5 Ways The Internet Of Things Is Changing The Game For Education And Learning

Geetika Tripathi

There’s been so much buzz about the Internet of Things (IoT) lately – maybe not as much as for the U.S. presidential campaigns, but it’s pretty close. For today’s youngsters, the day will come when a computer is no longer seen as a separate object or device. With technology very much entwined in the basic fabric of everyday living, our children might feel offended if their obedient room lamp doesn’t immediately acknowledge their presence by switching itself on.

Over time, the IoT will be a mindset, rather than a steady stream of technology. Even though every other device in our home, workplace, or surrounding environment will be intelligent enough to connect and talk to each other, people will inevitably focus on the transformational possibilities for our world.

The realm of education is no exception to the IoT’s influence. Until now, educational technology has pivoted more or less around virtual conferencing and classrooms, online tutorials, and similar offerings. However, this is only the beginning. Here are five ways the IoT can transform education.

1. Connect academies all over the map

Some of the latest IoT artillery in this field includes digital highlighters, smart boards, and even smarter boards. This means your printed text could be digitally transferred to your smartphone or any other app at an incredible speed through tools like C-Pen and Scanmarker. Interactive boards can receive, acknowledge, and reciprocate information, simplifying and accelerating the overall learning experience.

Just imagine a scenario where students sitting in a classroom or at their desk at home can interact with their classmates, mentors, and educators scattered across the world. Now, let’s suppose the lesson of the day is focused on sea life. To give students a really exciting – and highly educational – experience, the teacher decides to access live information generated through sensors and live feeds monitoring a particular body of water.

2. Conserve and sustain to survive and flourish

With the aid of the IoT, a variety of options are possible in terms of environmental and energy conservation, ecosystem regulation, traffic, and transport, to name a few, that can help schools build up their budgets and offer better learning opportunities. For example, a school district in Pennsylvania saved a fortune on energy by using the IoT to support its energy monitoring and control program and reinvested the savings into its education programs. After all, living a green lifestyle is the way to go for all of us – we might as well put it to work so we can invest in more critical areas.

3. Win over students (and parents) with a safe and secure learning environment

The safety and security of students are paramount – whether you are a parent, educational authority, security official, or concerned citizen. With empowered sensors, RFIDs, cameras, and connected devices, monitoring and surveillance of entire buildings is possible. Instant notifications, alerts, and configured actions would be a significant addition to the security and safety of schools and other educational institutions.

4. Grant parity for all

The connected world of everything has a lot to offer students who need modified learning plans and exceptions. There are already a number of devices, tools, and apps that create appropriate learning experiences while bringing them on par with the rest of the class. One such example is the Lechal shoe project, which enables the visually challenged to better navigate the world through technology.

5. Turn learners into creators

The IoT indeed promotes and paves the way for creativity – and for children, there’s nothing better than learning the nuances and applications of hyperconnectivity firsthand. After all the predictions regarding the enormous number of connected communication and decision-making devices in the years to come, this is an excellent opportunity for schoolchildren to understand, build, and control such systems themselves.

The future trajectory of IoT-enabled education: Bumpy or smooth?

The IoT has the potential to strip away common barriers in education such as economic status, geography, language, and physical location. But once the initial glitz of being “super and hyperconnected” fizzles out, there are more important questions that need to be answered.

Converging education with technology is not just about bringing learning resources or making learning simpler and faster – it’s about quality, impact, and community acceptance too. Even with all the fancy resources and technology at our children’s fingertips, it is still a long and tough road ahead for the IoT to reform education in a path-breaking and everlasting way. Nevertheless, the seeds are sown well and the harvest appears to be promising.

Learning doesn’t stop when you graduate; if you want to be successful, it’s a lifelong endeavor. Learn How to Create a Culture of Continuous Learning.

Comments

Geetika Tripathi

About Geetika Tripathi

My association with SAP is eight wonderful years. I have a disposition for the latest technological trends and a fascination for all the digital buzz apart from the world of process orchestration, cloud, and platforms.

