How Quickly Are Industries Adopting the Internet of Things?

Kai Goerlich

Science fiction writer William Gibson is credited with saying, ”The future is already here—it’s just not evenly distributed.” Such is the case with the Internet of Things (IoT).

Digital business requires both data and the equipment to capture, store, manage, and analyze that data before enterprises can better inform their decisions, automate actions, and improve operations. IoT technology provides a way.

According to IDC, companies are ramping up their IoT investments rapidly, which can be seen in seven major industries with high levels of physical products or assets. Overall, the market research firm forecasts that IoT spending will increase 19% on average through 2018. Some industries, such as discrete manufacturing, have already invested significantly; others, such as healthcare, have spent less to date but are expected to expand quickly in the future.

Opportunities for Connection

The IoT is poised for rapid growth across a wide variety of industries that are connecting physical assets 2016_Q1_charted_09
Download the infographic here.

The IoT Creates New Revenue Models

The Internet of Things represents a new course for automation and data-enabled decision making. Companies can use data collected from sensors on machines to create new business processes and revenue models.

It’s no wonder the numbers that researchers at Gartner cite—6.4 billion connected things in use in 2016, an increase of 30% over 2015—sound both large (billions, up 30%) and small at the same time (we’re just getting started). The future is being distributed unevenly, but it will reach just about everywhere, eventually.


Utilities are still in the early stages of connecting their physical assets, a McKinsey Global Institute analysis finds. Deregulation and new market entrants are expected to prompt greater investments in the future. For example, smart metering systems and renewable energy sources, both growing activities in this industry, require IoT connections.

And to compete, utilities will need to invest in systems that monitor and analyze data from smart devices at homes and businesses, Tata Consultancy Services notes. IDC predicts that eventually this industry will see a high impact from its IoT investments because both utility companies and consumers have a stake in making energy production and use more efficient.


The industry as a whole has been slowed by regulatory and privacy concerns, Tata Consultancy Services research finds. But as healthcare providers install more equipment to connect medical devices to networks, they, too, will adopt more data-driven devices. Ultimately, IDC suggests that the IoT will have a high impact through monitoring applications and sensors that enable patients to manage their health and fitness.


The IoT promises to bring new capabilities to distributors, including new opportunities to sell goods through industrial vending machines and automated transportation systems. However, the industry as a whole has been what McKinsey Global Institute calls a medium-level player on
the road to digitization.


2016_Q1_charted_05Discrete Manufacturing

Companies ranging from consumer goods makers to industrial manufacturers are applying IoT investments to monitor production and the flow of goods. Sensors enable predictive applications to schedule maintenance for jet engines, for example. And consumer goods makers are starting to experiment with marketing applications enabled by machine sensors and smartphones, Tata Consultancy Services notes.


As VDC Research Group points out, the drive to digitize business has been going on since well before 2013. Prices for RFID transponders have dipped over the past decade, which has enabled retailers to affix tags to goods, speeding up inventory tracking and shipments processing and reducing shrinkage, RFID Journal reports.



Logistics firm DHL and networking vendor Cisco predict that there will be 50 billion connected devices by 2020, while making the point that this “represents only a tiny fraction of what could be connected—something on the order of 3% of all connectable things.” The resulting connectivity will reshape how decisions are made about the way goods are stored, monitored, serviced, and delivered. According to IDC, the IoT will have a high impact on the logistics industry because the benefits are clear and easy to measure.

2016_Q1_charted_08Process Manufacturing

Companies in process industries have been heavy investors in technologies that make their assets more productive, including enterprise resource planning and supply chain management software. Leading players see the IoT as a way to extend the value of these investments. For example, Deloitte researchers note that oil and gas companies can wring more efficiency from resource processing and distribution by collecting and analyzing data from sensors and by monitoring equipment to reduce unplanned equipment outages.

By Michael S. Goldberg and Kai Goerlich


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. Share your thoughts with Kai on Twitter @KaiGoe.

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

Christine Donato

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For more stories, join me on Twitter.


Christine Donato

About Christine Donato

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

Size Doesn't Matter For Businesses In The Digital Economy

Christine Donato

SAP_Talks_Banner_2When I first entered the job market, I interviewed at a few different companies, one of which was a small insurance firm outside Philadelphia. My interviewer was a C-level executive, and he gave me a piece of advice I’ll never forget. He said, “You know, at a large corporation, you’re going to learn a lot about a little. Here with us, at a small business, you will learn a lot about a lot.”

He meant, of course, that employees of small to mid-sized companies wear many hats.  And usually, their organizational leaders are accessible resources and serve as CEO, CMO, CIO, CFO, and more all at one time.

Size doesn’t matter

Today, small businesses can be just as successful as, if not more successful than, their larger competitors. Why? Because with the right technology, small businesses can easily cause positive disruption in the market.

Within the boom of the digital economy, small businesses now have the power to reshape their markets and industries. A couple popular examples of this are Uber disrupting the transportation industry and Airbnb disrupting the hospitality industry.

Both have significantly shaken their larger competitors because they are successfully leveraging the Internet of Things to provide customers with a simple and easy way to purchase a service. And according to a recent blog by Vivek Bapat, 70% of consumers will recommend brands that offer a simpler experience.  And 38% of consumers will pay a premium for it (The Digitalist).

