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In-Memory: The Convergence Of Analytic And Operational Processing Is A Big Deal

Timo Elliott

For more than 40 years, organizations have been forced to run operational and analytic processes on different systems. The latency of disk-based databases and the high cost of live memory meant that combining operational and analytic processes just didn’t make economic sense.

Now new technology and falling costs are overturning a generation of analytics best practice. It’s becoming faster, simpler, and cheaper to use a single in-memory system for both operations and analytics.

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There have been roughly three phases of in-memory development:

(1) In-memory databases

This idea is far from new (one of the first to tout this approach as a differentiator was TM1 by Applix in the 1990s). But the economics have changed radically since the advent of 64-bit systems, and in the last few years in-memory technologies such as SAP HANA have proved their worth helping radically speed up and simplify business user access to information.

(2) In-memory analytic platforms

The power of in-memory isn’t limited to traditional structured data processing. It is also particularly well adapted for other types of analytic processing that require complex, high-speed calculations, such as predictive analytics. Today, this kind of processing is typically carried out using systems that are separate from the main database. Bringing them into a single system again simplifies and speeds up business analysis.

The latest version of SAP HANA integrates support for in-memory text analysis, predictive analytics, big data, and business calculations such as complex profitability and costing, or dynamically reallocating budgets.

(3) In-memory platforms

SAP HANA now includes full featured application server, web server, and development environment that allows developers to leverage the power of in-memory, pushing as much of the complex logic down into the database as possible.

In 2012, SAP started releasing applications that combine the best of operations and analytics in a single solution running on SAP HANA— including SAP CRM , SAP Business One, SAP Sales and Operations Planning. And SAP has just announced that the company’s core business suite of applications now runs on SAP HANA.

In-memory has already become the architecture of choice for the recent generation of cloud-based application vendors – now existing companies can get the same benefits for their on-premise systems, without radical disruption to existing applications.

The Benefits of Convergence

The ability to do have transactional processing and analytics on the same platform brings many benefits, including:

  • Faster, better analytics. Business people can access data the instant it has been updated, without complicated and expensive replication and aggregation. Analytics can be embedded into operational processes without having to worry about data inconsistency because of time lags.
  • Lower costs. Yes, in-memory architectures remains more expensive than disk, but having a single reporting system, and the reduced costs of data duplication and manipulation result in a compelling business case even without the business benefits of faster decisions.
  • Simplified application architectures. Most operational systems today require layers of cached data tables in order to provide acceptable performance. In-memory technologies hold out the promise of radically simplifying data application architectures. For example the number of data tables in a financial application could be reduced to just two – with all views of the data (balance sheet, etc) calculated on the fly, at any moment.
  • More flexibility. Simplified architectures make it update and adapt both analytic and operational systems. Changes require tweaks to metadata rather than dumping, recalculating, and reloading large quantities of data.
  • A ‘single source of truth’. This has long been a holy grail of the analytics industry. Reducing data duplication, and making it easier to carry out operational data governance in real time (data quality, master data management)  is a big step forward.

Of course, no technology is a silver bullet. In particular, in-memory systems don’t directly fix some of the biggest problems plaguing the provision of business analytics, notably the pains of data integration across multiple incompatible systems, and the politics of deciding common definitions for business concepts across the organization. And in-memory does nothing to ensure that business people actually make best use of the data that is provided.

But is it a big deal that we can now knock down a technical barrier that has plagued the industry for over 40 years? Yes indeed!

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About Timo Elliott

Timo Elliott is an innovation evangelist and international conference speaker who has presented to business and IT audiences in over forty countries around the world. A 23-year veteran of SAP BusinessObjects, Elliott works closely with SAP development and innovation centers around the world on new technology directions. His popular Business Analytics blog at timoelliott.com tracks innovation in analytics and social media, including topics such as big data, collaborative decision-making, and social analytics. Prior to Business Objects, Elliott was a computer consultant in Hong Kong and led analytics projects for Shell in New Zealand. He holds a first-class honors degree in Economics with Statistics from Bristol University, England.