Explore The Future Of Retail

Joerg Koesters

Today’s shoppers want personalized service. They expect an omnichannel experience where they can connect directly to retailers across social media, in-store, and through websites. They want to be able to see an Instagram photo of an outfit, click on a link, and have it delivered to their door within days. How can retailers compete in this market? It all comes down to digitalization. Creating better information access and providing on-the-go connectivity to consumers is critical.

Statistics and trends show shoppers are ready

Consumers today are ready to embrace a digital future. And, in many ways, they are already doing so. A survey from PWC.com shows that of 24,000 shoppers surveyed across 29 countries, 56% have shopped at Amazon.com and 47% own or plan to buy a wearable, connected device. More so, 39% of these shoppers are turning to social networks to gain insight and inspiration into what they purchase. Considering how important a connected retail experience is to consumers, retailers must take action to implement solutions.

Yet, many worry about costs. Over the last few years, we’ve physical retailers have seen less foot traffic in their stores as e-commerce grows by double digits. According to Fox Business, 24 large retailers have announced they are closed stores due to the industry’s overbuilt landscape. Simply, there are too many stores in some markets, making it harder to compete for shoppers. With so much uncertainty, investments need to be thoroughly researched. The connection of investment to business value needs to be made explicitly clear.

Digital investments allow retailers to build brand awareness, provide just-in-time services, and offer personalized interaction. It is these services and connection points that help retailers compete across the board. Take a closer look at some of the ways today’s consumers are demanding change and how retailers of all sizes can facilitate it.

Retailers are already poised to embrace digitalization, data analytics, and IoT

The good news is many retailers do not have to overinvest. Many of the technology components necessary to develop this type of connectivity are already in place. In a recent S.M.A.C. Talk Technology podcast, Oliver Grob, solutions manager within the Retail Industry Business Unit with SAP, expressed the same view. “You have cameras, you have interaction sensors, Bluetooth beacons, products which have intelligence techs on their RFID, and so many possibilities [that] what you can do and the level of insight into the retail business is dramatically raised compared to what retailers really know about their business.”

With this groundwork in place, retailers have access to the data they need to create customer-first decisions and services. Utilizing beacon sensors and the Internet of Things (IoT), retailers can gather a better level of insight into where consumers go when they enter a mall, what they buy, and what they desire. Applying advanced analytics to this sensor data can allow retailers to provide a better end result to virtually any customer who walks in the door.

Connecting with consumers through technology

Today’s connected shoppers are making it easier for retailers to provide instant personalized connections before, during, and after a physical shopping experience.  Grob says in the podcast, “Today we have smartphones all over the place that are connected all the time. They [shoppers] have GPS. So you have the possibility to sense what the customer is doing; what he is wanting. I mean, you can even start chatting with him on the spot. So you have the possibility to connect to the customer.”

Imagine a world in which a consumer gets help on the spot. The shopper visits a retailer and finds a pair of shoes to buy. But the shopper has a question. Instead of waiting for a sales associate, the shopper logs into an app, uses a chatbot to ask key questions, and makes a buying decision. What’s more, the shopper who doesn’t want to carry the shoes through the mall can push a few buttons on a smartphone and get the product delivered to their door.

Improving offerings to meet customer demand in advance with data

Data is critical throughout this process. With data, retailers are better enabled to make customer-focused decisions. They no longer need to manage that data either. Solutions are available to fill in that gap in real time. “You need to have the right things for the customer. You need to have the right answers, the right products, the right reaction, and the right time to deliver something. So to tackle this, of course, you need to analyze a lot of data. You need to know what is out there in the community, what’s hip, what Facebook likes, what Instagram likes, and all the social media,” continues Grob.

With this type of data, processed in real time by technology solutions, retailers can answer all of these questions and facilitate a strong sense of satisfaction from their shoppers. Buyers today have dozens of options for making a purchase. The companies that are able to stand out, solve customers’ problems, and – most importantly – connect with customers when they need and want that connection are the retailers that will flourish in a changing retail landscape.

Exploring the connectivity possible in retail is every company’s need

Achieving any of these goals takes connectivity and a dedication to innovation. It also takes partnerships with companies already creating positive results. Minimizing costs, personalizing service, and delivering incredible solutions at competitive prices are a possibility with innovations enabled by technologies such as machine learning, advanced analytics, and IoT.

