IoT And Connected Markets

Pushkar Ranjan

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.

We’ve grown accustomed to the idea of IoT in retail environments – for example, beacons that can recognize participants in frequent-shopper programs and automatically deliver personalized offers to their cellphones. But IoT can transform other kinds of markets, as well.

In rural settings, IoT can augment physical infrastructure to enable new connectivity and capabilities for agribusiness and related supply networks. In urban landscapes, IoT can connect traffic, buildings, and public spaces for greater efficiency and more effective services.

In both cases, IoT can empower new insights, innovations, and business models. It can also optimize the use of assets and natural resources; reduce energy usage, emissions, and congestion; and improve efficiency and quality of life.

But it’s still early days for connected markets. To see return on their IoT investments, organizations operating in these contexts will need to identify opportunities for quick wins – while understanding that the most significant payoffs will be achieved over time.

Connecting for transformation

Connected markets can enable transformations in three key contexts:

Market insights: Consumers and citizens increasingly demand consistent and seamless experiences across time, space, and geography. IoT enables retail and other public spaces to respond. Connected markets leverage beacons, mobile connectivity, and identity solutions to understand behaviors and preferences and then deliver hyper-personalized experiences.

For instance, a leading provider of sports apparel and equipment created a customer-activity repository to achieve a 360-degree view of customers. In one initiative, the company is leveraging a customer fitness app to track running, cycling, and other sports activities to serve up personalized offers.

Rural areas: Agriculture is big business, and modern farms and ranches can be large enough that they need to be managed by aircraft and other extensive physical infrastructure. And in both developed and emerging economies, agribusiness increasingly must do more with less to feed growing populations.

Connected markets augment and transform physical infrastructure to deliver new insights and capabilities. You can capture data from agricultural equipment to improve efficiency and operation. You can connect partners up and down the supply network to create transparent and sustainable food supply chains and better manage price volatility. Satellite, GPS, cloud, and related technologies are connecting even the most remote operations, from food producers through to wholesalers, retailers, and consumers.

Urban areas: As the global population grows, it is becoming more urbanized. Today, 50% of people live in cities, and by 2050, 75% will. To manage this growth and deliver services effectively, cities will need to become more connected.

IoT enables cities to respond as the work and personal lives of citizens become more mobile and automated. It can optimize traffic, energy usage, public spaces, ports, and other physical infrastructure.

The trend has already started with simple applications like smart parking. Smart parking combines sensors, cameras, and apps to help citizens quickly find parking spaces, help cities predict parking needs, and measurably ease traffic congestion. It will continue with autonomous living choices. One example is laundry. When designing high-density housing, rather than include laundry space in every apartment, urban developers might centralize laundry, using connected technologies to optimize the experience.

In both rural and urban markets, governments have a vested interest in driving IoT deployments. But governments often lack budgets for new IT initiatives. As a result, public-private partnerships will be key to the development of connected markets.

The potential upsides of connected markets are compelling. Once a market is virtualized, the opportunities for reaching new customers, partners, and even industries grow exponentially. The organizations that figure out connected markets will gain significant first-mover advantages – and position themselves for longer-term industry leadership.

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 sap.com/iot, attending our flagship event Leonardo Live this July 11–12 in Frankfurt, and following us on Twitter at @SAPLeonardo.

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Pushkar Ranjan

About Pushkar Ranjan

Pushkar Ranjan is part of the global Internet of Things (IoT) Go-To-Market team at SAP, where he is responsible for business development, sales enablement, and community engagement with prospects, customers, partners, and developer ecosystems in and around the topic of the IoT.
Pushkar has worked with SAP for more than 15 years across disciplines of product management, strategy consulting, and operations management in the areas of customer engagement and enterprise performance management. He has academic degrees of a Master’s in Business Administration from the Indian Institute of Management with a focus in the areas of Information Systems, Strategy, and Marketing.

Internet Of Things: Five Ways To Overcome Security Challenges

Jay Thoden van Velzen

The promise, benefits, and value of the Internet of Things (IoT) have been documented extensively, but a number of widely publicized IoT attacks leaves the impression that the IoT is deeply insecure. What is often not mentioned is that many of these attacks originated due to failures in implementing basic protections.

But even where the vendor has taken reasonable precautions, things can go horribly wrong, as can be seen in a – literally – fly-by attack on smart lighting.

