IoT And Connected Fleets

Pierre Erasmus

The Internet of Things (IoT) involves connected products, assets, fleets, infrastructures, markets, and people. In this series of blogs, we’ll address each of these connected aspects in turn.

While IoT can improve the management of fixed assets such as manufacturing equipment, it also optimizes the management of assets that are in motion — from trucks to forklifts to autonomous vehicles. We refer to this application of IoT as connected fleets.

The first connected fleets have involved automobiles. By 2021, nearly 100 million connected cars will be sold each year. For companies like GM, which already boasts a fleet of 12 million IoT-enabled cars, connected fleets can transform business models.

Connected fleets have implications for many organizations. Manufacturers of all kinds can use connected fleets to gain new visibility into their supply chains, lowering transportation costs and boosting throughput and fleet efficiency — while improving customer service through on-time delivery, for example. Logistics providers can increase revenues, identify and reduce unused capacity, and improve delivery. Heavy-equipment operators such as mining companies can manage trucks, loaders, and other expensive equipment in remote locations.

Maxing connections and advantages

To gain the maximum advantages of connected fleets, it helps to recognize the areas where IoT connectivity can deliver the most benefits. We’ve identified three key use cases:

Mobile asset insights — IoT enables organizations to capture and analyze vehicle data in real time. While that sounds straightforward, the potential benefits are manifold.

You can monitor vehicle operating parameters and performance to keep assets well-maintained and operational. You can also track vehicle location and driver behavior to make sure assets are being used in the right manner in the right context. For example, usage patterns for acceleration, braking, idle time, and fuel consumption could reflect undesirable driver behavior.

Geofencing capabilities allow fleet management to restrict, warn, or log usage of assets. Simply by adding sensors to a truck trailer, you can track container capacity and cargo conditions such as vibration and temperature.

Current telematics data enables real-time route planning for outbound logistics, with the ability to respond to changing conditions such as traffic. It can also help you improve efficiency to accommodate priority or incoming orders for share-load logistics. Historical telematics data enables operational improvements to fleet management in warehouses and on the shop floor.

Logistics safety — IoT allows organizations to improve the safety of assets, hazardous goods, and people. Equipment sensors can make sure assets function only in safe locations and operating parameters. They can also monitor hazardous goods and conditions. Wearable technology can ensure the safety of people in both routine and extreme situations.

This functionality can help organizations save tremendous amounts of money by avoiding equipment malfunctions and accidents. It can also save lives. In the event of an accident or safety situation, IoT can aid recovery efforts, informing rescuers and keeping them out of harm’s way.

Logistics networks — IoT allows organizations to optimize supply chain logistics and regulatory compliance across their global networks. This can be especially useful for organizations like hubs and port authorities. How can they continually increase throughput without growing physical capacity? By running fleets more efficiently.

Track-and-trace capabilities let you understand how many orders will enter a port, for example. A network logistics hub allows you to orchestrate the right number of containers, cranes, trains, trucks, and other equipment at the right time. And because the data is real-time, you can quickly adjust to changing conditions such as weather. Track and trace also improves regulatory compliance — for example, by allowing you to avoid packing or storing incompatible hazardous materials.

New connections, new models

In all these situations, organizations gain opportunities for new competitive advantage.

Manufacturers can increase revenue by combining products with services. For example, a forklift manufacturer worked with SAP to reimagine its business. The company had saturated the market for high-end forklifts. But IoT technology is enabling the company to lease forklifts and charge based on usage. By using sensors and connectivity to closely track how forklifts are being used — the number or weight of loads handled, for example — the company can lease its products to companies of all sizes, which pay only for the services they actually use. Customers don’t need to make large capital investments, and the manufacturer gains a new, ongoing revenue stream from both existing and new customers.

Service providers such as insurers offering pay-per-use models can leverage asset usage and location data to determine risk. The insurer benefits by getting deeper insight into the asset, its purpose, and location. Customers benefit from potentially lower premiums or a pay-per-use cost model.

Logistics providers can increase revenue by offering unused capacity to a logistics business network. Matching capabilities could create a marketplace to match demand and supply for shippers and carriers. Airports can improve operations, including parking, security, catering, fueling, cleaning, and fleet management such as real-time airplane tracking.

