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Connecting with ‘US:’ The necessity and value of the Internet of Things

Done right, the Internet of Things is the Internet of Us, connecting the physical and digital in a human-centered way that improves the world intelligently.

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By Frank Antonysamy, Vice President of Cognizant’s Global IoT and Engineering Services

U.S. food safety has been a concern since the days of Upton Sinclair’s classic novel about the stockyards and meatpacking industries in Chicago. Public reaction to The Jungle compelled Teddy Roosevelt and the U.S. Congress to pass food safety laws and establish the U.S. Food and Drug Administration in 1906.

More than a century later, threats clearly remain to the safety of domestic and global food supplies and the purity of water sources. Recently, we’ve learned about significant, ongoing, even deadly threats to our food and water. Food recalls have ranged from romaine lettuce to beef in the last 12 months; the tragedy in Flint, Mich., reminds us that poisonous chemicals still make their way into our water, as well. Faulty equipment or poorly executed processes often are to blame.

[Read more: The State of the Union for IoT Intelligence]

Solving Safety Challenges with Internet of Things

It doesn’t have to be this way. As the Internet of Things (IoT) begins to permeate our global infrastructure, sensor-equipped devices will soon outnumber the global population. There’s no reason to wait until communities face a food- or water-borne threat before fixing malfunctioning equipment or improving safety procedures.

Today we can automatically and rapidly glean information from IoT-enabled devices – about temperatures in IoT-equipped food storage and transportation equipment, for example, or the chemicals sensed by the pumps that filter and move our water, or the monitoring capabilities of the medical devices we increasingly rely on in hospitals and the home. With such intelligence, communities and businesses can address problems before they become a threat.

[Download]: Advancing Smart Manufacturing Operations Value with Industry 4.0

Increasing Food Safety on a Massive Scale

Recently, I had a conversation with Internet of Things maven Stacey Higginbotham on one of her Stacey on IoT podcasts. We discussed Cognizant’s work with Internet of Things adoption, and the ways in which these solutions can help businesses and the people they serve.

We talked about how one of the world’s largest sellers of fresh and frozen foods uses IoT-enabled refrigerators and freezers to reduce food spoilage across its global supply chain. Such spoilage not only results in financial losses due to food waste, but can also present risks to consumers. Although the business had already implemented alarms on the refrigeration systems in its distribution centers to signal malfunctions, it could take 36 hours for the maintenance operations team to respond – clearly too long when it comes to food safety and waste. There was also no mechanism to proactively monitor the refrigeration units and ensure timely service calls.

Our solution minimizes energy consumption and seeks to ensure consumer safety. It ties together sensors, cloud-based monitoring, algorithms that trigger alerts and warnings, reminders in handheld applications and a direct link of performance data to individual employees to encourage compliance with the company’s internal food safety protocols. The system covers hundreds of freezers, thousands of deliveries, 600 million data points and millions of pounds of food.

The results have been impressive. After rolling out the system to 100 of its stores, the business reduced priority response times from 36 hours to four hours, and decreased food loss by 10% in the first year by predicting refrigeration failures. The company aims to expand the system to 5,300 stores, with the potential to reduce operating costs by up to $40 million while ensuring the safe storage of food. (Hear more about this solution in the three-minute podcast recording below.)

[Download]: Designing Manufacturing’s Digital Future

From Providing Pumps to Offering Insights

These same principles guided our solution for a global manufacturer of high-technology industrial water pumps used in a range of applications, from providing drinking water for cities and villages, to processing waste water, to clearing and filtering the huge volumes of water moved during deep-sea drilling.

With the movement of all that water through its sensor-equipped and self-monitoring pumps, the manufacturer had access to a flood of information on everything from performance-based data on pressure and volume to the chemical composition of the water. By collecting and analyzing this information, the company could leverage and monetize its insights into not just equipment performance but also the safety of the water it delivers. If a certain chemical spikes in the water supply, for example, alerts are triggered, and municipalities can investigate. If water pressure or volume falls outside set parameters, precautions can be taken, including automatic alerts and even preemptive shutdowns.