Explore more of the ways retailers are transforming this industry with SAP.  Take a few minutes to listen to the full podcast from SAP’s Oliver Grob at S.M.A.C. Talk Technology.

Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading Accelerating Digital Transformation in Retail. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?

Comments

Joerg Koesters

About Joerg Koesters

Joerg Koesters is the Head of Retail Marketing and Communication at SAP. He is a Technology Marketing executive with 20 years of experience in Marketing, Sales and Consulting, Joerg has deep knowledge in retail and consumer products having worked both in the industry and in the technology sector.

How IoT, Machine Learning, And Digital Twins Will Transform Real Estate

Konstanze Werle

“Location, location, location” has long been regarded as the most critical factor in determining real estate value. Now, technology is disrupting this essential truth, adding a new dimension to a building’s value determination. Enterprise-level Internet of Things (IoT) applications, coupled with machine learning and building management system (BMS) integration, are enabling dramatic advancements in building efficiency and creating new revenue generation opportunities for commercial real estate companies.

Digital twins, which are virtual representations of real-world assets, are taking this one step further. By creating new virtual and augmented reality opportunities, digital twins can streamline building development and enhance the relationship between owner and tenant.

Beyond motion sensors and smart thermostats: Understanding the full scope of IoT integration for commercial real estate

When most consumers think about “smart buildings,” motion sensors and smart thermostats are two of the first things to come to mind. But smart building technology has progressed far beyond these consumer-friendly touch points. Contemporary buildings have hundreds or even thousands of sensors reporting vast quantities of data. This explosion of sensors has led to an exponential explosion of data that most commercial real estate (CRE) companies struggle to process and analyze.

Every piece of building equipment has a sensor continuously reporting status. While building managers are trying to use these sensors to proactively identify maintenance needs, that’s where most use stops. According to SAP’s Michael Shomberg, most CRE companies are not yet able to maximize overall utilization and realize true cost management benefits. That’s left some CRE executives wondering if the hype around IoT building management systems (BMS) is justified. After all, data without insights is, fundamentally, just a jumble of numbers.

IoT sensors, machine learning, and digital twins: Turning data into actionable insights

Consider a contemporary facility manager, for example. Today’s facility managers must monitor multiple screens at once, checking the building’s security system, equipment system, and lighting system, in addition to monitoring energy usage feedback from the utility company. IoT sensors and machine learning are changing this by centralizing the data, identifying which elements are most important, and turning this critical data into actionable insights.

Technology advancements like digital twinning and augmented reality will also make a difference. “As buildings are getting more and more complex, new systems and new capabilities are getting in there and the facility managers are challenged to keep up,” says Shomberg in the S.M.A.C. Talk Technology Podcast. “So what we’re going to have to do is be able to deliver knowledge about all of these complicated systems at the point of need.”

CRE executives face three challenges: managing sensor data volume, identifying what’s relevant, and using these insights to impact building management outcomes and drive cost savings. That’s where machine learning comes in.

Machine learning is an application of artificial intelligence (AI) that provides systems with the ability to automatically learn and improve from experience without being explicitly programmed. In addition to rapidly analyzing disparate pieces of data, machine learning can automate and improve complex analytical tasks. It can evaluate data in real-time, adjusting behavior with minimal need for supervision, increasing outcome efficiency and accuracy. The result: CRE firms don’t just have data. They have actionable insights they can instantly apply to generate building-wide cost-savings.

Digital twins are key to exploring the impact of these insights and realizing full cost-saving benefits. Thanks to IoT sensors, a digital twin receives continuous, real-time data from the twin’s real-world object or asset. This unique, one-to-one correspondence makes it possible to test future scenarios, including potential performance enhancements, and proactively anticipate maintenance faults. Digital twins also mean that building construction can be monitored remotely. If you’re building a skyscraper in Dubai, for example, you could comfortably sit in your New York office and use the digital twin to check the view from the 55th floor, configure amenities, and even create a price quote– all without ever being on site. Named a “Top 10 strategic trend” by Gartner, digital twins are enabling disruptive IoT solutions for the commercial real estate industry.

