To Cloud Or Not To Cloud: That Is The Compliance Question

Daniel Newman

Some companies have embraced cloud technology with open arms, while others approach it with extreme wariness—understandably so, since for industries that handle sensitive data, cloud security risks could spell disaster. However, fear of the cloud often comes from a lack of information rather than actual risk.

Companies today have the opportunity to use public, private, and hybrid cloud options, yet many technology leaders continue to vacillate in their cloud approach. Some still favor legacy solutions, even though they run slower and cost more. Others only use public or private cloud solutions minimally, and haven’t yet explored the possibility of hybrid solutions.

The possibilities of hybrid cloud

A hybrid cloud setup offers companies the greatest flexibility yet. If you have sensitive data, you can still use traditional networking for data storage while running some enterprise applications through a public or private cloud. The solution allows companies to set up a customized cloud structure that makes sense on every level.

The risk versus the reward  

Companies that look at the full threat landscape understand the potential risk of cloud solutions. While it will always carry a certain level of risk, lost devices, human error, and other types of breaches often represent a higher risk of vulnerability than a cloud solution. Furthermore, third-party companies often run private, public, and hybrid cloud solutions. Your security is in a vendor’s best interest. Without strong security protocols and continual updates, they could lose clients and their reputation in the industry.

All organizations in every industry are moving to the cloud. They may not house everything there, but they use it to some extent. Companies that fail to explore the possibilities today may not keep up with the changing digital needs of their target markets down the road. 2016 is the right time to explore a cloud migration.

Compliance and security: Hybrid cloud in tough verticals

Some industries must consider regulatory requirements before moving their enterprise applications and data into a cloud solution. Healthcare, government, and the finance industry all represent fields with data sensitivity concerns. Luckily, many vendors and a government program called FedRAMP now offer highly secure and customizable hybrid cloud solutions so certain industries can maintain compliance while continuing to transition to the cloud.

FedRAMP, healthcare, and government agencies. FedRAMP (Federal Risk and Authorization Management Program) is a program that standardizes security for cloud solutions. Companies that offer authorized FedRAMP security with their cloud solutions meet the security requirements sensitive industries can use to safely move their data and solutions into the cloud. Amazon, Windows, and IBM all offer FedRAMP cloud solutions for government agencies and other organizations.

The finance sector. Major banks, lenders, and other financial institutions—all heavily regulated—have discovered that the benefits of cloud migration outweighs the risks. They can work faster with less downtime and more comprehensive data management in the cloud, than in any traditional solutions provided. Plus, moving to the cloud is incredibly cost-effective. Hybrid solutions benefit internal operations, but more importantly, they benefit the customer.

Choosing a hybrid cloud provider 

Hybrid cloud solutions are scalable, so companies can use them on a small scale before they roll out a comprehensive solution at the enterprise level. Companies that still harbor reservations may find this type of approach more digestible. If you’re interested in seeing what the hybrid cloud can do for you, learn more about your compliance requirements. A cloud vendor that readily understands the regulatory constraints you face will know how to recommend a hybrid solution that allows you to create a secure solution.

When you adopt cloud solutions, they will offer more flexibility, faster transmission speeds, and enhanced productivity. Look for solutions that can support your needs today, as well as projects for the future of your industry. Explore how moving to the cloud will change device policies, IoT acceptance, and remote worker capabilities. A hybrid cloud investment will not only benefit your company today, it will also drive progress tomorrow.


This post was brought to you by IBM Global Technology Services. For more content like this, visit Point B and Beyond 

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The post To Cloud or Not to Cloud: That is the Compliance Question appeared first on Millennial CEO.


