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Digital transformation is becoming an ever more urgent business imperative, with executives keen to capitalize on the significant benefits it offers. According to research from Gartner, 87% of business leaders report that digitalization is their company’s top priority. Yet we regularly see executives who don’t know how to prepare their organizations to enable and embrace it. All too often, excessive focus on the technology itself means many leaders simply overlook the importance of planning and preparation with people in mind. And it’s one of the most common causes of failed digital transformations.

Of course, digitalization must have a business case, but ultimately its aim is to benefit people and society as a whole. Successful digitalization projects demonstrate an elegant, harmonious and interdependent interaction between technology and people for the wider benefit of everybody in mind. One element alone can’t succeed without the other. That’s why the human aspect is crucial. Leaders must strive for twin goals: early employee buy-in through effective change management. Let me break down how this works in practical terms.

What many fail to appreciate is that digital transformation is a people business in which human factors and culture are the predominant influencers. And the cost of ignoring the human factor is eye-watering; the failure rate for digital transformations stands between 60% and 85% (HBR Pulse Check Survey, 2019). As a leader, once you understand that it’s as much a cultural transformation as it is a technological one, you’ll find it easier to develop an overarching strategy that has your personnel at its heart from the beginning. 

As our CEO, Aymeric, reports, he visited a customer factory in Asia that had implemented a digital transformation. Its production machinery automation was successful. But management hadn’t adequately considered the workforce from conceptualization; employees remained oblivious to how digitalization could improve the processes for them. Because they hadn’t been involved from the start, floor managers were disengaged and resisted change, reverting to experience over automation to assign incoming jobs. New systems designed to track jobs through the production cycle were by-passed and the technology wasn’t able to learn.

Initiating cultural transformation

How, then, could this situation have been better managed so that employees recognized the benefits? If you put your workforce at the heart of any transformation, employees become agents of transformation rather than casualties. So, establish clear two-way communication up-front so everyone’s aware of the direct benefits, impacts and improvements you expect.

Part of this approach is to ensure new technology and user interfaces are instinctive for all generations represented in your company. They must be intuitive for generation Z (born post-1997) as well as baby boomers (1946-1964). Workshop your digital processes, encourage feedback and be prepared to redesign them if employees find new processes harder than legacy ones. Human-centered design has a helpful analogy in today’s music-streaming apps; most of them offer pretty much the same access to music but are all slightly different in UX design. People choose to use Spotify, Apple Music or Deezer, for example, based on how they interact with them. What digital leaders need to address is: what kind of technology and processes will a wide variety of employee groups and generations need and use, and still all find intuitive, attractive and engaging?

Successful change management boils down to understanding the diversity of our workforce; our job is to make sure we know exactly who our employees are, how they learn and what makes them tick. Efforts to align your corporate culture will dictate the success of any cultural transformation and change management. There are three aspects of cultural alignment on which the success of your change management depends:

• Information & functional silos
• Corporate immune system
• Generation diversity

Information & functional silos – how to mitigate isolation

Certain functions, like legal or finance, demand specific skills and qualifications, and employees within those groups consequently pursue vertical career paths. These individual function groups tend to value qualifications and skills over agility, and the privilege they tend to enjoy as a result of their expertise, influence and resources can create a functional silo.

These groups in turn can create information silos. Function-specific business imperatives within vertical groups that are, by their very nature, functionally oriented can ignore the broader company-wide advantages of collaboration. As a result, the organization can find itself in a situation where functional silos – in which many employees already feel isolated and disincentivized to collaborate – actively resist the sort of collaboration and data-sharing essential for digital transformations.

Look for opportunities for collaboration across different functions where isolated employees can break out of their silos to form new groups. Essentially, you’re looking to instill a shared culture across a diverse group of silos to develop common values and expectations. Once you achieve that, cross-functional teams can form and disperse quickly in response to commercial demands. The result? A more agile, coordinated operation.

The corporate immune system – how to use it

Let’s be clear; an immune system, like that of the human body itself, exists to protect the functioning status quo. Like the human body, that’s great if you don’t want to change anything. But disruption and innovation in an organization can be seen as a threat in the same way that a human immune system will see a viral infection, for example; individuals within your corporate structure may act to resist and neutralize anything that threatens to change any part of your company’s past and present.

Your corporate immune system – a key element of the human factor – can halt your entire digital transformation in its tracks. And it uses three key traits of human nature – resistance to change, skepticism and suspicion – to decrease innovations like digitalization. It’s important to recognize each of these three traits, so let’s have a closer look at the detail.

Resistance to change is partly rooted in a natural fear of the unknown, as recent experience with one of our clients shows. Engineers at a major energy equipment supplier feared losing their jobs to an AI design algorithm. The engineers were skeptical of an automated process. As a result, despite the benefits in time-to-market and reduced costs, the company experienced widespread resistance to proposed changes in design processes.

The solution was to pick out a handful of coaches from among the engineers, selected on their willingness to adopt change and their ability to act as role models to colleagues. These coaches were given access to the organization’s entire digital strategy, allowing them to see how important the transformation was to the company’s continued success. This gave the coaches the opportunity not only to identify new emerging roles as a result of the transformation – roles that would give engineers valuable extra skills – but to plot their development within the organization. Once satisfied that change was desirable, the coaches acted as intermediaries to explain the potential to their colleagues. As a result, engineering teams that had previously feared the unknown and were therefore resistant to change sensed the urgency and benefit of the change; in the end, those teams actively pursued change to bring about a successful launch of the algorithm.

Skepticism is insidious, so it’s important to keep an eye on it. Skeptics may have experienced failed transformations with previous employers, and this can strengthen a pervasive narrative that digital leaders may be untrustworthy. One way to overcome this is to identify prevailing skepticism in the team. It’s important to get a feeling for employees that might not possess core competencies that are critical to the success of any transformation: collaboration, disposition to change and agility. Conversations, support and internal or external training can be useful to upskill employees and address any gaps in core competencies that are identified.

Finally, the immune system deploys suspicion. Few employees simply tend to dislike the need for change. If they feel being left behind, they’ll look at the evolving target state and take that as justifiable grounds for suspicion. In reality, due to inevitable ongoing developments, the target state of digital transformations can continuously evolve – and change can happen quickly. If a small number of skeptics latch onto this, this tiny minority might already think the transformation will fail. If left ignored, the attitudes of that small minority could gain wider traction across the organization.

Generation diversity – how to identify & harness behaviors

It’s common for many organizations to play host for three to four generations of employees. Broadly speaking, your workforce will fit into one of four categories: baby boomers (1946-1964); generation X (1965 – 1976); millennials, or generation Y (1977 -1997); and generation Z (post-1997). Successful leaders know that they all think and feel differently.

That’s not to say these generations don’t share common ground, and we should beware of stereotypes. But leaders need to know unique attributes of distinct generations in order to take everyone of the transformation journey. Include the baby boomers, for example, and leaders are getting valuable knowledge, expertise and experience.

To make your transformation effective, the use of training to embed cross-generational mentoring is worth considering. The thinking behind this suggests that pairing different generations creates complementary strengths. One possible approach is to pair millennials with baby boomers, helping employees in their 50s and 60s understand exactly where their accumulated wealth of experience fits into your digital transformation. Another possible way is to follow the example of Italian fashion brand Gucci and establish a shadow board, made up of non-executive millennials to expose older executives to broader perspectives. Since it was established in 2015, its internet and digital strategies have been largely responsible for a 136% growth in sales.

