The CIO’s Cheat Sheet For Digital Transformation

Richard Howells

You didn’t sign up for this, but your company needs you—desperately.

As CIO, you figured you’d merely lead your IT department. You’d purchase equipment and create new systems. You’d implement policies and procedures around device usage. You’d protect your enterprise from dangerous cyberattacks.

But with new, groundbreaking technologies emerging every day—from the Internet of Things (IoT) to machine learning—your role within the organization has changed. In fact, it’s growing in importance. You’re expected to be more strategic. Your colleagues now view you as an influencer and change-maker. You’re looked upon to be a driving force at your enterprise—one who can successfully guide your company into the future.

The first step in making this transition from IT leader to company leader is to team up with others in the C-suite—specifically the COO—to drive digital transformation.

Increase CIO-COO collaboration and prepare your enterprise for the digital age

The precise roles and responsibilities of a COO are difficult to pin down. They often vary from company to company. But two things about the position are generally true:

  1. The COO is second in command to the chairman or CEO of an organization.
  2. The COO is tasked with ensuring a company’s operations are running at an optimal level.

In other words, the COO role is vitally important. And as technology continues to become more and more essential to a company’s short- and long-term success, it’s crucial for the COO to establish a close working relationship with the CIO. After all, the latest innovations—which today’s CIOs are responsible for adopting and managing—will unquestionably aid an organization’s operational improvements, no matter their industry.

Take manufacturing, for instance. The primary duty of a manufacturer’s COO is to create the perfect production process—one that minimizes cost and maximizes yield. To achieve this, the COO must ensure asset availability, balance efficiency with agility, and merge planning and scheduling with execution. This requires using a solution that provides real-time visibility. It involves harnessing the power of sensor data and connectivity. It encompasses capitalizing on analytics capabilities that enable businesses to be predictive rather than reactive.

And there’s one particular platform that makes all of this—and more—possible.

Experience the sheer power of IoT

In a recent white paper, Realizing IoT’s Value — Connecting Things to People and Processes, IDC referred to IoT as “a powerful disruptive platform that can enhance business processes, improve operational and overall business performance, and, more importantly, enable those innovative business models desperately needed to succeed in the digital economy.”

According to IDC research:

  • 80% of manufacturers are familiar or very familiar with the concept of IoT.
  • 70% view IoT as extremely or very important.
  • 90% have plans to invest in IoT within the next 12 to 24 months.
  • 30% already have one or more IoT initiatives in place.

So while most manufacturers appear to be on the same page about the importance and urgency of adopting IoT technology, there are stark differences in the kind of value they believe it can provide.

Nearly one-quarter (22%) of companies view IoT as tactical, meaning it can solve specific business challenges. Nearly 60%, however, see IoT as strategic. These organizations believe the technology can help them gain competitive advantages by enhancing the current products and services they provide, reducing costs, and improving productivity.

One thing all businesses can agree on is that IoT is essential to spurring enterprise-wide digital transformation—particularly as it pertains to reimagining business processes and products.

Innovate your organization’s business processes

Companies are constantly on the lookout for ways to run their operations smarter. In recent years, IoT has emerged as one of the most formidable methods for achieving this. It paves the way for increasing connectivity and business intelligence.

So what’s the endgame to all of this? Process automation.

While fully automated business processes remain a pipe dream for many companies, plenty of manufacturers are already making great strides in transforming their existing business processes with IoT.

Here are just a few ways IoT is enabling process improvements:

  • Predictive maintenance: IoT offers manufacturers real-time visibility into the condition of an asset or piece of equipment through wired or wireless sensors. By taking a proactive rather than reactive approach to maintenance, businesses can reduce asset/equipment downtown, minimize repair costs, and increase employee productivity.
  • Real-time scheduling: IoT technology empowers manufacturers to evaluate current demand and capacity availability in the moment. This allows businesses to continuously modify production schedules, resulting in higher throughput levels, lower unit costs, and greater customer satisfaction.
  • Environmental resource management and planning: IoT-enabled sensors provide manufacturers with the ability to capture and analyze energy use. By applying cognitive technology across the enterprise, companies can take the proper steps to reduce energy consumption and promote more sustainable environmental practices.