Next steps: Why digital transformation matters for commercial real estate

The real estate market is poised for significant growth over the next 30 years. Two out of three people are projected to live in cities by 2050. Currently, buildings account for 40 percent of total energy consumption, yet 90 percent of buildings lack the controls to be able to actually implement energy cost savings, reports Shomberg in the S.M.A.C. Talk Technology Podcast. CREs that invest in next-generation IoT, machine learning, and digital twinning stand to gain a critical first-mover advantage by addressing these unmet needs.

Right now, CRE firms have a unique window of opportunity to differentiate themselves within the real estate market. CRE firms that invest in machine learning and digital twinning will be better positioned to turn data into actionable insights– identifying unmet needs, transforming the customer experience, and realizing significant cost savings.

To learn more about how digital transformation is disrupting commercial real estate, listen to the S.M.A.C. Talk Technology Podcast with Michael Shomberg.

Hear the full podcast episode here. For more insight on digital leaders, check out the SAP Center for Business Insight report, conducted in collaboration with Oxford Economics, “SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart.”

Comments

Konstanze Werle

About Konstanze Werle

Konstanze Werle is a Director of Industries Marketing at SAP. She is a content marketing specialist with a particular focus on the travel and transportation, engineering and construction and real estate industries worldwide. Her goal is to help companies in these industries to simplify their business by sharing latest trends and innovation in their industry.

The Blockchain Solution

By Gil Perez, Tom Raftery, Hans Thalbauer, Dan Wellers, and Fawn Fitter

In 2013, several UK supermarket chains discovered that products they were selling as beef were actually made at least partly—and in some cases, entirely—from horsemeat. The resulting uproar led to a series of product recalls, prompted stricter food testing, and spurred the European food industry to take a closer look at how unlabeled or mislabeled ingredients were finding their way into the food chain.

By 2020, a scandal like this will be eminently preventable.

The separation between bovine and equine will become immutable with Internet of Things (IoT) sensors, which will track the provenance and identity of every animal from stall to store, adding the data to a blockchain that anyone can check but no one can alter.

Food processing companies will be able to use that blockchain to confirm and label the contents of their products accordingly—down to the specific farms and animals represented in every individual package. That level of detail may be too much information for shoppers, but they will at least be able to trust that their meatballs come from the appropriate species.

The Spine of Digitalization

Keeping food safer and more traceable is just the beginning, however. Improvements in the supply chain, which have been incremental for decades despite billions of dollars of technology investments, are about to go exponential. Emerging technologies are converging to transform the supply chain from tactical to strategic, from an easily replicable commodity to a new source of competitive differentiation.

You may already be thinking about how to take advantage of blockchain technology, which makes data and transactions immutable, transparent, and verifiable (see “What Is Blockchain and How Does It Work?”). That will be a powerful tool to boost supply chain speed and efficiency—always a worthy goal, but hardly a disruptive one.

However, if you think of blockchain as the spine of digitalization and technologies such as AI, the IoT, 3D printing, autonomous vehicles, and drones as the limbs, you have a powerful supply chain body that can leapfrog ahead of its competition.

What Is Blockchain and How Does It Work?

Here’s why blockchain technology is critical to transforming the supply chain.

Blockchain is essentially a sequential, distributed ledger of transactions that is constantly updated on a global network of computers. The ownership and history of a transaction is embedded in the blockchain at the transaction’s earliest stages and verified at every subsequent stage.

A blockchain network uses vast amounts of computing power to encrypt the ledger as it’s being written. This makes it possible for every computer in the network to verify the transactions safely and transparently. The more organizations that participate in the ledger, the more complex and secure the encryption becomes, making it increasingly tamperproof.

Why does blockchain matter for the supply chain?

  • It enables the safe exchange of value without a central verifying partner, which makes transactions faster and less expensive.
  • It dramatically simplifies recordkeeping by establishing a single, authoritative view of the truth across all parties.
  • It builds a secure, immutable history and chain of custody as different parties handle the items being shipped, and it updates the relevant documentation.
  • By doing these things, blockchain allows companies to create smart contracts based on programmable business logic, which can execute themselves autonomously and thereby save time and money by reducing friction and intermediaries.