Those two clear goals - early employee buy-in and effective change management – are at the heart of a successful transformation. Aligning your corporate culture to lay the ground for effective change management involves planning with people in mind and communicating those plans clearly; understanding their digital preparedness and anticipating employee reluctance will help ensure nobody is left behind.

So, before anything else: put people at the very heart of your transformation now. If you enable them as agents and advocates of change, together they will help you unlock the power and full potential of digitalization for your business.

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The year 2020 was a living demonstration of how fast and dramatic supply chain disruptions could become. Ninety-four percent of Fortune 1000 companies still haven't recovered. Over half of them are forced to downgrade their growth projections in the foreseeable future, as a result. Only a few businesses have achieved the supply chain agility which is necessary to tackle these new challenges. “Future-proofing” has shown to be critical to ensure a company’s resilience in times of crisis. To build a future-proof supply chain, a few crucial imperatives need to be considered. Luckily, you don’t have to be a fortune teller to see the future – just read on to do so.

In the sporting world, you're only as agile as you are alert. It takes extreme awareness to react to unexpected swipes and throws on the field. In supply chain management it’s similar, the faster you can detect opportunities and threats, the sooner and better you can respond to them. Therefore, one huge goal is to guarantee supply chain visibility and transparency. The benefits of supply chain transparency lie in the possibility to identify potential risks and vulnerabilities at an early stage. This identification may require a bit of digging – looking deep into your network to identify strong dependencies on e.g. one single supplier – but believe me: it’s definitely worth it.

The most adaptive supply chains are able to predict shipment disruptions long before they occur. Strategic planners are increasingly turning to predictive analytics as an enabler for forecasts once transparency is guaranteed and data is collected. Building on observations and learnings of the past as well as actual data, analytics can spot for example weather extremes, material shortages, and demand fluctuations before they become influential to supply chains. Of course, Artificial intelligence (AI) also has its part to play. The more information you have, the more proactive measures can be initiated. So, it's time to haul out those crystal balls. It can save you a fortune in supply chain costs.

Naturally, not every potential disruption of your supply chain can be predicted – this would be magic. However, creating supply chain transparency while controlling vulnerabilities will reduce risks significantly.

A strong ecosystem of partners is essential to collaboratively tackle supply chain threats. The importance of ecosystems to ensure future-proof value chains is steadily growing. Companies need to break up internal as well as external silos to ensure faster data sharing and value creation. They need to decide which stakeholders (suppliers, business partners, organizations, etc.) to include and how to collaborate efficiently. If single suppliers have been identified to be of high risk for your supply chain, diversifying the network can be the answer. To give a concrete example: Multitier supply chains are becoming more popular in numerous sectors as they rely on several single-level collaborations instead of one multi-level one. Multitier collaboration platforms aren't always easy to use, though. One weak link in the collaboration annihilates the entire chain, means they're only as effective as their least adept participant. Digital platforms can be a great enabler in this area creating consistent transparency and improving connectivity. Platform-based ecosystems can help by integrating all supply chain tools and synchronizing timelines and therefore optimize your processes sustainably. To unlock the benefits of supply chain resilience, you have to invest in not only building up but also managing a strong ecosystem.

We live in a world where automated processes and robotics become more and more part of modern life – basically a world that science fiction authors pictured decades ago. The technology landscape changes rapidly. Characteristics of supply chain 4.0 like digital twins, big data, augmented reality and the Internet of Things (IoT) revolutionize processes and organizations and can bring enormous benefits for your operations. Automation can increase efficiency for repetitive and high-volume tasks, freeing up time for your staff to concentrate on more value adding activities. Technologies like process mining increase transparency, can be used to track process quality and process deviations in real-time and allow you to be ahead of your competitors by immediately taking corrective actions. Also, on a more operational level, technologies like automated guided vehicles (AGVs), picking robots and more can speed up your warehouse processes and support you in satisfying your customer needs faster and more reliable.

Implementing new technologies turbo-charges your analytics by gathering more data than ever before, benefitting your predictive power enormously. However, technology needs to serve the business – not the other way around. Make sure to prove that the selected solution brings long-term business value before applying it.

Successfully implementing future supply chain strategies must mean that there is an operational fit in your organization that puts sustainability at its core. True, certain aspects of digital transformation in supply chain management can help to overcome some of the short-term pains associated with organizational change, but the transformation must always focus on how sustainable business practices will become. In this regard, organizations must have a clear vision of what sustainability means to them and how they will put this at the heart of their supply chain systems going forward. Acting responsibly requires integrating sustainability criteria in daily decisions and assessing environmental and social risks at any stage. Designing a sustainable supply chain is about looking beyond the next quarter, year or decade and act upon a long-term vision of the future. We all know: the time to act is now!

In many ways, supply chain resilience is an aggregation of your greatest strengths. When you focus on the personal assets you bring to the table, you can push your resilience to unparalleled heights. It's you who tweaks your strategy and you who decides on your business values. Your supply chain might be marching into the future, but it still needs some traditional human values. Similarly, your corporate culture and brand determine the strength of your ecosystem. Business leaders need to foster new digital-driven mindsets. If the individuals in your supply chain are allowed to flourish, so will the greater system. The modern supply chain is overwhelmingly reliant on digital technology, but the more human its strengths, the more adaptive its future.

Ultimately, you might think of your supply chain as an attempt to control the future, so don't forget your vision along the way. Having a clear vision in mind, based on your business strategy, fitting your operational processes and cultural environment is core for success. Your goals will determine the principles you espouse in your everyday transactions. In the end, making your supply chain future-proof is about implementing long-term change. Failing to do so will mean that your more forward-thinking competitors are beginning to outstrip your organization already. And yet, change for change's sake will not work either.

Think big. Think clear, and your ultimate supply chain strategy will come to the fore. To make your supply chain future-proof, you will need to see the holistic picture and make your supply chain not only transparent, but sustainable, data-driven and focused on a strong ecosystem while leveraging your own strengths. Avoiding future disruptions won’t come easy (as long as you are no fortune teller) – but will make your company navigate the digital future.

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The global cloud market is expected to surpass US$600 billion by 2023. Edge computing, although presently commanding considerably less market value, is growing equally as fast. Analysts project that the edge computing industry will generate revenues of more than $15 billion in 2025. It might be a relative newcomer on the scene, but it's already changing the way the world handles and processes data.

There are now over 50 billion connected devices in the world, so modern networks have an enormous load to bear. Today's wireless connections must support everything from self-driving cars and data storage systems to warehouse robotics and video analytics. Edge computing addresses those bandwidth challenges by carrying computing topology closer to its source. At its simplest, it narrows the gap between data storage and the devices that need it so that latency problems can be resolved.

At first glance, the cloud's basic premise of creating a centralized data source that can be accessed anywhere in the world looks like the opposite of edge computing's local data handling idea. However, in many ways, it's the cloud itself that created edge computing. Without centralized data storage, the big data movement would never have achieved such scope. Many online payment providers wouldn't exist, for example, and brand titans like Microsoft and Amazon would be different from what they are today.

If you're working on your IT infrastructure, you've probably spent some time trying to sort through the benefits of edge and cloud computing. Which is best? The answer isn't as clear-cut as you might think.

The IT industry came up with the word "cloud" for its amorphousness. Its name is the perfect metaphor to define its function. Much like a floating cirrus cloud, the data or "water" it provides can reach people all over the world.
So, in contrast, what is edge computing? To extend the cloud metaphor, it would be more like a faucet. It brings data (or water) right to your doorstep but supplies nothing to your neighbors. The differences don't end there, though.