Another challenge is that IoT-enabled devices are deployed “where the action is” – the factory floor, oil platforms, public roads, offices, stores, moving vehicles, or in cities running over wireless networks.

That means that they are often physically accessible by employees, contractors, and even the general public. If we compare that to modern cloud data centers, where only authorized personnel can enter, there is a substantial difference. More people with access means the risk of compromise goes up, so we may need to ensure devices themselves are physically protected against tampering.

But these are not insurmountable obstacles. The question is less one of not knowing what to do to protect IoT environments, rather how to implement and apply security measures to keep the solution safe.

Five recommendations for securing the IoT

1. Manage risk

Modern security practices follow a risk-based approach that considers both the ease of an attack and the impact should one happen – giving a strong indicator of how much security you’ll need. The reality is that an IoT solution that monitors, manages, and optimizes operations in a chemical factory requires much tighter security protocols than one that simply turns off the light in a conference room when sensors detect nobody is present. In the former, a successful attack could lead to a catastrophic industrial accident including injury and loss of life. In the latter, the worst that could happen is that an electricity bill is a little higher.

2. Limit device-to-device communication

There is a misconception that the Internet of Things, by definition, means that many devices are connected to many other devices, increasing the risk that a successful attack leads to catastrophic failure or takeover of a substantial portion of your IoT infrastructure. In many cases, devices have a single purpose and only need to send the data they collect to a single location. By limiting the number of IoT devices that talk to each other, we can better secure each one and limit the damage should any breaches occur.

3. Retain control over your IoT infrastructure

The risk is yours – any failure in security is your responsibility and you will be held accountable for the result – so it is important to maintain control. This starts with device selection: Make sure that devices either have the security features you need or, preferably, are “open” so you can analyze and understand how they work, and then add any features you need to fill security gaps. This includes the ability to update devices in an automated and secure way and to control that process yourself.

4. Use encryption from end to end

It’s critical to encrypt communication between devices and data-ingestion points to make sure nobody can listen in, tamper with sensitive data in transit, or recover enough information to spoof or impersonate the device and feed the system manipulated data. Modern encryption techniques work in much the same way as HTTPS does to protect information online. Encryption also needs to be tied to device identity to ensure the data we think comes from a particular device actually does.

5. Leverage existing expertise

Apply proven security technologies, tools, and best practices used in traditional IT landscapes. In many cases, they can be implemented directly: by using digital certificates or equivalent, by restricting what IoT devices can do and communicate with, and by adding protection and monitoring mechanisms. In other cases, such as micro-controllers and low-power networks, we may need to apply new techniques, but we can draw on existing principles and concepts.

IoT adoption is still in early days. Unfortunately, that means that there aren’t many established standards yet, and while the number of devices brought to market is quickly rising, certification schemes and regulations are lagging. As a result, adopters still need to carefully plan and build in security from the start and properly evaluate any IoT equipment brought in house.

As large technology providers recognize the security challenges with new IoT technologies and software solutions, the situation is rapidly improving. At SAP, we’re also committed to both describing the pitfalls and providing clear guidelines to overcome them.

This article originally appeared on the SAP Community.

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Jay Thoden van Velzen

About Jay Thoden van Velzen

Jay Thoden van Velzen is Director of IoT Security at SAP.

Why The IoT Means You'll Never Run Out Of Paper

Alfred Becker

In business, efficiency is critical. Any improvement to a standing process – even if relatively small – can have a profound impact when scaled up. Consider, for example, software that allows a train to travel more efficiently. While cutting a minute or two from a trip may not seem that significant, when those fuel savings are scaled up over thousands of trips, it becomes a serious cost savings.

The Internet of Things (IoT) has had a transformational effect on industries seeking to make their processes easier and more efficient. By leveraging the power of connected devices and data analysis, companies and governments are figuring out new ways to modernize established processes. Cities use IoT technology to reduce traffic congestion and pollution. Farmers use connected devices to improve crop yields. Railways use IoT technology to enhance safety and timeliness.

And companies can use it to ensure they never run out of paper supply.

How the IoT can keep paper supplies fully stocked

The applications of IoT technology are so varied as to seem almost unlimited. Companies are discovering ways, large and small, to increase productivity and efficiency through the use of data-based sensors and other devices.

