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How To Create A Transparent, Sustainable Food Supply Chain

Dr. Volker Keiner

Today’s farmer is in a tight spot. On one hand, the farm needs to produce a profit and run efficiently. On the other, consumers are demanding transparency and sustainability in farming. Digital transformation may seem like something that happens in other industries, but industry giants such as Cargill and John Deere are proving digital business transformation can lead to success in agriculture as well.

As our population grows, farms that embrace precision agriculture can see excellent gains. What kind of gains? Our research has found that early adopters are seeing an average 9% increase in revenue, 26% increase in profitability, and a 12% increase in market value.

Building transparency in the food supply chain

As communication improves, we’re seeing more impact in our industry from consumer opinion from food recalls, demand for locally sourced foods, and increased supply chain transparency. From ice cream to salad dressing, recalls are causing serious concerns for consumers and problems for agricultural production. Today’s consumers want farm-to-fork transparency to ensure their food safety. They’re also more aware and concerned about agricultural practices and how their food was produced. Many consumers are happy to pay more for food that is proven to be sourced using fair trade practices, which require the farmer to follow sustainable farming practices. But how do you build food traceability to that level?

Smallholder farming has answered this question in one fashion with the growing trend of direct marketing by farmers to the end consumer. The farmer creates a deep, one-on-one relationship with the consumer, who they see at farmers’ markets, on CSA days, and in the local community. This trend has been driven by society’s demand for further transparency in the food supply chain.

But clearly, this approach isn’t the answer for global agricultural supply chains. Consumers cannot maintain one-on-one relationships with all the farmers that produce input for their food, which provides a level of transparency while automating most of the communication needed.

Hyperconnectivity helps provide information, captured by digital farming solutions and processing practices, from the farm to the end consumer. It offers consumers the information they need, from the seeds and inputs used to the processes performed. It also eases the effort of maintaining so many one-on-one relationships. This process also affects the commodity markets because traders are limited as mixing and blending products impacts traceability.

Creating a sustainable agribusiness supply chain

Side by side with transparency is sustainability. The world’s population is expected to approach 10 billion people by 2050, which will require a 70% increase in food production. It’s no surprise that scarce resources such as water and arable land are becoming more valuable.

Additional transparency and networking also provides opportunities to optimize and increase the efficiency of food supply chains by reducing waste. It exceeds government and NGO scrutiny, affecting increasing and constantly changing regulations on farm operations, processing,and traceability. Digital transformation decreases the investment cost of transparency in the food supply chain: As more businesses digitalize, they can provide more information at a lower cost to the end consumer through mobile apps and QR codes. This level of transparency helps protect agribusiness and improves efficiency in farm operations.

Sustainable farming provides opportunities to improve yields while also preserving the environment. Precision farming is one area where technology and sustainability intersect, because inputs are used only where they are needed, reducing water, fertilizer, and fuel use. In California’s ongoing drought, for example, precision agriculture is expected to reduce water usage on farms by 25%.

Fresh water supply is significant concern for sustainable agriculture. Today, 80% of the world’s arable land is watered exclusively by rainfall and produces 60% of the world’s plant-based food. The remaining 20% is irrigated and produces 40% of the world’s plant-based food. As aquifers sink to record lows, the use of irrigation falls into a bad light. Precision agriculture can better match appropriate crops to soil and climate conditions and help protect our limited clean water supply. Such opportunities provide exciting opportunities for creativity and digital entrepreneurship in farming.

Another area where sustainability can play a role is in helping maintain and preserve the family farm. Family farms are becoming rarer as younger generations realize the challenges of profitability and leave in search of better opportunities. Precision farming limits inputs, automates tasks, and helps slow or eliminate the loss of experienced operators. This in turn boosts profitability, making the business of farming more appealing to younger generations.

Digitalizing agriculture improves transparency and sustainability. Fully 90% of executives recognize the impact the digital economy has on their business. Only 15% are creating a plan of action to adapt to these changes. Where will your agribusiness supply chain fall in this range? Will you get ahead of the curve or be left behind?

To learn more about digital transformation for agribusiness, click here.