The efficiencies of connected fleets often pay off in lower costs and better customer experiences. The key is to go beyond simple gathering of IoT data. Organizations will need to combine sensor data with contextual and business data, and then analyze it to gain insights and make predictions. It’s at this informational intersection that connected fleets will truly deliver value.

Effective IoT connectedness requires a unifying foundation. SAP has addressed this need by introducing SAP Leonardo Internet of Things portfolio, innovative solutions designed to help organizations digitally transform existing processes and evolve to new digital models. Learn more by reading about real-world use cases, visiting, attending our flagship event Leonardo Live this July 11–12 in Frankfurt, and following us on Twitter at @SAPLeonardo.


Pierre Erasmus

About Pierre Erasmus

Pierre Erasmus is Solution Manager for the SAP Leonardo portfolio of Internet of Things solutions at SAP.

Differentiating Products With Data-Based Services

Don Gordon

Ever since Steve Jobs revealed the first iPhone, people have come to associate big tech launches with physical products. So when SAP chairman Hasso Plattner, Prof. Dr. h.c. mult., unveiled the new SAP digital innovation system last month, many people in the SAPPHIRE NOW audience reflexively looked around for a nonexistent device.

The fact is, value and differentiation are migrating away from physical products like devices and toward data-based services that fundamentally change the way consumers interact with those products. For consumer products (CP) companies, adapting to this change is imperative because today, even new and highly sought-after products become commoditized more quickly than ever before. For CP companies, this means they need to:

  • Innovate ways to be more efficient using IoT and analytics across lines of business (for example, in manufacturing and supply chain operations to increase efficiency as a way to lower costs)
  • Create innovative data services around products – for example, by building sensors into products. In this case, the data is what allows for differentiation. It’s what makes the product more valuable to the customer. And it’s how CP companies can increase market share, customer retention, and margins.

So where does a digital innovation system come in? It is, as Plattner explained, a “digital innovation system that enables customers to rapidly innovate and scale that innovation to redefine their business for the digital world.” You might think of it as a digital services innovation platform that brings together the power of machine learning, IoT, analytics, and Big Data in ways that were previously not possible.

With all of these technologies unified, it’s much easier to harness data to drive process, value, and customer experience transformation. Consider this: When customers – both B2B and B2C – purchase and use connected, self-aware products, they can passively send product and usage data in the course of daily activities and work (for example, usage levels, wear and tear rates, maintenance information, and functionality used and not used).

This data can be used to inform every aspect of the product value chain. For example, when a customer purchases a smart refrigerator, they agree to passively stream product and usage data from that refrigerator on a continuous basis. Sensors can be built into it to capture and send performance and operations data useful to every player in the product value chain. As an interactive product, the refrigerator can send data (or alerts) when compressors are overheating, vibrations or temperatures are exceeding desired maximums, or Freon levels are low.

The value of this data can extended to a CP manufacturer’s entire extended value chain. For example, a refrigeration manufacturer with commercial and consumer product lines could include B2B traditional suppliers that enable the manufacturer to make better products, as well as involve other providers of data-based services around the product to expand the customer value proposition, as shown in the illustration below.

transformation of the refrigeration value chain

Transformation of the refrigeration value chain

So from this perspective, the future of CP lies in harnessing new kinds of data – and IDC appears to agree. In a May 2017 Analyst Connection, Simon Ellis, program vice president at IDC, forecasted that 90% of the growth in the CP industry over the next decade will go to companies that successfully engage directly with consumers. “While this may mean direct-to-consumer selling, it is most likely to be about a ‘brand relationship.’ The successful engagement will be one that turns data and information from consumers into product and service offerings that meet or even exceed consumers’ expectations. The 90% is a projection, of course, and the actual results may be higher or lower, but the point is that to succeed in the future, CP companies will need to engage with their consumers in a new way.”

I invite you to read Ellis’ paper, “Using Data to Digitally Transform Consumer Products,” He provides valuable insights into how untapped digital technologies have the potential to harness data to drive new capabilities and data-driven services, deliver totally new insights into the changing behaviors and needs of customers, and more.



