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Autonomous Vehicles: Accelerating Into The Mainstream

Dan Wellers and Larry Stolle

In just one year, self-driving cars have gone from the theoretical to the imminent. Major manufacturers are leaping into development. The U.S. Department of Transportation issued new rules in September giving the federal government broad oversight over vehicles operated by software rather than by humans. Discussion of the technology’s pros and cons has become a staple in publications as mainstream as the New York Times. But now that the first fatality has occurred, we need to take a closer look at the implications and challenges of autonomous vehicles.

At the moment, the focus is on self-driving versions of today’s automobiles. However, autonomous vehicles also include taxis, buses, delivery vans, long-haul trucks, and more. Any vehicle that meets the fundamental need to move passengers and/or cargo from point A to point B may soon include multiple exponential technologies – machine learning and artificial intelligence, sensors, drones, cybersecurity, and at some future point, super materials – that allow it to pilot itself under some, if not all, circumstances.

What’s driving how we’re driving?

Whether autonomous vehicles will hit the road is no longer a question; some of them already have, and others, like the autonomous trucks being developed by Otto, a startup recently acquired by Uber, are on their way. What we need to be asking now is when self-driving cars will change lanes from experiments and curiosities to the mainstream – and how long it will be before they dominate. These factors will heavily influence the answers:

Technological limits. So far, machines can’t duplicate the sophisticated, intricate choreography that human drivers perform every day. Nor can they correct for catastrophic human error. The Tesla in June’s fatality failed to “see” a white truck against a bright sky, but it wasn’t designed to operate without any human intervention. The driver failed to override it, reportedly because he was not only speeding, but distracted by watching a movie on the car’s dashboard video screen. While current technology can achieve something very near autonomy, the last few steps still promise to be a big leap, in part because we don’t yet know where to draw the line between requiring human intervention and forbidding it. That line will shift as we become more comfortable with the technology and as technology itself advances. Moreover, security will have to become a higher priority as vehicles become just another set of endpoints in the Internet of Things.

The so-called “Trolley Problem.” The technological limits of self-driving vehicles are inextricably entwined with this iconic thought exercise, which asks whether it’s better to do nothing and let a runaway trolley hit five people on its track, or to actively participate in killing a single person standing on another track by pulling the lever that diverts the trolley. Self-driving vehicles will force us to confront similar ethical issues, and soon. They will have to learn what to do when a collision is unavoidable, but what will we teach them about whose safety to prioritize? Children over the elderly? Pedestrians over other drivers? The people in the vehicle over everyone else? Or should we simply instruct them to minimize injuries and deaths, even if their own passengers end up among the casualties?

Infrastructure limits. Current infrastructure is made for vehicles with human drivers. It’s going to need an overhaul if we hope to achieve the efficiency autonomous vehicles promise us. Our current infrastructure is crumbling in some areas and will need to be adapted in the short term to carry higher volumes of traffic. Traffic lights, signals, and signage may have to be enhanced (perhaps with their own sensors and beacons) so autonomous vehicles can detect them even in the brightest sunlight. Parking spaces and parking structures will need retooling to make it possible for cars to come and go as they’re summoned and allow payment when no human is present to feed a meter. On a positive note, if mass adoption of driverless vehicles reduces both the number of vehicles and the between-vehicle spacing that’s needed for safe operation, we could finally redesign roads to take up less space and free up real estate for more attractive purposes.

Mapping issues. Current autonomous vehicle technology requires highly detailed maps. Not every road is mapped to the necessary detail, and roadwork can make any map obsolete overnight. We’ll need either to raise our mapping game or develop GPS technology that includes enhanced geolocation features and isn’t entirely reliant on maps.

Resistance to change. Although an estimated 10 million driverless cars are expected to be on the road by 2020, many drivers – whether out of love of driving or a broader aversion to being told what to do – may fiercely resist any pressure to adopt them. This will change as the technology develops and is proven safe, especially as older adults realize that an autonomous car can drive them when they no longer have the reflexes, vision, or strength to drive themselves. After a generation or two grows up with self-driving cars as the norm, manually operated cars are likely to be the purview of collectors, hobbyists, and other niche enthusiasts.

Current mileposts 

Google and Tesla, which currently dominate the discussion of autonomous vehicles, are taking different paths to the technology. Tesla is working on perfecting its autopilot while reminding drivers (not always successfully, as June’s accident proves) that the technology is meant to assist rather than replace them. Google, by comparison, is simply designing test vehicles under the assumption that human drivers will make mistakes. Its experimental self-driving cars lack brake pedals, accelerators, and steering wheels; they’re packed with impact-absorbent foam and plastic windshields; and their top speed is a far from blistering 25 mph. Of course, these won’t hit the U.S. market as long as the government requires human controls in vehicles, but they suggest where we might be heading.

