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SAP Brings You The Internet of Things For Business: Connect, Transform, and Reimagine Business in A Hyperconnected Future
SAP Brings You The Internet of Things For Business: Connect, Transform, and Reimagine Business in A Hyperconnected Future
SAP Brings You The Internet of Things For Business: Connect, Transform, and Reimagine Business in A Hyperconnected Future
Internet of Things
8 SAP Solutions for the IoT: Connect, Transform, and Reimagine Business
10 Connected Logistics
21 Conclusion
21 Learn More
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SAP Solutions for the Internet of Things Built for Your Business
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SAP Solutions for the Internet of Things Built for Your Business
Metcalfes law teaches us that the value of a Jump ahead 10-plus years, and we are beginning
communications network increases with every to see enterprises take advantage of this same
new node that joins the network. With only two principle. They are creating value by leveraging
phones on a telecommunications network, hundreds of millions of potential connections
the value of having a phone is rather low. When on the Internet. For example, online professional
billions of phones exist on the network, having a networks have streamlined the act of recruiting
phone is a gateway to more conversations than the best talent. Business networks have prospered,
anyone could have in their lifetime. with millions of companies connecting their
supplier, customer, and payment systems to
Over the past decade, weve seen Metcalfes seamlessly engage in online, collaborative
law demonstrate its power in the realm of the commerce. And more recently, were starting to
Internet. The growth of social networks is one see massive volumes of connected sensors and
example of this phenomenon at work. Facebook, smart devices leveraged to transform business
once a tool for college students to connect with models and simplify complex tasks. This is the
each other online, has become one of the corner- Internet of Things (IoT), and it will increasingly
stones of the Internet, providing social context connect people and businesses to everything
to many of our everyday online interactions. else to become, in essence, the very fabric
Facebooks existence as a university fad seems that supports a new networked economy.
a distant memory. When these changes are coupled with improve-
ments in network infrastructure, Big Data
analytics, and smart applications all connected
in the cloud businesses will enter the era of
true hyperconnectivity.
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SAP Solutions for the Internet of Things Built for Your Business
The number of Internet users worldwide has For supporting evidence, look no further than the
grown enormously over the last 15 years and is impact on enterprises. Numerous analysts and
now estimated to be close to 3 billion. But even other experts have weighed in on the potential
more striking is the vast array of intelligent devices impact of the Internet of Things, citing trillions
that are now connecting to the vast information of dollars in financial impact, with 50% of the
network around them. Estimates vary, but many worlds industries being affected.
analysts speculate that the number of connected
devices could be more than 50 billion by 2020 SAP is taking an active role in this evolving new
extending the reach of software-enabled insight market. As the creator of the software used by
by an order of magnitude. companies to run their core business operations,
SAP expects to be at the center of the changes
Along with the growth in connected devices in business processes made possible as billions
comes a wide array of opportunity. For the first of connected devices come online. Whether
time in modern history, insight can be offered to companies use the Internet of Things to transform
businesses and consumers wherever products their logistics, customer engagement processes,
exist. Devices ranging from connected toasters or internal ticketing systems, the applications
to connected turbines can analyze their own built to take advantage of the new machine data
contextual information and advise customers must be able to interact with SAP solutions.
about optimal ways they can be put to use. While
weve long envisioned these types of intelligent SAPs goal is to enable the Internet of Things
devices, they are now a reality thanks to recent for our customers to help run their businesses
gains in the realms of connectivity, sensor tech- better. To accomplish this task, we are working
nology, and real-time data processing for a wide to make it even simpler to connect the new
array of products. Its never been cheaper, easier, generation of Internet-enabled devices in the
or faster to embed software in a product and cloud. We are delivering new products that
deliver insight. support our customers as they transform their
existing business processes by harnessing the
The act of adding intelligence to an ever-expanding machine data generated by their connected
network of connected devices is poised to create devices. And were delivering the platform
tangible value for enterprises around the globe. technology needed to reimagine customer
Whether there will be 30, 40, 50, or 60 billion experiences from the ground up. When your
connected devices by 2020, the implication is the childs car seat can tell you if your child is at
same: the way everyone does business will change. risk of catching a cold, the value of the car seat
changes dramatically.