Don Gordon

About Don Gordon

Don Gordon leads global Consumer Products industry marketing for SAP. Previously he led global Retail industry marketing for IBM. He lives in Philadelphia, considered by many to be the finest city on earth.

Your Walls Can Talk – Find Out What They’re Saying

Stephanie Reshel

The growing use of technology and its resulting data are having a significant impact on energy and utility companies worldwide. In fact, the utility sector is forecast to experience 93% data growth since 2015, with 84% of it being unstructured, according to the SAP and IBM paper “Digital Transformation in Energy and Utility Companies.”

Industry convergence is playing a big role in the increased use of data. Converging industries and disruptive technology are redefining multiple industries globally and forcing the creation of innovative business models. The energy and utility sectors are experiencing this through the increased use of smart appliances, energy monitoring systems, net metering, mobile technology, cognitive applications, the Internet of Things (IoT), and cloud computing.

If your walls can talk – what are they saying?

The marriage of technology companies with traditional energy and utility companies is creating fascinating systems that enable operating technology (OT) systems and information technology (IT) systems to automatically talk to each other. Until recently, these systems could not share information or communicate with one another.

So in essence, now your walls really can talk thanks to wall-mounted smart-grid metering – and what they’re saying is that cognitive computing will change the future of the energy and utilities sectors even more. When OT and IT systems share a common database with near-real-time cognitive computing and data utilization capabilities, they can provide a stronger understanding of what is currently happening and what is most likely to happen in the future.

Innovative real-world examples

Here are some practical examples of how innovative technology is redefining traditional energy and utility procedures:

  • Asset responsiveness: Equipment sensors (OT) can set off a high-temperature alarm, which can automatically send a work order (IT) to a technician’s mobile device
  • Information accessibility: Service orders can be more efficient when cognitive computing provides data about customers, work orders, equipment details, and site history to field technicians
  • Predictive maintenance: Solutions using IoT sensors, predictive analytics, and even weather forecasts can be used to help predict maintenance patterns, schedules, and potential damage to equipment

What else is altering the energy and utility landscape?

Disruptive technology is just one of the elements contributing to the considerable transformation in the energy and utility industries. According to the SAP and IBM paper, the following three elements all play a role:

  • Evolving markets
  • Changing customer expectations
  • Disruptive technology

Evolving energy and utility markets, changing customer expectations, and disruptive technology are all creating a perfect environment for new business models such as self-service and subscription-based models that enable new revenue streams.

Business innovation lead by “prosumers”

Alternative energy sources like geothermal, wind, and solar are also driving an increase in the number of “prosumers” – companies or individuals that act as both consumers and microsuppliers of energy. As renewable energy gains popularity, more people are using and providing energy in this way, and, as a result, their impact on the utility market increases and new business models emerge.

Not only that, smart devices enable greater control over energy consumption, so technology is also making it easier for consumers to make smarter choices about how they use energy. These efficiencies are making it harder for energy companies to maintain the same amount of revenue per customer. As a result, traditional energy and utility companies are being pushed to provide a more personalized experience by offering more connected home products and a more retail-like customer experience. CenterPoint Energy is one example of an energy company that has made significant digital changes to create a more personalized customer experience.

Using data to your advantage

The energy and utility industries are not the only sectors undergoing massive digital transformation. Whether your business is in the energy sector or not, you can use cognitive solutions and data utilization to your advantage. Here are some steps you can take to make significant progress on your digital journey:

  1. Assess your company’s current digital readiness
  1. Develop a digital strategy and reimagine business models and processes
  1. Assess and prioritize opportunities based on value, benefits, ROI, and total cost of ownership
  1. Develop a roadmap that considers cloud and cognitive technology, services, and user experience
  1. Use design thinking to refine, explore, and prototype solutions
  1. Implement solutions on time and on budget
  1. Maximize investments with continuous innovation

The blend of technology with any type of traditional company can create opportunities for innovative business models and emerging revenue streams that could prove to be very lucrative going forward. How can you reimagine your business?

Learn more about Digital Transformation in Energy and Utility Companies.

Find out more about Digital Transformation with IBM and SAP.


Stephanie Reshel

About Stephanie Reshel

Stephanie Reshel is senior director for Strategic Ecosystem Marketing at SAP. She drives joint marketing strategies globally with the top strategic services partners. Follow her on @SReshel.

