Surprising Benefits of Combining IoT and Blockchain (they go beyond economic ones!)

One final effort to work this blockchain obsession out of my system so I can get on to some exciting other IoT news!

I couldn’t resist summarizing for you the key points in”Blockchain: the solution for transparency in product supply chains,” a white paper from Project Provenance Ltd., a London-based collective  (“Our common goal is to deliver meaningful change to commerce through open and accessible information about products and supply chains.”).

If you’ve followed any of the controversies over products such as “blood diamonds” or fish caught by Asian slaves & sold by US supermarkets, you know supply chains are not only an economic issue but also sometimes a vital social (and sometimes environmental) one. As the white paper warns:

“The choices we make in the marketplace determine which business practices thrive. From a diamond in a mine to a tree in a forest, it is the deepest darkest ends of supply chains that damage so much of the planet and its livelihood.”

Yikes!

Now blockchain can make doing the right thing easier and more profitable:

“Provenance enables every physical product to come with a digital ‘passport’ that proves authenticity (Is this product what it claims to be?) and origin (Where does this product come from?), creating an auditable record of the journey behind all physical products. The potential benefits for businesses, as well as for society and the environment, are hard to overstate: preventing the selling of fake goods, as well as the problem of ‘double spending’ of certifications present in current systems. The Decentralized Application (Dapp) proposed in this paper is still in development and we welcome businesses and standards organizations to join our consortium and collaborate on this new approach to understanding our material world.”

I also love Provenance’s work with blockchain because it demonstrates one of my IoT “Essential Truths,” namely, that we must share data rather than hoard it.  The exact same real-time data that can help streamline the supply chain to get fish to our stores quicker and with less waste can also mean that the people catching it are treated fairly. How cool is that?  Or, as Benjamin Herzberg, Program Lead, Private Sector Engagement for Good Governance at the World Bank Institute puts it in the quote that begins the paper, Now, in the hyper-connected and ever-evolving world, transparency is the new power.

While I won’t summarize the entire paper, I do recommend that you so, especially if blockchain is still new to you, because it gives a very detailed explanation of each blockchain component.

Instead, let’s jump in with the economic benefits of a blockchain and IoT-enabled supply chain, since most companies won’t consider it, no matter what the social benefits, if it doesn’t help the bottom line. The list is long, and impressive:

  • “Interoperable: A modular, interoperable platform that eliminates the possibility of double spending
  • Auditable: An auditable record that can be inspected and used by companies, standards organizations, regulators, and customers alike
  • Cost-efficient:  A solution to drastically reduce costs by eliminating the need for ‘handling companies’ to be audited
  • Real-time and agile:  A fast and highly accessible sign-up means quick deployment
  • Public: The openness of the platform enables innovation and could achieve bottom-up transparency in supply chains instead of burdensome top-down audits
  • Guaranteed continuity:  The elimination of any central operator ensures inclusiveness and longevity” (my emphasis)

Applying it to a specific need, such as documenting that a food that claims to be organic really is, blockchain is much more efficient and economical than cumbersome current systems, which usually rely on some third party monitoring and observing the process.  As I’ve mentioned before, the exquisite paradox of blockchain-based systems is that they are secure and trustworthy specifically because no one individual or program controls them: it’s done through a distributed system where all the players may, in fact, distrust each other:

“The blockchain removes the need for a trusted central organization that operates and maintains this system. Using blockchains as a shared and secure platform, we are able to see not only the final state (which mimics the real world in assigning the materials for a given product under the ownership of the final customer), but crucially, we are able to overcome the weaknesses of current systems by allowing one to securely audit all transactions that brought this state of being into effect; i.e., to inspect the uninterrupted chain of custody from the raw materials to the end sale.

“The blockchain also gives us an unprecedented level of certainty over the fidelity of the information. We can be sure that all transfers of ownership were explicitly authorized by their relevant controllers without having to trust the behavior or competence of an incumbent processor. Interested parties may also audit the production and manufacturing avatars and verify that their “on-chain” persona accurately reflects reality.”

The white paper concludes by also citing an additional benefit that I’ve mentioned before: facilitating the switch to an environmentally-sound “circular economy,” which requires not only tracking the creation of things, but also their usage, trying to keep them out of landfills. “The system proposed in this paper would not only allow the creation (including all materials, grades, processes etc) and lifecycle (use, maintenance etc) to be logged on the blockchain, but this would also make it easy to access this information when products are returned to be assessed and remanufactured into a new item.”

Please do read the whole report, and think how the economic benefits of applying blockchain-enabled IoT practices to your supply chain can also warm your heart.

 

Circular Company: Will Internet of Things Spark Management Revolution?

Could the IoT’s most profound impact be on management and corporate organization, not just cool devices?

I’ve written before about my still-being-refined vision of the IoT — because it (for the first time!) allows everyone who needs instant access to real-time data to do their jobs and make better decisions to share that data instantly —  as the impetus for a management revolution.

