million roses – the majority red – will be sold and delivered within a three-day period.

So how exactly do our roses get to our loved ones on the big day? The cold-chain logistics of transporting short shelf-life products such as flowers across a global network from a farm in Ecuador, for example, to a happy spouse or significant other in Massachusetts, let’s say, is not easy. It requires a lot of planning, collaboration, and execution. Humidity-controlled shipping containers, refrigerated cooling facilities, and other equipment are required to minimize delivery delays and ensure freshness.

Flowers have a shelf life of about 10 days. A day lost in the supply chain is 10% lost in shelf life, which can cost the wholesaler big bucks and result in an unsatisfied customer, her Valentine’s Day dream left drooping right in front of her!

Appeal to the sweet tooth with chocolates

Candies and chocolates have long been a Valentine’s Day tradition. In fact, Valentine’s Day is fourth on the list of holidays with the most candy sales – behind Halloween, Easter, and Christmas. The National Confectioners Association estimates that more than 36 million heart-shaped boxes of chocolate will be sold for Valentine’s Day. (Fun fact about chocolate.)

The modern chocolate supply chain is a global affair. It all starts with the cocoa, which is predominantly grown in equatorial countries, with Ghana and the Ivory Coast responsible for 50% of the global supply. Imagine if there was a natural disaster or other break in that supply. Can you picture the panic late in the evening of February 13 – when most men shop – if there was no chocolate left on the shelf? It would definitely highlight the need for the global supply chain to be more robust and explain why supplier backup is so critical.

To establish resiliency against supply shocks such as the cocoa-bean shortage, companies need to combine risk-management strategies with a balanced supply network, a multi-tier understanding of inventory positioning, and the visibility and responsiveness to re-plan supply interruptions.

Another rising challenge to this global supply is the spotlight around the sustainability of the supply in West Africa and the prevalence of child labor, human trafficking, and forced labor. This certainly doesn’t jibe with the “hearts and roses” image typically associated with Valentine’s Day. Partially as a result of this, we are now seeing a number of chocolate companies around the world sourcing Fair Trade Certified cocoa. Many are also increasingly sourcing cocoa beans that have been certified by independent organizations to meet various labor, social, and environmental standards.

So with those little pointers, and a “tip of the cap” to the business processes that make it all happen, here’s to a happy Valentine’s Day.

For more on protecting your supply chain, take a look at our research infographic on Supply Chain Fraud: Where Has All the Money Gone?

Join me on Twitter: @howellsrichard.

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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.

Connected For Purpose: What Total Digital Transformation Looks Like

Jennifer Schulze

272824_low_jpg_srgb-300x263Every organization is, in essence, a single entity comprised of connected segments. Much like a caterpillar, each segment must move in accord with the rest of the body to advance. We can look at a company’s digital transformation similarly: When the move to digital is piecemeal and conversion to cloud is a series of disjointed decisions made across departments, the organization as a whole suffers. Total digital transformation requires careful planning and purpose; the result is a company metamorphosis enabling greater efficiency, transparency, and growth.

Planning for a total transformation

As each department within an organization considers its move to digital, questions arise around ownership, schedules, data risks, and legacy systems. Individual departments may not consider is how the cloud will affect interaction with internal and external customers. Therefore, a comprehensive strategy that addresses the transformation of each business area as part of a total company evolution is key to success.

But where does an organization start? As a first step, stakeholders from every department across the business should discuss digital transformation holistically.

  • What will a cloud solution do for your department?
  • How may the digital transformation improve the business as a whole?
  • Will an existing partner (or partners) suffice to provide these solutions, or are new partnerships needed?
  • Can one software solution cover all business area requirements? If not, how will the separate solutions integrate to provide company-wide data and value?

The need for end-to-end strategy yields deeper opportunity for distributors and resellers. As outside consultants with expert knowledge of both cloud solutions and their customers’ businesses, they’re in prime position to methodically lead the right types of discussions. Whether development is led internally or externally, the digital transformation strategy should specifically address:

  • Transformation owners and hierarchy
  • Map of the business chain
  • Scheduled deployments
  • Legacy system concerns and migration

Synchronized change delivers company-wide results

Tearing down silos and connecting the move to cloud across an organization results in many additional benefits. A scheduled migration can reduce latency periods during the transition to digital, as contingency plans manage workflow and cross-department interactions. Swift upgrades keep business moving at the speed of innovation. Digital transformation also improves user experience and increases employee empowerment, streamlining processes, simplifying the transfer of information, and offering more mobile functionality. Finally, an end-to-end cloud solution unleashes department data, enabling predictive and actionable analytics that encompass the entire business chain.

Digital transformation, when done right, connects every business department and employee, optimizes interactions and provides data to anticipate breakdowns or gaps in the company’s workflow. When done strategically, a digital transformation is much like a caterpillar becoming a butterfly; the DNA of the original organism is there, but it’s so vastly improved that an entirely new – and beautiful – creature emerges.