Cloud Computing Definition

Cloud computing relies on a remote server network to store and use data off-site. Like our figurative cirrus cloud, it can supply data to a large number of people at once. The cloud doesn't require you to maintain your own infrastructure; thus, no capital investment or staffing costs are needed in that area.

Edge Computing Meaning

Any edge computing definition should emphasize that this model doesn't rely on data centers or the cloud. Instead, it brings computing closer to a data source to minimize potential distance-related challenges. Much like our figurative faucet, it delivers its resources quickly and cheaply through fairly basic infrastructure. When things go wrong, it's also straightforward to troubleshoot.

The cloud was designed to overcome the limitations of local storage. It brought the world on-demand data storage and new levels of computing power. That changed the way businesses and individuals approached their IT assets. Dropbox launched an era of floating file access, while service providers like Amazon Web Services (AWS) brought the business world a new approach to software. Both companies turned data storage and computing into a sailing cirrus that you could access anytime from anywhere, no matter which device you had on hand. Remote work became easier to achieve than ever before, and apps could be accessed and developed by multiple specialists simultaneously. In short, the cloud's benefits include:

• Access to masses of storage space without the costs involved in storage infrastructure.
• Speeds that would be prohibitively expensive to achieve on your own.
• Remote data access that allows workers to collaborate from any country or device.
• The potential for Software as a Service (SaaS) pricing structures, which makes expensive software scalable and remarkably affordable. SaaS lets businesses pay a regular premium to "rent" software instead of buying it. It costs a fraction of a software product.
• Reduced risk of data losses.
• No need for a large in-house IT department.

You need the cloud if you use remote teams, need to extend local data storage capacity, or want to streamline your IT operations. In addition, key digitalization technologies like IoT (Internet of Things) depend on the cloud as a central location to store, process, and analyze data. It's also ideal if you expect rapid growth and need access to certain innovative software that is being offered through cloud-based subscription models. By contrast, edge computing benefits include:

• Reduced latency, so your apps usually function smoothly when working with real-time data.
• Data privacy and security is more straightforward to implement locally.
• Edge computing combined with IoT technology saves you bandwidth, thereby allowing you to choose where to best dedicate your resources.

Edge computing allows you to analyze your devices before sending data to the cloud—and that's where the magic happens. If your industry requires adherence to strict privacy laws or you have a tight IT strategy, for example, then edge computing gives you the right blend of benefits. That said, the best solution to the cloud-vs-edge debate is to use both. Separately, each solution is a lone voice. Together, they're a choir.

Fog computing blends both edge and cloud computing. By doing so, it stretches the cloud to the edge of the network so that it's easier to connect IoT devices in real-time. By incorporating the benefits of both edge and cloud technology, it achieves a high-level network environment. It can connect two disparate ecosystems without losing local storage benefits. Fog computing reduces latency between devices while simultaneously reducing bandwidth requirements. It opens up exciting possibilities for several industries. Autonomous self-driving cars, smart cities, and real-time analytics are all at their best with fog computing. Its capacity to transfer data right at the edge of remote areas makes it suitable for roaming use cases as well. Fog computing is, effectively, edge computing with wheels.

Edge computing has plenty of untapped potential. Analysts predict that it will account for 75% of enterprise data by 2025. In the coming years, it will deliver insights faster than ever before. But as more and more devices with ever greater numbers of sensors will be producing even more data with higher sampling rates in the near future, a centralized model, such as cloud computing, will be placed under greater stress. Even with optimizations, the bandwidth required will become a bottleneck. This doesn't mean there's an end in sight for the cloud, though. After all, many devices designed for edge computing have strictly limited computing power. Both solutions offer important benefits to the business world but used in tandem unlocks additional versatility for advanced digitalization approaches.

Let’s dig a little deeper to illustrate this: The transmission costs of providing trivial sensor values to a centralized location will often not be worth it for ordinary measurements, such as confirming the normal state of a device. The value in knowing an IoT-tracked 24/7 production asset is switched on, for instance, is much less than knowing when it is off for whatever reason. In the end, edge computing's benefits are limited by the fact that edge-enabled devices only know what is going on locally - the ‘big picture’ can only be assembled centrally and is not readily available at the edge. Consequently, AI for a fleet of such devices can only be realized centrally and not at the edge.

What will the future look like?

Although no one can say for sure, fog computing is already shaping up as an added value driver of digitalization initiatives, bringing benefits both in the direction from edge to cloud and vice versa.

From Edge to Cloud

It is likely that data will be pre-processed on edge devices, and their first actions will be triggered in a decentralized manner on the basis of some centrally specified analytics. This model should allow for the automation of systems while maintaining low latency. Only selected data – information that is particularly interesting or potentially important for others to know about - will be collected centrally via cloud services.

From Cloud to Edge

Fog computing will facilitate fleet recommendations to IoT devices derived from the centrally collected data held in the cloud. For this to work, new analytics models will need to distribute centrally computed insights back out to edge devices where they can be utilized. As such, adopting a fog computing digitalization strategy now appears to offer organizations the greatest level of versatility going forwards.

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The speed of change often blows my mind. It took 75 years to get 100 million people using the telephone, but in 2016 it took just one month to get 100 million people playing the online game Pokémon GO.

Our world’s level of complexity is increasing tremendously. In today’s world of digital transformation, circumstances dictate that we make weekly if not even daily decisions of strategic importance. Nowadays, it’s vital to turn organizations into future-sensing organisms with the capability to probe, sense and respond continuously. IoT is a major lever for this transformation, serving both business and community. In fact, the best examples of IoT in action show that this double objective is clearly being met.

IoT is transforming the way we work – and the way we live.

Imagine the scene: a strong storm over an offshore facility. Grid operators are warning of outages. The challenge is to manage the gusts exerting excessive wind loads on the turbines of an offshore wind farm and to avoid potential interruptions to clean energy generation.

When storms like this exceed the operating limits of certain wind speed ranges, the turbines apply a brake and stop operating. However, there is an operational and commercial requirement for all turbines to be available as much as possible.

Here’s the solution: turbines with sensors and an IoT cloud-based platform incorporating for example machine learning (ML) that allow increased remote monitoring and troubleshooting. Using data from different sources, such as weather or operational data, allows to utilize the maximum potential of the wind farm. As a result, turbulence can be managed as optimal revolutions-per-minute are maintained and specific loads across the turbines are balanced.

How is this changing the world?

With assets maximized to deliver in extreme weather conditions, we’re less likely to suffer power cuts. So, the electricity in our hospitals, schools and homes stays on and our communication networks remain operational and robust. All with clean, zero-carbon energy utilized to its full potential – no matter how big the storm.

Manufacturers are usually eager to improve factory set-ups and assembly line design to attain greater worker safety and better resource efficiency. But how can that happen without taking the factory off-line for an expensive physical run-through?

The solution is a digital twin: A digital simulation of a real-life process that allows the factory to trial any proposed improvements or changes. Created with plant simulation software, the facility can develop a digital twin of the assembly line design based on a 3D material flow simulation model. In other words, it builds a factory simulator.

How is this changing the world?

What this example shows is how we can plan changes to any part of our physical world without exposing humans to unquantified risk. And we’re no longer subject to so many downtimes in our real-life systems; they march on while their digital twin ponders a more productive future for them.

IoT allows us to identify unknown pitfalls without any risk to assets, while business-critical systems remain online. Its primary human benefit here lies in reducing risks exposure during trial runs, for example on new factory line design. Further, it opens the way to improve workplace health and safety.
 