Buyers of the pumps want this information. So, while using this data to improve the performance of its products, the business can also share insights with its clients on a subscription basis, opening up new revenue streams. The business is no longer just providing world-class high-tech pumps; it’s offering customers critical insights from the pumps it sells, as a value-added service. (Hear more about this solution in the three-minute podcast recording below.)

[Download]: Advancing Smart Manufacturing Operations Value with Industry 4.0

Connecting Things; Connecting to Our Needs

What links these two examples is their prioritization of real human needs as part of the solution. Clean and safe food and water are vital to human health, and companies that help provide themadd value.

For many years, large industrial enterprises have lived in two separate worlds: the world of all their physical assets (factories, equipment, buildings, people) and the world of their digital assets (software, workflows, algorithms, reports). Through sensor technology, network capability, security advances and IoT platforms, these two worlds are now becoming seamlessly integrated like never before.

Today, the shorthand for this ongoing integration is the Internet of Things. In reality, though, it’s the Internet of Us. Technology offers us a path to connect our physical world with a digital one, in which we occupy a new space and a new future: a place where the physical and digital come together, enabling businesses to transform their operational and business models, in a scalable way, through intelligence. (Hear more on the Internet of Us in the three-minute podcast recording below.)

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4 ways to plan for the post-pandemic normal

When the crisis eases, we will have entered a new digital normal. Your strategies need to reflect this shift: Consider these factors as you plan for the longer term.

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This post originally appeared at Enterprisers Project.

When I sat down to write this article, a follow-on to my previous article on common leadership oversights on the path to digital transformation, the coronavirus’s threat to global business had not reached the magnitude that we feel and see today. In a few short weeks, the pandemic has forced a new virtual work reality on businesses and entire operating models have been shifted – and in many cases, upended.

A business environment that is changing so dramatically and rapidly requires speed, innovation on the fly, and the need to scale thinking beyond anything we might have previously imagined. Now is not the time to back-burner digital initiatives but to ramp them up.

Now is not the time to back-burner digital initiatives but to ramp them up.

When the crisis eases, we will have entered a new digital normal. The strategies we use to run, change, and staff the business will need to reflect this shift. Consider the following factors as you plan for the longer term:

1. The right financials

Any business that isn’t digital by now likely won’t be a business for long. Learning to embrace and adjust is imperative. Continuing – or starting – a digital transformation will be more important than ever, and you’ll need to rethink your business’ capital allocation strategies for digital initiatives and the staffing that supports them.

To figure this out, become best friends with your finance team and think for both the short- and long-term. In the current climate, it can be easy to be either too short-sighted or too far-sighted, but you need to plan for the next week, month, quarter, year, three and five years.

Become best friends with your finance team and think for both the short- and long-term.

Consider how your company may bounce back from the pandemic when stay-at-home orders are lifted, kids go back to school, and consumers begin to mobilize again: We will have entered an entirely different digital world, with new digital expectations from consumers. Is there potential for a rapid and significant surge, followed by a normalization? Will you be facing a slow rise? Digital transformation funds need to be allocated to react appropriately to these various scenarios; staffing discussions should follow based on these decisions.

2. The right tools

It is likely that at least some of your employees will remain virtual, even when the majority can get back into the office. How will you support them? You may have sacrificed some tools or technologies in your move to quickly get employees out of your building and into their homes; you may have also overpaid for the sake of quick deployment.

You’ll need to rework your strategy for the long term. This could include better or more consistent access to networks and servers, the capacity to host formal business meetings online, new portable equipment, virtual collaboration and communication software, and more.

For many, this will require working with your corporate legal team to change their thinking. Where they may have once been risk-averse for the sake of the business, they will now need to take smart risks, also for the take of the business. State your case, find common ground, and move forward.

In some particularly dire situations, you may even need to become comfortable with making decisions first and asking for permission later.

3. The right staffing

You’ll need to continue to make smart staffing decisions – quickly. You likely have three types of talent available:

  • Employees who are great at running the business
  • Employees who are hungry for more
  • New talent that may not yet exist in your business but needs to be brought in

Unfortunately, this global crisis may have created gaps in your workforce.