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SAP Solutions for the Internet of Things Built for Your Business
Helping our customers put the IoT to work for We look forward to reader feedback. Our
their businesses requires SAP to work with a customers and developers that leverage SAP
host of new partners. Never before have so technologies and applications can best predict
many different types of vendors been required whether our proposed approach is compelling.
to support new ways of doing business. While We believe this is the path forward. We believe our
SAP technologies and applications will play a approach to technology, ecosystem development,
critical role in this environment, we have a deep and value creation with our customers will help
appreciation for members of our community all of us capitalize on the Internet of Things
that will help us create this new value for our together. But, at the same time, we also welcome
customers. everyones feedback and are primed to listen.
Engage with us and share your thoughts on the Internet of Things community, accessible at
scn.sap.com/community/internet-of-things.
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AN IoT REFERENCE POINT Any core IoT system will also require data storage
As we move through our perspective on this capabilities that enable not only a nearly infinite
increasingly significant technology market, we store of low-value data but also high-performance
have identified the capabilities solution providers storage for the data that is critical to real-time
need to have in this evolving market, as shown business performance.
in the following table.
In addition, IoT solutions require access to that
Any solution deployed to take advantage of new machine data as well as an ever-expanding
smart, connected devices starts with the device. array of other business information sources
At the edge of the network, there needs to be some to provide true business value and meet users
digitally enabled piece of hardware collecting expectations.
information, sending that information home for
central processing, or processing it at the edge. In the following sections, we explain how SAP is
That device then needs to be connected in some delivering solutions that can execute against
way for example, through the cloud. Only by these broad requirements, where we intend to
interpreting the hardwares unique signals and partner, and how we are already working with
transmitting them over wired or wireless pathways customers to deliver value.
back to a central environment can that data
be made sense of and acted upon centrally.
Technology Capability
Applications and analytics Use-case-specific business applications
(inherently connected) Device-data visualizations and analytics
Application platform Application-enablement services
Access to device-data libraries and core application integration
Data platform Intelligent data storage enabling efficient capture and use of
device data
Connectivity Middleware and protocols to interpret data from connected devices
Connectivity for data transmission
Edge devices Devices with sense and response capabilities
(edge software and hardware) Embedded software to manage edge processing and data
transmission
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SAP Solutions for the Internet of Things Built for Your Business
To help our customers join the IoT revolution for seamless integration of connected machines
without disrupting their existing business pro- with SAP solutions. The SAP Manufacturing
cesses, SAP will continue to offer line-of-business Execution and SAP Manufacturing Integration
and industry-specific solutions that build on our and Intelligence applications enable responsive
existing footprint in core transactional business manufacturing and a high degree of integration
solutions, assets, and capabilities. Presently, between the shop floor and the top floor.
the prioritized IoT solutions support Industry 4.0
for manufacturing, predictive maintenance, and The Industry 4.0 vision is not limited to automation
connected logistics. These core IoT applications of a single production facility. It incorporates
will be integrated with SAP Business Suite appli- integration across core functions, from production,
cations that customers are running today both materials sourcing, supply chain, and warehousing
on premise and in the cloud. all the way to sale of the final product. This high
level of integration and visibility across business
INDUSTRY 4.0 AND RESPONSIVE processes will enable greater operational efficiency,
MANUFACTURING responsive manufacturing, and improved product
The Internet of Things is being called the fourth design.
industrial revolution, as it allows the physical
and digital worlds to converge through all layers More than 1,400 SAP customers are using manu-
of production to completely transform the way facturing solutions from SAP to automate their
manufacturing operations are run. manufacturing operations. Visionary companies
like Harley-Davidson Inc. are at the forefront of
This is critical for a number of reasons. First, Industry 4.0 innovation with its use of end-to-end
industrial production requirements are changing. digital engineering. In Harley-Davidsons new
As customers grow savvier, they are demanding manufacturing facility, every machine is a con-
products that more precisely meet their expecta- nected device, and every variable is continuously
tions. And second, companies face increasing measured and analyzed. Equipment provides
pressure to manufacture at more competitive performance data that the manufacturing system
prices. To adapt to these changing conditions, uses to anticipate maintenance issues before
the fields of systems engineering, production IT, machines break, which minimizes workflow
and business systems must fuse together more interruptions. Harley can tell to the nearest tenth
closely than ever to achieve higher levels of of a second how long it takes to install every
efficiency. component on a motorcycle, and the system
alerts floor managers about issues at the individual
To address these challenges, SAP has a compre- component level. Harley even measures the
hensive set of manufacturing solutions that form temperature, humidity, and the RPMs of the
the foundation of our Industry 4.0 solutions. SAP ventilation fans in the buildings. All this data is
is focusing on the automation of business pro- analyzed continuously to identify factors that
cesses in manufacturing processes orchestrated will improve efficiency and throughput.