When we walk on the sidewalks of our streets, we rarely think about what is happening underneath us. But there’s an IoT story buried down there that is much more than just a legacy heating system blowing off steam.

A city underground network hosts a typically extensive array of critical infrastructure, including miles of electrical cables, water systems, and gas pipelines. If any part of it fails, everything can grind to a halt in seconds. That’s why it’s essential to monitor the underground network constantly to ensure the city’s functions are never interrupted.

Previously, maintenance would have involved work that was expensive, time-consuming, and dangerous. But by equipping critical infrastructure with smart sensors – predicting maintenance issues long before anything goes wrong – it’s possible to watch, detect and transmit the condition of fibre-optic cables and gas pipes in real time. Meanwhile, with the potential threat to public safety, IoT-based early warning systems are able to reduce incidents significantly.

How is this changing the world?

These technologies increase safety and reliability. They deliver efficiencies, save time and reduce costs. That means our broadband is less likely to fail; it ensures a safe water supply; and it minimizes the risk to human life and property from leaking gas pipes and manhole covers.

Think of how many factors determine whether our urban lives are happy or miserable. Can we move around the city with ease? Will the air we breathe impact our long-term health?

Air quality is one important consideration among many that challenges citizens and planners alike. In order to reduce the impact on people’s health, city authorities are searching for new ways to manage and reduce air pollution in metropolitan areas. One possible solution is leveraging the potential of cloud-based solutions and Artificial Intelligence (AI). Comprehensive data analysis and forecasting enable decision makers to improve emergency response times and lower emissions of carbon dioxide, carbon monoxide and nitrogen oxide. How does it work? IoT gathers emissions data in real-time and simulates immediate future actions designed to improve air quality for example by adapting speed limits or offering free public transport.  

How is this changing the world?

The forecasts allow cities to simulate measures to avert or mitigate breaches in air quality standards. The result? Lower greenhouse gas emissions that support a happier and healthier metropolitan life where we can move with ease and enjoy the full potential of cities.

Yes, the world is becoming increasingly complex, and so how we deal with it must mirror that. But underneath this complexity is a relatively simple philosophy – to adopt a growth mindset and learn to react effectively with solutions that genuinely benefit the individual, the organization, and society at large.

As we have seen, IoT has already affected us in many positive ways. Businesses are seeing both cost savings and greater revenue, and governments are finding better ways to provide essential services relating to security, infrastructure, environmental protection, and beyond.

And we are just starting. Now is the time to shape the future world we want to live in – using technology with purpose which serves both business and society!

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The last decade was about connecting the consumer world. This decade is about connecting infrastructure and industry to the Internet of Things (IoT)—and the pandemic has only accelerated this trend.

So, at the Web Summit 2020 in December we brought together eight leaders across the private sector, government, and academia. We then asked: How we can unlock the full potential of the IoT to transform infrastructure, industry, and society?

And one takeaway was clear: No one's company can develop and offer these end-to-end solutions on its own. We will need to reassess longstanding ways of thinking and redefine competition. The pandemic, in particular, has demonstrated the value of working together as part of an IoT ecosystem – not an egosystem – tapping into the full range of expertise and perspectives to solve problems and innovate new solutions.

Here are four key elements to building the connected world that emerged during our discussion.

Collaboration isn’t just necessary to building the IoT—it's an accelerator. That’s because no one person or company is an expert at everything. Creating the new systems and developing the new markets for the IoT ecosystem will require a lot of collaboration between companies and organizations. The software developers need a data scientist who needs a marketing communications expert, and so on. The IoT is going to involve tons of R&D, coding, hardware, intellectual property expertise, and communications at a new scale. That assembling of talent and intelligence will make things move faster.

This does not mean an end to competition. The IoT ecosystem will need that, too: innovation will be the name of the game. But we must move beyond the old models of competition to a much more integrated practice of collaboration and cooperation. Most, if not all, the companies with a major stake in developing the IoT will come to see collaboration as a core practice. Collaboration will also be inevitable as we realize the opportunity of using the IoT not just to create business value, but to keep the end-user in mind and solve shared societal challenges.

Moving from a total competition model to a new era of cooperation will rely greatly on a global diversity of thought, workforce, and leadership. Put simply, diversity sparks innovation—the overlap of multiple cultures, experiences, and backgrounds in the act of innovating is where the magic happens.

We’re already seeing that magic happens in engineering programs at universities and colleges across the world, where a new emphasis on multidisciplinary thinking, collaboration, and diversity is helping to accelerate innovation. Today’s young, diverse engineers are highly aware how technological advancements can exacerbate inequities, and they also know that the possibilities of the IoT ecosystem are endless and can transform every single aspect of modern society to create a more sustainable, secure and safe future.

To be sure, business managers need to provide real, measurable results and value for shareholders and stakeholders—that’s the here and now. But as we consider how to build the IoT ecosystem, we realize that we must develop a combination of technologies that over the long term will bring about all kinds of changes at great scale, so we must think long term about how those technologies will work together, how they will adapt and evolve, and how they will change industry and society. 

Exponential technologies like artificial intelligence (AI), digital communications, quantum computing, and blockchain are becoming more and more integrated. This integration of technologies will play a critical role in the digital transformation of just about every legacy business we can think of and will create business synergies we don’t yet know. These combined technologies will also be central to decarbonization and reversing climate change. The IoT will allow us to integrate services, predictive maintenance, efficiency, and innovation that will deliver results for customers in ways that we need to plan for now. That’s why we need to plan for the long term and keep an eye on the big picture: the value of IoT to society.  Embracing open source technology and the power of ecosystems will help us tackle global challenges together.
 

If there’s one barrier to developing the IoT ecosystem, it’s the tendency in business to do things the way they’ve always been done. Breaking that barrier will require a cultural change in every business and organization, and it starts with leadership. Business leadership must be willing to revise business models, align their people on new key objectives, and accelerate toward new outcomes, with new ways of measuring success. This will generate value for customers, for the business and for societies.

Cultural change is also essential for companies to create the sales force, service managers, and engineering teams they will need to build their IoT ecosystem. Once they have such new teams in place, companies will quickly find out how much value they can create through transformation and how to tackle the global challenges.

And what brings all four of these elements to life? People and trust. People control the tech and navigate using the tech, and we will learn to trust ourselves and trust each other, knowing that we’re advancing IoT in the right way: replacing the egosystem with an ecosystem that, five, 10, and 20 years from now, will be a people-driven network expanding what’s humanly possible. If we do, we will be unlock the full potential of IoT both to our businesses and to advancement of a more resilient, sustainable, and equitable world.

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Artificial Intelligence, machine learning and data science seem inevitable to unlock the digital future. Do you want to jump on the bandwagon? Slow down, take a step back and ask yourself: Do you really know where to start? Does your idea really fit your organization? Sneak Peek: Failure is part of the process and concrete business value doesn’t come easy.

According to Gartner, by the end of 2024, 75% of enterprises will shift from piloting to operationalizing Artificial Intelligence (AI), driving a 5 times increase in streaming data and analytics infrastructures. Is your digital transformation journey about to begin? Great! However, getting started can be tricky. The big question is: how do you find a suitable AI use case and how do you know it’s the right one to kick off your digital journey? Our AI experts from Siemens Advanta identified 10 steps to find your first AI use case.

First off, don’t give in to the temptation of just using that cool technology you saw at a conference or of copying that fancy solution your competitor went for. Go for an ACTUAL challenge of your organization! This will help you build an ACTUAL project as opposed to a hobby: have a real “customer”, get a commitment, search for support, and a pull from the organization. Also, keep in mind that hobby projects are the first thing to be cancelled once operational pressure builds up. Working on a real pain point insulates your project from being stopped prematurely.