Hints of the Future

In the mid-1990s, when the World Wide Web was in its infancy, we had no idea that the internet would become so large and pervasive, nor that we’d find a way to carry it all in our pockets on small slabs of glass.

But we could tell that it had vast potential.

Today, with the combination of emerging technologies that promise to turbocharge digital transformation, we’re just beginning to see how we might turn the supply chain into a source of competitive advantage (see “What’s the Magic Combination?”).

What’s the Magic Combination?

Those who focus on blockchain in isolation will miss out on a much bigger supply chain opportunity.

Many experts believe emerging technologies will work with blockchain to digitalize the supply chain and create new business models:

  • Blockchain will provide the foundation of automated trust for all parties in the supply chain.
  • The IoT will link objects—from tiny devices to large machines—and generate data about status, locations, and transactions that will be recorded on the blockchain.
  • 3D printing will extend the supply chain to the customer’s doorstep with hyperlocal manufacturing of parts and products with IoT sensors built into the items and/or their packaging. Every manufactured object will be smart, connected, and able to communicate so that it can be tracked and traced as needed.
  • Big Data management tools will process all the information streaming in around the clock from IoT sensors.
  • AI and machine learning will analyze this enormous amount of data to reveal patterns and enable true predictability in every area of the supply chain.

Combining these technologies with powerful analytics tools to predict trends will make lack of visibility into the supply chain a thing of the past. Organizations will be able to examine a single machine across its entire lifecycle and identify areas where they can improve performance and increase return on investment. They’ll be able to follow and monitor every component of a product, from design through delivery and service. They’ll be able to trigger and track automated actions between and among partners and customers to provide customized transactions in real time based on real data.

After decades of talk about markets of one, companies will finally have the power to create them—at scale and profitably.

Amazon, for example, is becoming as much a logistics company as a retailer. Its ordering and delivery systems are so streamlined that its customers can launch and complete a same-day transaction with a push of a single IP-enabled button or a word to its ever-attentive AI device, Alexa. And this level of experimentation and innovation is bubbling up across industries.

Consider manufacturing, where the IoT is transforming automation inside already highly automated factories. Machine-to-machine communication is enabling robots to set up, provision, and unload equipment quickly and accurately with minimal human intervention. Meanwhile, sensors across the factory floor are already capable of gathering such information as how often each machine needs maintenance or how much raw material to order given current production trends.

Once they harvest enough data, businesses will be able to feed it through machine learning algorithms to identify trends that forecast future outcomes. At that point, the supply chain will start to become both automated and predictive. We’ll begin to see business models that include proactively scheduling maintenance, replacing parts just before they’re likely to break, and automatically ordering materials and initiating customer shipments.

Italian train operator Trenitalia, for example, has put IoT sensors on its locomotives and passenger cars and is using analytics and in-memory computing to gauge the health of its trains in real time, according to an article in Computer Weekly. “It is now possible to affordably collect huge amounts of data from hundreds of sensors in a single train, analyse that data in real time and detect problems before they actually happen,” Trenitalia’s CIO Danilo Gismondi told Computer Weekly.

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials.

The project, which is scheduled to be completed in 2018, will change Trenitalia’s business model, allowing it to schedule more trips and make each one more profitable. The railway company will be able to better plan parts inventories and determine which lines are consistently performing poorly and need upgrades. The new system will save €100 million a year, according to ARC Advisory Group.

New business models continue to evolve as 3D printers become more sophisticated and affordable, making it possible to move the end of the supply chain closer to the customer. Companies can design parts and products in materials ranging from carbon fiber to chocolate and then print those items in their warehouse, at a conveniently located third-party vendor, or even on the client’s premises.

In addition to minimizing their shipping expenses and reducing fulfillment time, companies will be able to offer more personalized or customized items affordably in small quantities. For example, clothing retailer Ministry of Supply recently installed a 3D printer at its Boston store that enables it to make an article of clothing to a customer’s specifications in under 90 minutes, according to an article in Forbes.

This kind of highly distributed manufacturing has potential across many industries. It could even create a market for secure manufacturing for highly regulated sectors, allowing a manufacturer to transmit encrypted templates to printers in tightly protected locations, for example.