For more digital transformation strategies, see Leading The Shift To A Digital Business With Determination.

 

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About Jennifer Schulze

Jennifer Schulze is Vice President of marketing for SAP. In her role, she manages customer marketing as part of the office of the COO. She has over 15 years of technology marketing and management experience and is a small business owner in the San Francisco Bay area.

Why Small Construction Companies Must Consolidate

Michael Quadt

In today’s construction industry, more than 90 percent of companies have fewer than 100 employees. This is about to dramatically change.

The construction industry is at an inflection point, analogous to the move from landline telephones to cellular technology. Digital technologies are disrupting the industry, providing new opportunities to address the challenges of poor profitability/productivity, project performance, skilled labor shortages, and sustainability concerns. But smaller companies simply cannot afford to make this digital transformation. They also cannot afford to fall further behind. The result: consolidation is sweeping through the construction industry.

Already consolidation has impacted the industrial and civil segments, leaving only a few large players remaining in each region. In commercial construction, new contracting models and partnerships (e.g., public-private partnerships) are increasing the amount of work a group can perform, causing non-innovators to lose market share. Although residential construction yet to experience significant disruption, urban population growth will drive change here as well.

Over the next decade, Construction Today predicts that 50 percent or more privately held businesses will consolidate. It is not enough to simply understand the trends driving consolidation. It is essential that businesses understanding the new opportunities created by consolidation– and how companies can harness these changes for dynamic growth.

How digital disruption is driving construction company consolidation

Digital disruption is upon us. 3D printing and robotics, for example, requires 30 to 60 percent less building materials and products can be completed 50 to 80 percent faster. The market for portable and modular buildings is growing as digital technology powers faster completion rates. Portakabin, a UK-based construction company building, uses 3D building information modeling (BIM) and a factory-like setting to construct portable and modular buildings 50 percent faster than conventional buildings. This allows Portakabin to obtain a higher level of precision, delivering construction on time and within budget.

The Internet of Things (IoT) is powering new efficiencies and smarter asset utilization. For example, CCC, a large Middle Eastern contractor, faced weak demand in 2008. The company had two choices: become more efficient or go out of business. Today, CCC uses IoT to monitor and improve the utilization of its assets, saving approximately $15 million per year.

From supply chain to workforce planning, there are tremendous opportunities to streamline business processes in construction. Lean processes, perfected in the industrial industry, provided a framework for optimization and reduced waste. Today’s business networks power seamless communication of information on a global scale. The World Economic Forum estimates that lean principles and methods could reduce completion times by 30 percent and cut costs by 15 percent.

Adapting business models to these technologies, however, is a costly process and one that smaller construction companies simply cannot afford. The result: Companies must look towards consolidation, mergers and acquisitions in order to remain competitive in the current marketplace.

Consolidation benefits: reimagining business processes & workflow

Consolidation should not be viewed solely as a strategic move for survival. It is also an opportunity for companies to shed antiquated processes and reimagine their business models. Entire categories of work can be eliminated through automation. Advances in computing power, connectivity, and sensor technology are opening doors to eliminate ever more complex tasks, such as quantity takeoffs, scheduling, and forecasting. Improved accuracy and lower costs from automated processes provide a competitive advantage for early adopters.

Consolidated companies can leverage mobile and IoT technologies to automate productivity reporting and profitability analysis in near real time. Instant feedback allows workers to understand how they are performing and enables competition through gamification.

Digitization is also enabling the emergence of an open talent economy that connects people and jobs in a borderless workplace. For example, contractors will be able to scale operations rapidly by filing talent gaps from trade workers to management through a virtual talent network. Acting as a virtual union hall, the talent network will maintain training and certification records to validate the qualifications of the candidates. Resourcing processes will need to reflect this paradigm change, allowing resource managers to tap into not only the company’s on-payroll talent, but also identify best-of-breed contractors, alumni, freelancers, and open source talent, map them against demand, contact them, and engage them anywhere in the world, anytime.

Next steps: embracing a digital future

The digital future is here. Businesses that consolidate must be prepared to continue evolving. To harness new opportunities for growth, every firm needs a clear digital strategy and innovation framework. SAP works with construction companies to power their digital transformation through strategy alignment, opportunity assessment, solution roadmap, value realization, and governance.

New cloud-based technologies and engineering software will play a critical role in supporting construction companies as they consolidate, reimagine business processes, and embrace a digital future.

For more insight on this new digital age of construction, see Building a Sustainable World, How to survive and thrive in a digital construction economy.

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Michael Quadt

About Michael Quadt

Michael Quadt is responsible for providing a high level of expertise for the Engineering, Construction, & Operations Industry Business Unit at SAP Central Europe, France, United Kingdom and Benelux. Michael is a Civil Engineer with more than 30 years of experience in the construction and real estate industries. Prior to SAP, he held a variety of positions at a big player in the IT business.