Traditional car manufacturers are also picking up the pace. Toyota, currently the world’s largest car maker, is creating an onboard system that only takes over when the human driver makes a mistake. BMW, Ford, and Nissan are also steering their research toward creating autonomous vehicles, while Spanish automaker SEAT has partnered with Samsung and SAP to present “a new concept for the connected car.” Built on the SAP Vehicles Network, this currently includes a smartphone app that integrates the car key and lets owners start, stop, and share access to the vehicle remotely, as well as a different app that lets drivers find, reserve, and pay for a parking space using fingerprint verification, both features that are also building blocks for greater autonomy.

Similarly, SAP has introduced the SAP Vehicle Insights app, which gathers driving and maintenance information about individual vehicles and entire fleets. This type of information will become relevant to managing fleets of self-driving cars as well. 

Merging into a driverless world

When Henry Ford introduced the Model T in 1908, it may have been an early stage in the automobile’s evolution, but it created a mass market and gave rise to many of the rules of the road we still observe today. Similarly, we’re further down the road to autonomous vehicles than many of us realize. In fact, automated driver assistance systems like those that automate braking, alert drivers to hazards on the road, or show what’s in blind spots have already brought us a long way.

We still lack the central “brain” to control all the other automated systems, the heuristic learning and decision-making abilities to take the place of the human driver, and the infrastructure necessary to enable truly autonomous operations, and even as we solve these issues, new ones will almost certainly come speeding toward us. Yet the value, safety, efficiency, improved capital utilization, and other benefits of self-driving vehicles will far outweigh the costs of continuing to develop them – so buckle up, because we’ve got an exciting ride ahead.

Download the executive brief Speeding Toward a Driverless Future

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To learn more about how exponential technology will affect business and life, see Digital Futures in the Digitalist Magazine.

Listen to a Special Edition broadcast about The Future of Cars on SAP’s Coffee Break with Game-Changers.

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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.

 

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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.

What Is Digital Transformation?

Andreas Schmitz

Achieving quantum leaps through disruption and using data in new contexts, in ways designed for more than just Generation Y — indeed, the digital transformation affects us all. It’s time for a detailed look at its key aspects.

Data finding its way into new settings

Archiving all of a company’s internal information until the end of time is generally a good idea, as it gives the boss the security that nothing will be lost. Meanwhile, enabling him or her to create bar graphs and pie charts based on sales trends – preferably in real time, of course – is even better.

But the best scenario of all is when the boss can incorporate data from external sources. All of a sudden, information on factors as seemingly mundane as the weather start helping to improve interpretations of fluctuations in sales and to make precise modifications to the company’s offerings. When the gusts of autumn begin to blow, for example, energy providers scale back solar production and crank up their windmills. Here, external data provides a foundation for processes and decisions that were previously unattainable.

Quantum leaps possible through disruption

While these advancements involve changes in existing workflows, there are also much more radical approaches that eschew conventional structures entirely.

“The aggressive use of data is transforming business models, facilitating new products and services, creating new processes, generating greater utility, and ushering in a new culture of management,” states Professor Walter Brenner of the University of St. Gallen in Switzerland, regarding the effects of digitalization.

Harnessing these benefits requires the application of innovative information and communication technology, especially the kind termed “disruptive.” A complete departure from existing structures may not necessarily be the actual goal, but it can occur as a consequence of this process.

Having had to contend with “only” one new technology at a time in the past, be it PCs, SAP software, SQL databases, or the Internet itself, companies are now facing an array of concurrent topics, such as the Internet of Things, social media, third-generation e-business, and tablets and smartphones. Professor Brenner thus believes that every good — and perhaps disruptive — idea can result in a “quantum leap in terms of data.”

Products and services shaped by customers

It has already been nearly seven years since the release of an app that enables customers to order and pay for taxis. Initially introduced in Berlin, Germany, mytaxi makes it possible to avoid waiting on hold for the next phone representative and pay by credit card while giving drivers greater independence from taxi dispatch centers. In addition, analyses of user data can lead to the creation of new services, such as for people who consistently order taxis at around the same time of day.

“Successful models focus on providing utility to the customer,” Professor Brenner explains. “In the beginning, at least, everything else is secondary.”

In this regard, the private taxi agency Uber is a fair bit more radical. It bypasses the entire taxi industry and hires private individuals interested in making themselves and their vehicles available for rides on the Uber platform. Similarly, Airbnb runs a platform travelers can use to book private accommodations instead of hotel rooms.

Long-established companies are also undergoing profound changes. The German publishing house Axel Springer SE, for instance, has acquired a number of startups, launched an online dating platform, and released an app with which users can collect points at retail. Chairman and CEO Matthias Döpfner also has an interest in getting the company’s newspapers and other periodicals back into the black based on payment models, of course, but these endeavors are somewhat at odds with the traditional notion of publishing houses being involved solely in publishing.

