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The Internet of Things (IoT) is creating quite a stir. As companies figure out how best to apply IoT technology, they are faced with both challenges and new opportunities.

At the 2016 SAP Executive Summit on IoT, Margaret Anne McPhee, North America National Vice President of S/4HANA Services at SAP, moderated a panel on IoT Digital Transformation with experts from Intel and Capgemini.

Left to Right: Bridget Karlin (Intel), Margaret Anne McPhee (SAP), Debbie Krupitzer (Capgemini)

McPhee kicked off the engaging discussion with the idea that organizations need to look at the IoT as an opportunity to transition from reactive to proactive decision making and take advantage of the new data and information created.

Bridget Karlin, Managing Director of IoT Group at Intel Corporation, said the IoT is a big opportunity but there is a lot of complexity around the projects. Organizations need to think about where to get started with IoT implementations, figure out where it makes sense, and determine where it will provide real return on investment.

To help answer those questions, Intel worked with partners like SAP and Capgemini, as well as standards boards, to develop an end-to-end IoT platform. The platform defines how to get started and how to connect things from the sensor, through the network, to the cloud.

Karlin said the Intel IoT platform and technology is designed to reduce complexity. For example, an IoT appliance developed by Intel and SAP comes with integrated security, integrated analytics, and an integrated database that can immediately connect to the cloud so companies can experience faster time to market.

Debbie Krupitzer, North America Digital Manufacturing/Industrial IoT Practice Lead, Capgemini, provided insight into how different industries are applying IoT solutions. She said the retail industry is investing in IoT solutions to gain more customer engagement. And in manufacturing there is a push to connect and gain efficiency in plants.

When working with clients, Krupitzer said they look at a plant as a connected city. With that in mind, they find out what the client is trying to achieve with IoT solutions. Do they want to make money or save money?

A lot of times, companies want to save money first. To do that, Krupitzer said they look at improving operational efficiencies around things like water, energy and lighting, to reduce those costs. Then they look at the production lines to find opportunities for better throughput.

Krupitzer said organizations often think they have optimized the supply chain but they haven’t looked at it with an IoT lens. They weren’t thinking about sensors in everything and the numerous possibilities the data generated would offer.

When McPhee asked the panel about the challenges that plague IoT implementations, Karlin said security is at the top of the list. A lot of things being connected weren’t built with security in mind. So organizations need a plan to integrate security from the hardware all the way through the network and software stack.

Interoperability is also a challenge.  Connecting devices and people across multiple systems and platforms and aligning on standards isn’t easy. And real-time connectivity is certainly a challenge from a communications perspective. Certain use cases require robust coverage, low latency, and faster speeds than might be available in existing plants or stores. Manageability also gets more complex as more end-point devices are added and scalability is an issue as the number of devices and data grows rapidly.

Krupitzer said her clients know IoT data is like currency but they aren’t sure why. It is important to segment out what data is valuable and for who. Engineering, marketing, customer service, and customers will all want different data from devices. Personas and KPI’s for data need to be established upfront from a business perspective, she explained.

In addition to new data, IoT solutions can disrupt a business in many ways. They can take a company from making and selling products to managing and selling services. They can require core business processes to change and impact the workforce. Karlin said the transformative opportunity of IoT is to look at your core business and determine what you can expand into.

But don’t succumb to pressure to do an IoT project because it is a hot topic. Panelists suggest to start by defining the desired outcome and what is expected from the IoT solution. Then do a pilot, establish the why, what and how upfront, and create a plan to ensure the systems and devices are secure and that the data can be trusted.

Since no project starts with a clean slate, a clear understanding of the end-to-end IT environment you are working within is also required. Karlin recommends talking to business partners and soliciting their help to pre-validate integration and alignment across the tech landscape.

IoT projects aren't easy but the outcome can be transformational. McPhee urged organizations to get started and offered a nice approach. She said, “Think big but start small.”

To learn more about the SAP Executive Summit on IoT click here.

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Reimagining Business with IoT