Identify the individuals in the first two groups and work with your talent management team to assess whether you need to advance digital investments previously planned for. Do these individuals have the right type of skills for their teams? Are they collaborative and communicative? IT cannot work in a silo, and team members need to be able to communicate what they are doing and why, and be clear on how their actions are aligned to larger goals.

When you’ve completed this review, identify the additional skills you will need for the future. This might include teams familiar with building out cloud deployments or working with microservices, etc. Push the rest of your leadership team to break through capital allocation constraints to bring in new employees who not only have the right experience but also can quickly teach your existing teams on new tools organically.

4. The right brand permission

As you work through your accelerated digital transformation, you’ll start to think about your business as a truly digital brand. In fact, you might already think so, simply because you’ve been able to get your staff up and running remotely.

But is this the perception all your stakeholders have? According to the Yale School of Management, “Brand permission defines the limits of customers’ willingness to accept a familiar brand name in new marketplace situations.” For example, you can’t simply say, “We are digital now, world!” and expect your market to immediately accept that if you haven’t been digital historically. You need to earn this right.

You can’t simply say, “We are digital now, world!” You need to earn this right.

Brand permission is something you and the rest of the company will need to work on – largely focused on delivering useful and impactful digital products and services – in order to attract the new talent you need. Start thinking about this now.

The global pandemic has thrown us into an entirely new world. Business leaders can no longer rest on their laurels and, certainly, can no longer put off or draw out a digital transformation. Making the right decisions now will help to ensure your business is positioned well when this crisis passes.

This post originally appeared at Enterprisers Project.

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Taking the pulse of digital transformation success with surveys from AHEAD and PwC

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Digital transformation: Necessary, but continues to be no easy feat.

Two new surveys from PwC and AHEAD are going behind the curtain of digital transformation investment, looking at the measurement of DX success — what’s working and what isn’t — and the gap between expectation and reality with respect to payback. 

The vital role of infrastructure 

Conducted by Hanover Research and commissioned by AHEAD, the State of Enterprise Digital Transformation 2020 studied close to 300 enterprise IT decision makers, finding that 93% of enterprises are undergoing a digital transformation of some kind. The biggest motivating factors were a desire to cut costs (77%) and a need to provide improved customer experiences (71%) — “components that often run counter to one another, yet are critical to a business’s success,” explains the report. 

Additional key findings from the State of Enterprise Digital Transformation report are:

  • 43% of transformations are led by a CIO or CTO. CEOs, on the other hand, lead 23% of DX efforts
  • 58% of transformations are on target or ahead of schedule, while 42% are behind schedule or stalled
  • 36% say the combination of legacy system complexity and technical debt are the biggest transformation obstacles, followed by a lack of funding commitment (13%)
  • Among those companies on schedule, 94% say their infrastructure and operations can keep up with the demands of apps and software development functions.

In analyzing factors surrounding enterprise digital transformation, AHEAD identified six areas that correlate with success — defined by the organization as a respondent citing their current transformation is on schedule or ahead of schedule.

These six factors are:

  1. Dedicated Leadership: “Transformations led by a CIO, CEO, CDO, or CTO are 22% less likely to fall behind schedule.”
  2. An “all-in” approach: “Transformations that are on track are 30% more likely to be full-scale initiatives.”
  3. Defined strategy: “Enterprises undergoing successful digital transformation are 12% more likely to have a defined digital strategy.”
  4. Infrastructure: “Businesses that include IT infrastructure as a big part of their digital transformation are 36% more likely to have a successful transformation.”
  5. DevOps: “Enterprises that take a DevOps approach and see their infrastructure and operations as integrated are 43% more likely to see success in digital transformation.”