Before even looking at the data, there must be a shared understanding of the goal of the AI use case within the team. Merely “analyzing the data” is not going to work! The common understanding of what you want to achieve needs to be directly attached to the business problem: Go back to your organization’s strategy or major pain point and align potential use case outcomes (e.g., a strategic goal of a more bespoke marketing can be achieved by understanding different types of customers based on their purchasing behavior). New ways of ideation and innovation such as design thinking can be the right approach here.

The healthcare industry holds one of the most significant investment opportunities for IoT technology ventures. We have observed its growth for years as investors keep leveraging better diagnostic and treatment ideas. The outbreak of the COVID-19 pandemic brought a lot more attention to the sector, and several digital health innovations emerged in 2020 in response to it. These IoT related solutions include applications that help with contact tracing, remote diagnostics and remote patient monitoring. We anticipate that the IoT new trends in this sector in 2020 will still be relevant in 2021, especially with the emerging need for vaccine cold chain management. These innovations will stay with us even beyond 2021 and will keep addressing various other health care challenges – supporting our ability to manage healthcare systems effectively.

Will we ever have an Artificial General Intelligence – an AI that can solve any problem, just like a human brain? This is highly disputed. Still, nobody contests the fact that today’s AIs perform well on specific, and sometimes very complex, problems. Make sure the selected challenge you want to tackle is defined in a way that is susceptible to AI. It has to be a data problem, such as:

• identifying anomalies
• grouping together entities that have similar features
• predicting outcomes

Formulate your problem as a data problem!

The data you use must fit the task, it must be sufficient in volume and quality and it needs to be accessible. If the data is not in shape, your use case will not get off the ground. Problems with the data can typically be fixed, but the fixes are all too often neither fast nor cheap. Processes might have to be changed and systems or IT landscapes adapted before you can get started. Plan significant effort to get the data in shape and ask the right questions early!

If you’re not in a research and development department, you are unlikely to get your AI use case funded or supported beyond a certain stage, unless there is a reasonable business case for the envisioned solution. This can be a daunting exercise. Estimating the potential benefits is already quite hard, determining the costs correctly is typically even more tricky (see our ROI whitepaper). If you manage to specify the benefits of your use case, you enable your whole organization to see the potential of the investment. For instance, increasing process efficiency or reducing manual efforts in your organization will provide you with the buy-in you need.

Your digitalization journey is a learning journey – not only for you, but for most of the organizations out there. There are chances that your first use case might turn out differently as originally envisioned. Although total failure is a somewhat extreme scenario, partial rather than full success is the likely outcome. Be prepared to adapt! You might not end up with what you initially craved for, but when adapting learnings early on, your partial success might turn out to be exactly what your company needs.

Since this is the first step in your digitalization journey, nobody expects a full-blown victory. Nevertheless, flat-out failure will not help you getting support for the next idea. Make sure to learn on the way so that you can either stop early or adjust. This will help you to give positive traction to digitalization efforts in your company and gather promoters to support you.

Don’t let overwhelming organizational complexity hold you back in kicking-off your use case! Rather select a small and manageable subset, like a small region, a specific business unit, a selection of products or a particular type of customer. This will allow you to prove the value of your solution to the stakeholders while you learn about the important opportunities and threats at the same time.

If your use case proves valuable, you don’t want to stay limited to this small subset! Ideally, your case can be swiftly adopted to be scaled to larger regions or more business units. This also means you need to balance efforts to standardize processes, document your initial steps and have productive infrastructure and operations in mind early so they can easily be applied to the expanded scope.

For many business stakeholders, the journey of finding the first AI use case still needs to be demystified. Surely, there is no one-size-fits-all solution. The success of an AI project heavily relies on individual characteristics of your organization, its stakeholders and available data. As every journey is unique, it is important to start by answering the right questions early on and manage expectations. The potentials of Artificial Intelligence remain huge. However, often a trusted partner is needed to create transparency on the benefits of machine learning and other technologies for your business. Learn how we can leverage advanced analytics to create value here.

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Traffic is moving and clocking-in machines are beeping again – life in China is resuming.

China’s economic recovery picks up speed at the end of 2020 – something many other countries are longing for. And it has done so more quickly than most observers expected. According to data from the National Bureau of Statistics, China’s GDP grew by 6.5% in the fourth quarter, being the only major economy to have expanded in 2020. This puts China a step ahead of the rest of the world on the recovery curve.

For me, developments in China provide valuable insights that can help us better understand and prepare for our recovery in Europe and the US. Which is why I am delighted that my colleague Xiaoxun (BJ) Zhu, Head of Siemens Advanta China, has taken the time to share with me his first hand experiences of recent months.

Bettina: BJ, looking back over recent months, what, in your eyes, can countries in the West who are still in the midst of shutdown, learn from your experience in China?

BJ: China recognized the importance of digitalization in the fight against COVID-19 and exploited its potential. Many companies reacted quickly and developed customized digital solutions as a response to the new challenges. And when it came to ramping up the economy, it quickly became clear that a digital monitoring system was the only way to ensure compliance with the strict statutory regulations. Digital tools not only guard against a new wave of infection, they have also driven forward digital transformation in companies. That makes companies more future-proof and more resilient, as demonstrated by a report from the China Academy of Information and Communications Technology (CAICT) which examined the impact of the pandemic on companies in the IoT space.

Bettina: In Germany too, we are looking at ways of using digital technologies to better protect employees on company premises, like with Siemens’ Comfy App. What does your monitoring system look like?

BJ: Our system is a campus management system that we developed ourselves. It has a wide range of features, including access authentication, body temperature measurement, temperature status recording, preventive health advice, plus higher-value insights based on data analytics. It is an important element in our safety concept and has proved to be an efficient preventive tool. Our many years of experience in campus management meant that we were able to develop the tool very quickly. As a result, we were able to provide our clients in China with a cost-effective, efficient solution right when they needed it, as they got their operations up and running again.

Bettina: It is impressive that you managed to develop and scale the system in such a short timeframe! I’m very interested to see whether similar concepts will be adopted in Germany too. After lockdown, many companies are struggling with cash flow issues and are fearful for the future. Where you are, the economy has started up again. How has the situation evolved?

BJ: Small and medium-sized enterprises, in particular, are still experiencing problems with their cash flow, unfortunately - and that includes some of our customers. To help them, we have developed a four-point action plan:

1. Comprehensive analysis of the company’s financial position to identify losses and financing gaps
2. Compile a multi-point budget plan with different scenarios and versions
3. Conduct emergency budget planning to implement continuous monitoring of annual targets
4. Optimize and align all enterprise management tools with the aid of digital technologies

Our experience shows that these steps are essential if a company is to be able to assess the impact of the pandemic on its own business. They form the basis for developing effective targeted measures to secure the survival of the company.

Bettina: I think that the cash flow problems are just the tip of the iceberg. In the current situation, what, as you see it, is particularly important for companies if they are to be equipped for the future?

BJ: With the many internal challenges facing companies at the moment, it is important not to lose sight of one’s own supply chain. Fast, efficient assessment of procurement risks and of the sustainability of the supply chain is absolutely essential. Those who have not yet done so, should first and foremost implement a crisis management system, centralize scheduling and expand their procurement channels. The next step, based on experience gained and using short-term success metrics, is to increase security of supply and improve the quality and efficiency of the supply chain. In the long term, the focus must be on optimizing the supply chain network and on end-to-end digitalization of supply chain management.