Taking Learning Back to School

Dan Wellers


Denmark spends most GDP on labor market programs at 3.3%.
The U.S. spends only 0.1% of it’s GDP on adult education and workforce retraining.
The number of post-secondary vocational and training institutions in China more than doubled from 2000 to 2014.
47% of U.S. jobs are at risk for automation.

Our overarching approach to education is top down, inflexible, and front loaded in life, and does not encourage collaboration.

Smartphone apps that gamify learning or deliver lessons in small bits of free time can be effective tools for teaching. However, they don’t address the more pressing issue that the future is digital and those whose skills are outmoded will be left behind.

Many companies have a history of effective partnerships with local schools to expand their talent pool, but these efforts are not designed to change overall systems of learning.

The Question We Must Answer

What will we do when digitization, automation, and artificial intelligence eject vast numbers of people from their current jobs, and they lack the skills needed to find new ones?

Solutions could include:

  • National and multinational adult education programs
  • Greater investment in technical and vocational schools
  • Increased emphasis on apprenticeships
  • Tax incentives for initiatives proven to close skills gaps

We need a broad, systemic approach that breaks businesses, schools, governments, and other organizations that target adult learners out of their silos so they can work together. Chief learning officers (CLOs) can spearhead this approach by working together to create goals, benchmarks, and strategy.

Advancing the field of learning will help every business compete in an increasingly global economy with a tight market for skills. More than this, it will mitigate the workplace risks and challenges inherent in the digital economy, thus positively influencing the future of business itself.

Download the executive brief Taking Learning Back to School.

Read the full article The Future of Learning – Keeping up With The Digital Economy


Dan Wellers

About Dan Wellers

Dan Wellers is the Global Lead of Digital Futures at SAP, which explores how organizations can anticipate the future impact of exponential technologies. Dan has extensive experience in technology marketing and business strategy, plus management, consulting, and sales.


Why Millennials Quit: Understanding A New Workforce

Shelly Kramer

Millennials are like mobile devices: they’re everywhere. You can’t visit a coffee shop without encountering both in large numbers. But after all, who doesn’t like a little caffeine with their connectivity? The point is that you should be paying attention to millennials now more than ever because they have surpassed Boomers and Gen-Xers as the largest generation.

Unfortunately for the workforce, they’re also the generation most likely to quit. Let’s examine a new report that sheds some light on exactly why that is—and what you can do to keep millennial employees working for you longer.

New workforce, new values

Deloitte found that two out of three millennials are expected to leave their current jobs by 2020. The survey also found that a staggering one in four would probably move on in the next year alone.

If you’re a business owner, consider putting four of your millennial employees in a room. Take a look around—one of them will be gone next year. Besides their skills and contributions, you’ve also lost time and resources spent by onboarding and training those employees—a very costly process. According to a new report from XYZ University, turnover costs U.S. companies a whopping $30.5 billion annually.

Let’s take a step back and look at this new workforce with new priorities and values.

Everything about millennials is different, from how to market to them as consumers to how you treat them as employees. The catalyst for this shift is the difference in what they value most. Millennials grew up with technology at their fingertips and are the most highly educated generation to date. Many have delayed marriage and/or parenthood in favor of pursuing their careers, which aren’t always about having a great paycheck (although that helps). Instead, it may be more that the core values of your business (like sustainability, for example) or its mission are the reasons that millennials stick around at the same job or look for opportunities elsewhere. Consider this: How invested are they in their work? Are they bored? What does their work/life balance look like? Do they have advancement opportunities?

Ping-pong tables and bringing your dog to work might be trendy, but they aren’t the solution to retaining a millennial workforce. So why exactly are they quitting? Let’s take a look at the data.