by transactions on the shop floor as a basis
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In this new, state-of-the-art facility, Harley-Davidson They can then analyze this data to find patterns
can build 1,700 bike variations on one production and root causes for failures insights that help
line and ship a customized bike approximately them predict when an asset or equipment will
every 90 seconds. Harley-Davidson now manu- fail and proactively apply preventive measures to
factures 25% percent more motorcycles with prevent the failure from occurring.
30% fewer people, and the locked schedule
to build a motorcycle has been slashed from SAP Predictive Maintenance and Service allows
21 days to 6 six hours. asset owners and operators to monitor asset
performance, reduce unplanned downtime,
PREDICTIVE MAINTENANCE AND SERVICE and manage asset-related risks while aligning
Owners, operators, or manufacturers of machines priorities between operations and maintenance.
and equipment often have to manage their assets Equipment manufacturers can analyze warranty
at remote sites, limiting their visibility into perfor- claims, proactively manage spare-part stocks,
mance and usage. If a problem occurs for assign the right technicians, and optimize
instance, on a construction crane or wind turbine product design and manufacturing. Dealers and
it is often costly to identify and even more costly aftermarket service providers can offer add-on
to address in a timely way. And if maintenance services for asset operators and optimize services
crews fail to resolve an issue, it can result in delivery, maximize machine uptime, and raise
system failure, equipment downtime, or hazard- service efficiency all while reducing costs.
ous conditions for workers.
For SAP customers in manufacturing-based and
The SAP Predictive Maintenance and Service asset-intensive industries, a predictive mainte-
solution, based on SAP HANA Cloud Platform, nance and service solution is a natural extension
allows equipment manufacturers and operators of processes already supported by SAP Business
of machinery and assets to monitor machine Suite software, such as enterprise asset manage-
health remotely, predict failures, and proactively ment and customer service management. For
maintain assets. Specifically, owners, operators, example, SAP Predictive Maintenance and Service
or manufacturers of machines and equipment helps customers experience more reliable asset
can collect sensor and telemetry data from availability, greater customer retention, better
remote assets and merge it with business data, customer service levels, and higher service-
such as past maintenance records and contextual contract renewal rates.
data (such as weather and traffic data).
Learn more about SAP customers innovating with the Internet of Things.
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SAP Connected Logistics allows companies, Along with HPA, SAP is working with partner
institutions, and individuals dealing with ever- T-Systems International GmbH to build a
increasing time pressure and growth constraints logistics business network solution leveraging
to gain greater and even real-time visibility T-Systems TelematicOne platform. This platform
into their complete business network, regardless unifies telematics data to one interface and
of whether they have a direct business relation reports geo-fence alarms to the connected
to one another or not. Connected logistics will logistics application from SAP. This application
merge real-time location data from the various also enables truck drivers to receive up-to-date
parties of a logistics hub in one place and allow information about incidents and the current
them to communicate more efficiently and gain parking situation using mobile tablets.
significant cost efficiencies. For example, by
enabling better orchestration, SAP Connected Using this joint solution, HPA now has real-time
Logistics can help shorten wait times for pickup visibility across more than 400 entities in its
and delivery and support better utilization of logistics business network. The port has visibility
existing physical infrastructures, resulting in into current street conditions and communicates
fewer delays within responsive supply chains that information to trucks. This is added to up-
seeking to meet real-time demand. to-date parking space information from parking
space providers. If the ship is delayed and the
Consider the benefits being realized by the container gate is not open, the driver is informed
Hamburg Port Authority (HPA), the largest to wait at a parking area. As the ship arrives, the
port in Germany, which handles approximately container gate notifies the driver, who is then
10,000 ships and 9 million containers every given the optimal route to pick up the shipment.
year. Sascha Westermann, head of intermodal This high level of connectivity throughout
operational traffic management at HPA, antici- the network results in lower wait times, faster
pates that the port will be handling 25 million turnarounds, more efficient route planning, and
containers by 2025. The main challenge is lack lower fuel costs.
of expansion space. We cant increase the
ports surface area, so we need to look at ways to
become more efficient in the space that we have,
explains Westermann.