Bettina: For me, that last point in particular has become more significant in the current situation. Globalization has meant that supply chains have become incredibly complex in recent decades. Daimler, for example, works with more than 213 tier 1 suppliers worldwide according to LBBW Research and Bloomberg. The 10 largest of these alone have 588 suppliers, and these in turn depend on 2,900 other suppliers. Keeping track of these is virtually impossible without the right tools. Do you agree, that the trend towards Glocalization will continue?

BJ: I think so, yes – you need to ensure that your supply chain is resilient and for this a dedicated risk management in balancing global AND local vendors definitively can help.

Bettina: COVID-19 still has the whole world in its grip in the second and also third wave. Where do we go from here?

BJ: As the author Hal Borland put it so well - No winter lasts forever, no spring skips its turn. The pandemic is a turning point in the digitalization of the economy and society. If we are to be prepared for the upcoming uncertainties and the complexity of a digital, global economy, then a smart approach to the digital dynamic or as Christian Schuldt from the Future Institute aptly describes it - a digital resilience - will be critical to our success. Siemens, with its experience and insights, can make a valuable contribution to driving further developments in this area. In so doing, we make companies more flexible, more agile and, as a result, more competitive in the long term.

Bettina: Transformation of corporate culture also has a key role to play in building digital resilience. Digitalization must not be just a buzzword in organizations, it must be embraced actively by all employees.

Thank you very much BJ for these fascinating insights. I am certain that the four-point plan to address cash flow issues and the supply chain measures you described will be very useful for other companies too, as a way of mitigating the impact of the crisis. 

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The Internet of Things (IoT) has become one of the key tech trends in recent years. By connecting devices to collect and share data, IoT is one of the strongest enablers to accelerate digital transformation. So, whether you are considering to improve your factory’s production capacity, the maintenance of rail systems, or urban live support systems – from transportation and health, to energy consumption and safety, the adoption of IoT technology will provide tremendous benefits for business and society.
Based on our experience with clients, we at Siemens Advanta analyzed the top IoT business trends regarding relevant markets and technologies empowering you to leverage these IoT future trend insights when embarking on your digital transformation journey in 2021.

Manufacturing companies traditionally depend on human presence to physically operate their machines – especially when there are issues that need onsite fixing. With advancing factory digitalization, IoT emerging solutions will become relevant in this regard resulting in less need for human to human interaction. This IoT business trend increases people’s safety, raises efficiency, and reduces costs. Once you have your devices connected, remote monitoring and asset management can be easily handled from remote locations. Our Underground Network Solutions are a best practice example how metropolitan cities can use IoT solutions for predictive and prescriptive maintenance purposes and beyond. And the opportunities are endless, adding for example Robotics and Drones to improve and automate business processes.

Our second IoT business trend already is and will be even more the power couple of the year: AIoT. The Artificial Intelligence of Things (AIoT) combines AI with IoT – two independent, powerful technologies which accelerate each other’s capabilities.

But why is it so revolutionary? While IoT digitizes the physical world and brings data together, AI uses that data to make sense out of the big amount of information and to control the overall system. Empowered by Machine Learning (ML), it supports the overall data analytics process and data management. Our projects proof that the marriage of these two technologies makes perfect sense – more than that, it’s inevitable in order to achieve real business benefit. The combined forces open doors for new use cases and business opportunities. And the trend is upward. According to Gartner, 80% of IoT projects will have an AI component by 2022. Our clients know: IoT is good, AIoT is even better.

The healthcare industry holds one of the most significant investment opportunities for IoT technology ventures. We have observed its growth for years as investors keep leveraging better diagnostic and treatment ideas. The outbreak of the COVID-19 pandemic brought a lot more attention to the sector, and several digital health innovations emerged in 2020 in response to it. These IoT related solutions include applications that help with contact tracing, remote diagnostics and remote patient monitoring. We anticipate that the IoT new trends in this sector in 2020 will still be relevant in 2021, especially with the emerging need for vaccine cold chain management. These innovations will stay with us even beyond 2021 and will keep addressing various other health care challenges – supporting our ability to manage healthcare systems effectively.

With our society currently challenged with enormous environmental issues, there has been increased pressure for businesses to adopt sustainable practices – a trend pushed by various policy initiatives such as the European Green Deal which aims at making Europe climate neutral by 2050. Working with our clients, we see the rising demand to integrate environmentally friendly solutions. The target is to save resources and raise efficiency: Do more with less! We are convinced that the use of Artificial Intelligence (AI) and IoT will be key to serving that sustainability purpose.

There are already a good number of dedicated IoT solutions that help leverage smart data to maximize city potential as well as unlock the power of digital technology for increased sustainability and efficiency. And we project that by utilizing more data generated from such IoT solutions, it will become possible to improve emergency response times, reduce greenhouse gas emissions, and improve quality of life.

In edge computing, data is not sent to the cloud for analysis and processing, but it’s analyzed as it is received on-device. This way, businesses deliver large amounts of data, ensuring real-time analytical readiness using a tailored data model. Edge computing is not a new kid on the block, but the demand for this technology and its applications has dramatically risen over the last year, especially with the rising amount of cyber-attacks. It’s time for the supply to catch up and keep its critical infrastructure safe. 

The pre-2020 networks were not designed to accommodate the 2020 style of conducting business. In 2021, we anticipate that businesses will demand more edge computing solutions as their structures change from the bottom up, which will lead to more innovative solutions. Businesses that make use of this technology are likely to gain an edge, develop opportunities, increase responsiveness and thrive in times of disruption.

Robotic process automation (RPA) is not a new phenomenon. More and more companies are relying on RPA technologies, but it often remains with the automation of isolated processes. The big challenge lies in the scalability and a company-wide, holistic use of RPA. This is where Hyperautomation goes a step further. Hyperautomation, a Gartner-influenced term, refers to an approach that combines robotics with other technologies, such as Artificial Intelligence (AI) and Machine Learning (ML). Everything that can be automated, should be automated. The ideal state is an all-encompassing, intelligent integration; a "digital twin" of all process and thus of one's own organization with visualized processes, metrics and data analysis. 

Hyperautomation is a concept that increases a company's competitiveness and positions it to be more resilient and robust – especially important in times of crisis. It has immense potential, which will become increasingly important in 2021, and beyond. Thus, it is our well-deserved IoT emerging trend number 6.

With IoT technologies now being used to monitor traffic, operate public amenities, and manage buildings, smart cities are no longer a thing of the future. There are countless applications of IoT in the automation of cities, a concept that we are already making a reality through our Siemens Digital City Solution. In 2021, we anticipate that this IoT emerging trend will continue to grow, as local governments realize smart cities are more resilient and better equipped to deal with unforeseen large-scale crises.

Two areas where this shift will be very visible is smart public transport and energy management. For example, IoT technologies are expected to provide a better understanding of the need of citizens and their patterns of movement.  Our smart city solution, Campus Control Center, is already addressing many of these challenges.

It’s estimated that food demand will increase between 59% to 98% by 2050. Although this might sound overwhelming, smart farming and agricultural IoT emerging trends provide us with a way out. IoT technologies have already been helping farmers beat climate uncertainty, crop disease, and increase yields exponentially for a while. These innovations also help farmers minimize costs by properly managing resources such as fertilizer or water, which can significantly increase profits while avoiding to harm to the environment.