Meanwhile, organizations are investigating ways of using blockchain technology to authenticate, track and trace, automate, and otherwise manage transactions and interactions, both internally and within their vendor and customer networks. The ability to collect data, record it on the blockchain for immediate verification, and make that trustworthy data available for any application delivers indisputable value in any business context. The supply chain will be no exception.

Blockchain Is the Change Driver

The supply chain is configured as we know it today because it’s impossible to create a contract that accounts for every possible contingency. Consider cross-border financial transfers, which are so complex and must meet so many regulations that they require a tremendous number of intermediaries to plug the gaps: lawyers, accountants, customer service reps, warehouse operators, bankers, and more. By reducing that complexity, blockchain technology makes intermediaries less necessary—a transformation that is revolutionary even when measured only in cost savings.

“If you’re selling 100 items a minute, 24 hours a day, reducing the cost of the supply chain by just $1 per item saves you more than $52.5 million a year,” notes Dirk Lonser, SAP go-to-market leader at DXC Technology, an IT services company. “By replacing manual processes and multiple peer-to-peer connections through fax or e-mail with a single medium where everyone can exchange verified information instantaneously, blockchain will boost profit margins exponentially without raising prices or even increasing individual productivity.”

But the potential for blockchain extends far beyond cost cutting and streamlining, says Irfan Khan, CEO of supply chain management consulting and systems integration firm Bristlecone, a Mahindra Group company. It will give companies ways to differentiate.

“Blockchain will let enterprises more accurately trace faulty parts or products from end users back to factories for recalls,” Khan says. “It will streamline supplier onboarding, contracting, and management by creating an integrated platform that the company’s entire network can access in real time. It will give vendors secure, transparent visibility into inventory 24×7. And at a time when counterfeiting is a real concern in multiple industries, it will make it easy for both retailers and customers to check product authenticity.”

Blockchain allows all the critical steps of the supply chain to go electronic and become irrefutably verifiable by all the critical parties within minutes: the seller and buyer, banks, logistics carriers, and import and export officials. Although the key parts of the process remain the same as in today’s analog supply chain, performing them electronically with blockchain technology shortens each stage from hours or days to seconds while eliminating reams of wasteful paperwork. With goods moving that quickly, companies have ample room for designing new business models around manufacturing, service, and delivery.

Challenges on the Path to Adoption

For all this to work, however, the data on the blockchain must be correct from the beginning. The pills, produce, or parts on the delivery truck need to be the same as the items listed on the manifest at the loading dock. Every use case assumes that the data is accurate—and that will only happen when everything that’s manufactured is smart, connected, and able to self-verify automatically with the help of machine learning tuned to detect errors and potential fraud.

Companies are already seeing the possibilities of applying this bundle of emerging technologies to the supply chain. IDC projects that by 2021, at least 25% of Forbes Global 2000 (G2000) companies will use blockchain services as a foundation for digital trust at scale; 30% of top global manufacturers and retailers will do so by 2020. IDC also predicts that by 2020, up to 10% of pilot and production blockchain-distributed ledgers will incorporate data from IoT sensors.

Despite IDC’s optimism, though, the biggest barrier to adoption is the early stage level of enterprise use cases, particularly around blockchain. Currently, the sole significant enterprise blockchain production system is the virtual currency Bitcoin, which has unfortunately been tainted by its associations with speculation, dubious financial transactions, and the so-called dark web.

The technology is still in a sufficiently early stage that there’s significant uncertainty about its ability to handle the massive amounts of data a global enterprise supply chain generates daily. Never mind that it’s completely unregulated, with no global standard. There’s also a critical global shortage of experts who can explain emerging technologies like blockchain, the IoT, and machine learning to nontechnology industries and educate organizations in how the technologies can improve their supply chain processes. Finally, there is concern about how blockchain’s complex algorithms gobble computing power—and electricity (see “Blockchain Blackouts”).

Blockchain Blackouts

Blockchain is a power glutton. Can technology mediate the issue?

A major concern today is the enormous carbon footprint of the networks creating and solving the algorithmic problems that keep blockchains secure. Although virtual currency enthusiasts claim the problem is overstated, Michael Reed, head of blockchain technology for Intel, has been widely quoted as saying that the energy demands of blockchains are a significant drain on the world’s electricity resources.