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SAP Solutions for the Internet of Things Built for Your Business
The Internet of Things goes beyond operational But more broadly, SAP technology enables
monitoring and control. Rich operational context partners and developers to build new horizontal
from connected devices, representing the collec- and vertical applications based on SAP HANA
tive wisdom of several systems, can be used to Cloud Platform. A software development kit
optimize existing business processes and enable (SDK) enables these new applications to reuse
new innovations and business models. For example, core SAP software or components as services.
cars can recommend next stops based on driver Partners can also use the SAP HANA Cloud
preferences. A network of vending machines can Platform for developing Java-based applications.
propose real-time offers based on customers
purchase history. Insurance companies can offer The following sections explain our perspective on
tailored insurance plans based on actual driver the necessary technology and capabilities of an
performance. Manufacturers can make a custom IoT platform.
product called manufacturing to a lot of 1 at
scale. And companies can track, trace, and monitor DELIVERING IoT SOLUTIONS: AN OVERVIEW
their extended supply chain operations. The The starting point of any IoT solution is the physical
opportunities are enormous, but the questions entity of interest: silicon. Were starting to see
most often asked include: advances in technology in the areas of miniature
What technologies are required to take sensors, communications, and compute infra-
advantage of these types of solutions today? structures that make it easy for manufacturers
How do we piece together a system of to embed an ever-increasing set of smart sensors
connected things that can help us transform in increasingly sophisticated devices. We are also
our business model? seeing the ubiquity of mobile networks that allow
What are the types of solutions that could help assets to connect while moving across large
us drive down cost, increase revenue, or gain geographical spaces. And with the advent of
valuable customer insight? energy-efficient devices, broadband communica-
tion channels, and protocols specially designed
The functional components of the core IoT for information transport from and to endpoints,
applications available from SAP, as described were seeing a flood of data coming from the
above, can be used separately as foundational edge of networks (a concept we will explore later
services for building other applications. For in more detail) to the processing centers.
example, functionality from SAP Predictive Main-
tenance and Service can be used across remote
machine monitoring, geo-location-based tracking
and tracing, and consumables management.
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Data transfer from the edge of the network to Information that is already summarized and
processing centers must take into account the made relevant to operational and enterprise
variability inherent in device communication, decision making can be saved in a real-time
which can range from high-frequency pulses to data store for immediate access.
batch uploads. These methods for data transfer
work whether there are consistent and stable When business-relevant data is stored and acces-
communication channels or channels with inter- sible, advanced analytics (including predictive
mittent disruptions. These variations are well analytics) and machine learning techniques can
known and have led to highly customized and be applied to it. These tools allow processing of
use-case-specific implementations. But Internet- new information that was previously unknown
based communication over public networks or ignored to detect patterns and risks. In fact,
offers new solution models that, along with a applying predictive techniques on top of the
promise of standardization, could lead to pack- monitoring and automation support is what
aged solutions going forward. makes the Internet of Things game changing.
SIM based
Networked solutions
Business processes
Wired or wireless
Sensor Store | Locate | Correlate
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Bringing the Parts Together Building an IoT solution involves three main
To participate fully in the digitized world of IoT steps, or phases:
and innovate in ways that create business value 1. Data integration: This is the first and
each enterprise must determine how to address primary step. It brings a variety of data
these three elements of IoT solutions within their into a coherent, complete set from the
business operations and information architecture. edge to the core to offer the deepest
Given the pace of technological evolution, it is a and broadest insights possible.
challenge for any institution to do this internally 2. Data management: This step, which brings
from the ground up. Therefore, organizations together IT and OT infrastructures, requires
should consider: special attention. Data management must
Using an IoT-ready technology infrastructure address the challenge of managing large
to develop, deliver, and monetize IoT volumes of data, as well as layering on con-
applications textual information such as asset taxonomy
Establishing a rich partner and developer and time and location data.