In 2021 and beyond, we will witness the increased use of the Low Power Wide Area Network (LPWAN) technology in smart agriculture. This technology is great for collecting data about the weather, soil moisture and chemical compositions of the soil at a significantly lower cost compared to traditional methods. And finally, let’s not forget about controlled environment agriculture (CEA). It’s is expected to boost food production by allowing crop farming in areas that would otherwise be naturally unsuitable.

In recent years, IoT and blockchain have been rising to fame side by side.  So, it comes as no surprise that these two fields have the potential to significantly empower each other.

The rise of IoT adoption has been coupled with some security and data reliability concerns. Interestingly, the 2020 COVID-19 crisis has pushed businesses towards a speedier IoT adoption, leaving these concerns on the sidelines. As 2020 was the year of quick adoption, 2021 is likely to be the year when security catches up to it. Here is when blockchain steps in. Blockchain is synonymous with data integrity and its combination with IoT can reveal many business opportunities. It can enhance IoT by its unique way of sharing that ensures information is reliable and traceable. Sources of data can be easily identified, and data remains unchangeable – increasing trust in IoT.
This power couple can facilitate numerous end-to-end solution opportunities throughout 2021, so definitely stay on the lookout for that.

The events around the coronavirus pandemic have shown how vulnerable our society is. Once again, those who took care of their company's digital strategy in time have emerged as "winners". In a recent study, 84% of respondents claim that IoT was a critical factor for business continuity. Fortunately, times of crisis have the characteristics to catalyze developments. This is also the case in the field of IoT and digitalization. In fact, it has been confirmed that Covid-19 has accelerated the adoption of IoT.

In times of massive disruption, technological evolution, and unforeseen events, it is up to the companies to build processes and systems that enable the entire enterprise to be agile. Resilient businesses are able to quickly adapt to changing situations and adjust their business processes. They must be empowered to make quick decisions based on data. The availability, processing and analysis of data is crucial here for rapid responsiveness, and this is where IoT and, above all, Artificial Intelligence (AI) will play a decisive role.

IoT future trends promise to improve efficiency and growth in various fields with a significant impact on both economy and society. To remain relevant and competitive, it is crucial for businesses to take action and take the first steps in order to leverage the opportunities that IoT provides today – and even more in the future.

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The effects of the coronavirus pandemic have significantly affected everyone across the globe. The economic downturn experienced by businesses has decisively impacted various industries, such as travel, oil and gas and automotive. Rethinking business models to keep up with the changing economic situation is the new normal. But which long-term trends has the pandemic initiated in our society? What do businesses have to keep an eye on? And which actions can they take to remain relevant during and after the pandemic?  

Supply chain disruptions, reduced physical interactions and international travel restrictions are some of the challenges which we are experiencing today. Companiesmust look for ways to mitigate the risk. Digitalization offers several opportunities as it will accelerate and further gain traction. Digital transformation aims at combining talent and technology to boost operational efficiency, customer experience and ultimately competitiveness in the market. A business needs to focus on all aspects of its value chain to achieve this:  
 

• Strategy 
  Adapt and define new business models leveraging e.g. the Internet of Things (IoT) or Artificial Intelligence​ (AI). 

• Innovation and R&D 
  Speed up innovation cycles in Research & Development (R&D) and Product Lifecycle Management (PLM) by incorporating, for example, agile approaches or DevOps. 

• Supply Chain & Manufacturing 
  Focus on process automation, remote operations and flexible production(based on e.g. additive manufacturing). 

• Organization 
  Manage increased complexity with the help of digitalization, optimize system architectures and drive modularization. 

• Sales & Marketing 
  Improve customer experience through e-commerce and multichannel selling. 

Companies need to consider the opportunities that digitization offers in various sectors to ensure that they remain competitive and continue to grow while building up a resilient business.  

As Covid-19 continues to unveil the vulnerability of businesses, it is getting more and more important that companies prepare for potential setbacks. Next to investing in digitalization – like these three concrete examples from Aymeric Sarrazin, CEO of Siemens Advanta, outline –  improving the overall strategy is a good point to start with. This can be achieved by adjusting to changing societal and economic needs, focusing on portfolio optimizations and innovations, or adapting diverse business models and sales channels.  

For supply chain and operations resilience, businesses can focus on diversifying their supplier network and re-localizing their supply chain activities. It’s worth to think about making the office space and production facilities more flexible to accommodate changes during crisis situations. 

On the financial side, companies need to increase liquidity buffers during crisis. They can apply short-term and medium to long-term measures to raise financial resilience, think about insurances for particularly vulnerable businesses, or evaluate on subscription models which have a high relevance in stabilizing cash flows. 

Lastly, investing in people, the core of every business, is key to build up resilience. Home office becomes the new normal. So, companies need to support their staff by introducing new forms of collaboration, provide relevant trainings and necessary IT equipment to make sure the workforce is prepared for and confident with work changes. An increase of variable salary proportions gives a mean to appreciate employees during intense home office times. 

For many companies the effects of the coronavirus have resulted in a decline in business growth rates. Global GDP forecasts expect a decline by -5.2% depending on the scenario of recovery. But how can businesses grow during this challenging period?  

For a sustainable future growth, business leaders need to have a well-strategized plan. One potential action field is to shift businesses to promising growth verticals. They can think about engaging in the production of complementary products, whether electronics and semiconductors, pharma, food and beverages, or health care products – whichever fits their business portfolio best. 
 
Additionally, companies can focus on adapted regional exposure by balancing all types of markets depending on their individual use case – starting from the US and China to the European market and the promising emerging countries.  

Again, digitalization can be a strong lever, not only making the business more resilient but also promising future growth. Leaders should consider leveraging technology with strong potential, such as IoT.  

Globalization has continuously accelerated since the 18th century. However, during times of crisis nationalism gains popularity and political regimes change. As a result, there is a potential increase in local requirements for foreign goods admission to enter local markets, such as in food and beverage, electronics or in automotive industry. This change leads to increased costs for suppliers.  

A second driver to counter globalization is the shift of supply chains to own economic spheres. Especially critical parts will be increasingly integrated to achieve a better access to and responsibility for the supply chain.

The pandemic has made social inequality and environmental shortcoming particularly visible. Social responsibility and sustainability are gaining importance.  

In April 2020 the US unemployment rate achieved a peak of 14,7% – the highest since the great depression – with Covid-19 clearly revealing societal gaps. Poor and underprivileged people are hit by the pandemic to a disproportionate extent. Our societies are highly dependent on the economic status of our countries. Raised unemployment rates and social unrest are triggering the need for business models that focus on social impact and governmental interventions, such as an unconditional basic income or other ways to support people during very high unemployment rates. 

The pandemic further made transparent how our daily actions affect the environment. As economic activities have been slowed down during the lockdowns and travelling dropped immensely, the global CO2 emissions saw record drop by 4.6% or 2.5 gigatons. Consumer awareness starts to shift towards sustainable products, which on the business side will lead to investments in sustainability. Next to that, a raise in governmental stimulus programs to promote climate-friendly technologies is expected which will help companies to gain foothold. Germany’s national government, for example, boosts electric-vehicle incentives to raise demand and heavily invests the ramp up hydrogen technologies.  

Government interventions have been witnessed in different parts of the world as a way of responding to the impact of the Covid-19 pandemic. Though the measures differ from one region to another, they are all aimed at helping businesses mitigate the short- and long-term effects. Some of the modes of government intervention include tax reliefs and short-time work compensation. Others include availing loans to companies and equity investments by the government to distressed companies. The European Commission, for example, is mobilizing emergency support packages for specific countries. To benefit from government interventions, companies should always be on the lookout for policy updates and ensure total compliance to take precautions.