My thoughts were provoked by Heppelmann & Porter’s observation that:

“For companies grappling with the transition (to the IoT), organizational issues are now center stage — and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.”

If I’m right, the IoT could let us switch from the linear and hierarchical forms that made sense in an era of serious limits to intelligence about things and how they were working at thaFor companies grappling with the transition, organizational issues are now center stage—and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.t moment, to circular forms that instead eliminate information “silos” and instead give are circular, with IoT data as the hub. 

This article expands on that vision. I’ve tried mightily to get management journals to publish it. Several of the most prestigious have given it a serious look but ultimately passed on it. That may be because it’s crazy, but I believe it is feasible today, and can lead to higher profits, lower operating costs, empowering our entire workforces, and, oh yeah, saving the planet.

Audacious, but, IMHO, valid.  Please feel free to share this, to comment on it, and, if you think it has merit, build on it.

Thanks,

W. David Stephenson


The IoT Allows a Radical, Profitable Transformation to Circular Company Structure

 

by

W. David Stephenson

Precision assembly lines and thermostats you can adjust while away from home are obvious benefits of the Internet of Things (IoT), but it might also trigger a far more sweeping change: swapping outmoded hierarchical and linear organizational forms for new circular ones.

New org charts will be dramatically different because of an important aspect of the IoT overlooked in the understandable fascination with cool devices. The IoT’s most transformational aspect is that, for the first time,

everyone who needs real-time data to do their jobs better or
make better decisions can instantly 
share it.

That changes everything.

Linear and hierarchical organizational structures were coping mechanisms for the severe limits gathering and sharing data in the past. It made sense then for management, on a top-down basis, to determine which departments got which data, and when.

The Internet of Things changes all of that because of huge volumes of real-time data), plus modern communications tools so all who need the data can share it instantly. 

This will allow a radical change in corporate structure and functions from hierarchy: make it cyclical, with real-time IoT data as the hub around which the organization revolves and makes decisions.

Perhaps the closest existing model is W.L. Gore & Associates. The company has always been organized on a “lattice” model, with “no traditional organizational charts, no chains of command, nor predetermined channels of communication.”  Instead, they use cross-disciplinary teams including all functions, communicating directly with each other. Teams self-0rganize and most leaders emerge spontaneously.

As Deloitte’s Cathy Benko and Molly Anderson wrote, “Continuing to invest in the future using yesteryear’s industrial blueprint is futile. The lattice redefines workplace suppositions, providing a framework for organizing and advancing a company’s existing incremental efforts into a comprehensive, strategic response to the changing world of work.”  Add in the circular form’s real-time data hub, and the benefits are even greater, because everyone on these self-organizing teams works from the same data, at the same time.

You can begin to build such a cyclical company with several incremental IoT-based steps.

One of the most promising is making the product design process cyclical. Designers used to work in a vacuum: no one really knew how the products functioned in the field, so it was hard to target upgrades and improvements. Now, GE has found it can radically alter not only the upgrade process, but also the initial design as well:

“G.E. is adopting practices like releasing stripped-down products quickly, monitoring usage and rapidly changing designs depending on how things are used by customers. ‘We’re getting these offerings done in three, six, nine months,’ (Vice-President of Global Software William Ruh said). ‘It used to take three years.’”

New IoT and data-analytics tools are coming on the market that could facilitate such a shift. GE’s new tool, “Digital Twins,” creates a wire-frame replica of a product in the field (or, for that matter, a human body!) back at the company. Coupled with real-time data on its status, it lets everyone who might need to analyze a product’s real-time status (product designers, maintenance staff, and marketers, for example) to do so simultaneously.

The second step toward a cyclical organization is breaking down information silos.

Since almost every department has some role in creation and sales of every product, doesn’t it make sense to bring them together around a common set of data, to explore how that data could trigger coordinated actions by several departments? 

Collaborative big-data analysis tools such as GE’s Predix, SAP’s HANA, and Tableau facilitate the kind of joint scrutiny and “what-if” discussions of real-time data that can make circular teamwork based on IoT-data sharing really achieve its full potential.

The benefits are even greater when you choose to really think in circular terms, sharing instant access to that real-time data not only companywide, but also with external partners, such as your supply chain and distribution network – and even customers – not just giving them some access later on a linear basis.  For example, SAP has created an IoT-enabled vending machine. If a customer opts in, s/he is greeted by name, and may be offered “your regular combination” based on past purchases, and/or a real-time discount. That alone would be neat from a marketing standpoint, but SAP also opened the resulting data to others, resulting in important logistics improvements. Real-time machine-to-machine (M2M) data about sales at the new vending machines automatically reroute resupply trucks to those machines currently experiencing the highest sales. 