Why 3D Printed Food Just Transformed Your Supply Chain

Hans Thalbauer

Numerous sectors are experimenting with 3D printing, which has the potential to disrupt many markets. One that’s already making progress is the food industry.

The U.S. Army hopes to use 3D printers to customize food for each soldier. NASA is exploring 3D printing of food in space. The technology could eventually even end hunger around the world.

What does that have to do with your supply chain? Quite a bit — because 3D printing does more than just revolutionize the production process. It also requires a complete realignment of the supply chain.

And the way 3D printing transforms the supply chain holds lessons for how organizations must reinvent themselves in the new era of the extended supply chain.

Supply chain spaghetti junction

The extended supply chain replaces the old linear chain with not just a network, but a network of networks. The need for this network of networks is being driven by four key factors: individualized products, the sharing economy, resource scarcity, and customer-centricity.

To understand these forces, imagine you operate a large restaurant chain, and you’re struggling to differentiate yourself against tough competition. You’ve decided you can stand out by delivering customized entrees. In fact, you’re going to leverage 3D printing to offer personalized pasta.

With 3D printing technology, you can make one-off pasta dishes on the fly. You can give customers a choice of ingredients (gluten-free!), flavors (salted caramel!), and shapes (Leaning Towers of Pisa!). You can offer the personalized pasta in your restaurants, in supermarkets, and on your ecommerce website.

You may think this initiative simply requires you to transform production. But that’s just the beginning. You also need to re-architect research and development, demand signals, asset management, logistics, partner management, and more.

First, you need to develop the matrix of ingredients, flavors, and shapes you’ll offer. As part of that effort, you’ll have to consider health and safety regulations.

Then, you need to shift some of your manufacturing directly into your kitchens. That will also affect packaging requirements. Logistics will change as well, because instead of full truckloads, you’ll be delivering more frequently, with more variety, and in smaller quantities.

Next, you need to perfect demand signals to anticipate which pasta variations in which quantities will come through which channels. You need to manage supply signals source more kinds of raw materials in closer to real time.

Last, the source of your signals will change. Some will continue to come from point of sale. But others, such as supplies replenishment and asset maintenance, can come direct from your 3D printers.

Four key ingredients of the extended supply chain

As with our pasta scenario, the drivers of the extended supply chain require transformation across business models and business processes. First, growing demand for individualized products calls for the same shifts in R&D, asset management, logistics, and more that 3D printed pasta requires.

Second, as with the personalized entrees, the sharing economy integrates a network of partners, from suppliers to equipment makers to outsourced manufacturing, all electronically and transparently interconnected, in real time and all the time.

Third, resource scarcity involves pressures not just on raw materials but also on full-time and contingent labor, with the necessary skills and flexibility to support new business models and processes.

And finally, for personalized pasta sellers and for your own business, it all comes down to customer-centricity. To compete in today’s business environment and to meet current and future customer expectations, all your operations must increasingly revolve around rapidly comprehending and responding to customer demand.

Want to learn more? Check out my recent video on digitalizing the extended supply chain.

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Hans Thalbauer

About Hans Thalbauer

Hans Thalbauer is the Senior Vice President, Extended Supply Chain, at SAP. He is responsible for the strategic direction and the Go-To-Market of solutions for Supply Chain, Logistics, Engineering/R&D, Manufacturing, Asset Management and Sustainability at SAP.

How to Create a Culture of Continuous Learning

Polly Traylor

The digital age has transformed every aspect of corporate processes, and corporate learning is no exception. We have mobile apps, social media, and online courses to help us achieve just-in-time learning when we identify a gap in knowledge at work or in our personal lives. Companies everywhere face the challenge of training and reskilling their workforces to keep pace with technological change, business disruption, and global competition.