ecosystem to complement and extend the 3. Business innovation: Once foundational
solutions that can be developed on the IoT data integration and data management are
foundation put in place, many types of business innova-
tion are possible. Enterprises can create
These two paths coexist well and deliver value meaningful insights and reimagine their
together. In the next section, we explore the key business models and customer experiences.
characteristics of an IoT-ready technology infra-
structure for business application development. As an organization progresses through these
Based on the terminology in this section, we steps, they can realize business value. Lets
focus on the core of the IoT solution with some explore these three phases in more detail.
suitable extensions for the edge. This keeps
the conversation focused on business transfor- Data Integration
mation that will help organizations realize the Data integration is the glue that connects
promise of IoT. the physical and the digital worlds. IoT-ready
infrastructures must provide many ways to
facilitate integration, as explored in the following
sections.
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Central to the value of any IoT solution is the To facilitate integration among vendors, SAP
network of value providers associated with it. To solutions for the IoT conform to several enterprise
illustrate this concept, consider an example such standards. SAP plans to offer our ecosystem of
as fleet tracking. For over 20 years, companies developers and partners the building blocks to:
have tracked commercial trucks using traditional Deliver IoT applications
systems and processes to find ways to save fuel Provide new connections to the SAP HANA
and reduce downtime and maintenance. With platform
an IoT fleet-tracking solution, companies can Leverage our libraries of statistical tools
use sensors and analytics to expand what can be
tracked and improved, such as driver behavior, SAP also intends to work with other software
route optimization, engine diagnostics, tire vendors to integrate their specialized capabilities
pressure, and so on. But to deliver such a solution in IoT technology with our offerings. SAP is open
requires numerous vendors in areas such as to embracing community-driven software, such
connected logistics and software applications, as the Hadoop and Spark ecosystems.
sensor and hardware manufacturers, and
connectivity vendors. For this solution to work, With our commitment to delivering a diverse
all vendors must agree upon an integration ecosystem of partners, we believe we can help
approach so they can deliver value to the solution. our customers derive the utmost value from their
SAP software landscapes. Our partners will be
As enterprises explore new business models able to quickly build the vertical applications
based on IoT solutions, they must perform due that will put the data customers create in SAP
diligence on what vendors offer and how their Business Suite applications to work in ways
offerings integrate with those provided by other weve never imagined. Only with an eye toward
vendors. In addition, they must break the cycle of delivering the entire ecosystem can SAP truly
custom development, which is rampant in the help our customers and development community
current machine-to-machine (M2M) world, and to harness the power of the Internet of Things.
move to packaged, scalable, standard solutions.
These solutions require vendor communities
to come together and deliver the experience
consumers really want.
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SAP Solutions for the Internet of Things Built for Your Business
Conclusion
The Internet of Things will be increasingly With the right platform, we can deliver differen-
significant in the business world over the coming tiated applications for our customers and
years. Enterprises will discover that solutions empower our developer ecosystem to do the
based on these new layers of connectedness can same. There is no shortage of opportunity to
transform their operational processes, unlocking tie the new data available to us from connected
enormous value through greater efficiency. These devices back to core business data to drive
enterprises will also find themselves with oppor- transformation. Our developer ecosystem will
tunities to transform their customers experiences. play a vital role in configuring our horizontal
When intelligence can be gathered from and solutions for specific industry verticals and using
applied to the edge of your network, anything SAP platform technology to deliver their own
is possible. unique applications. By integrating SAP solutions
with the Internet of Things, we can all win.
In our perspective, the underpinning of the
business transformation to come is software
architecture optimized for the unique needs of
edge computing, machine-data storage, real-time
analysis, and connectivity in the IoT ecosystem.
At SAP, were investing our resources to build
this foundation. Were reaching out to and part-
nering with the other members of the technology
ecosystem that can help our customers achieve
their grandest ambitions when it comes to
leveraging the Internet of Things to create true
business value.
LEARN MORE
To learn more about SAP and the Internet of Things, visit:
www.sap.com/IoT
www.Twitter.com/sap_iot
www.youtube.com/sapinternetofthings
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