With the IoT, sharing data can make your own product or service more valuable. With the Apple HomeKit, you can say “Siri, it’s time for bed,” and the Hue lights dim, Schlage lock closes, and Ecobee thermostat turns down. By sharing real-time IoT data, each of these companies’ devices become more valuable in combinations than they are by themselves.

Hierarchical and linear management is outmoded in the era of real-time data from smart devices. It is time to begin to replace it with a dynamic, circular model with IoT data as its hub.

Digital Twins: the Ultimate in Internet of Things Real-Time Monitoring

Get ready for the age when every product will have a “digital twin” back at the manufacturer, a perfect copy of not just the product as it left the factory floor, but as it is functioning in the field right now. That will be yet another IoT game-changer in terms of my 4th IoT Essential Truth, “rethink products.”

Oh, and did I forget to mention that we’ll each have a personal body twin from birth, to improve our health?

For the first time we’ll really understand products, how they work, what’s needed to improve them, and even how they may be tweaked once they’re thousands of miles from the factory, to add new features, fix problems, and/or optimize efficiency.

Key to circular organizations

Even better, the twin can play a critical role in accomplishing my vision of new circular organizations (replacing obsolete hierarchies and linear processes), in which all relevant departments and functions (and even supply chain members, distribution networks and customers, where relevant) form a continuous circle with real-time IoT data as the hub).  Think of the twin as one of those manifestations of the real-time data to which all departments will have simultaneous access.

GE Digital Twin visualization

               GE Digital Twin visualization

I’ve often remarked how incredible it was that companies (especially manufacturers) were able to function as well as they did and produce products as functional as they were despite the inability to peek inside them and really understand their operations and/or problems. Bravo, industrial pioneers!

However, that’s no longer good enough, and that’s where digital twins come in.  In a WSJ blog post this week, General Electric’s William Ruh, my fav IoT visionary/pragmatist, talked about how the company, as part of its “Industrial Internet” transformation, is making digital twins a key tool:

“Every product out there will have one, and there will be an ability to connect a system, or systems of digital twins, easily. The digital twin is a model of an asset, a product such as a jet engine or a model of the blades in a jet engine. Sensors on those blades pull the data off and feed them into the digital twin. The digital twin is kept current with the data that is run off the sensors. It is in sync with the reality of the blade. Now we can ask what is the best time to change the blade, how the blade performs, options to get greater efficiency.”

Proof of the pudding?

Ruh says they’ve created a wind turbine and twin they call the “Digital Windfarm,” which generates 20% more electricity than a nearby conventional turbine.

PTC is also working on digital twins. According to the company’s Executive VP for Digital Twin, Mike Campbell,:  “It’s a model that uniquely represents a physical occurrence in the real world. This one-­to­one mapping is important. You create a relationship between the digital data and a unique product occurrence from a variety of sources: sensors, enterprise data on how it was made, what its configuration was, its geometry, how it is being used, and how it is being serviced.”

Predix

The key to digital twins is GE’s “Predix” predictive analytics software platform, which the company is extending across its entire product line. As always, the key is a constant stream of real-time data:

“weather, component messages, service reports, performance of similar models in GE’s fleets—a predictive model is built and the data collected is turned into actionable insights. This model can perform advanced planning, such as forecasting a ‘plan of the day’ for turbine operation, determining a highly efficient strategy to execute planned maintenance activities, and providing warnings about upcoming unplanned maintenance events, all of which ultimately generates more output and revenue for the customer.”

Digital doppelgängers

Here’s where the really sci-fi part kicks in: Ruh also predicts (Predix??, LOL) that GE’s medical division will soon create digital twins for you and me — at birth!

“I believe we will have a digital twin at birth, and it will take data off of the sensors everybody is running, and that digital twin will predict things for us about disease and cancer and other things. I believe we will end up with health care being the ultimate digital twin. Without it, I believe we will have data but with no outcome, or value.”

And, frankly, there’s also a spooky aspect to what GE’s doing, working with retailers to create psychographic models of customers based on their buying preferences. I’m dubious on that account: I do appreciate some suggestion about what might interest me, especially books, based on my past purchases. On the other hand, a couple of weeks I shopped for — but didn’t buy — biz cards online. Now, I get AdSense ads for these cards everywhere — even on this homepage (sorry for stuff that isn’t IoT, dear reader) Get over it, OK? Count me out when it get’s down to really granular psychographic profiles — too many risks with privacy and security.

I suspect digital twins will become a staple of the IoT, yielding critical real-time info on product status that will enable predictive maintenance and, as Ruh has written elsewhere, speeding the product upgrade process because, for the first time, designers will know exactly how the products are functioning in the field, as opposed to the total lack of information that used to be the norm. Stay tuned.

Day 2, Live Blogging from SAP’s IoT2016 Internet of Things Event

I’m up first this morning, & hope to lift attendees’ vision of what can be achieved with the Internet of Things: sure, cool devices and greater efficiency are great, but there’s so much more: how about total transformation of businesses and the economy, to make them more creative, precise, and even environmentally sustainable?

