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The IoT: It’s not about connecting “things.” It’s about connecting business value

During the month of June, leading manufacturers across North America came together in Chicago to discuss how The Internet of Things and the digital economy is shaping manufacturing. The theme of the conference: Run Simple: Intelligently Connect everywhere was chosen to highlight the importance of extracting business value from the world being increasingly defined by ubiquitous connections.

While the conference addressed new emerging technologies like the IoT, Cloud Computing, SAP S/4HANA and business networks, it focused less on the current and future state of connectivity and focused more on how companies are planning and meeting the challenges imposed by the new digital economy. While having 50 billion connected devices is newsworthy, until that level of enhanced connectivity leads to tangible business value, hyper- device connectivity by itself is meaningless.

As stated and reinforced, in the opening welcome address by SAP’s Midwest Vice President and General Manager, DJ Paoni, “We don’t often think about electricity as technology and no longer consider it an innovation…’s so common and ordinary we only notice electricity when it’s not available. What’s interesting historically is that when electricity was introduced on the shop floor, it had virtually NO immediate impact. Productivity did not increase, product quality did not improve, and labor conditions were roughly the same. In fact, no material improvement happened for 20 years.”

The introduction of electricity to manufacturing is a poignant reminder that hyper- connectivity alone will not guarantee business success. Hyper-connectivity by itself is just a new operating state-just another new business reality in today’s digital economy. Consider hyper-connectivity today’s “digital electricity.” While the world may becoming increasingly more connected, like having electricity on the shop floor, only by having the knowledge of what to do with this increased level of connectivity, is what will ultimately drive business value. So how can companies begin to harness these new potential innovations and hyper connectivity? I recommend that they start by fully understanding the emerging use cases that support these technologies. The use cases define the potential business value.

When examining these use cases do so with an open but “process-focused mindset.” While you may not operate a shipping port, like the IoT/ SAP HANA use case from the Hamburg Port Authority, most companies, operating warehouses will also benefit from further optimizing space utilization and from the efficiency gains associated with goods entering and leaving their warehouses.

Companies will gain more knowledge and insight from examining use cases, by concentrating less on the industry and products covered, and by focusing more on understanding the business processes and functions that are receiving increased business value. While current use cases may not fit a company’s business exactly, they still may offer valuable insight into areas for potential innovation previously undiscovered.

As organizations, begin to explore different use cases, SAP’s Industry Value Engineering organization can assist with further defining specific business objectives and business values, along with innovation road maps.

You can learn more about the resources offered by the SAP Industry Value Engineering organization and SAP Industry and LOB Solutions by visiting our Manufacturing Industries Forum 2015 Resource Center. During the conference, over 500 attendees enjoyed expert solution and industry presentations. Experience how companies are transforming their manufacturing businesses by downloading presentations from pre-conference workshops, keynotes, industry discussions, analyst research, customer panels, and 35- plus customer case studies.

I trust you will find the information beneficial, and I look forward to seeing you at future SAP Manufacturing Industries Forums.

Warmest regards,

Harry Blunt

Director of High Tech Industry Field Marketing, North America

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