Millennials’ common reasons for quitting

In order to gain more insight into the problem of millennial turnover, XYZ University surveyed more than 500 respondents between the ages of 21 and 34 years old. There was a good mix of men and women, college grads versus high school grads, and entry-level employees versus managers. We’re all dying to know: Why did they quit? Here are the most popular reasons, some in their own words:

  • Millennials are risk-takers. XYZ University attributes this affection for risk taking with the fact that millennials essentially came of age during the recession. Surveyed millennials reported this experience made them wary of spending decades working at one company only to be potentially laid off.
  • They are focused on education. More than one-third of millennials hold college degrees. Those seeking advanced degrees can find themselves struggling to finish school while holding down a job, necessitating odd hours or more than one part-time gig. As a whole, this generation is entering the job market later, with higher degrees and higher debt.
  • They don’t want just any job—they want one that fits. In an age where both startups and seasoned companies are enjoying success, there is no shortage of job opportunities. As such, they’re often looking for one that suits their identity and their goals, not just the one that comes up first in an online search. Interestingly, job fit is often prioritized over job pay for millennials. Don’t forget, if they have to start their own company, they will—the average age for millennial entrepreneurs is 27.
  • They want skills that make them competitive. Many millennials enjoy the challenge that accompanies competition, so wearing many hats at a position is actually a good thing. One millennial journalist who used to work at Forbes reported that millennials want to learn by “being in the trenches, and doing it alongside the people who do it best.”
  • They want to do something that matters. Millennials have grown up with change, both good and bad, so they’re unafraid of making changes in their own lives to pursue careers that align with their desire to make a difference.
  • They prefer flexibility. Technology today means it’s possible to work from essentially anywhere that has an Internet connection, so many millennials expect at least some level of flexibility when it comes to their employer. Working remotely all of the time isn’t feasible for every situation, of course, but millennials expect companies to be flexible enough to allow them to occasionally dictate their own schedules. If they have no say in their workday, that’s a red flag.
  • They’ve got skills—and they want to use them. In the words of a 24-year-old designer, millennials “don’t need to print copies all day.” Many have paid (or are in the midst of paying) for their own education, and they’re ready and willing to put it to work. Most would prefer you leave the smaller tasks to the interns.
  • They got a better offer. Thirty-five percent of respondents to XYZ’s survey said they quit a previous job because they received a better opportunity. That makes sense, especially as recruiting is made simpler by technology. (Hello, LinkedIn.)
  • They seek mentors. Millennials are used to being supervised, as many were raised by what have been dubbed as “helicopter parents.” Receiving support from those in charge is the norm, not the anomaly, for this generation, and they expect that in the workplace, too.

Note that it’s not just XYZ University making this final point about the importance of mentoring. Consider Figures 1 and 2 from Deloitte, proving that millennials with worthwhile mentors report high satisfaction rates in other areas, such as personal development. As you can see, this can trickle down into employee satisfaction and ultimately result in higher retention numbers.

Millennials and Mentors
Figure 1. Source: Deloitte

Figure 2. Source: Deloitte

Failure to . . .

No, not communicate—I would say “engage.” On second thought, communication plays a role in that, too. (Who would have thought “Cool Hand Luke” would be applicable to this conversation?)

Data from a recent Gallup poll reiterates that millennials are “job-hoppers,” also pointing out that most of them—71 percent, to be exact—are either not engaged in or are actively disengaged from the workplace. That’s a striking number, but businesses aren’t without hope. That same Gallup poll found that millennials who reported they are engaged at work were 26 percent less likely than their disengaged counterparts to consider switching jobs, even with a raise of up to 20 percent. That’s huge. Furthermore, if the market improves in the next year, those engaged millennial employees are 64 percent less likely to job-hop than those who report feeling actively disengaged.

What’s next?

I’ve covered a lot in this discussion, but here’s what I hope you will take away: Millennials comprise a majority of the workforce, but they’re changing how you should look at hiring, recruiting, and retention as a whole. What matters to millennials matters to your other generations of employees, too. Mentoring, compensation, flexibility, and engagement have always been important, but thanks to the vocal millennial generation, we’re just now learning exactly how much.

What has been your experience with millennials and turnover? Are you a millennial who has recently left a job or are currently looking for a new position? If so, what are you missing from your current employer, and what are you looking for in a prospective one? Alternatively, if you’re reading this from a company perspective, how do you think your organization stacks up in the hearts and minds of your millennial employees? Do you have plans to do anything differently? I’d love to hear your thoughts.

For more insight on millennials and the workforce, see Multigenerational Workforce? Collaboration Tech Is The Key To Success.