Develop and deliver innovative products

Creating smarter business processes isn’t enough for companies today. They must aspire to develop more intelligent products, too. This capability can help modern-day enterprises provide greater value to consumers, increase revenue, and separate themselves from the competition.

IoT is tailor-made for helping businesses build innovative products. With greater connectivity between organizations and goods, manufacturers can go beyond merely producing products to producing products and selling as-a-service add-ons.

Here are few ways manufacturers are creating smarter products and experiencing greater business success with IoT:

  • Remote management: IoT enables businesses to continuously monitor the health of their products. With remote management, organizations can identify problems, implement corrective actions, and increase customer satisfaction.
  • Quality feedback loop: IoT-connected products keep design and service teams loaded with useful data. Based on the information they collect, manufacturers can continue to refine products and prevent potential product recalls.
  • Product as a service: IoT technology presents organizations with myriad revenue-generating opportunities. Selling as-a-service add-ons with products allows manufacturers to take advantage of more continuous revenue streams throughout product life cycles.

Forget best practices—embrace next practices

When it comes to a company’s digital transformation, the buck stops with its CIO. After all, the CIO is responsible for adopting and managing the cutting-edge innovations that enable organizations to fuel business growth and stay competitive.

But to achieve this, CIOs need to forget about best practices and instead embrace next practices.

IDC describes next practices as “innovative processes that enable businesses to remain successful in the evolving industry landscape and at the same time prepares them for future challenges and disruptions as the scale of innovation speeds up.”

Today, there’s no better way for a company to stay innovative and competitive than by adopting game-changing IoT technology.

Want to learn more? Download the IDC white paper.

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About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.

Digitalist Flash Briefing: What Powers The World’s First Green Cargo System In Switzerland? The IoT

Bonnie D. Graham

Today’s briefing takes us to Switzerland where plans are underway for a greener, more efficient future – powered by the Internet of Things.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist”. Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

Read more on today’s topic

 

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About Bonnie D. Graham

Bonnie D. Graham is the creator, producer and host/moderator of 29 Game-Changers Radio series presented by SAP, bringing technology and business strategy thought leadership panel discussions to a global audience via the Business Channel on World Talk Radio. A broadcast journalist with nearly 20 years in media production and hosting, Bonnie has held marketing communications management roles in the business software, financial services, and real estate industries. She calls SAP Radio her "dream job". Listen to Coffee Break with Game-Changers.

How IoT And Connected Vehicles Are Redefining Fleet Management

John Ward

For years now, we have been hearing – and, in many cases, learning firsthand – how connected cars are changing the everyday lives of individual car owners.

But what about the impact on those folks who own dozens, or even thousands, of vehicles? What do connected vehicles mean to them?

ARI has a special perspective on this subject. As the largest privately held fleet-management company in the world, ARI currently manages more than 1.4 million vehicles around the globe. Its goal is to help customers control the total cost of ownership of fleets that can include light, medium, and heavy duty trucks, as well as cars.

It’s clear that ARI believes the combination of IoT technologies and network connectivity are driving advancements in fleet management that involve both car and driver.

Under the hood

In fleet management, it starts with capitalizing on all the data that a modern fleet generates. Connected cars can crank out up to 25 gigabytes of data per hour.

“We help our customers make educated decisions about their fleets by translating data points into actual strategies,” says Majk Strika, the managing director for ARI Fleet Europe.

ARI officials explain that telematics are already an integral part of more than 100,000 of the vehicles the company manages – and that number is growing rapidly. As a result, ARI processes more than a terabyte of telematics on a monthly basis.

“With vehicles that have telematics and IoT capabilities, we are really seeing inside that vehicle,” says Bill Powell, director of enterprise architecture at ARI. “When we take our fleet management information and analyze that together with IoT information, patterns begin to emerge.”

ARI is using technologies like an in-memory computing platform and digital innovation system to drive this insight to the company’s call center. Here, more than 400 ASE-certified technicians rely on this information to make decisions affecting critical issues like vehicle maintenance and repair, warranty protection, and driver safety for their clients.

Behind the wheel

“But the Holy Grail is figuring out what’s going on behind the wheel,” Powell says, “interacting and connecting with that driver.”