I’ve just revised my 4 IoT Essential Truths, the heart of my presentation, bumping make privacy and security the highest priority from number 4 to number 1 because of the factors I cited last week. I’ll draw on my background in crisis management to explain to the engineers in attendance, who I’ve found have a problem with accepting fear because it isn’t fact-based, how losing public trust could kill the IoT Golden Goose.

I’ll go on to explain the three other Essential Truths:

  • Share Data (instead of hoarding it, as in the past)
  • Close the Loop (feed that data back so there are no loose ends, and devices become self-regulating
  • Rethink Products so they will contain sensors to feed back data about the products’ real-time status, and/or can now be marketed not as products that are simply sold, but services that both provide additional benefits to customers while also creating new revenue streams for the manufacturer.

I’ll stress that these aren’t just truisms, but really difficult paradigm shifts to accomplish. They’re worth it, however, because making these changes a reality will allow us to leave behind old hierarchical and linear organizational structures that made sense in an age of limited and hard-t0-share data. Instead, we can follow the lead of W.L. Gore and its cyclical “lattice management,” in which — for the first time — everyone can get the real-time data they need to do their jobs better and make better decisions. Equally important, everyone can share this data in real time, breaking down information silos and encouraging collaboration, both within a company and with its supply chain and distribution network — and even with customers.

Amen.


Back with Michael Lynch of SAP!

  • we can change the world and enhance our understanding greater than ever.
  • can help us solve global warming.
  • great case study on heavy truck predictive maintenance in GoldCorp Canadian gold mines.
  • IoT maturity curve:
  • Critical question: who are you in a connected future?  Can lead to re-imaginging your corporate role.
  • UnderArmour is now embedding monitors into clothing.
  • Tennant makes cleaning equipment. Big problem with lost machines, now can find them quickly.
  • Asset Intelligence Network — Facebook for heavy equipment — SAP will launch soon.
  • example of a tractor company that’s moving to a “solutions-based enterprise.” What is the smallest increment of what you do that you could charge customer. Like the turbine companies charging for thrust.

SAP strategy:

  • “Our solution strategy is to grow by IoT-enabling core industry, and providing next generation solutions for millions of human users, while expanding our platform market by adding devices.”
  • they have an amazing next-gen. digital platform. More data flow through there than Alibaba & Amazon!
  • CenterPoint Energy — correlating all sorts of data such as smart meter & weather. Better forecasting.
  • Doing a new home-based diabetes monitoring system with Roche.
  • Doing a lot of predictive maintenance.
  • Connected mining.
  • Building blocks:
    • Connect (SAP IoT Starter Kit)
    • Transform
    • Re-imagine

Ending the day with my presentation on first steps for companies to take in beginning an IoT strategy, with special emphasis on applying analytical tools such as HANA to your current operations, and building “precision operations” by giving everyone who needs it real-time data to improve their job performance and decision-making. Much of the presentation will focus on GE, with its “Brilliant Factories” initiative!

Live Blogging from SAP’s HANA IoT event

Hmm. Never been to Vegas before: seems designed to bring out the New England Puritan in me. I’ll pass on opulence, thank you very much…

 SAP HANA/ IoT Conference

SAP HANA/ IoT Conference

Up front, very interested in a handout from Deloitte, “Beyond Linear,” which really is in line with speech I’ll give here tomorrow on the IoT “Essential Truths,” in which one of my four key points will be that we need to abandon the old, linear flow of data for a continuous cyclical one.  According to Deloitte’s Jag Bandia,

“Among users with a complete, 360-degree view of relevant data for each specific process can help avoid missed opportunities. The ‘all data’ approach means relevant data can and should come from anywhere — any application, any system, any process — not just the traditional channels associated with the process.”

Bravo!

First speaker: SAP Global Customers Operations CTO Ifran Khan:

  • “digital disruption”: catalyst for change & imperative to go digital.
  • digression about running going digital (I put in my 30 minutes this morning!!!), creating a totally new way of exercising (fits beautifully with “Smart Aging“!)
  • new macro tech trends are enabling digitalizations: hyper-connectivity, super computing, cloud computing, smart world, and cybersecurity (horrifying stat about how many USB sticks were left in dry cleaning!)
  • those who don’t go digital will go under…. (like John Chambers’ warning about IoT).
  • new opportunities in wide range of industries
  • need new digital architectures — “driving locality of data, integrated as deep as possible into the engine.
  • HOLY COW! He starts talking about a circular, digitally-centered concept, with a buckyball visual.  Yikes: great minds think alike.
  • sez HANA allows a single platform for all digital enterprise computing.
  • running things in real-time, with no latency — music to my ears!