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Dr. Volker Keiner

About Dr. Volker Keiner

Volker Keiner is a solution manager for commodities in general and for the agribusiness at SAP. As part of the Industry Solutions team for agribusiness and commodity management, he is driving, supporting, and positioning new SAP solutions for commodity trading, commodity logistics, farm to fork, and digital farming. He is working with various customers and partners in these areas.

The Internet Of Things: An Environmentalist’s Heaven Or Hell?

John Graham

Back in early December, The Guardian ran an article asking whether the Internet of Things will save or sacrifice the environment. As you’d expect, the answer is far from clear. Some environmentalists worry about the effects of producing, installing, and powering those billions of extra devices; others urge the use of IoT sensor networks to help us monitor and curb resource consumption and emissions.

On the surface, the thought of creating huge wireless sensor networks for the benefit of the environment seems paradoxical. However, there is a much bigger picture lurking underneath. The Global e-Sustainability Initiative’s (GeSI) recent #SMARTer2030 report suggests that IoT-related technologies could save “almost 10 times the carbon dioxide emissions that it generates by 2030 through reduced travel, smart buildings, and greater efficiencies in manufacturing and agriculture.”

Even if we achieve a situation in which physical IoT devices have a net positive effect on humanity’s carbon footprint, there is still the massive data transmission and storage growth to consider. Speaking as an executive of a company providing the cloud-based data platform for IoT networks, I can say that it’s in our best interests to keep energy consumption as low as possible, because it costs less. That’s why data centers are built with energy efficiency top of mind.

Ultimately, whether or not the IoT turns out to be an environmentalist’s dream will depend on how we apply its concepts. If it’s primarily used to stream endless high-quality video feeds 24 hours a day or for power-hungry gimmicks and trivialities, the footprint will be far worse than if it’s used directly to get resource and energy management under control. It seems unlikely that the private sector and consumers alone will summon the collective motivation to veer in the direction of the latter, so policy will need to keep up and be sound and assertive.

The attitude of disposability in Western society today is another issue altogether. Perfectly functional year-old smartphones and computers are piling up in landfills across the globe as consumers struggle to resist the lure of the latest model. Can the IoT buck this trend by being founded on sensor networks built to last? With the world trending away from centralized hardware and toward cloud-based software, it could be that upgrades to the virtual aspects of IoT will be enough to satisfy our lust for innovation, while the sensors hum away out of sight and out of mind.

Time will tell.

Register here to listen to an SAP Live webcast in which IBM’s IoT guru Michael Martin discusses the possibilities and challenges of our connected future.

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John Graham

About John Graham

John Graham is president of SAP Canada. Driving growth across SAP’s industry-leading cloud, mobile, and database solutions, he is helping more than 9,500 Canadian customers in 25 industries become best-run businesses.

Climate Change: Look North and South – The Evidence Is Real

Nancy Langmeyer

Explorer Sir Robert Swan – the first and only man to walk on both the North and South Poles unsupported – believes that “the greatest threat to our planet is the belief that someone else will save it.”

As a self-proclaimed survivor, Sir Swan, like many others around the globe, believes that climate change and global warming are very serious issues.

The United Nations (UN) adopted 17 Sustainable Development Goals (SDGs) in 2015, and Goal 13 asks the world to “take urgent action to combat climate change and its impacts.” According to the UN, “Climate change is now affecting every country on every continent. It is disrupting national economies and affecting lives, costing people, communities, and countries dearly today and even more tomorrow.”

The National Aeronautics and Space Administration (NASA) says the rate of temperature increase around the globe has nearly doubled in the last 50 years due to greenhouse gases released as people burn fossil fuels. But even though 2016 was the hottest year in recent history, sadly there are still people in the world who say global warming is of no concern and that it is actually a “hoax!”

Well, like Sir Swan, let’s look to the North and Sole Poles and see what we can learn about the reality of this situation.

The Poles have a story to tell us…

Sir Swan believes the North and South Poles hold vital clues to the issue of global warming and that they are an indication of what is going on around the world in respect to climate change.