Yet the traditional approach to learning, accomplished through classroom training, has been transitioning quickly to more cost-effective and real-time learning methods. This transition is crucial in enabling employees to learn new technologies at the rapid pace that vendors deliver them by, along with associated skills, such as data analysis.

Additionally, Millennials, the largest workforce demographic today, are demanding new methods for learning that center on social collaboration, video, and mobile apps. Corporate learning departments are determining how and where to blend face-to-face learning with digital learning methods.

Our experts discuss the trends and challenges ahead.

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qa_qHow is the digital world affecting corporate learning today?

Elliott Masie: We’ve seen a huge spike in the use of tracked online learning. Depending on the industry, as much as 70% of learning is now driven by compliance or regulatory experiences and as much as 90% of that is delivered digitally, either to a mobile phone or a desktop or through a live Webinar. If it’s skill building, such as how to delegate in a positive way as a leader, you’ll want a blended model where some content is delivered face-to-face. When you don’t have digital learning, the irony is you have a limited supply of learning and the supply goes to the people who need it the least – those who are really enthusiastic and proactive. Once you add a digital component to learning, the supply becomes limitless, available to talent across the organization.

Karie Willyerd: My daughter wanted to apply to the Centers for Disease Control for an internship, which required statistics knowledge. So she went to Khan Academy, took a few modules, and passed the test. It’s the idea that you can instantly get the training you need. I think the softer skills, such as leadership skills, will still require a classroom. But companies are getting increasingly virtual. There will be a very limited percentage of training that is done live in the future.

Bernd Welz: The general shelf life of knowledge is shortening with the increasing pace of digital transformation, so companies need a strategy to push knowledge and make sure that knowledge is always fresh. That’s where the digital learning platforms come into play. A manager will be able to say, ”Here’s a piece of knowledge that you really need.” With the learning management platform the manager can then very effectively dispatch the course to the employee and check later to see whether the learning was completed. Learning is much more real time and proactive.

qa_q

Digital learning often consists of short snippets of content, with a video or social element, rather than longer courses that take place over a day or two. Is there a danger to fly-by-night learning?

Jim Carroll: There’s always a phrase I use with Millennials, whether it’s about video games, how they ingest knowledge, or how they play sports: it’s not bad, it’s just different. The older generations tend to retain their values and understanding of what education is, but this generation has grown up in an entirely different world. Millennials think differently about what the world is and where they can get knowledge.

Willyerd: We need to connect with other people in our learning. In one of the studies we did for my book The 2020 Workplace, people said they don’t really like e-learning. We have to come up with ways to make e-learning more sociable.

qa_q

How can companies create an effective learning culture as they transform their learning organizations to digital and just-in-time learning?

SAP_Learning-Isbell_QA_images2400x1600_2Masie: Southwest Airlines has recognized that learning is continuous. Its goal is to launch its learning program and then include follow-ups and touchbacks for the learners rather than just teach in traditional classes.

Emirates, too, has figured out that digital is where the bulk of learning takes place. It has a culture of continuous learning whereby managers regularly talk to the people about what they’re learning or bump them to new or better learning activities or resources.

Carroll: Organizations are realizing that they need to deliver knowledge where it wasn’t required before, and the time they have to do it in is compressed. Organizations used to plan a year out for the changes that were going to occur in their industry. But business is speeding up to such a degree that all of a sudden we have to get ready now, because the change is going to have a big impact on us in the next three months.

qa_q

Are corporations doing enough to invest in learning transformation?

SAP_Learning-Isbell_QA_images2400x1600_3Willyerd: Eventually, people are going to realize ”Wow, we’ve got a real reskilling thing to do here!” When you look at how much the United States puts into training as a percentage of overall revenue, I think we are in 25th place or something ridiculous like that. But how did Korea go from where it was to being such a powerhouse? The government subsidized half of all training budgets for companies. I don’t think we’re going to go that far, but I can see it being a tax deduction or a tax incentive.