About Daniel Newman

Daniel Newman serves as the Co-Founder and CEO of EC3, a quickly growing hosted IT and Communication service provider. Prior to this role Daniel has held several prominent leadership roles including serving as CEO of United Visual. Parent company to United Visual Systems, United Visual Productions, and United GlobalComm; a family of companies focused on Visual Communications and Audio Visual Technologies. Daniel is also widely published and active in the Social Media Community. He is the Author of Amazon Best Selling Business Book "The Millennial CEO." Daniel also Co-Founded the Global online Community 12 Most and was recognized by the Huffington Post as one of the 100 Business and Leadership Accounts to Follow on Twitter. Newman is an Adjunct Professor of Management at North Central College. He attained his undergraduate degree in Marketing at Northern Illinois University and an Executive MBA from North Central College in Naperville, IL. Newman currently resides in Aurora, Illinois with his wife (Lisa) and his two daughters (Hailey 9, Avery 5). A Chicago native all of his life, Newman is an avid golfer, a fitness fan, and a classically trained pianist

The Future Of Wholesale Distribution: Using Data To Drive Action

Werner Baumbach

Recently I was asked if I thought that wholesale distribution would be any different 30 years from now. To me, the answer is so obvious that I took me a few seconds to respond.

Instead of polishing the crystal ball, let’s look back 30 years and think about how much our world has changed since 1986.

Back in the second half of the 1980’s, most of my music collection was still on tape, and the Internet was still not available to most of us. When I had to write a paper (yes, I was still in high school back then), I would go to the library and hope to find a book or two on my subject.

My PC had a hard drive that most modern cameras would fill with fewer than 5 shots. Drones were science fiction, globalization was not part of my vocabulary, and shopping internationally meant bringing something home from vacation.

I think we will all agree that the world has changed dramatically since then, and so has the way we do business. Technology has gone through through revolutionary cycles, and most of it is now based on vast amounts of data.

A 2015 study revealed that 90% of all data created has been released in the last two years. With the emergence of all kinds of intelligent tools and gadgets, it is not surprising that the same study predicts continuous data volume growth rates north of 40%.

Looking at some social media posts, I will admit that much of that data has limited value. But on a less judgmental level, for the first time in history, the problem is not that we have too little data. The challenge now is to comprehend the vast amount of information available, create insight, and act based on that knowledge.

The wholesale industry has traditionally had a very detailed picture of its customers, especially on the sales side. Our industry benefits from maintaining close relationships with customers. In our new global and virtual world, these relationships are becoming more complex – a risk for future success, but more importantly, a vast opportunity.

Customers do have a simple choice: to take their business elsewhere. But we need to understand how to best meet our customers’ needs, and to be truly successful, we must find the best approach for individuals or for groups of customers with similar interests.

Already we are seeing wholesale companies use sentiment analysis to optimize their assortments. Items that receive bad feedback can be eliminated to avoid unhappy customers. In the next step, predictive modelling can be used to increase efficiency for new product introductions and monitor success. Customer segmentation will need to significantly evolve to factor in additional aspects and insight and deliver personalized offers and value. And we will need to find ways to stay consistently engaged with our customers across all channels.

The key to success is being able to compile all information across different sources—both virtual and direct—and create an instant picture that can be used to best service the customer in the moment. Just because a customer was looking for a printer a week ago, for example, doesn’t necessarily mean they are still interested in that purchase today.

Going back to the initial question: I am convinced that in 2046, the world—and the wholesale distribution industry—will look significantly different than it does today. And while my crystal ball is a bit murky on how much automation, robotics, drones, and virtual reality the future will include, it is fairly clear on one point: Everything will be based on data and the ability to use it to drive informed action and activities.

For more insight on digital transformation in wholesale, see Winning The Gold Medal In Wholesale Distribution.


About Werner Baumbach

Werner Baumbach is a solution manager for the SAP Global Wholesale Distribution Industry Business Unit at SAP. Werner has over 20 years of experience in different roles in software and consumer industries. He has a passion for innovative and future technologies and solutions in Wholesale and Retail.

Effects Of Digital Transformation On Businesses: Helpful Use Cases

Sven Denecken

Digital transformation is a well-known concept in today’s business environment. The growing connectivity of people, machines, and businesses has changed market demands. In order to keep up and stay competitive, business must adjust to these demands by digitizing their processes and business models.

But digital transformation also holds many new opportunities to grow and even establish new branches of business. Therefore, companies should embrace innovation, ensure effective customer engagement, bring in fresh ways of thinking, and empower a company to make well-informed decisions as a collective whole.

Many businesses have already begun to transition toward digital transformation as they realize that it cannot be left for tomorrow. In this series we will illustrate, using industry-specific use cases, how businesses can reimagine their business models, processes, products, and services to achieve the benefits of digital transformation. To do this, organizations are increasingly looking to adopt technology enablers like Big Data, mobility, collaboration, analytics, and cloud computing.