Jayne Landry, SAP:

  • too few in enterprise have real-time access to analytics — oh yeah!
  • “analytics for everyone”
  • “own the outcome”
  • “be the one to know”
  • SAP Cloud for Analytics — “all analytics capabilities in one product.” real-time, embedded, consumer-grade user experience, cloud-based. Looking forward to seeing this one!
  • “Digital Boardroom” — instant insight. Same info available to board also available to shopfloor — oh yeah — democratizing data!

Very funny bit by Ty Miller on using SAP Cloud for Analytics to analyze Area 51 data. Woo Woo!

Ifran Khan again:

  • how to bring it to the masses? Because it’s expensive and difficult to maintain on the premises, extend and build in cloud! Add new “micro services” to SAP HANA cloud platform: SAP Application Integration, Tax Service, Procurement, Customer Engagement, Predictive, and, ta da, IoT.
  • video of Hamburg Port Authority. Absolutely love that and what they’re doing with construction sites!

Jan Jackman, IBM:

  • customers want speed. Cloud is essential. IBM & HANA are partners in cloud…

This guy is sooo neat: Michael Lynch, IoT Extended Supply Chain for SAP (and former opera student!):

  • “Connecting information, people, and things is greatest resource ever to drive insightful action.”
  • “big deal is the big data processing potential is real & chips are cheaper, so you can build actual business solutions”
  • STILL gmbh (forklifts) great example!
  • phase 1: connect w/ billions of internet-enabled things to gain new insights
  • phase II: transform the way you make decisions and take action
  • phase III: re-imagine your customer’s experience.
  • they do design thinking workshops — would luv one of those!
  • great paradigm shift: Hagleitner commercial bathroom supplies
  • Kaeser compressors: re-imaging customer service
  • working with several German car companies on enabling connected driving
  • once again, the  Hamburg Port Authority!!

SAP’s strategy:

  • offers IoT apps. platforms, and facilitates extensions of IoT solutions
  • work closely with Siemens: he’s talked with them about turbine business.
  • SAP has several solutions for IoT
  • Cloud-based predictive maintenance!
  • “social network for assets”: Asset Intelligence Network
  • They did the Harley York PA plant! — one line, 21-day per bike to 6 hrs.  (displays all around the plant with KPIs)
  • 5 layers of connectivity in manufacturing “shop floor to top floor”  SAP Connected Manufacturing
  • They have a IoT Starter Kit — neat
  • SAP Manufacturing Integration and Intelligence
  • SAP Plant Connectivity
  • SAP Event Stream Processor
  • SAP MobiLink
  • SAP SQL Anywhere/SAP ultralite
  • 3rd Party IoT Device Cloud (had never heard of “device cloud” concept — specialize in various industry verticals).

“Becoming an Insight-Driven Organization”  Speakers: Jag Bandla and Chris Dinkel of Deloitte.

  • Deloitte is using these techniques internally to make Deloitte “insight-driven”
  • “an insight-driven organization (IDO) is one which embeds analysis, data, and reasoning into every step of the decision-making process.” music to my ears!
  • emphasis on actionable insight
  • “when humans rely on their own experiences and knowledge, augmented by a stream of analytics-driven insights, the impact on value can be exponential”
  • benefits to becoming an IDO:
    • faster decisions
    • increased revenue
    • decreased cost of decision making
  • challenges:
    • lack of proper tech to capture
    • oooh: leaders who don’t understand the data…
  • 5 enabling capabilities:
    • strategy
    • people
    • process
    • data
    • tech
  • developing vision for analytics
  • Key questions: (only get a few..)
    • what are key purchase drivers for our customers?
    • how should we promote customer loyalty?
    • what customer sentiments are being expressed on social media?
    • how much should we invest in innovation?
  • Value drivers:
    • strategic alignment
    • revenue growth
    • cost reduction
    • margin improvement
    • tech
    • regulation/compliance
  • Organize for success (hmm: I don’t agree with any of these: want to decentralize while everyone is linked on a real-time basis):
    • centralized (don’t like this one, with all analyzed in one central group.. decentralize and empower!)
    • consulting: analysts are centralized, but act as internal consultants
    • center of excellence: central entity coordinates community of analysts across company
    • functional: analysts in functions such as marketing & supply chain
    • dispersed: analysts scattered across organization, little coordination
  • Hire right people! “Professionals who can deliver data-backed insights that create business value — and not just crunch numbers — are the lifeblood of an Insight-Driven Organization”
    • strong quantitative skills
    • strong biz & content skills (understand content and context)
    • strong data modeling & management skills
    • strong IT skills
    • strong creative design skills (yea: techies often overlook the cool design guys & gals)
  • Change the mindset (critical, IMHO!):
    • Communicate: build compelling picture of future to steer people in right direction.
    • Advocate: develop cohort of leaders to advocate for program.
    • Active Engagement: engage key figures to create pull for the program
    • Mobilize: mobilize right team across the organization.
  • How do you actually do it? 
    • improve insight-to-impact with “Exponential Biz Processes” — must rebuild existing business processes!  Involves digital user experience, biz process management, enterprise science, all data, and IT modernization.
      • re-engineer processes from ground up
      • develop intuitive, smart processes
      • enable exception-based management
  • Data:
    • “dark data:” digital exhaust, etc. might be hidden somewhere, but still actionable.
      • they use it for IoT: predictive personalization (not sure I get that straight…).
    • want to have well-defined data governance organization: standards, data quality, etc.
  • Technology: digital core (workforce engagement, big data & IoT, supplier collaboration, customer experience
    • HANA
  • Switch to digital delivery: visualizations are key!
    • allow for faster observations of trends & patterns
    • improve understanding & retention of info
    • empower embedded feeds and user engagement