I know of a large hotel chain that implemented an online social collaboration space and began to use it for innovation ideas. It got people together from different brands who could share what they were doing. Before the collaboration space, the hotel chain didn’t have a way to do this effectively; now it can foster cross-brand innovation. Corporate leaders need to understand that learning does have a bottom-line benefit when there’s the right kind of investment in it.

Welz: In many industries, companies need to transform themselves, and knowledge is the key ingredient of a successful transformation. You need to know what the state of the art is, and you can only do that if you have a systematic approach to learning. You can’t just leave it to up to the employees hoping that they will read the right books or find the right training course on their own. The transformation is much less stressful if you can assure employees that they will get the knowledge they need to be successful.

Polly Traylor is a freelance writer who reports frequently about business and technology.

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About Polly Traylor

Polly S. Traylor writes about business, technology and healthcare from Denver, Colorado.

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IoT In Discrete Manufacturers: Create A Live Business Operation Around Connected Products

Kai Goerlich

While discrete manufacturing is used in a diverse range of industries, including automotive, aerospace, defense, construction, industrial machinery, and high tech, all of them face common and tough challenges such as higher resource volatility, more competition, increasing customer expectations, and shorter innovation cycles.

According to a study by a Roland Berger (see chart), product complexity has increased dramatically in the past 15 years. Manufacturers have to cope with two overlapping trends: the variety of products is constantly increasing and has more than doubled in the past 15 years, and, in parallel, product lifecycles have gotten about 25% shorter. These factors are putting an increasing pressure on margins, on supply and procurement systems, and on overall business models. According to Roland Berger, managing this complexity could reduce costs by roughly 3% – and certainly digitization can help improve this margin.

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The threats and potentials of digitization

Adapting to the age of hyperconnectivity is a matter of life and death for the majority of companies, according to a study by the Economist Intelligence Unit. More than half of enterprises feel very strong competitive pressure from digital offerings by their traditional competition, established companies using digital to enter their market, and digital startups. Certainly, the competition is not waiting, and neither will today’s well-informed digital customers, who want more choice, better customization, and more information around the buying process. While digitization might add another disruptive dimension to an already rising complexity, discrete manufacturers are seeking the benefits of digitization. They are already proactively exploring the use of the IoT to better connect their supply chains, assets, and products, according to an IDC white paper, The Internet of Things and Digital Transformation: A Tale of Four Industries, sponsored by SAP.

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Most manufacturers start with less complex projects, such as enhanced visibility or tracking, and progress to more sophisticated processes that require automated or predictive workflows, according to IDC. The findings of the study suggest that companies should start their IoT projects with the overarching goal of a live business operation already in mind. By combining three IoT use cases for manufacturing, i.e. connecting products, creating a connected shop floor with customization, and extending digital business models (see chart), companies will create a competitive business operation that fully exploits the digital opportunities.

Connecting products to improve innovation

Using IoT for innovation is a highly underestimated potential of digitization. A significant percentage of new products fail, and the associated R&D and marketing costs are lost. Customers already expect their products to come with a certain degree of interactivity and this demand will certainly grow in the future. According some estimates on the adoption of connected technology by consumers, the ratio of connected and interactive products will rise to approximately 20% on average by 2020, according to Forbes. This is a conservative estimate, and in some segments the ratio might increase much faster.

By digitizing current products and launching fully digitized ones, manufacturers can significantly reduce the risk of new product failures, as IoT-based products will enable them to monitor the actual use and performance of their products, get live feedback from their customers, and adopt future product innovation. IDC expects that by 2017, 60% of global manufacturers will use IoT to sense data from connected products and analyze that data to optimize the product portfolios, performance, and manufacturing processes. Similarly, the integration of IT assets and information with operational technology in the plant and the supply chain is also on the roadmap, if not already started.

Connecting the shop floor

Digitization offers the possibility to oversee every step in the manufacturing process, from customer demand, through production, and across the complete supply chain. The IDC study identified two IoT use cases – strategic asset management and customer experience – that seem to be very attractive for discrete manufacturing.