Consider the case of paper companies and printer producers. The two have what should be a naturally synergistic relationship. Each produces half the equipment in a common office device. Yet, historically, paper companies and printer producers haven’t necessarily worked together. A business purchases its printers and paper from separate suppliers. Paper is restocked either through an ordering process initiated once paper stock runs low, or though a planning process that automatically orders paper through electronic data interchange (EDI). Both approaches are based on planned paper consumption, not real-world use, which often is different. In addition, there is always a time lag, even using the planning approach, between paper order and receipt.

It’s easy to see the inefficiency in this process. Waiting for the printer’s “load more paper” light to start flashing is a reactive move. It’s also inefficient, as it all but ensures printers regularly run out of paper, forcing workers to wait while paper is resupplied or go to another location.

Now consider an even larger problem for companies that require a variety of specific paper types in order to operate. If an error during the inventory process results in one paper type running out, the company’s productivity slows and costs rise while it waits for delivery.

Fortunately, this is a scenario that no longer needs to occur, thanks to IoT-driven process improvements. Paper companies and printer producers can collaborate to ensure paper supplies remain constant. Sensors can transmit data from printers to paper companies, showing the precise type of paper being used and predicting when it will need to be replenished. This real-time data can be integrated into the planning process – ideally using the print shop’s production planning software – and order paper automatically via EDI based on actual consumption.

This ensures there are no gaps in supply, no halt to productivity. The predictive power of IoT technology helps printer and paper companies collaborate in an efficient manner that benefits all parties: Businesses are guaranteed the timely replenishment of paper inventory. Printer and paper companies benefit from the synergies facilitated by the IoT. Print shops can offer customers the option to automatically stock paper as a value-added service, requiring no action from the customer.

The end result? Greater productivity, higher efficiency, enhanced collaboration, and new business opportunities.

The awesome growth potential of connected devices

Ensuring continuous access to paper is just one small example of the transformational power of IoT technology. Opportunities such as these can be found in virtually every industry. The way we work, live, travel, and take care of our health and our homes can all be improved through the use of smart, connected devices.

The most exciting thing? We’re only seeing the tip of the iceberg. Because IoT technology is relatively young, even more revolutionary opportunities are likely to develop. According to Gartner, roughly 8.4 billion connected devices will be in use in 2017. This represents a 31% jump over 2016. Business spending represents slightly less than 60% of the overall market.

By 2020, overall IoT spending is expected to reach nearly $1.3 billion. This rapid growth will be driven in part by increasing adoption in the manufacturing, retail, healthcare, and transportation sectors. Cross-industry IoT spending, featuring use cases relevant to all industries (think smart buildings), will also be a significant growth driver.

The takeaway

Ultimately, IoT technology holds not only the promise of sustained innovation and business transformation, but profound changes to the way we live and work. Having printers that never run out of paper is but one example of the almost countless number of opportunities that will arise as IoT technology matures.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Energy and Natural Resource Companies. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?

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Alfred Becker

About Alfred Becker

Alfred Becker is the global lead for Paper & Packaging Industry
and Manufacturing within Mill Products Industries at SAP.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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The Human Factor In An AI Future

Dan Wellers and Kai Goerlich

As artificial intelligence becomes more sophisticated and its ability to perform human tasks accelerates exponentially, we’re finally seeing some attempts to wrestle with what that means, not just for business, but for humanity as a whole.

From the first stone ax to the printing press to the latest ERP solution, technology that reduces or even eliminates physical and mental effort is as old as the human race itself. However, that doesn’t make each step forward any less uncomfortable for the people whose work is directly affected – and the rise of AI is qualitatively different from past developments.

Until now, we developed technology to handle specific routine tasks. A human needed to break down complex processes into their component tasks, determine how to automate each of those tasks, and finally create and refine the automation process. AI is different. Because AI can evaluate, select, act, and learn from its actions, it can be independent and self-sustaining.

Some people, like investor/inventor Elon Musk and Alibaba founder and chairman Jack Ma, are focusing intently on how AI will impact the labor market. It’s going to do far more than eliminate repetitive manual jobs like warehouse picking. Any job that involves routine problem-solving within existing structures, processes, and knowledge is ripe for handing over to a machine. Indeed, jobs like customer service, travel planning, medical diagnostics, stock trading, real estate, and even clothing design are already increasingly automated.