His colleagues agree. “There’s a lot of information we can get around driver safety and driver behavior,” notes ARI’s senior vice president of European operations, Mark Bryan, in a video filmed at a recent SAP Leonardo Live event.

And providing drivers with real-time information can promote behavior that results in cost savings. Bryan describes a common scenario where GPS data combined with information about local gas prices can direct drivers to the lowest-cost fuel provider.

“That’s a simple example,” says Bryan. “But fuel is the largest part of our clients’ spend. Consider the potential impact if you can continually provide that information to 2,000 drivers.”

So where can you see technologies like IoT, network connectivity, and advanced analytics at work in fleet management?

The short answer is, under the hood and behind the wheel.

Join us at SAP Leonardo Live North America in Chicago, November 2-3, 2017.

Please follow me on Twitter @JohnGWard3.

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About John Ward

John Ward is an Integrated Marketing Expert at SAP. He has over 30 years of professional writing experience that includes marketing material, sales support, technical documentation, video scripting, and magazine articles.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

Link to Sources


From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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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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Blockchain: Much Ado About Nothing? How Very Wrong!

Juergen Roehricht

Let me start with a quote from McKinsey, that in my view hits the nail right on the head:

“No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.”

Now, in the industries that I cover in my role as general manager and innovation lead for travel and transportation/cargo, engineering, construction and operations, professional services, and media, I engage with many different digital leaders on a regular basis. We are having visionary conversations about the impact of digital technologies and digital transformation on business models and business processes and the way companies address them. Many topics are at different stages of the hype cycle, but the one that definitely stands out is blockchain as a new enabling technology in the enterprise space.

Just a few weeks ago, a customer said to me: “My board is all about blockchain, but I don’t get what the excitement is about – isn’t this just about Bitcoin and a cryptocurrency?”

I can totally understand his confusion. I’ve been talking to many blockchain experts who know that it will have a big impact on many industries and the related business communities. But even they are uncertain about the where, how, and when, and about the strategy on how to deal with it. The reason is that we often look at it from a technology point of view. This is a common mistake, as the starting point should be the business problem and the business issue or process that you want to solve or create.

In my many interactions with Torsten Zube, vice president and blockchain lead at the SAP Innovation Center Network (ICN) in Potsdam, Germany, he has made it very clear that it’s mandatory to “start by identifying the real business problem and then … figure out how blockchain can add value.” This is the right approach.

What we really need to do is provide guidance for our customers to enable them to bring this into the context of their business in order to understand and define valuable use cases for blockchain. We need to use design thinking or other creative strategies to identify the relevant fields for a particular company. We must work with our customers and review their processes and business models to determine which key blockchain aspects, such as provenance and trust, are crucial elements in their industry. This way, we can identify use cases in which blockchain will benefit their business and make their company more successful.

My highly regarded colleague Ulrich Scholl, who is responsible for externalizing the latest industry innovations, especially blockchain, in our SAP Industries organization, recently said: “These kinds of use cases are often not evident, as blockchain capabilities sometimes provide minor but crucial elements when used in combination with other enabling technologies such as IoT and machine learning.” In one recent and very interesting customer case from the autonomous province of South Tyrol, Italy, blockchain was one of various cloud platform services required to make this scenario happen.

How to identify “blockchainable” processes and business topics (value drivers)

To understand the true value and impact of blockchain, we need to keep in mind that a verified transaction can involve any kind of digital asset such as cryptocurrency, contracts, and records (for instance, assets can be tangible equipment or digital media). While blockchain can be used for many different scenarios, some don’t need blockchain technology because they could be handled by a simple ledger, managed and owned by the company, or have such a large volume of data that a distributed ledger cannot support it. Blockchain would not the right solution for these scenarios.

Here are some common factors that can help identify potential blockchain use cases:

  • Multiparty collaboration: Are many different parties, and not just one, involved in the process or scenario, but one party dominates everything? For example, a company with many parties in the ecosystem that are all connected to it but not in a network or more decentralized structure.
  • Process optimization: Will blockchain massively improve a process that today is performed manually, involves multiple parties, needs to be digitized, and is very cumbersome to manage or be part of?
  • Transparency and auditability: Is it important to offer each party transparency (e.g., on the origin, delivery, geolocation, and hand-overs) and auditable steps? (e.g., How can I be sure that the wine in my bottle really is from Bordeaux?)
  • Risk and fraud minimization: Does it help (or is there a need) to minimize risk and fraud for each party, or at least for most of them in the chain? (e.g., A company might want to know if its goods have suffered any shocks in transit or whether the predefined route was not followed.)