The impact of digitalization transcends Generation Y

Digitalization is effecting changes in nearly every industry. Retailers will likely have no choice but to integrate their sales channels into an omnichannel approach. Seeking to make their data services as attractive as possible, BMW, Mercedes, and Audi have joined forces to purchase the digital map service HERE. Mechanical engineering companies are outfitting their equipment with sensors to reduce downtime and achieve further product improvements.

“The specific potential and risks at hand determine how and by what means each individual company approaches the subject of digitalization,” Professor Brenner reveals. The resulting services will ultimately benefit every customer – not just those belonging to Generation Y, who present a certain basic affinity for digital methods.

“Think of cars that notify the service center when their brakes or drive belts need to be replaced, offer parking assistance, or even handle parking for you,” Brenner offers. “This can be a big help to elderly people in particular.”

Chief digital officers: team members, not miracle workers

Making the transition to the digital future is something that involves not only a CEO or a head of marketing or IT, but the entire company. Though these individuals do play an important role as proponents of digital models, it also takes more than just a chief digital officer alone.

For Professor Brenner, appointing a single person to the board of a DAX company to oversee digitalization is basically absurd. “Unless you’re talking about Da Vinci or Leibnitz born again, nobody could handle such a task,” he states.

In Brenner’s view, this is a topic for each and every department, and responsibilities should be assigned much like on a soccer field: “You’ve got a coach and the players – and the fans, as well, who are more or less what it’s all about.”

Here, the CIO neither competes with the CDO nor assumes an elevated position in the process of digital transformation. Implementing new databases like SAP HANA or Hadoop, leveraging sensor data in both technical and commercially viable ways, these are the tasks CIOs will face going forward.

“There are some fantastic jobs out there,” Brenner affirms.

Want more insight on managing digital transformation? See Three Keys To Winning In A World Of Disruption.

Image via Shutterstock

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Andreas Schmitz

About Andreas Schmitz

Andreas Schmitz is a Freelance Journalist for SAP, covering a wide range of topics from big data to Internet of Things, HR, business innovation and mobile.

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


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How Digital Transformation Is Rewriting Business Models

Ginger Shimp

Everybody knows someone who has a stack of 3½-inch floppies in a desk drawer “just in case we may need them someday.” While that might be amusing, the truth is that relatively few people are confident that they’re making satisfactory progress on their digital journey. The boundaries between the digital and physical worlds continue to blur — with profound implications for the way we do business. Virtually every industry and every enterprise feels the effects of this ongoing digital transformation, whether from its own initiative or due to pressure from competitors.

What is digital transformation? It’s the wholesale reimagining and reinvention of how businesses operate, enabled by today’s advanced technology. Businesses have always changed with the times, but the confluence of technologies such as mobile, cloud, social, and Big Data analytics has accelerated the pace at which today’s businesses are evolving — and the degree to which they transform the way they innovate, operate, and serve customers.

The process of digital transformation began decades ago. Think back to how word processing fundamentally changed the way we write, or how email transformed the way we communicate. However, the scale of transformation currently underway is drastically more significant, with dramatically higher stakes. For some businesses, digital transformation is a disruptive force that leaves them playing catch-up. For others, it opens to door to unparalleled opportunities.

Upending traditional business models

To understand how the businesses that embrace digital transformation can ultimately benefit, it helps to look at the changes in business models currently in process.

Some of the more prominent examples include:

  • A focus on outcome-based models — Open the door to business value to customers as determined by the outcome or impact on the customer’s business.
  • Expansion into new industries and markets — Extend the business’ reach virtually anywhere — beyond strictly defined customer demographics, physical locations, and traditional market segments.
  • Pervasive digitization of products and services — Accelerate the way products and services are conceived, designed, and delivered with no barriers between customers and the businesses that serve them.
  • Ecosystem competition — Create a more compelling value proposition in new markets through connections with other companies to enhance the value available to the customer.
  • Access a shared economy — Realize more value from underutilized sources by extending access to other business entities and customers — with the ability to access the resources of others.
  • Realize value from digital platforms — Monetize the inherent, previously untapped value of customer relationships to improve customer experiences, collaborate more effectively with partners, and drive ongoing innovation in products and services,

In other words, the time-tested assumptions about how to identify customers, develop and market products and services, and manage organizations may no longer apply. Every aspect of business operations — from forecasting demand to sourcing materials to recruiting and training staff to balancing the books — is subject to this wave of reinvention.

The question is not if, but when

These new models aren’t predictions of what could happen. They’re already realities for innovative, fast-moving companies across the globe. In this environment, playing the role of late adopter can put a business at a serious disadvantage. Ready or not, digital transformation is coming — and it’s coming fast.

Is your company ready for this sea of change in business models? At SAP, we’ve helped thousands of organizations embrace digital transformation — and turn the threat of disruption into new opportunities for innovation and growth. We’d relish the opportunity to do the same for you. Our Digital Readiness Assessment can help you see where you are in the journey and map out the next steps you’ll need to take.

Up next I’ll discuss the impact of digital transformation on processes and work. Until then, you can read more on how digital transformation is impacting your industry.

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About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.