1. Strategic asset management

Manufacturers should start to digitize all of their assets in the production process and use IoT-based preventive and predictive maintenance scenarios in the plant and supply chain to reduce downtime and improve utilization. Using the information generated from digitization and IoT, businesses can evaluate use patterns and maintenance routines of their inventory and assets and optimize operations. Fixed assets can account for as much as one-third of all operating costs, so under today’s cost pressures a digital asset management surely matters. To fully use the potential of IoT and the real-time information gathered from assets, devices, and machines, companies need to ramp up their analytical and decision-making capabilities. Anecdotally, companies report that IoT use cases (such as remote maintenance) changed the way they thought about data and got them thinking significantly differently about information and insights.

2. Customization for customer experience

Demand for more choice, flexibility, and customized products is growing fast and estimated to be 15% of all products by 2020, according to MIT Smart Customization Group. Depending on size, material, and complexity, that percentage might be significantly higher. However complex the challenge for manufacturers might be, connected production in real-time is the basis, and it needs the right data from production capabilities, supply, equipment, and workforce, combined with all customer preferences. Getting the customer into the customization and production process is increasingly important for an improved customer experience, so IoT should be used to connect the products and, with it, the customer. This will not only give companies valuable data about user preferences and ideas for product innovation and improvements, but it will allow them to plan the customization of products much more efficiently.

Digitally enhanced business models

Digitization is by now a synonym for disruption. According to a study by the Economist Intelligence Unit, 60% of companies think that digitization is the biggest risk they face. More than half of companies feel competitive pressure from digital offerings by their traditional competition and digital startups. As IDC found, discrete manufacturers are already actively exploring the IoT opportunities, so the change is already underway.

As we pointed out previously, the customer experience of choosing and buying a product is increasingly important, but it does not stop there. IoT-connected products will get the customer into an ongoing interaction with the product vendor and/or retailer, enhancing the buying and use experience. Moreover, companies can use this connection to expand their business models. In its study, IDC mentions a wider range of ideas that manufacturers already explore, such as remote maintenance, refill and replenishment, contracting, product performance, training, and location-based services. While they may not be applicable for all companies, they show the wide range of possibilities and opportunities. Digitization may be a threat for some traditional business models and companies, but it offers huge potentials for those who focus on the customer experience.

Creating a live business operation

The huge potential that IoT offers is less the physical connection of things, machines, and devices, and more the opportunity to create a live business operation based on an advanced data strategy and analytics. While all aspects of IoT have large innovation opportunities on their own, the combination of connected products, customization, and digitally expanded business models promises the biggest benefits for discrete manufacturers. Thus any IoT strategy – wherever it starts – should be created with a larger digitization goal in mind.

Conclusion

  • Connecting products and strategic asset management has big potentials for discrete industries.
  • The combination of connected products, customization, and digitally expanded business models promises the biggest benefits.
  • Companies should create a live business operation with advanced data and analytical skills to use the full potential of IoT.

For more details and information, please read IDC’s IoT whitepaper IoT and Digital Transformation: A Tale of Four Industries and look for future IoT papers that delve deeper into the IDC study’s findings.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Idea Director of Thought Leadership at SAP. His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

What Going Digital Really Means For Your Supply Chain

Amr El Meleegy

Like the air we breathe, the term “digital” permeates every facet of our lives, so much that it’s become a fact of life that we take for granted. We use digital technology to communicate information, learn new skills, sell goods, shop, and much more. While most find this new way of life revolutionary, others might argue that there is nothing really new about digital. Why? Because they have been doing digital forever.

For decades, supply chains have incorporated digital technologies like programmable logic controllers, radio-frequency ID, EDI, and electronic documents into their processes and operations. If that’s digital transformation, supply chain operators have long-boarded that train before anyone else thought of coming along for the ride. Over the last 25 years, these technologies have optimized and streamlined the function dramatically – evolving rapidly to accelerate processes, squeeze costs, and offer better quality.