Indeed, Wired magazine has estimated that by July 2019, the Bitcoin network alone will require more energy than the entire United States currently uses and that by February 2020 it will use as much electricity as the entire world does today.

Still, computing power is becoming more energy efficient by the day and sticking with paperwork will become too slow, so experts—Intel’s Reed among them—consider this a solvable problem.

“We don’t know yet what the market will adopt. In a decade, it might be status quo or best practice, or it could be the next Betamax, a great technology for which there was no demand,” Lonser says. “Even highly regulated industries that need greater transparency in the entire supply chain are moving fairly slowly.”

Blockchain will require acceptance by a critical mass of companies, governments, and other organizations before it displaces paper documentation. It’s a chicken-and-egg issue: multiple companies need to adopt these technologies at the same time so they can build a blockchain to exchange information, yet getting multiple companies to do anything simultaneously is a challenge. Some early initiatives are already underway, though:

  • A London-based startup called Everledger is using blockchain and IoT technology to track the provenance, ownership, and lifecycles of valuable assets. The company began by tracking diamonds from mine to jewelry using roughly 200 different characteristics, with a goal of stopping both the demand for and the supply of “conflict diamonds”—diamonds mined in war zones and sold to finance insurgencies. It has since expanded to cover wine, artwork, and other high-value items to prevent fraud and verify authenticity.
  • In September 2017, SAP announced the creation of its SAP Leonardo Blockchain Co-Innovation program, a group of 27 enterprise customers interested in co-innovating around blockchain and creating business buy-in. The diverse group of participants includes management and technology services companies Capgemini and Deloitte, cosmetics company Natura Cosméticos S.A., and Moog Inc., a manufacturer of precision motion control systems.
  • Two of Europe’s largest shipping ports—Rotterdam and Antwerp—are working on blockchain projects to streamline interaction with port customers. The Antwerp terminal authority says eliminating paperwork could cut the costs of container transport by as much as 50%.
  • The Chinese online shopping behemoth Alibaba is experimenting with blockchain to verify the authenticity of food products and catch counterfeits before they endanger people’s health and lives.
  • Technology and transportation executives have teamed up to create the Blockchain in Transport Alliance (BiTA), a forum for developing blockchain standards and education for the freight industry.

It’s likely that the first blockchain-based enterprise supply chain use case will emerge in the next year among companies that see it as an opportunity to bolster their legal compliance and improve business processes. Once that happens, expect others to follow.

Customers Will Expect Change

It’s only a matter of time before the supply chain becomes a competitive driver. The question for today’s enterprises is how to prepare for the shift. Customers are going to expect constant, granular visibility into their transactions and faster, more customized service every step of the way. Organizations will need to be ready to meet those expectations.

If organizations have manual business processes that could never be automated before, now is the time to see if it’s possible. Organizations that have made initial investments in emerging technologies are looking at how their pilot projects are paying off and where they might extend to the supply chain. They are starting to think creatively about how to combine technologies to offer a product, service, or business model not possible before.

A manufacturer will load a self-driving truck with a 3D printer capable of creating a customer’s ordered item en route to delivering it. A vendor will capture the market for a socially responsible product by allowing its customers to track the product’s production and verify that none of its subcontractors use slave labor. And a supermarket chain will win over customers by persuading them that their choice of supermarket is also a choice between being certain of what’s in their food and simply hoping that what’s on the label matches what’s inside.

At that point, a smart supply chain won’t just be a competitive edge. It will become a competitive necessity. D!


About the Authors

Gil Perez is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Tom Raftery is Global Vice President, Futurist, and Internet of Things Evangelist, at SAP.

Hans Thalbauer is Senior Vice President, Internet of Things and Digital Supply Chain, at SAP.

Dan Wellers is Global Lead, Digital Futures, at SAP.

Fawn Fitter is a freelance writer specializing in business and technology.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

Comments

Tags:

CEO Priorities And Challenges In The Digital World

Dr. Chakib Bouhdary

Digital transformation is here, and it is moving fast. Companies are starting to realize the enormous power of digital technologies like artificial intelligence (AI), Internet of things (IoT) and blockchain. These technologies will drive massive opportunities—and threats—for every company, and they will impact all aspects of business, including the business model. In fact, business velocity has never been this fast, yet it will never be this slow again.

