During the past few weeks, I have met with a number of people in the SAP ecosystem and beyond in the context of the Internet of Things (IoT). I was seeking to educate them about what SAP can help them with or how we can best collaborate in this arena, but it also has been a learning experience for me. I have been reminded that, being in the software business, you can get so caught up in technical jargon – especially in Silicon Valley – that you start to believe that the rest of the world has the same viewing lens that you do. But, as I’ve found out, that is not the case.
During a conversation before a presentation I was about to make, I was asked by one SAP customer, “How do I know my IoT problem?” I was quiet for a moment. Then, I asked, “How do you mean?” The response: “I can’t seem to find an IoT problem.”
The IoT Problem
No one wakes up in the morning and says, “I need to find an IoT solution for my IoT problem.” Too many are confused by the constant barrage of “IoT this” and “IoT that” – too many are wondering if they might have a bigger problem should they be unable to identify an IoT problem! The fact is that where most businesses sit, there is no such thing as an IoT problem. What we have are real business problems that can now be solved using the Internet of Things.
It is widely expected that, by 2020, 2.5 billion people will be connected on social networks and 75 billion connected devices, tied to $65 trillion in global business trade. The massive numbers of connected “things” – the signal-emitting devices, the sensors – and the explosion of data generated by these things is changing the way we do business today and how we will do business in the future. When we are able to derive actionable insights from these things, when we are able to know where opportunity and risk exist from all of the connected “things,” then we will get the first level of value from these “things” on the Internet. However, the true promise of using the IoT is realized when a company can evolve business processes and turn that insight into outcomes. Doing this in a fully automated manner, frequently by leveraging the Internet, is a true prize.
How do we measure this value? Outcomes like lowering cost, optimizing productivity, and increasing uptime are significant for any company, but you gain an extra mile when you realize value in innovative ways, leveraging your business network and often creating ecosystem advantages. When you are at that stage, you likely will have identified and created new revenue streams as well as new/renewed business models. You might find that you are able to reduce production lead time of customized products (as I have found in one specific use case) from a 21-day cycle to six hours, or achieve a 10 percent reduction in maintenance costs, or transition from being an equipment manufacturer of providing an experience beyond that piece of equipment, thus realizing greater value.
These are the business outcomes we are after. The Internet of Things makes this possible and gives us the ability to do things we couldn’t in the past.
To achieve these outcomes with the IoT, you need a solid platform that can provide the horsepower and ability to deal with complexities arising from a variety of data. The right platform is not a trivial matter. All the sensor data in the world is only as valuable as the insight that can be derived from it and the action taken on it.
According to some estimates, less than 1 percent of data generated by sensors is actually used today – and mostly for real-time needs. Most software vendors can marshal this data only in limited ways. This is not adequate when addressing IoT use cases. What is needed is the ability to deal with an exponentially higher degree of big data. Often, the data volume encountered in IoT use cases are such that you could easily accumulate a petabyte of data in a month, with several hundred billion messages daily, all coming at you with a ferocious velocity. True value from an IoT solution can be derived only when we are able to address things in real time (or near real time) and also have all the data available for a deeper analysis that does not necessarily need to happen in real time. This addresses the need to be agile and drive new business value instantly and also to be able to explore new scenarios and business models.
Armed with this knowledge of the power of IoT solutions, can you think of a pain point or a business problem you need to solve in your enterprise with these capabilities? When you have identified that business problem, you will have found your IoT problem!
(P.S., The individual who asked me the IoT problem question that I referenced above is on his way to planning an initiative that will deliver an IoT solution to address a long-standing problem in his business.)
Puneet Suppal is a seasoned IT strategist and thought leader specializing in SAP products for real-time business advantage. Experienced at leading global initiatives across multiple IT platforms, serving numerous verticals, Puneet specializes in driving business value by aligning people, technology, and business processes. Currently, he is focused on technology-driven innovation with customers and partners that drives business and social advancement. In particular, he is passionate about crafting solutions that leverage the Internet of Things, often to deliver actionable analytics to address data problems.
A member of the Data Informed Board of Advisers, Puneet is recognized as an authority within the SAP ecosystem. He frequently writes and speaks on the importance of focusing on business processes, as well as on in-memory computing and mobility. Follow him on Twitter @puneetsuppal.
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