Use case business intentions

Let’s begin with the first digitization use case within the consumer product industry: real-time supply chain visibility.

In order for a business to achieve real-time supply chain visibility, it needs to move from manual to system-based production planning and scheduling, automate sales order management, and enable traceability and visibility of operations and shipments within and outside the organization. By leveraging Big Data and analytics capabilities, the company can analyze the demand for production, delivery and process times, and can create event based notifications for better monitoring of the supply chain. So in this case, Big Data and analytics are the technology enabler that will help enterprises to realize the digital transformation goals.

FMCG customer example

To make this use case more relatable, we will illustrate a before-and-after situation with an anonymized fast-moving consumer goods (FMCG) customer.

This company is an example of digital transformation done right, with Big Data and analytics as technology enablers. The idea was to track and analyze real-time data to reimagine the process of work to help reduce costs and improve process flow.

Before digital transformation

The purchase data across various auctioning platforms was captured manually, with buying prices varying significantly. The lack of real-time purchases visibility hindered the mid-market price interventions. There also was a manual production planning process with lengthy planning cycle times. Time stamps for various processes were captured in disparate systems, which did not facilitate backward calculation of customer “need by” dates. The company was unable to demonstrate traceability to customers quickly or efficiently. As it was not able to track and monitor warehouse utilization in real time, it monitored decision-making manually, which is of course not the most efficient approach.

In a digitized environment, these circumstances posed a threat to the company’s position in the market, and even to its existence. Hence, it acknowledged the need to immediately transform digitally. The need for change becomes clear when a business is unable to work in real time or with a great analytics tool to make the best decisions based on accurate information. Overall, the time-consuming, error-prone processes of sourcing data for planning in this company needed to be reimagined.

After digital transformation

The company started with live tracking and reporting to facilitate quick responses to changing situations, to achieve cost benefits, reduce decision times, and improve opportunity captures. Next was better monitoring of the supply chain by event-based notifications to correct any schedule non-conformance issues. The company also facilitated traceability both within the organization and outside through a single lot traceability report.

Immediate results

When implementing digital transformation, the results are instantaneous. In this example, there is a long list of business benefits:

  • Ÿ INR 120+ million saved by optimized sourcing
  • Ÿ Reduced the time lag of price visibility, from 1 day to 20 minutes
  • Ÿ Improved bale-to-box time
  • Ÿ 5% improvement in on-time delivery performance (OTIF levels)
  • Ÿ Speed improvement by over 100x for root-cause analysis: traceability reports will now be ready in <30min (previously, they required 18 hours)
  • Ÿ Optimized warehouse utilization and reduced supply chain costs by INR 4.2 million

This is just one example of many more to come. There is no doubt that digital transformation is the next step for businesses to stay competitive and prepared for the future. Stay tuned for more digitization use cases, with hands-on business examples.

Stay tuned for more examples, and follow me via @SDenecken.

This article originally appeared on ZDnet.


Sven Denecken

About Sven Denecken

Sven Denecken is Senior Vice President, Product Management and Co-Innovation of SAP S/4HANA, at SAP. His experience working with customers and partners for decades and networking with the SAP field organization and industry analysts allows him to bring client issues and challenges directly into the solution development process, ensuring that next-generation software solutions address customer requirements to focus on business outcome and help customers gain competitive advantage. Connect with Sven on Twitter @SDenecken or e-mail at

From E-Business to V-Business

Josh Waddell, Pascal Lessard, Lori Mitchell-Keller, and Fawn Fitter

Some moments are so instantly, indelibly etched into pop culture that they shape the way we think for years to come. For virtual reality (VR), that moment may have been the scene in the 1999 blockbuster The Matrix when the Keanu Reeves character Neo learns that his entire life has been a computer-generated simulation so fully realized that he could have lived it out never knowing that he was actually an inert body in an isolation tank. Ever since, that has set the benchmark for VR: as a digital experience that seems completely, convincingly real.