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.

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Finding Value In IoT Data

Paul Taylor

One day soon, we will wake up and wonder how we ever survived in a world of “dumb” disconnected things. Our homes, including our pantries, closets, and shoe racks, and our offices, factories, and vehicles will be full of connected devices.

The World Economic Forum estimates that the number of connected devices will grow at a compound annual growth rate (CAGR) of 21.6% over the next four years from 22.9 billion in 2016 to a headline-grabbing 50.1 billion by 2020 – equivalent to almost five connected devices for every person on the planet.

By 2020, there will be an estimated 5 connected devices to every 1 person on the planet.

But that will be just the beginning. Welcome to the Internet of Things (IoT).

Underpinning the growth of IoT are tumbling prices for the sensors that turn “dumb” things into “smart” devices and capture data from the environment around them, and the vast data-centric and mostly wireless networks that connect these devices to each other and to the broader Internet.

As the sensors grow ever cheaper, and the network grows ever larger, the more data we as individuals, professionals, companies, and governments can collect and analyze to make ever more intelligent decisions.

Just like other commoditizing electronic components, fierce competition, and Moore’s Law has driven down prices, especially for accelerometers and gyroscope sensors typically used in smartphones and other mobile devices.

As a result, manufacturers can add sensor and communications modules to almost any product for a few dollars, bringing the day when everything (valued at $10 or more is) I0T-ready a big step closer.

“Our perspective is that cost of both the sensors and devices is approaching free and the size is approaching invisible,” said James Bailey, managing director of the mobility practice at Accenture, last year. “Literally everything will have IoT technology at some point.”

At the same time, the cost of embedded processors, networking and cloud-based computing – other key components in the IoT world – have all fallen.

The opportunity for transformation

IoT, particularly the Internet of Industrial Internet of Things (IoIT), is about hyperconnectivity and sensor-generated data – huge amounts of it. But the real value lies in what you can do with that data – in the outcomes it enables, rather than the collection, transmission, or storage of that data.

“We need more data-driven decision making,” said Tanja Rückert, executive vice president of Digital Assets and IoT at SAP,  during the SAP Executive Summit on the Internet of Things that took place earlier this month.

Her views were echoed by Nils Herzberg, senior vice president and global co-lead of IoT Go to Market, who stressed that “data is the fuel of the 21st century.”

Nevertheless, a recent study found that while 81 percent of business executives believe that successful adoption of industrial IoT is critical to their company’s future success, only 25 percent have a clear industrial IoT strategy.

A challenge and a huge opportunity remains for those enterprise software and services companies that have the technology and tools available to help people and businesses make sense of, analyze, and harness the tsunami of data that we are about to be engulfed by.

Here’s the real business potential to add value through IoT: Companies in almost every industry will transform into digital businesses which means oversight must be powered by real-time data – fed in large part by sensors.

As Herzberg, says, the beauty of sensors that they bring real-time data to applications: “Customers run applications for business critical processes, which could run better with real-time awareness.”

Big Data analytics and machine learning will deliver personal and business insights and will enable us to make immediate decisions based on that data – rather than relying as we have in the past, on guesswork or out-of-date forecasts. “When sensors provide real-time information, customers can make better decisions, rather than using guess work,” says Herzberg.

IoT data is already helping companies track goods on their way through the supply chain and immediately alert managers in case of theft or damage, reducing waiting times in busy ports, playing a key roll in jet engine and tractor predictive maintenance, helping farmers optimize crop yields, and improving safety across a number of public and private enterprises.

The market

So how big is the market opportunity? Cisco, the networking equipment group, predicts the global Internet of Things market will be $14.4 trillion by 2022, with the majority invested in improving customer experiences.

Cisco suggested that additional areas of investment would include reducing the time-to-market ($3T), improving supply chain and logistics ($2.7T) and cost reduction strategies ($2.5T) and increasing employee productivity ($2.5T).

But the implications of IoT and the Big Data analytics that it feeds will go far beyond traditional business models and have a profound impact on both enterprises and individuals. When combined with machine learning and cognitive computing, the insights derived from IoT data will enable us as individuals and businesses users to deploy intelligent agents empowered to make autonomous decisions and negotiate with other agents on our behalf.

This is not about machines replacing humans. Rather, intelligent apps augment humans’ ability to run the business. Predicted businesses will deploy intelligent agents across multiple areas to help all employees, from sales to suppliers to shop floor.

Things to outcomes

Ultimately, machines will help people understand connections between information by monitoring, analyzing, and correlating data that people wouldn’t see ordinarily. This helps people improve outcomes. For example, in healthcare it can mean improving patients’ recovery times.

Enterprise IoT may be Big Data’s killer app, but ultimately it is still about people.

For more insight on the Internet of Things, see IoT, Sensors, And All Things Digital: Can We Handle It All?

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