Connecting blockchain with the Internet of Things

This is where blockchain’s value can be increased and automated. Just think about a blockchain that is not just maintained or simply added by a human, but automatically acquires different signals from sensors, such as geolocation, temperature, shock, usage hours, alerts, etc. One that knows when a payment or any kind of money transfer has been made, a delivery has been received or arrived at its destination, or a digital asset has been downloaded from the Internet. The relevant automated actions or signals are then recorded in the distributed ledger/blockchain.

Of course, given the massive amount of data that is created by those sensors, automated signals, and data streams, it is imperative that only the very few pieces of data coming from a signal that are relevant for a specific business process or transaction be stored in a blockchain. By recording non-relevant data in a blockchain, we would soon hit data size and performance issues.

Ideas to ignite thinking in specific industries

  • The digital, “blockchained” physical asset (asset lifecycle management): No matter whether you build, use, or maintain an asset, such as a machine, a piece of equipment, a turbine, or a whole aircraft, a blockchain transaction (genesis block) can be created when the asset is created. The blockchain will contain all the contracts and information for the asset as a whole and its parts. In this scenario, an entry is made in the blockchain every time an asset is: sold; maintained by the producer or owner’s maintenance team; audited by a third-party auditor; has malfunctioning parts; sends or receives information from sensors; meets specific thresholds; has spare parts built in; requires a change to the purpose or the capability of the assets due to age or usage duration; receives (or doesn’t receive) payments; etc.
  • The delivery chain, bill of lading: In today’s world, shipping freight from A to B involves lots of manual steps. For example, a carrier receives a booking from a shipper or forwarder, confirms it, and, before the document cut-off time, receives the shipping instructions describing the content and how the master bill of lading should be created. The carrier creates the original bill of lading and hands it over to the ordering party (the current owner of the cargo). Today, that original paper-based bill of lading is required for the freight (the container) to be picked up at the destination (the port of discharge). Imagine if we could do this as a blockchain transaction and by forwarding a PDF by email. There would be one transaction at the beginning, when the shipping carrier creates the bill of lading. Then there would be look-ups, e.g., by the import and release processing clerk of the shipper at the port of discharge and the new owner of the cargo at the destination. Then another transaction could document that the container had been handed over.

The future

I personally believe in the massive transformative power of blockchain, even though we are just at the very beginning. This transformation will be achieved by looking at larger networks with many participants that all have a nearly equal part in a process. Today, many blockchain ideas still have a more centralistic approach, in which one company has a more prominent role than the (many) others and often is “managing” this blockchain/distributed ledger-supported process/approach.

But think about the delivery scenario today, where goods are shipped from one door or company to another door or company, across many parties in the delivery chain: from the shipper/producer via the third-party logistics service provider and/or freight forwarder; to the companies doing the actual transport, like vessels, trucks, aircraft, trains, cars, ferries, and so on; to the final destination/receiver. And all of this happens across many countries, many borders, many handovers, customs, etc., and involves a lot of paperwork, across all constituents.

“Blockchaining” this will be truly transformational. But it will need all constituents in the process or network to participate, even if they have different interests, and to agree on basic principles and an approach.

As Torsten Zube put it, I am not a “blockchain extremist” nor a denier that believes this is just a hype, but a realist open to embracing a new technology in order to change our processes for our collective benefit.

Turn insight into action, make better decisions, and transform your business. Learn how.

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Juergen Roehricht

About Juergen Roehricht

Juergen Roehricht is General Manager of Services Industries and Innovation Lead of the Middle and Eastern Europe region for SAP. The industries he covers include travel and transportation; professional services; media; and engineering, construction and operations. Besides managing the business in those segments, Juergen is focused on supporting innovation and digital transformation strategies of SAP customers. With more than 20 years of experience in IT, he stays up to date on the leading edge of innovation, pioneering and bringing new technologies to market and providing thought leadership. He has published several articles and books, including Collaborative Business and The Multi-Channel Company.