In his TED talk, Swan showed pictures of melting ice in the North and South Poles, describing it as a dangerous situation. He says, “We need to listen to what these places tell us, and if we don’t, we’ll end up with our own survival situation here on planet Earth.”

So, let’s start in the North and find out what we can learn there.

At 90⁰ north latitude, the North Pole is 450 miles north of Greenland, in the middle of the Arctic Ocean. There is no actual landmass at the North Pole – only massive amounts of ice that expand in winters and shrink down to half the size in summers.

The climate change story here is that the North Pole has been experiencing unusually high temperatures, reaching 32⁰ Fahrenheit in December 2016, which was 50⁰ warmer than typical! This trend has lead to an alarming shrinkage of the Arctic Sea ice masses that equates to approximately 1.07 million km² of ice loss every decade.

Why is this a problem? Well, according to the National Science Foundation, sea ice variability – the amount of water the ice puts into or pulls out of the ocean and the atmosphere – plays a significant role in climate change. NASA says that, “The sea ice cover of the Arctic Ocean and surrounding seas helps regulate the planet’s temperature, influences the circulation of the atmosphere and ocean, and impacts Arctic communities and ecosystems.”

Even the coldest place on Earth is getting warmer!

Now, in the completely opposite direction, what can we learn from the South Pole and Antarctica? At 90⁰ south latitude, Antarctica, which includes approximately 90% of the ice on the planet, is a little over 300 feet above sea level with an ice sheet on it that is about 9,000 feet thick.

Much colder than the North Pole, the temperature here has dropped to a chilling low of -135.8⁰ Fahrenheit in 2013. However, this pole, too, is experiencing warmer weather, with its highest temperature reaching 63.5⁰ in March 2015.

NASA indicates that Antarctica has been losing about 134 gigatonnes of ice per year since 2002. And just recently, a new concern emerged – a rift in the continent that could send a significant part of the polar cap off into the ocean and create one of the largest icebergs ever recorded. This could, in the long run, raise global sea levels by four inches.

So what’s a little rise in sea level?

While a couple inches here or there doesn’t seem like much, NASA says rising sea levels can erode coasts and cause more coastal flooding, and in fact, some island nations could actually disappear.

And that’s just the sea level. There are other ramifications as the climate changes, such as an increase in infectious diseases with the expansion of tropical temperature zones, more intense rain storms and hurricanes, and many other life-threatening issues.

Let’s be the “someone else”

These insights are just the tip of the iceberg (so to speak) in the story of global warming, but it is evident the Poles are telling us that climate change is real. It’s also evident that it’s time for us as the inhabitants of this world to become the “someone else” Sir Swan talks about. And the good news is that it’s not too late for us to save this planet.

We don’t have to go to the North or South Pole to make an impact. We can simply follow Swan’s advice: “A survivor sees a problem and doesn’t go, ‘Whatever.’ A survivor sees a problem and deals with that problem before it becomes a threat.”

Whether it’s at work with a company like SAP that supports the UN SDGs with its vision and purpose, or individually – we all have to help climate change before there are irreversible threats to our place. Let’s be the someone else, starting today.

A quick note: My last blog focused on how women in the arts and sports are helping to break gender inequality barriers. Well, I am happy to report that this same movement is happening in science too! In 2016, an initial 76 women in science embarked on a leadership journey to increase the awareness of climate science. The inaugural session of the year-long Homeward Bound program, which focused on empowering women in science, culminated in December 2016 with the largest female expedition in Antarctica. Here these brilliant, dedicated female scientists and engineers saw the effects of climate change first-hand and brainstormed how they, through “collaborative leadership, diverse thinking, and creative approaches,” could make an impact. 

SAP’s vision is to help the world run better and improve people’s lives. This is our enduring cause; our higher purpose. Learn more about how we work to achieve our vision and purpose.

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Nancy Langmeyer

About Nancy Langmeyer

Nancy Langmeyer is a freelance writer and marketing consultant. She works with some of the largest technology companies in the world and is a frequent blogger. You'll see some under her name...and then there are others that you won't see. These are ones where Nancy interviews marketing executives and leaders and turns their insights into thought leadership pieces..

