The Internet of Things (IoT) brings great opportunities for High Tech companies – and SAP can help. Let me explain the How and Why.
Let’s start with the value chain of a High Tech manufacturer, consisting of these five main elements:
These elements are horizontally integrated, ideally through an enterprise software solution like from SAP, serving as a common data platform. It has to be smart in the sense that it allows fast and simple correlation, analysis and visualization of data.
The IoT now enables the additional vertical integration from the business process down to the asset level. Intelligent assets are being connected to exchange meaningful data. Data coming from the assets can be used to optimize business processes, data from the enterprise applications can be used to control these assets.
The IoT serves as an enabler for new business scenarios on top of the value chain. These scenarios can be run by enhancements of the enterprise applications or by specific IoT apps on top of the enterprise applications.
A High Tech manufacturer has two 2 roles:
- User of IoT-enabled equipment in order to support own internal processes
- Producer of IoT ready equipment to help customers improve their processes
Starting with the user perspective there are mainly two areas for IoT-optimized and new business scenarios: Supply Chain and Manufacturing. IoT helps to create efficiency and reduce cost here.
Supply Chain: IoT in logistics and transportation can be used to optimize logistics processes, to track products and vehicles and to support warehouse workers using Augmented Reality apps.
Manufacturing: connecting own machines from the shop floor with the top floor business applications can be used to optimize manufacturing processes (lot size one, flexibility, configurability), improve asset availability and performance with predictive maintenance, save energy and to improve product quality.
Continuing with the producer perspective three areas are relevant for IoT: Product Innovation, Sales and Marketing and Customer Service. IoT helps to add value for customers here.
Product Innovation: product development processes need to include the aspect of building IoT ready products, answering question like: What data needs to captured? What sensors need to be integrated where? And what additional IoT-based features and functionalities shall be enabled?
Sales and Marketing: Data from customers’ equipment may be used for personalized marketing and for new business models like pay-per-use as an alternative to buying products.
Customer Service: connecting customers’ equipment helps to resolve issues remotely, also to predict and prevent issues before they occur. Service technicians are supported using Augmented Reality apps.
As a summary we can see that there are three areas where the Internet of Things can help High Tech companies to create additional value:
Product Innovation – IoT-enabled products and solutions, extended solution portfolio
Process Innovation – IoT-optimized internal processes in manufacturing, logistics and maintenance
Business Model Innovation – IoT as an enabler for new business models like Pay-per-Use or Managed Services
And SAP IoT solutions are enablers for all three areas. Feel free to contact me if you would like to discuss SAP-enabled IoT opportunities for your company.