Today, no one is going to be unaware, Matrix-like, that they’re wearing an Oculus Rift or a Google Cardboard headset, but the virtual worlds already available to us are catching up to what we’ve imagined they could be at a startling rate. It’s been hard to miss all the Pokémon Go players bumping into one another on the street as they chased animated characters rendered in augmented reality (AR), which overlays and even blends digital artifacts seamlessly with the actual environment around us.

Believe the Hype

For all the justifiable hype about the exploding consumer market for VR and, to a lesser extent, AR, there’s surprisingly little discussion of their latent business value—and that’s a blind spot that companies and CIOs can’t afford to have. It hasn’t been that long since consumer demand for the iPhone and iPad forced companies, grumbling all the way, into finding business cases for them.

sap_Q316_digital_double_feature1_images1If digitally enhanced reality generates even half as much consumer enthusiasm as smartphones and tablets, you can expect to see a new wave of consumerization of IT as employees who have embraced VR and AR at home insist on bringing it to the workplace. This wave of consumerization could have an even greater impact than the last one. Rather than risk being blindsided for a second time, organizations would be well advised to take a proactive approach and be ready with potential business uses for VR and AR technologies by the time they invade the enterprise.

They don’t have much time to get started.

The two technologies are already making inroads in fields as diverse as medicine, warehouse operations, and retail. And make no mistake: the possibilities are breathtaking. VR can bring human eyes to locations that are difficult, dangerous, or physically impossible for the human body, while AR can deliver vast amounts of contextual information and guidance at the precise time and place they’re needed.

As consumer adoption and acceptance drives down costs, enterprise use cases for VR and AR will blossom. In fact, these technologies could potentially revolutionize the way companies communicate, manage employees, and digitize and automate operations. Yet revolution is rarely bloodless. The impact will probably alter many aspects of the workplace that we currently take for granted, and we need to think through the implications of those changes.

sap_Q316_digital_double_feature1_images2Digital Realities, Defined

VR and AR are related, but they’re not so much siblings as cousins. VR is immersive. It creates a fully realized digital environment that users experience through goggles or screens (and sometimes additional equipment that provides physical feedback) that make them feel like they’re surrounded by and interacting entirely within this created world.

AR, by contrast, is additive. It displays text or images in glasses, on a window or windshield, or inside a mirror, but the user is still aware of and interacting with reality. There is also an emerging hybrid called “mixed reality,” which is essentially AR with VR-quality digital elements, that superimposes holographic images on reality so convincingly that trying to touch them is the only way to be sure they aren’t actually there.

Although VR is a hot topic, especially in the consumer gaming world, AR has far more enterprise use cases, and several enterprise apps are already in production. In fact, industry analyst Digi-Capital forecasts that while VR companies will generate US$30 billion in revenue by 2020, AR companies will generate $120 billion, or four times as much.

Both numbers are enormous, especially given how new the VR/AR market is. As recently as 2014, it barely existed, and almost nothing available was appropriate for enterprise users. What’s more, the market is evolving so quickly that standards and industry leaders have yet to emerge. There’s no guarantee that early market entrants like Facebook’s Oculus Rift, Samsung’s Gear VR, and HTC’s Vive will continue to exist, never mind set enduring benchmarks.

Nonetheless, it’s already clear that these technologies will have a major impact on both internal and customer-facing business. They will make customer service more accurate, personalized, and relevant. They will reduce human risk and enhance public safety. They will streamline operations and smash physical boundaries. And that’s just the beginning.

Cleveland Clinic: Healing from the Next Room

Medicine is already testing the limits of learning with VR and AR.

sap_q316_digital_double_feature1_imageseightThe most potentially disruptive operational use of VR and AR could be in education and training. With VR, students can be immersed in any environment, from medieval architecture to molecular biology, in classroom groups or on demand, to better understand what they’re studying. And no industry is pursuing this with more enthusiasm than medicine. Even though Google Glass hasn’t been widely adopted elsewhere, for example, it’s been a big success story in the medical world.

Pamela Davis, MD, senior vice president for medical affairs at Case Western Reserve University in Cleveland, Ohio, is one of the leading proponents of medical education using VR and AR. She’s the dean of the university’s medical school, which is working with Cleveland Clinic to develop the Microsoft HoloLens “mixed reality” device for medical education and training, turning MRIs and other conventional 2D medical images into 3D images that can be projected at the site of a procedure for training and guidance during surgery. “As you push a catheter into the heart or place a deep brain stimulation electrode, you can see where you want to be and guide your actions by watching the hologram,” Davis explains.

The HoloLens can also be programmed as a “lead” device that transmits those images and live video to other “learner” devices, allowing the person wearing the lead device to provide oversight and input. This will enable a single doctor to demonstrate a delicate procedure up-close to multiple students at once, or do patient examinations remotely in an emergency or epidemic.

Davis herself was convinced of the technology’s broader potential during a demonstration in which she put on a learner HoloLens and rewired a light switch, something decidedly outside her expertise, under the guidance of an engineer wearing a lead HoloLens in the next room. In the near future, she predicts, it will help people perform surgery and other sensitive, detailed tasks not just from the next room, but from the next state or country.

Customer Experience: From E-Commerce to V-Commerce

Consumers are already getting used to sap_Q316_digital_double_feature1_images3thinking of VR and AR in the context of entertainment. Companies interested in the technologies should be thinking about how they might engage consumers as part of the buying experience.

Because the technologies deliver more information and a better shopping experience with less effort, e-commerce is going to give rise to v-commerce, where people research, interact with, and share products in VR and AR before they order them online or go to a store to make a purchase.

Online eyewear retailers already allow people to “try on” glasses virtually and share the images with friends to get their feedback, but that’s rudimentary compared to what’s emerging.

Mirrors as Personal Shoppers

Clothing stores from high-end boutiques to low-end fashion chains are experimenting with AR mirrors that take the shopper’s measurements and recommend outfits, showing what items look like without requiring the customer to undress.

Instant Designer Shows

Luxury design house Dior uses Oculus Rift VR goggles to let its well-heeled customers experience a runway show without flying to Paris.

Custom Shopping Malls

British designer Allison Crank has created an experimental VR shopping mall. As people walk through it, they encounter virtual people (and the occasional zoo animal) and shop in stores stocked only with items that users are most likely to buy, based on past purchase information and demographic data.

A New Perspective

IKEA’s AR application lets shoppers envisage a piece of furniture in the room they plan to use it in. They can look at products from the point of view of a specific height—useful for especially tall or short customers looking for comfortable furniture or for parents trying to design rooms that are safe for a toddler or a young child.

Painless Do-it-Yourself Instructions

Instead of forcing customers to puzzle over a diagram or watch an online video, companies will be able to offer customers detailed VR or AR demonstrations that show how to assemble and disassemble products for use, cleaning, and storage.

sap_Q316_digital_double_feature1_images4Operations and Management: Revealing the Details

The customer-facing benefits of VR and AR are inarguably flashy, but it’s in internal business use that these technologies promise to shine brightest: boosting efficiency and productivity, eliminating previously unavoidable risks, and literally giving employers and managers new ways to look at information and operations. The following examples aren’t blue-sky cases; experts say they’re promising, realistic, and just around the corner.

Real-Time Guidance

A combination of AR glasses and audio essentially creates a user-specific, contextually relevant guidance system that confirms that wearers are in the right place, looking at the right thing, and taking the right action. This technology could benefit almost any employee who is not working at a desk: walking field service reps through repair procedures, guiding miners to the best escape route in an emergency, or optimizing home health aides’ driving routes and giving them up-to-date instructions and health data when they arrive at each patient’s home.

Linking to the Hidden

AR technology will be able to display any type of information the wearer needs to know. Linked to facial identification software, it could help police officers identify suspects or missing persons in real time. Used to visualize thermal gradients, chemical signatures, radioactivity, and other things that are invisible to the naked eye, it could help researchers refine their experiments or let insurance claims assessors spot arson. Similarly, VR will allow users to create and manipulate detailed three-dimensional models of everything from molecules to large machinery so that they can examine, explore, and change them.

Reducing the Human Risk

VR will allow users to perform high-risk jobs while reducing their need to be in harm’s way. The users will be able to operate equipment remotely while seeing exactly what they would if they were there, a use case that is ideal for industries like mining, firefighting, search and rescue, and toxic site cleanup. While VR won’t necessarily eliminate the need for humans to perform these high-risk jobs, it will improve their safety, and it will allow companies to pursue new opportunities in situations that remain too dangerous for humans.