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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Unleash The Digital Transformation

Kadamb Goswami

The world has changed. We’ve seen massive disruption on multiple fronts – business model disruption, cybercrime, new devices, and an app-centric world. Powerful networks are crucial to success in a mobile-first, cloud-first world that’s putting an ever-increasing increasing amount of data at our fingertips. With the Internet of Things (IoT) we can connect instrumented devices worldwide and use new data to transform business models and products.

Disruption

Disruption comes in many forms. It’s not big or scary, it’s just another way of describing change and evolution. In the ’80s it manifested as call centers. Then, as the digital landscape began to take shape, it was the Internet, cloud computing … now it’s artificial intelligence (AI).

Digital transformation

Digital transformation means different things to different companies, but in the end I believe it will be a simple salvation that will carry us forward. If you Bing (note I worked for Microsoft for 15 years before experiencing digital transformation from the lens of the outside world), digital transformation, it says it’s “the profound and accelerating transformation of business activities, processes, competencies, and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way.” (I’ll simplify that; keep reading.)

A lot of today’s digital transformation ideas are ripped straight from the scripts of sci-fi entertainment, whether you’re talking about the robotic assistants of 2001: A Space Odyssey or artificial intelligence in the Star Trek series. We’re forecasting our future with our imagination. So, let’s move on to why digital transformation is needed in our current world.

Business challenges

The basic challenges facing businesses today are the same as they’ve always been: engaging customers, empowering employees, optimizing operations, and reinventing the value offered to customers. However, what has changed is the unique convergence of three things:

  1. Increasing volumes of data, particularly driven by the digitization of “things” and heightened individual mobility and collaboration
  1. Advancements in data analytics and intelligence to draw actionable insight from the data
  1. Ubiquity of cloud computing, which puts this disruptive power in the hands of organizations of all sizes, increasing the pace of innovation and competition

Digital transformation in plain English

Hernan Marino, senior vice president, marketing, & global chief operating officer at SAP, explains digital transformation by giving specific industry examples to make it simpler.

Automobile manufacturing used to be the work of assembly lines, people working side-by-side literally piecing together, painting, and churning out vehicles. It transitioned to automation, reducing costs and marginalizing human error. That was a business transformation. Now, we are seeing companies like Tesla and BMW incorporate technology into their vehicles that essentially make them computers on wheels. Cameras. Sensors. GPS. Self-driving vehicles. Syncing your smartphone with your car.

The point here is that companies need to make the upfront investments in infrastructure to take advantage of digital transformation, and that upfront investment will pay dividends in the long run as technological innovations abound. It is our job to collaboratively work with our customers to understand what infrastructure changes need to be made to achieve and take advantage of digital transformation.

Harman gives electric companies as another example. Remember a few years ago, when you used to go outside your house and see the little power meter spinning as it recorded the kilowatts you use? Every month, the meter reader would show up in your yard, record your usage, and report back to the electric company.

Most electric companies then made a business transformation and installed smart meters – eliminating the cost of the meter reader and integrating most homes into a smart grid that gave customers access to their real-time information. Now, as renewable energy evolves and integrates more fully into our lives, these same electric companies that switched over to smart meters are going to make additional investments to be able to analyze the data and make more informed decisions that will benefit both the company and its customers.

That is digital transformation. Obviously, banks, healthcare, entertainment, trucking, and e-commerce all have different needs than auto manufacturers and electric companies. It is up to us – marketers and account managers promoting digital transformation – to identify those needs and help our clients make the digital transformation as seamlessly as possible.

Digital transformation is more than just a fancy buzzword, it is our present and our future. It is re-envisioning existing business models and embracing a different way of bringing together people, data, and processes to create more for their customers through systems of intelligence.

Learn more about what it means to be a digital business.

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Goswami Kadamb

About Goswami Kadamb

Kadamb is a Senior Program Manager at SAP where he is responsible for developing and executing strategic sales program with Concur SaaS portfolio. Prior to that he led several initiatives with Microsoft's Cloud & Enterprise business to enable Solution Sales & IaaS offerings.