So why are we still talking about digitally transforming the supply chain? During the SAP Radio episode Digital Transformation Across the Extended Supply Chain, from the Coffee Break with Game-Changers Future, Rick Imber, national vice president for the Extended Supply Chain Center of Excellence at SAP, stated “The key is going digital with your business processes and eliminate all those manual steps so you can give the customer what they want. That’s what supply chain digital transformation is all about – the customer.”

Redefining the supply chain one digital innovation at a time

When executives say that their supply chain is going through a digital transformation, they are not referring to the traditional model of supply, demand, and fulfillment. They really mean the extended supply chain – a close integration with other lines of business units that impact and are influenced by the supply chain such as product development, manufacturing, sales, and operations to name a few. Most important, that entire network needs to revolve around delivering the best-possible customer experience.

According to Michael Yagdar, principal and America’s SAP leader at Ernst and Young, the demand for instant service in near perfect quality is bringing additional pressure to the supply chain. “Every single day, companies provide excellent service or ultimate flexibility to the customer. But the implications for the business are significant. Just look at how the supply chain needs to evolve to meet that demand. Customer intimacy is now the source of differentiation,” he stated during the panel discussion with Imber.

Take smart vending machines, for example. With this new beverage delivery system, consumers can personalize their drink, choosing different flavors and ingredients by simply pressing a few buttons on a single machine. While this may sound like a great differentiator, this is only half of the story. By linking the kiosk to a supplier network, enterprises can provide insights to their suppliers into what consumers prefer and how much they pour at a single visit. Not only will suppliers understand which products are selling and need to be replenished, but they can also pinpoint an opportunity to offer a new flavor on store shelves.

Another great digital technology that is evolving the supply chain is 3D printing. For Barilla, this technology is revolutionizing its pasta production and realigning its entire supply chain. The brand can now offer more than just five varieties of pasta to restaurants, retailers, and wholesalers, giving them a choice of ingredients (vegan!), flavors (Mediterranean tomato!), and shapes (soccer balls to celebrate my favorite team’s win!). By putting a 3D printer in its customers’ facilities, Barilla’s supply chain must anticipate and fulfill every possible configuration. The whole notion of demand anticipation and fulfillment and replenishment is completely flipped. Instead, the supply chain needs to think about arriving at the customer site to service this piece of equipment.

Powering the supply chain of the future

In such a dynamic environment, supply chains – as well as the rest of the business – need a new digital core that can provide full, immediate access to accurate, real-time information about their customers, supplier network, and competitors. Having the right information can make a difference when producing and distributing custom products with shorter lead times and smaller runs to meet customer demand while keeping costs under control, minimizing inventory buffers, and driving productivity to peak levels.

With a new digital core any change in supply and demand can be quickly detected and resolved throughout the supply chain. A large order needs to be suddenly shipped overnight? No problem. The digital core can identify any production gaps efficiently, send an alert about the demand-and-supply imbalance, and provide various options to fix it. Now, the supply-chain process happens in real time with increased visibility and decision support

No matter how efficient your processes, the supply chain is only as good as the supplier network. By integrating the digital core into your suppliers’ network, companies can help ensure that they are using the right and best suppliers.

The supply chain of the future: networked, connected, with a brand-new operational model that keep customers coming back for more.

To get a personalized digital core business scenario recommendations report visit https://www.s4hana.com.

For an in-depth look at the digital supply chain and other influences affecting business in the digital age, download the SAP eBook, The Digital Economy: Reinventing the Business World.

Discover the multiple factors driving digital transformation in the SAP eBook, Digital Disruption: How Digital Technology is Transforming Our World.

This article originally appeared in SAP Business Trends. It was modified for Digitalist Magazine.

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Amr El Meleegy

About Amr El Meleegy

Amr El Meleegy is a senior director of Product Marketing at SAP. He is currently responsible for our next-generation suite of business applications, SAP S/4HANA.