Methods for Creating Your Enterprise IoT Strategy
As part of a topic group in the German SAP user group (DSAG), my colleague Jürgen Jakowski and myself – together with a number of ambitious customers and partners – evaluate possible approaches and methods for developing an individual customer enterprise strategy for the Internet of Things (IoT). With blogs like this one, we want to share the results of these activities with other SAP customers and DSAG members.
In his latest blog series, Jürgen explored the characteristics of an enterprise IoT strategy. He outlined the need for parameters, methods, approaches, and strategies that help to make an Internet IoT journey more successful along the following activity map, consisting of six consecutive steps:
The second step of this journey is the task of defining a starting point for an enterprise’s IoT activities (as described in Part 2 of Jürgen’s blog series).
Based on this, let me outline how we want to tackle this definition of a starting point. Our approach focuses on the following essential components that make an IoT solution successful (and that you most probably know from human-centered design):
- Human desirability describes the field of solutions with an outcome that is attractive to users, as they fulfill specific needs that exist today or generate additional value (directly or indirectly to the user, as IoT also deals with Machine-to-Machine [M2M] communication).
- Economic viability describes the field of solutions that a) can be realized with a positive outcome in terms of generated benefits versus efforts spent and b) are in alignment with the overall business goals and targets of an enterprise. Overall, a solution is viable if it makes economic sense for an enterprise to invest in it.
- Technical feasibility describes the field of solutions that an enterprise organization is technically able a) to achieve in a reasonable amount of time and b) to operate with reasonable effort.
Successful innovation lies in the sweet spot where these three fields intersect, resulting in a solution that is technically feasible within viable economic limits, and with a desirable outcome for the user.
In our approach, we will tackle this triangle with the methods set out below. These act as accelerators in the sense that they help you to gather relevant knowledge and make the decisions required in this phase of your project:
- To ensure human desirability, we use design thinking as an innovative and creative problem-solving approach. The goal here is to bring in the right mix of diverse business and technical experts to identify a large set of verified ideas for iteratively shaped solutions that solve the right problem and fit the user – all based on a common understanding in the diverse team of experts involved.
For general information about design thinking, see the corresponding topic in SAP Enterprise Architecture Explorer (including a description and several valuable links, for example to an SAP training course).
- To ensure economic viability , we use business model innovation as systematic, iterative and creative method to improve existing business models, or to find new ones (defining how to make money with an offering, such as a product or a service). An appropriate business model (or the adaption of an existing one) is a key factor for success, especially for digital economies. The business model innovation method is based on the business model canvas and takes into account many aspects, such as possible white spots in your existing business model, a better understanding of the addressed market, and costs and revenue. The overall goal is to identify the right business model that enables you to extract the right set of ideas (that generate profit) from the previously identified pool of desirable ideas and opportunities.
If you want to learn the method hands-on with support from experienced trainers, here is a link to a Business Modell Development & Innovation training from SAP. For an introduction to the business model canvas, see this short YouTube video from Alexander Osterwalder, who invented it. In addition to this, we plan to provide a topic about business model innovation in SAP Enterprise Architecture Explorer, again with valuable links (I will add a link here, as soon as we have it ready).
- Finally, to ensure the technical feasibility of the identified desirable and viable ideas and opportunities, we see enterprise architecture as a valuable approach, as it can help you to create a clear picture of your business and IT environment, together with a structured plan for how to improve it. In the context of SAP and IoT, you can use SAP Enterprise Architecture Explorer as an accelerator. SAP Enterprise Architecture Explorer is based on a framework that makes use of several principles to provide a stakeholder-oriented guidance and structured information for the transformation of your company’s architecture.
To learn more, see Enterprise Architecture and related topics in SAP Enterprise Architecture Explorer. This offers many semantically-connected topics, easy-to-consume videos and detailed blogs that enable you to dive straight into the enterprise architecture topics.
In the coming months, we as a group plan to validate these methods on practical examples and real-life customer scenarios.
We are excited about what we will learn about the feasibility of our approaches and about all the aspects that play a part in defining viable enterprise IoT strategies. Based on the findings and the feedback from the group, we plan to further develop the overall approach on a step-by-step basis. All of which of course is planned to be reflected in further blogs and content in SAP Enterprise Architecture Explorer.
I hope that you will join us on this exciting journey! As always, all feedback is welcome.
All the best,