 

IoT and the Data-Driven Enterprise: Bob Mahoney, Red Hat & Sid Sipes, Sr. Director of Edge Computing, SAP

  • What’s driving enterprise IoT?
    • more connected devices
    • non-traditional interactions such as M2M and H2M
    • ubiquitous internet connectivity
    • affordable bandwidth
    • cloud computing
    • standards-based and open-source software
  • Biz benefits:
    • economic gains
    • new revenue streams (such as sale of jet turbine data)
    • regulatory compliance
    • efficiencies and productivity
    • ecological impact
    • customer satisfaction
  • example of Positive Train Control systems to avert collisions. Now, that can be replaced by “smarter train tech”
  • SAP and edge computing (can’t move all of HANA to edge, but..)
    • improve security in transmission
    • reduce bandwidth need
    • what if connection goes down
    • actual analysis at the edge
    • allows much quicker response than sending it to corporate, analyzing & send it back
    • keep it simple
    • focused on, but not limited to, IoT
  • they can run SQL anywhere on IoT, including edge: SQL Anywhere
  • Red Hat & SAP doing interesting combination for retail, with iBeacons, video heat map & location tracking: yields real insights into consumer behavior.

3 Steps to Make Your City a World Leader in the IoT

I don’t know about you, but, in the face of grim news globally, I’m determined to make this an incredible year of change and growth.

Happy New Year!

I took a longer than normal time off, to pick up our youngest in Hong Kong after a semester abroad in Thailand, then vacation in Bali.

Hong Kong Internet of Things Association

I started the trip with a speech to the Hong Kong Internet of Things Association, in which I laid out my vision of radical change in corporate management and organization made possible by the IoT, away from the increasingly-obsolete hierarchical and linear forms that made perfect sense in an early 20th-century setting when data was hard to gather and share, but doesn’t when the IoT can allow instant sharing of real-time data by all who need it.

But the most interesting issue came up in the following q & a, when someone asked whether Hong Kong could become a global leader in the IoT.

I told them yes, and followed up with an op-ed in today’s South China Morning Post laying out the steps.

I believe the same steps can help your city become an IoT leader, and that this is a case of the-more-the-merrier: the more cities become IoT leaders the quicker widespread innovation and IoT adoption will become, and the more liveable and efficient our cities — the necessary focus of global growth in this century, especially to meet the challenge of global warming — will become.  So here goes!

  1. Create an IoT community.The one in Boston that I founded is now three years old, and numbers almost 2,000 members. My reason for doing it was that I’d run into many people working in the IoT here (Boston is listed as having the 4th largest concentration of IoT headquarters) but they were largely working in isolation, without a forum to bring them together.

    Forming an IoT network is a crucial step, because the IoT is inherently collaborative: as I’ve written many times before, “network effects” make each individual IoT device or service more valuable if they can be combined with others (for example, Apple’s HomeKit now allows someone to simply say “Siri, it’s time for bed,” and that voice command can trigger collaborative action by a variety of devices from different manufacturers, such as turning down the thermostat, locking the front door, and turning off the lights, which makes each of these IoT devices more valuable than they would be in isolation). Equally important, face-to-face contact may spark ideas that even the most talented IoT practitioner wouldn’t have thought of, huddled alone in his or her garret (or kewl cow0rking space…).

    An association that brings together all of your IoT practitioners will create synergistic benefits for all of them.

  2. Embrace the “smart city” vision. 

    This has the biggest potential payoff for your city, whether or not it becomes a big IoT commercial hub.Traditionally, cities have been laggards in technology adoption, but that’s no longer the case, starting in 2008, when I had the extreme privilege of being a consultant to DC CTO Vivek Kundra (who later became the first US CIO, specifically because of his achievements in DC) when he launched the DC Open Data initiative and the Apps [remember, this was 2008: what the heck are these “apps”???] for America contest to design apps to capitalize on this real-time data.  Hundreds of cities worldwide have embraced the concept, and because it stresses that the solutions be open source, cities that are late to the game can quickly benefit by adopting and adapting creative solutions that others have pioneered.

    When the IoT came along, many of these cities and their entrepreneurial residents were quick to realize their real-time data could lead to IoT apps and services that would deal with many of the prime concerns of cities: traffic control, mass transit, electricity, public health, environmental quality, and water and sewage (Credit where credit is due: IBM’s pioneering Smarter Planet service started working with many of the early adopters even before the smart city movement had a name).

    Cities that have launched comprehensive smart city programs, especially Barcelona’s, which includes projects ranging from free wi-fi to health monitoring for seniors to an app to find parking spaces, have realized tangible benefits while cutting operating costs and that will be the case for newcomers as well.

    Sometimes these initiatives tap the collaborative nature of the IoT to produce a public benefit that would be hideously expensive if they were carried out by municipal workers. For example, in Boston the “Street Bump” smartphone app uses the phone’s sensors to detect if the user’s car hits a pothole, then instantly reports the exact location to the city’s Department of Public Works (DPW). In essence, every driver becomes a de facto DPW employee!

  3. Finally,  join in the worldwide “Things Network” movement.As I’ve written before, this will create citywide, free networks for IoT data exchange, in essence turning an entire city into an IoT laboratory for experimentation and mutual benefit.

    This campaign, which was crowdsourced by only 10 technology enthusiasts in Amsterdam last August, successfully created a citywide data network there in less than a month, using 10 $1200 (USD) “LoRaWan gateways.”  LoRanWan is particularly suited to the IoT because it demands little power, has long range (up to 11 km) and low bandwidth. It wouldn’t require passwords, mobile subscription and zero setup costs.

    There are already 27 cities pursuing Things Networks, and the parent organization is making the concept even easier to deploy through a successful Kickstarter campaign last Fall to raise money to build a new LoRaWan gateway that would only cost $200.

    Unlike the full involvement of city government in initiatives such as opening city data bases, a Things Network is best done by volunteers, so that it will not be co-opted by official government agencies or powerful commercial interests: it is most powerful if it’s open to absolutely anyone who wants to try out a smart Internet of Things idea, while also potentially saving the city the cost of administering an expensive program that could instead be run by volunteers at little cost.

So there you have it: 3 practical steps to make your city a world leader in the Internet of Things that will improve urban life and make the city more efficient even if you don’t make the top 10.  Let’s get cracking!

Why Global Warming Must Be IoT Focus for Everyone

Thanksgiving 2015I want to offer you six great reasons — five of them are seated with my wife and me in this photo — why we all should make global warming a primary focus of IoT projects for the foreseeable future.

There simply is no way to sugar-coat the grim news coming out of the Paris climate talks: even with the most dramatic limits that might be negotiated there, scientists warn we will fall short of the limits in temperature rises needed to avoid global devastation for my grandchildren — and yours.

Fortunately, the Internet of Things can and must be the centerpiece of the drastic changes that we will have to make collectively and individually to cope with this challenge:

“Perhaps one of the most ambitious projects that employ big data to study the environment is Microsoft’s Madingley, which is being developed with the intention of creating a simulation of all life on Earth. The project already provides a working simulation of the global carbon cycle, and it is hoped that, eventually, everything from deforestation to animal migration, pollution, and overfishing will be modeled in a real-time “virtual biosphere.” Just a few years ago, the idea of a simulation of the entire planet’s ecosphere would have seemed like ridiculous, pie-in-the-sky thinking. But today it’s something into which one of the world’s biggest companies is pouring serious money.”

Let me leave you with a laundry list of potential IoT uses to reduce global warming compiled by Cisco’s Dr. Rick Huijbregts:

  • Urban mobility “apps” predict how we can move from A to B in a city in the most environmental friendly manner. Real time data is collected from all modes of city transportation.
  • Using solar energy to power IT networks that in turn power heating, cooling and lighting. Consequently, reduce AC/DC conversions and avoid 70% electricity loss.
  • IP­based, and POE (Power of Ethernet) LED lighting in buildings reduced energy by 50% because of LED and another 50% because of control and automation.
  • Sensors (Internet of Things) record environmental highs and lows, as well as energy consumption. Data analytics allow us to respond in real­time and curtail consumption.
  • Real time insight in energy behaviour and consumption can turn into actionable reduction. 10% of energy reduction can be achieved by behavioural change triggered by simple awareness and education.
  • Working from home while being connected as if one were in the office (TelePresence, Cisco Spark, WebEx, just to name a few networked collaboration tools) takes cars off the road.
  • Grid modernization by adding communication networks to the electrical grid to allow for capacity and demand management.
  • Planning, optimizing, and redirecting transportation logistics based on algorithms, real­time weather and traffic data, and streamlined and JIT shipment and delivery schedules.

These are all great challenges and offer the potential for highly profitable IoT solutions.  For the sake of my six grandchildren, let’s get going!

Data Is the Hub: How the IoT and Circular Economy Build Profits

Fasten your seatbelts! I think I’ve finally zeroed in on the Internet of Things’ (IoT’s) most important potential economic benefit and how it could simultaneously help us escape the growing global environmental crisis:

make real-time IoT data* the hub of a circular economy and management mentality. It’s both good for the bottom line and the planet.