As for more complex problem-solving, we used to think it would take computers decades or even centuries to catch up to the nimble human mind, but we underestimated the exponential explosion of deep learning. IBM’s Watson trounced past Jeopardy champions in 2011 – and just last year, Google’s DeepMind AI beat the reigning European champion at Go, a game once thought too complex for even the most sophisticated computer.

Where does AI leave human?

This raises an urgent question for the future: How do human beings maintain our economic value in a world in which AI will keep getting better than us at more and more things?

The concept of the technological singularity – the point at which machines attain superhuman intelligence and permanently outpace the human mind – is based on the idea that human thinking can’t evolve fast enough to keep up with technology. However, the limits of human performance have yet to be found. It’s possible that people are only at risk of lagging behind machines because nothing has forced us to test ourselves at scale.

Other than a handful of notable individual thinkers, scientists, and artists, most of humanity has met survival-level needs through mostly repetitive tasks. Most people don’t have the time or energy for higher-level activities. But as the human race faces the unique challenge of imminent obsolescence, we need to think of those activities not as luxuries, but as necessities. As technology replaces our traditional economic value, the economic system may stop attaching value to us entirely unless we determine the unique value humanity offers – and what we can and must do to cultivate the uniquely human skills that deliver that value.

Honing the human advantage

As a species, humans are driven to push past boundaries, to try new things, to build something worthwhile, and to make a difference. We have strong instincts to explore and enjoy novelty and risk – but according to psychologist Mihaly Csikszentmihalyi, these instincts crumble if we don’t cultivate them.

AI is brilliant at automating routine knowledge work and generating new insights from existing data. What it can’t do is deduce the existence, or even the possibility, of information it isn’t already aware of. It can’t imagine radical new products and business models. Or ask previously unconceptualized questions. Or envision unimagined opportunities and achievements. AI doesn’t even have common sense! As theoretical physicist Michio Kaku says, a robot doesn’t know that water is wet or that strings can pull but not push. Nor can robots engage in what Kaku calls “intellectual capitalism” – activities that involve creativity, imagination, leadership, analysis, humor, and original thought.

At the moment, though, we don’t generally value these so-called “soft skills” enough to prioritize them. We expect people to develop their competency in emotional intelligence, cross-cultural awareness, curiosity, critical thinking, and persistence organically, as if these skills simply emerge on their own given enough time. But there’s nothing soft about these skills, and we can’t afford to leave them to chance.

Lessons in being human

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level – and to do so not just as soon as possible, but as early as possible.

Singularity University chairman Peter Diamandis, for example, advocates revamping the elementary school curriculum to nurture the critical skills of passion, curiosity, imagination, critical thinking, and persistence. He envisions a curriculum that, among other things, teaches kids to communicate, ask questions, solve problems with creativity, empathy, and ethics, and accept failure as an opportunity to try again. These concepts aren’t necessarily new – Waldorf and Montessori schools have been encouraging similar approaches for decades – but increasing automation and digitization make them newly relevant and urgent.

The Mastery Transcript Consortium is approaching the same problem from the opposite side, by starting with outcomes. This organization is pushing to redesign the secondary school transcript to better reflect whether and how high school students are acquiring the necessary combination of creative, critical, and analytical abilities. By measuring student achievement in a more nuanced way than through letter grades and test scores, the consortium’s approach would inherently require schools to reverse-engineer their curricula to emphasize those abilities.

Most critically, this isn’t simply a concern of high-tuition private schools and “good school districts” intended to create tomorrow’s executives and high-level knowledge workers. One critical aspect of the challenge we face is the assumption that the vast majority of people are inevitably destined for lives that don’t require creativity or critical thinking – that either they will somehow be able to thrive anyway or their inability to thrive isn’t a cause for concern. In the era of AI, no one will be able to thrive without these abilities, which means that everyone will need help acquiring them. For humanitarian, political, and economic reasons, we cannot just write off a large percentage of the population as disposable.

In the end, anything an AI does has to fit into a human-centered value system that takes our unique human abilities into account. Why would we want to give up our humanity in favor of letting machines determine whether or not an action or idea is valuable? Instead, while we let artificial intelligence get better at being what it is, we need to get better at being human. That’s how we’ll keep coming up with groundbreaking new ideas like jazz music, graphic novels, self-driving cars, blockchain, machine learning – and AI itself.

Read the executive brief Human Skills for the Digital Future.

Build an intelligent enterprise with AI and machine learning to unite human expertise and computer insights. Run live with SAP Leonardo.


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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu