Tanja Rueckert was always interested in technology. The little girl who took apart radios to see how the parts were connected and how she could make them work better today is Executive Vice President, Line of Business Digital Assets and IoT at SAP, helping customers understand how various technologies and edge devices are connected and how they can make their business better.
Rueckert spoke with Data Informed about her new role at SAP, the developing world of the Internet of Things and Industry 4.0, and how organizations can ensure they are ready for this new era of business.
Data Informed: You’ve been in this role since April. What is at the top of your to-do checklist? What are you looking to accomplish in the first year of this role?
Rueckert: Since April, we already started consolidating all the different Internet of Things teams. We added supply chain management, manufacturing, transportation, and logistics, which makes a lot of sense because they are the ones where the impact is highest, especially at the beginning of the Internet of Things.
On top of our checklist is innovation and thought leadership. We were able to get positive feedback from Gartner on the SAP IoT strategy – they now see that we have the unique opportunity to connect ERP systems to the things, SAP S/4HANA to the things, really the business systems, the business process, connect them using all of the information provided by the device. This innovation leadership with analysts, with research institutes, working on artificial intelligence, working on machine learning, combined with the Internet of Things, is very fascinating, and is on top of my list.
Number two is customer adoption and transformation. There are several leading customers that really see the opportunity and are already through with the first IoT project, and on to the next one. What my team and I absolutely want to do is help our customers on the digital transformation journey, and customer adoption is clearly very high on our list.
Number three is growing our ecosystem. Especially in the Internet of Things, partners are always important and I believe that SAP did very well on the SAP HANA ecosystem in the past. In the era of Industry 4.0 and the Internet of Things, it becomes even more important. Operational technology (OT) and IT come closer together, so the machine builder, SAP – we as the IT provider, they as the OT provider – will have symbiotic partnerships. Also, in the area of connectivity, we work with several partners. No player alone will cover all of the Internet of Things space. Driving the ecosystem is number three of my top to-do’s to make it a big success for SAP.
What are the biggest customer misconceptions about IoT, Industry 4.0, and digital transformation that you are seeing?
Rueckert: That’s a very good question. I believe that, out of this era, those businesses that are not leading and being fast, for them it will be very hard to catch up on the competitive advantage of leading companies. So why are some hesitant? One reason is that some believe that it might be hype. Some others believe that it happens, but in the future, it’s not yet here.
The second one is to understand that you don’t have to re-invent everything at once. It does not have to be a major, huge project. You could start small. You could automate your manufacturing; you could go into logistics and do some route optimization of your deliveries. Or you could say that maintenance is the biggest cost item on my profit-and-loss statement, I’d like to go from planned maintenance to predictive maintenance. So you could select elements to start. Understanding that you can start small and, secondly, that automation creates new job opportunities is a very important element.
Especially in the area of the Internet of Things, the topic of data privacy and data security is a very important one. And customers have mission-critical data – it’s not about some of their HR processes or something that they are not worried to have in the cloud, it’s really about the mission-critical data – and they need to better understand that they are really safe and you can have secure transmissions. And SAP invested heavily in IoT security. We are involved in several of the standards committees, like the Industrial Internet Consortium, where I am co-chairing the steering committee. We are on the board of Platform 4.0, so we really want to drive interoperability, standardization, as well as a high level of security, including security framework and standardization to help our customers overcome that hurdle. Those are the three main points I hear in customer conversations.
You mentioned that one of the misconceptions is that it is all hype and that it is not yet here. How far along do you think before we are in Industry 4.0? What stage are you finding that most organizations are at on their path to digital transformation?
Rueckert: I think if you go in terms of numbers, I would say that several companies are at Industry 3.0 or 3.5 in terms of the maturity of the customers and how they are ready to transform their business models and processes. We have some leading customers that already are at 4.1 or 4.2. I recently had a customer here, our leading customer in Thailand, and she has a clear vision and wants to make it happen this year: a fully automated factory.
What do you see as the timetable to get everyone to Industry 4.0? What is the fastest route to get there?
Rueckert: The fastest route to get there is, always, to start. It’s very hard to give a generic timetable here because it’s often company-specific and, to a certain extent, industry-specific and also business-specific. I think industry borders will blur over time, but there will be no general timeline. I believe that we have this year a kind of initiate phase, maybe partially next year, and then it accelerates because a lot of customers see their neighbor companies all doing something, getting started, and then going more to scale say in two years everybody just continues with another project. And I see especially next year it will be very critical to accelerate that path. I believe those journeys are company, industry, or sometimes cross-company specific. But, to your question on the timeline, I think it will happen within the next few years. It will not take 10 years. I think in 2020, we will already be looking at a completely different environment in all companies and industries from what we have today.
What are some of the most important tools to get there?
Rueckert: I think the most important part is the openness and mindset of the company of the customer. I truly believe technology is not an obstacle anymore. Technology can do everything. It’s really the openness, the readiness, the mindset, openness to change, to have new business models in mind and even to cannibalize part of the business to reach new heights.
The cost of sensors is significantly down. This makes it easy to have sensors everywhere. Second, the sensors are getting more intelligent, they have capabilities we didn’t have before. They are not only collecting data, they really have some intelligence in them. I believe the intelligence at the edge, including the sensors and software at the edge, is absolutely a key tool. The connectivity from the edge to the platform is critical. I also made a statement once in a keynote that I believe that company leaders need to think about algorithms as strategic assets, as part of their strategy. I believe these (elements) are critical for success.
What are some tips you can offer for an organization that wants to get started down that route?
Rueckert: My slogan is, “Start small, start now.” And think end to end. While thinking big, you can start now, and start small.
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