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Why Blurring Industry Lines Can Be a Tremendous Business Opportunity

Feature Article | July 12, 2017 by Derek Klobucher

Disruptive technologies are helping cutting-edge organizations blur the lines between industries, opening a world of new possibilities to those undergoing digital transformation. But there are new responsibilities to customers and employees too.

“If you want to self-disrupt, you still have to protect the existing workforce [and] the existing business and in parallel build the other one,” Henning Kagermann, president of Munich-based acatech, the National Academy of Science and Engineering, said Tuesday morning in Frankfurt at SAP Leonardo Live, a conference centered around SAP’s digital innovation system.

Digital transformation is a shifting from automation to autonomous systems, according to Kagermann. These self-learning systems can independently achieve a predetermined goal, even under changing circumstances.

“These projects are not just another IT implementation — it is transforming your company,” Tanja Rueckert, president of IoT and Digital Supply Chain at SAP, said as she opened the event’s first plenary session. “I met one of our customer project executives, and he told me, ‘This is the most important project of my life.’”

Reap What You Sow

Stara S/A is no stranger to the high-tech mindset. To help customers get the most out of their land, seeds and other assets, the Brazil-based farm equipment manufacturer transformed once in 2005 — when it began making its own agricultural computers and sensors — and again in 2015, when it launched a telemetry system.

“In Brazil, 22 percent of our GDP is from agribusiness, and technology is the way to keep this business running,” Stara CIO Christiano Paim Buss said during the plenary session. “Companies that aren’t thinking about digital transformation are in big trouble.”

Focusing on its customers, Strata teamed with SAP to offer real-time access to all of the data in users’ ERP systems, such as inventory and expenses, according to Buss. This has helped farmers increase their corn production by 10 percent, while decreasing environmental impacts.

And internally, Stara has enhanced its employee engagement while increasing factory productivity by 20 percent.

Street Smarts

“Digital is happening, and it offers tremendous business rewards,” SAP Industry Cloud President Pat Bakey said, referencing an SAP Center for Business Insight study released Tuesday. “We [also] see businesses operating in multiple industries — and we see a blurring of industries.”

Case in point, Volvo is moving into the autonomous vehicles, a customer focus that allows people to consume education or entertainment instead of concentrating on the road. People in those new Volvos can forget about insurance too; the Sweden-based luxury automaker will also take responsibility for its vehicles involved in accidents.

“Think about the opportunity they have in terms of new business models,” Bakey said. “Are they actually a manufacturer of cars? Are they a telecommunications company? Are they a retailer? Or are they an entertainer?”

Buckle Your Seatbelts

U.K.-based high-tech conglomerate McLaren Technology Group first put IoT-style sensors on its Formula 1 racecars in 1993 to optimize performance, measuring break temperature, ride height and more (and later using insights from this data to improve the customer experience in McLaren’s automotive business). McLaren’s modern sensors collect about 100 GB of data each race weekend.

“We have an applied technologies business now, where we’ve taken our learning and heritage from Formula 1,” McLaren CIO Craig Charlton told the SAP Leonardo Live crowd, “and figure out, from an outcome basis, how we can bring technology to life in financial services, healthcare and connected vehicles.”

Data insights that help McLaren racecar drivers excel in the cockpit could one day help executives shine during shareholder meetings, Charlton stated. McLaren is even seeking ways to apply lessons learned from topnotch pit crews to streamline the manufacturing processes.

Redrawing the Map

“Traditional boundaries may not be the same anymore,” Hans Thalbauer, senior vice president of IoT and Digital Supply Chain for SAP Leonardo, said Tuesday. “If you look at online retail companies, they’re becoming more like logistics companies; if you look at logistics service providers, they’ve started manufacturing with 3D printing; you go to the manufacturing industry, they provide more and more services.”

All of this opportunity makes this an exciting time for enterprises. But all of the change can make it a scary time for the workforce.

“There is a joint effort now to between employees and companies to ensure employability for your entire life,” acatech’s Kagermann said. “For the workforce in a company, you can use digital technologies to upskill people with a low level of skills to a much higher level than we have them today … we hope we can get everybody there.”


Read more news and coverage from the SAP Leonardo Live event

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This story originally appeared on SAPVoice on Forbes

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