Learn more… Listen to #SAPTalks

According to a recent Economist Intelligence Unit study, 59% of executives agree that in order for their businesses to survive with today’s customers, their businesses must embrace and adapt to hyperconnectivity.

To learn more about numerous small and mid-sized businesses that are ditching legacy processes and inside-the box thinking to become disruptive forces in their markets, check out the new podcast series, #SAPTalks…Small to Midsized Business, hosted by David Trites.

In about 20 minutes per episode, guest speakers from small and mid-sized companies share their unscripted and in-depth digital transformation experiences. They explain their industries, challenges, current technology projects, best practices, and lessons learned along the journey.

The first episode will air on the Voice America Channel on Tuesday October 13th and will feature Paula Muesse, CIO and CFO of Zhena’s Gypsy Tea. On the show, Paula will explain how Zhena’s adopted new technology to best sell organic, fair-trade, and competitive teas.

You can follow the conversation on Twitter by hash tagging #SAPTalks and by following @SAPSmallBiz.

Follow the blog series

Read about more companies that have broken the myth that SAP is only for big business:

How to be a World-Leading Publisher in a Digital World

Franklin Valve Shows How Small Business Tackles Rapid Growth

Who is Feeding China’s Half Billion Pigs?

How Prime Meats Cuts Through Business Complexity

High-Tech ERP Helps EvoShield Protect Athletes and Grow Business

Stick to Basics in Family Recipes and the Sausage Business

For more on how you can successfully sell into the small and mid-sized market, please click here.

For more stories, follow me on Twitter and LinkedIn.


Christine Donato

About Christine Donato

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

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.



Leveraging Digital Twins To Breathe New Life Into Your Products And Services

Thomas Kaiser

Are you familiar with the concept of the twin paradox? In physics, the twin paradox is a thought experiment in which one twin stays on Earth while the other travels in a spaceship at a high speed for a period of time. According to the special theory of relativity, the second twin will return home measurably younger than the first.

In a similar way, the concept of the digital twin can accelerate your business and breathe new life into your products and services.

But the digital twin isn’t just a thought experiment. Gartner lists digital twins as a Top 10 strategic trend for 2017. It’s part of a broader digital transformation on which IDC says companies will invest $2.1 trillion a year by 2019.

Already, smart companies are using digital twins to better understand operations, get closer to customers, and transform their business.

Connecting real and virtual

A digital twin is a virtual representation of a real-world product or service. That could be anything from a toaster to industrial machinery to complex processes. The virtual representation combines three types of information: business data, contextual data, and sensor data.

Business data covers information such as customer name, location, and service-level agreements. Contextual data includes details such as ambient temperature, humidity, and weather events. Sensor data involves things like machine speed, operating temperature, and vibration.

Sensor data is key because, while companies have been using digital twins for years, it’s only with the Internet of Things (IoT) that they’ve become cost-effective. Gartner predicts that 6.4 billion things will be connected this year, a 30% jump over 2015. By 2020, at least half of all new business processes will incorporate IoT – transforming live data into new value.

Drilling down on digital twins

How does a digital twin work? Let’s say you manufacture industrial drills. A digital twin can help you understand how customers use your drill. The goal is to continuously improve the product to increase customer satisfaction and identify opportunities for new products and services.

For example, you might discover that your drill malfunctions in certain situations. That can enable you to improve product design. Or it can let you help customers modify the way they use the drill to avoid problems.

Or, you might discover that customers use your drill not only to make holes but also to cut materials. That might lead you to develop a new product that’s purpose-built for cutting.

Or, maybe you discover that while customers want holes made, they don’t necessarily want to purchase and operate a drill. So rather than sell drills, you might offer a hole-drilling service. In other words, instead of charging customers for machinery they operate, you charge them for holes drilled by machinery you operate for them. Some SAP customers have been quite successful in making this kind of leap from products to services.

Digital twins across industries

Digital twins aren’t just for manufacturers. Insurers can apply digital twins in offerings like usage-based car insurance. Retailers can track how customers navigate the store and interact with products on the shelves. Cities can model areas for things like smart lighting. Ports can monitor weather, shipping traffic, containers, and trains and trucks entering and leaving.

Digital twins cover the entire lifecycle of an asset or process. In fact, they can form a foundation for an end-to-end, closed-loop value chain for smart, connected products and services, from design to production, from deployment to continuous improvement.

The promise of continuous improvement is why it’s increasingly important to integrate digital technologies into all products. As you leverage your digital twin to identify opportunities for new or better features, you can implement those improvements quickly and cost-effectively through firmware updates.

Implementing digital twins involves four steps:

  1. Integrate smart components such as sensors, software, computing power, or data storage into new or existing products.
  1. Connect the product to a central location where you can capture sensor data and enrich that sensor data with business and contextual data.
  1. Analyze that data on an ongoing basis to identify opportunities for product improvements, new products, or even new business models.
  1. Leverage these digital insights to transform your company — for example, by reducing costs through proactive avoidance of business interruptions, or by creating new business opportunities.

Of course, while those steps are easy to list, they can require significant effort to achieve. But digital twins are becoming a business imperative. Companies that fail to respond will be left behind. Those that embrace digital twins have the opportunity to better understand customer needs, continuously improve their products and services, and even identify new business models that give them competitive advantage.

Consumer demand for virtual reality is changing how businesses manage and operate. Learn how to transition From E-Business to V-Business.