To move quickly, companies need to be clear on what they want to achieve through digital transformation and understand the possible roadblocks. Based on my meetings with customer executives across regions and industries, I have learned that CEOs often have the same three priorities and face the same three challenges:

1. Customer experience – No longer defined by omnichannel and personalized marketing.

Not surprisingly, 92 percent of digital leaders focus on customer experience. However, this is no longer just about omnichannel and personalized marketing – it is about the total customer experience. Businesses are realizing that they need to reimagine their value proposition and orchestrate changes across the value chain – from the first point of interaction to manufacturing, to shipment, to service – and be able to deliver the total customer experience. In some cases, it will even be necessary to change the core product or service itself.

2. Step change in productivity – Transform productivity and cost structure through digital technologies.

Businesses have been using technology to achieve growth for decades, but by combining emerging technologies, they can now achieve a significant productivity boost and reduce costs. For this to happen, companies must first identify the scenarios that will drive significant change in productivity, prioritize them based on value, and then determine the right technologies and solutions. Both Mckinsey and Boston Consulting Group expect a 15 to 30 percent improvement in productivity through digital advancements – blowing the doors off business-as-usual and its incremental productivity growth of 1 to 2 percent.

3. Employee engagement – Fostering a culture of innovation should be at the core of any business.

Companies are looking to create an environment that encourages creativity and innovation. Leaders are attracting the needed talent and building the right skill sets. Additionally, they aim for ways to attract a diverse workforce, improve collaborations, and empower employees – because engaged employees are crucial in order to achieve the best results. This Gallup study reveals that approximately 85 percent of employees worldwide are performing below their potential due to engagement issues.

As CEOs work towards achieving these three desired outcomes, they face some critical challenges that they must address. I define the top three challenges as follows: run vs. innovate, corporate cholesterol, and digital transformation roadmap.

1. Run vs. innovate – To be successful you must prioritize the future.

The foremost challenge that CEOs are facing is how they can keep running current profitable businesses while investing in future innovations. Quite often these two conflict as most executives mistakenly prioritize the first and spend much less time on the latter. This must change. CEOs and their management teams need to spend more time thinking about what digital is for them, discuss new ideas, and reimagine the future. According to Gartner, approximately 50 percent of boards are pushing their CEOs to make progress on digital. Although this is a promising sign, digital must become a priority on every CEOs agenda.

2. Corporate cholesterol – Do not let company culture get in the way of change.

The older the company is, the more stuck it likely is with policies, procedures, layers of management, and risk averseness. When a company’s own processes get in the way of change, that is what I call “corporate cholesterol.” CEOs need to change the culture, encourage cross-team collaborations, and bring in more diverse thinking to reduce the cholesterol levels. In fact, both Mckinsey and Capgemini conclude that culture is the number-one obstacle to digital effectiveness.

3. Digital transformation roadmap – Digital transformation is a journey without a destination.

Many CEOs struggle with their digital roadmap. Questions like: Where do I start? Can a CDO or another executive run this innovation for me? What is my three- to five-year roadmap? often come up during the conversations. Most companies think that there is a set roadmap, or a silver bullet, for digital transformation, but that is not the case. Digital transformation is a journey without a destination, and each company must start small, acquire the necessary skills and knowledge, and continue to innovate.

It is time to face the digital reality and make it a priority. According to KPMG, 70 percent to 80 percent of CEOs believe that the next three years are more critical for their company than the last fifty. And there is good reason to worry, as 75 percent of S&P 500 companies from 2012 will be replaced by 2027 at the current disruption rate.

Download this short executive document. 

Comments

Dr. Chakib Bouhdary

About Dr. Chakib Bouhdary

Dr. Chakib Bouhdary is the Digital Transformation Officer at SAP. Chakib spearheads thought leadership for the SAP digital strategy and advises on the SAP business model, having led its transformation in 2010. He also engages with strategic customers and prospects on digital strategy and chairs Executive Digital Exchange (EDX), which is a global community of digital innovation leaders. Follow Chakib on LinkedIn and Twitter