Reducing the Commercial Risk

sap_Q316_digital_double_feature1_images5VR can also reduce an entirely different type of operational risk: that of introducing new products and services. Manufacturers can let designers or even customers “test” a product, gather their feedback, and tweak the design accordingly before the product ever goes into production. Indeed, auto manufacturer Ford has already created a VR Immersion Lab for its engineers, which, among other things, helped them redesign the interior of the 2015 Ford Mustang to make the dashboard and windshield wipers more user-friendly, according to Fortune. In addition to improving customer experience, this application of VR is likely to accelerate product development and shorten time to market.

Similarly, retailers can use VR to create and test branch or franchise location designs on the fly to optimize traffic flow, product display, the accessibility of products, and even decor. Instead of building models or concept stores, a designer will be able to create the store design with VR, do a virtual walkthrough with executives, and adjust it in real time until it achieves the desired effect.

Seeing in Tongues

At some point, we will see an AR app that can translate written language in near-real time, which will dramatically streamline global business communications. Mobile apps already exist to do this in certain languages, so it’s just a matter of time before we can slip on glasses that let us read menus, signs, agendas, and documents in our native tongue.

Decide with the Eye

More dramatically, AR project management software will be able to deliver real-time data at a literal glance. On a construction site, for example, simply scanning the area could trigger data about real-time costs, supply inventories, planned versus actual spending, employee and equipment scheduling, and more. By linking to construction workers’ own AR glasses that provide information about what to know and do at any given location and time, managers could also evaluate and adjust workloads.

Squeeze Distance

Farther in the future, VR and AR will create true telepresence, enhancing collaboration and potentially replacing in-person meetings. Users could transmit AR holograms of themselves to someone else’s office, allowing them to be seen as if they were in the room. We could have VR workspaces with high-fidelity avatars that transmit characteristic facial expressions and gestures. Companies could show off a virtual product in a virtual room with virtual coworkers, on demand.

Reduce Carbon Footprint

If nothing else, true telepresence could practically eliminate business travel costs. More critically, though, in an era of rising temperatures and shrinking resources, the ability to create and view virtual people and objects rather than manufacturing and transporting physical artifacts also conserves materials and reduces the use of fossil fuel.

Employees: Under Observation

The strength of digitally enhanced reality—and AR in particular—is its ability to determine a user’s context and deliver relevant information accordingly. This makes it valuable for monitoring and managing employee behavior and performance. Employees could, for example, use the location and time data recorded by AR glasses to prove that they were (or weren’t) in a particular place at a particular time. The same glasses could provide them with heads-up guided navigation, alert employers that they’re due for a legally mandated break, verify that they completed an assigned task, and confirm hours worked without requiring them to fill out a timesheet.

However, even as these capabilities improve data governance and help manage productivity, they also raise critical issues of privacy and autonomy (see The Norms of Virtual Behavior). If you’re an employee using VR or AR technology, and if your company is leveraging it to monitor your performance, who owns that information? Who’s allowed to use it, and for what purposes? These are still open legal questions for these technologies.

Another unsettled—and unsettling—question is how far employers can use these technologies to direct employees’ work. While employers have the right to tell employees how to do their jobs, autonomy is a key component of workplace satisfaction. The extent to which employees are required to let a pair of AR glasses govern their actions could have a direct impact on hiring and retention.

Finally, these technologies could be one more step toward greater automation. A warehouse-picking AR application that guides pickers to the appropriate product faster makes them more productive and saves them from having to memorize hundreds or even thousands of SKUs. But the same technology that can guide a person will also be able to guide a semiautonomous robot.

The Norms of Virtual Behavior

VR and AR could disrupt our social norms and take identity hacking to a new level.

The future of AR and VR isn’t without its hazards. We’ve all witnessed how distracting and even dangerous smartphones can be, but at least people have to pull a phone out of a pocket before getting lost in the screen. What happens when the distraction is sitting on their faces?

This technology is going to affect how we interact, both in the workplace and out of it. The annoyance verging on rage that met the first people wearing Google Glass devices in public proves that we’re going to need to evolve new social norms. We’ll need to signal how engaged we are with what’s right in front of us when we’re wearing AR glasses, what we’re doing with the glasses while we interact, or whether we’re paying attention at all.