Consumption trends have changed and will continue changing due to the effects of Covid-19. The demand for some commodities is falling while others are rising. For example, restaurants are witnessing a fall in demand for food and drinks. On the other hand, the demand for sanitizer, sports equipment or food delivery raised as people try to reduce leaving their homes and avoid exposure to large gatherings. The changes in consumption patterns call for the restructuring of business models. Businesses need to think about new ways to serve their customer. Is their product or service still relevant in the new normal?

Following the unprecedented effects of the pandemic, many companies have adopted the work remotely policy. This global trend will not only be fit to use during the pandemic but may also be a long-term trend for most businesses. Siemens, for example, officially announced to establish mobile working as a core component of the new normal. It allows its employees to work two to three days per week from anywhere as a permanent, worldwide standard. This trend will significantly change the way people live and work. Many will opt to live in remote areas away from the crowding in big and mostly expensive cities, while still working remotely. As the New York Times reports, empty apartments in Manhattan reach a record high leading to rent drops at 10%. Companies need to evaluate the overall impact of this trend on their business: how will it impact their growth after Covid-19 and, beyond that, how will it impact the company culture and its people? 

These eight, only briefly addressed, trends and fields of action provide initial indications of where companies need to be attentive and alarmed. Digitalization, Business Resilience, Business Growth, Globalization, Social & Environmental Responsibility, Governmental Interventions, Changed Consumer Behaviors, Less Urban more Remote – Make sure that your business stays relevant during and after the Covid-19 pandemic. 

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Digital transformation is spurring innovation and new business models across virtually all industrial and commercial sectors. In fact, 69% of senior executives responding to a global survey by Harvard Business Review Analytic Services (2019) report that changes to their business model expanded their markets to additional business segments over the past two years. 
So, what is the best way to scope, scale, and lead the digital transformation successfully? There is no one-size-fits-all answer to the question. But we have created a checklist for digital transformation that offers valuable advice to see where your business stands on its digital journey. Let’s get started!

From the outset, digital enterprise transformation planning involves being able to see the big picture. It is also necessary to visualize the desired results with clarity. Lateral thinking and brainstorming sessions – perhaps involving stakeholders – can add value at the conceptual stage, too.

From the outset, define the objectives. Decide what you want to achieve and be sure why the organization needs to transform. Depending on the current versus the envisaged ways of working, the deciding factors might include:

• Reducing the cost of supplies
• Boosting sales turnover
• Reducing wastage or duplication
• Improving profit margins
• Gaining new customers
• Catching up with or overtaking competitors
• Implementing new technology

In short, begin by assessing the current state of the business. Consider the demands placed on your employees and systems, as well as potential areas for improvement.
 

Additionally, a digital transformation checklist ought to include an evaluation of how much the proposed technology will contribute to the bottom line. Calculating the return on investment (ROI) ensures checking viability before pressing ahead.

To calculate digital ROI, it is necessary to establish a framework which measures and balances six key areas: operations, safety and soundness, infrastructure, customers, employees, and disruption or innovation. If we allocate metrics to each of these areas and relevant key performance indicators (KPIs), we can track how well digital initiatives are performing. Usefully, too, we can fine-tune the implementation and have teams be accountable for their part in achieving the desired goals.

Remember, when investigating the ROI of an Internet of Things (IoT) initiative, the IoT solution defines the invest, and the business problem defines the potential return. If it does not support your business, don’t do it. If you want to learn in more detail how to accurately calculate the ROI of IoT initiatives, take a look into our ROI whitepaper.
 

Next, we outline the road map, using an incremental approach based on priorities. Developing and following a strategy will help to keep the process under control and increase the probability of success. Notably, digital strategy and transformation are not theoretical; success depends on digitizing daily workflows and updating processes. Thus, the involvement of employees, customers and suppliers is vital.

Best practice dictates that we should not attempt to implement all the changes at once. Instead, we select the most important or significant for early implementation. Then, when KPIs indicate the new way of working is producing good results, we roll out the changes more widely and move on to the next stage.
 

The failure rates of digital transformations remain high. These failures largely stem from the unique challenges associated with digital transformation, including shifting from the current culture to a more digital, entrepreneurial one, dealing with a lack of digital talent, working in cross-functional teams where silos have been the norm, meeting accelerated timelines due to higher customer expectations, and accepting evolving target states instead of fixed goals.

What most business leaders underestimate is that digital transformation is not just about technology: Above all, it is about people. That makes it complex – thus requiring a new approach for managing the change (learn more about this approach in this Digital Transformation pdf).

For digital transformation to succeed, the company's management and leadership have to support employee and stakeholder relations, as well as the changes in business processes. To this end, a commitment to clearly defined goals and widespread buy-in from all parties concerned are likely to contribute more to results than impressive job titles.

In other words, successful change management involves embracing cultural shifts within the organization. Mindset is everything: getting the whole organization on board is key. Where necessary, experienced employees with valuable but non-digital skills can receive coaching, mentoring, courses or on-the-job training so they can adapt to new working methods.

Good communication keeps staff, customers and stakeholders involved. Involving employees through empowerment and retraining will help to foster healthy interest and adequate levels of participation from the very beginning.

Choosing the right tools and technologies is crucial. Companies must be careful to avoid falling in love with the coolness factor of the technology. On the market, there are many digital transformation trends discussed about, but the technology must serve the business, not the other way around.

Today, many companies are still in the exploration phase. Their focus is on trying to better understand the new technology and its possible applications. Since there are so many different opportunities and the business impact of different paths remains opaque, picking the best strategy for the IoT journey remains a challenge. Before making decisions on expensive IoT implementations and choosing the direction of your journey, research your options and seek advice to select the best technology and systems for your business.

One cost-effective way of ensuring the real value of digitalization projects is prototyping them before you even begin. Set the base for future investment decisions by identifying if the new products or solutions provide the expected benefit for the customer and for you. This will also help to win potential stakeholders over.

Integrating Information Technology (IT) and Operational Technology (OT) is not an easy task – yet, when done right, it can unlock unparalleled growth. By implementing the right IoT solutions, you can successfully bridge the gap and establish smart, interconnected foundations to improve your business processes and increase the value of your data.

With the integration of IT and OT systems, you can unlock the power of your data and thereby generating accurate predictions and making informed decisions. 

But keep in the following in mind: When it comes to integrating systems and services, no two infrastructures are equal. Whether you need to integrate Big Data or Data Analytics, implement microservices or containers, or if you need your data to be stored on-premises or in the cloud, make sure to develop the right solution architecture for your enterprise.

We live in times in which digitalization is radically changing the business landscape across industries. To remain competitive, businesses around the world are increasingly investing in digital transformation. According to the research company IDC, global corporate spending on digital transformation is predicted to go up to $2 trillion over the two-years to 2022.

Still, IDC also clearly states that 59% of organizations are currently at a digital deadlock, unable to move forward with their digital innovation.

Of similar significance were Gartner’s research insights on Digitalization. Digitalization is a company’s priority for 87% of senior business leaders, yet only 40% of organizations have brought digital initiatives to scale.

In order to avoid that digital transformation efforts continue to stall, it is important to have a trusted partner at your side guiding you through your digital transformation. Each digital journey is individual and needs to be custom-fit.

By ticking off the different aspects of this checklist, you are already well on your way to embark on a successful digital transformation journey. If you would like to discuss digital transformation readiness further, contact us and we will get you in touch with our experts.