I started writing about circular business models back in the 90’s, when I consulted on profitable environmental strategies, i.e., those that were good both for the corporate bottom line and the planet.  It galled me that executives who railed about eliminating inefficiency thought reducing waste was for tree-huggers. Semantics and lifestyle prejudices got in the way of good strategy.

Ford’s River Rouge Plant (1952 view)

I could see that it was vital that we get away from old, linear models that began with extracting resources and ended with abandoned products in landfills. Ford’s massive 1 x 1.6 mile River Rouge Plant, the world’s largest integrated factory, was the paradigm of this thinking: ore was deposited at one end, made into steel, and cars came out the other (Hank’s penchant for vertical integration even led him to buy rubber plantations! If you have any illusions about the ultimate impossibility of top-down control, watch the PBS documentary on Ford — he simply couldn’t share power, even with his own son — and it almost ruined the company). The linear model worked for a long time, and, truth to tell, it was probably the only one that was feasible in the era of paper-and-pencil information flow:  it was so hard to gather and transmit information that senior management controlled who got what information, and basically threw it over the transom to the next office.

As for any kind of real-time information about what was actually happening on the factory floor: fugetaboutit: all that was possible was for low-level functionaries to shuffle along the assembly line, taking scheduled readings from a few gauges and writing them on a clipboard. Who knew if anyone ever actually read the forms, let alone made adjustments to equipment based on the readings?

Fast forward to 2015, and everything’s changed!

The image of the circular corporation popped back into my head last week while I was searching for an image of how the IoT really can change every aspect of corporate operations, from product design to supply chain management.  I was happily surprised that when I Googled “circular economy” I found a large number of pieces, including ones from consulting gurus Accenture and McKinsey (the most comprehensive report on the concept is probably this one from the Ellen MacArthur Foundation), about the bottom-line and environmental benefits of switching from a linear (‘take-make-dispose’) pattern.

But how to make the circular economy really function? That’s where the IoT comes in, and, in my estimation, is THE crucial element.

Visualize everything a company does as a circle, with IoT-gathered real-time data as its hub. That’s crucial, because everything in a profitable circular company revolves around this data, shared in real time by all who need it.

When that happens, a number of crucial changes that were impossible in the era of linear operations and thinking and limited data became possible for the first time:

  • you can optimize assembly line efficiency because all components of the factory are monitored by sensors in real time, and one process can activate and regulate another, and/or managers and assembly-line workers can fine-tune processes (think of the 10,000 sensors on the GE Durathon battery assembly line).
  • you can integrate the assembly line with the supply chain and distribution and sales network as never before (provided that you share the real-time data with them), so materials are delivered on a just-in-time basis) and production is dictated by real-time data on sales (the SAP smart vending machine, integrated with logistics, is a great example).
  • you can optimize product redesign and upgrades and speed the process, because sensor data from the products as they are actually used in the field is immediately fed back to the designers, so they have objective evidence of what does, and doesn’t work properly (think of how GE has improved its product upgrade process). No more ignorance of how your products are actually used!
  • from an environmental standpoint, having sensors on key components can make it possible for you to recover and profitably remanufacture them (closing the loop) rather than having them landfilled (I was excited to learn that Caterpillar has been doing this for 40 years (!) through its Reman Program, which “reduces costs, waste, greenhouse gas emissions and need for raw inputs.”).
  • you can create new revenue streams, by substituting services for actual sales of products.  I’ve written before about how GE and RollsRoyce do this with jet engines, helping clients be more efficient by providing them with real-time data from jet turbines in return for new fees, and Deere does it with data feeds from its tractors. Now I learn that Phillips does this, with industrial lighting, retaining ownership of the lighting: the customers only pay for the actual use of the lights. Phillips also closes the loop by taking the lights back at the end of their life and/or upgrading them.

As I’ve written before, creating the real-time data is perhaps the easier part: what’s harder is the paradigm shift the circular economy requires, of managers learning to share real-time data with everyone inside the enterprise (and, preferably, with the supply chain, distribution network, retailers, and, yes, even customers). When that happens, we will have unprecedented corporate efficiency, new revenue streams, satisfied customers, and, equally important reduce our use of finite resources, cut pollution, and tread lightly on the earth.  There you have it: the secret to 21st-century profitability is:

real-time IoT data, at the hub of the circular enterprise.


*Oh yeah, please don’t drop a dime on me with the grammar police about the title: in fact, I’m a retired colonel in the Massachusetts Grammar Police, but I’ve given up the fight on “data.” From my Latin training, I know that data are the plural form of datum, but datum is used so infrequently now and data with a singular verb has become so common that I’ve given up the fight and use it as a singular noun.  You can see the issue debated ad nauseum here