More sinister possibilities will present themselves down the line. How do you protect sensitive data from being accessed by unauthorized or “shadow” VR/AR devices? How do you prove you’re the one operating your avatar in a virtual meeting? How do you know that the person across from you is who they say they are and not a competitor or industrial spy who’s stolen a trusted avatar? How do you keep someone from hacking your VR or AR equipment to send you faulty data, flood your field of vision with disturbing images, or even direct you into physical danger?

As the technology gets more sophisticated, VR and AR vendors will have to start addressing these issues.

Technical Challenges

To realize the full business value of VR and AR, companies will need to tackle certain technical challenges. To be precise, they’ll have to wait for the vendors to take them on, because the market is still so new that standards and practices are far from mature.

sap_Q316_digital_double_feature1_images6For one thing, successful implementation requires devices (smartphones, tablets, and glasses, for now) that are capable of delivering, augmenting, and overlaying information in a meaningful way. Only in the last year or so has the available hardware progressed beyond problems like overheating with demand, too-small screens, low-resolution cameras, insufficient memory, and underpowered batteries. While hardware is improving, so many vendors have emerged that companies have a hard time choosing among their many options.
The proliferation of devices has also increased software complexity. For enterprise VR and AR to take off, vendors need to create software that can run on the maximum number of devices with minimal modifications. Otherwise, companies are limited to software based on what it’s capable of doing on their hardware of choice, rather than software that meets their company’s needs.

The lack of standards only adds to the confusion. Porting data to VR or AR systems is different from mobilizing front-end or even back-end systems, because it requires users to enter, display, and interact with data in new ways. For devices like AR glasses that don’t use a keyboard or touch screen, vendors must determine how to enter data (voice recognition? eye tracking? image recognition?), how to display it legibly in any given environment, and whether to develop their own user interface tools or work with a third party.

Finally, delivering convincing digital enhancements to reality demands such vast amounts of data that many networks simply can’t accommodate it. Much as videoconferencing didn’t truly take off until high-speed broadband became widely available, VR and AR adoption will lag until a zero-latency infrastructure exists to
support them.

sap_Q316_digital_double_feature1_images7Coming Soon to a Face Near You

For all that VR and AR solutions have improved dramatically in a short time, they’re still primarily supplemental to existing systems, and not just because the software is still evolving. Wearables still have such limited processing power, memory, and battery life that they can handle only a small amount of information. That said, hardware is catching up quickly (see The Supporting Cast).

The Supporting Cast

VR and AR would still be science fiction if it weren’t for these supporting technologies.

The latest developments in VR and AR technologies wouldn’t be possible without other breakthroughs that bring things once considered science fiction squarely into the realm of science fact:

  • Advanced semiconductor designs pack more processing power into less space.
  • Microdisplays fit more information onto smaller screens.
  • New power storage technologies extend battery life while shrinking battery size.
  • Development tools for low-latency, high-resolution image rendering and improved 3D-graphics displays make digital artifacts more realistic and detailed.
  • Omnidirectional cameras that can record in 360 degrees simultaneously create fully immersive environments.
  • Plummeting prices for accelerometers lower the cost of VR devices.

Companies in the emerging VR/AR industry are encouraging the makers of smartglasses and safety glasses to work together to create ergonomic smartglasses that deliver information in a nondistracting way and that are also comfortable to wear for an eight-hour shift.

The argument in favor of VR and AR for business is so powerful that once vendors solve the obvious hardware problems, experts predict that existing enterprise mobile apps will quickly start to include VR or AR components, while new apps will emerge to satisfy as yet unmet needs.

In other words, it’s time to start thinking about how your company might put these technologies to use—and how to do so in a way that minimizes concerns about data privacy, corporate security, and employee comfort. Because digitally enhanced reality is coming tomorrow, so business needs to start planning for it today. D!

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



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

Thomas Kaiser

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

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

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

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

Connecting real and virtual

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

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

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

Drilling down on digital twins

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

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

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

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

Digital twins across industries

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

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

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

Implementing digital twins involves four steps:

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

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

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