Getting to payback

In its 2020 Global Digital IQ research PwC found that just 5% of companies “are doing all it takes” to get to payback from digital — a group they call Transcenders. 

https://twitter.com/PwCUS/status/1230869930112954368

PwC identified 4 ways these organizations achieve payback on digital transformation: 

  1. Mandate change: “84% mandate—not just encourage—collaboration and cross-functional work.” As a result, these organizations have a clear direction for digital 96% of the time.
  2. Invest like you mean it: “Transcenders invest 33% more than other companies in the plumbing—the technology, processes, operating models, and the ways of working—that will drive their digital supremacy.” This has led to a 17% higher profit margin growth at these organizations, and an increase in time spent innovating at 84% of Transcenders.
  3. Put people first: People are at the core of innovation, and “63% of Transcenders have upended their training process and obsess over getting it right.” At 72% of Transcenders, adoption of new programs and tech is widespread.
  4. Build resilience: “67% of Transcenders lived through a major disruption—merger or acquisition, business model change, or senior leadership change—in the last two years and have come out stronger.” The payoff is that 90% of Transcenders aren’t falling behind in digital. 

As part of the survey, respondents named up to five companies they believed lead in digital. Some of the most repeated names include Sony, Porsche, Facebook, Apple, Walt Disney, P&G, AliBaba, Netflix, Microsoft, Amazon, and more. 

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MIT Sloan scientist shares digital transformation lessons for older companies

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Not sure how examples from Apple, Amazon, Uber, or Airbnb can apply to your older organization currently on its digital transformation journey?

Not all of us can be digital natives, but a new book from MIT Sloan’s Center for Information Systems Research principal research scientist Jeanne W. Ross (along with Cynthia M. Beath and Martin Mocker), is exploring lessons from established organizations that have made substantial progress in their own digital transformation work.

Designed for Digital: How to Architect Your Business for Sustained Success distills five years of research, which includes case studies and surveys from hundreds of business and IT leaders. Most companies represented were very early in their DX journey, but examples of established companies that found success in navigating the digital waters include DBS Bank, LEGO, Philips, Schneider Electric, and USAA.

David F. Carr, in an article from The Enterprisers Project, outlined five key takeaways from the book:

1) Your business needs a digital design

Instead of trying to be Amazon, your organization should be figuring out how to continue to do what it does well and add digital products that enhance its products and services,” explains Ross.

To figure out what makes sense for the organization, you need a design for your business, Carr elaborates. That means better distribution. As the book explains, “The accountability framework for digital devolves many decision rights to autonomous teams while creating the context to help these teams make the right decisions.”

2) IT architecture is important, but not the point

Frequently overstated by marketing experts is that digital transformation is more about business strategy than the technology. 

The point is not to design an elegant digital system that will impress other IT architects but to use technology to create business opportunities,” Carr summarized.

3) A robust operational backbone is necessary but not sufficient:

An important distinction Ross and her fellow authors make is between the operational backbone and the digital platform.

The former means the systems at the heart of operational efficiency, like ERP, supply chain, and CRM systems. “If your organization has been around a few decades, your operational backbone includes all the things you were supposed to have been integrating and optimizing all along.”

The digital platform, however, involves the new technologies your organization needs to create digital products. This platform will be a custom creation, due to the diverse needs of business design.

A major reason organizations have for not reaching digital innovation is that their operational systems are holding them back, which pivots to the next takeaway observed by Carr.

4) Pivot to digital ASAP

The need for a robust operational backbone may mean your organization needs to devote more energy to boring but important backend systems before it can do the cool new digital stuff,” explains Carr. “On the other hand, be alert for the point where it makes sense to declare your operational backbone ‘good enough.’”

An example used in the book is of Schneider Electric, a multinational headquartered in France that makes electrical distribution and management products for utilities and industry. Management recognized the wasted potential of divergent IoT and cloud efforts, gathering them into a coherent cloud platform.

5) Create a digital platform, not an isolated app

While a series of apps might be the “cooler” approach, a digital platform offers reusable components with support for all digital products — both now and future ones — ingrained in its design. 

A perfect, flexible, and scalable platform isn’t going to happen immediately, so evolution is a necessity once the work is started. As the book explains, “Digital companies will be tempted to simply code the functionality for any given offering in a one-off, monolithic fashion.” This strategy could work in the early stages, but will culminate in a rework when customer demands create opportunity for adaptation.

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