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Early users of SAP IoT platforms report real business benefits

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One manufacturer said sensors connected to an internet gateway enable it to find efficiencies in improved asset management and share data with its customers — just like SAP IoT markting promised.

Software vendors are constantly leaping ahead of — and playing catch up to — their users’ real business needs, and with the internet of things, SAP is right in the thick of it. The company is working a variety of angles to support its customers who are already using IoT-based systems, while it is also prepping for a future wave of SAP IoT implementations.

But what are SAP IoT users really up to right now? Which industries are moving faster than others? Where are they finding value?

“There are three kinds of use cases that we’re typically seeing,” said Nayaki Nayyar, general manager and global head of IoT and innovation go-to-market at SAP. “One is what we call industrial customers — customers with heavy manufacturing looking to optimize operations cost, maintenance cost and turnaround time.

“The other category is the aftermarket, which is after a customer has bought a product, and it could be consumer through a retailer or even B2B. These customers are tracking how their customers are using their products, then getting that live feedback to improve design, marketing and create better engagement with customers,” Nayyar explained.

“The third is simple but very prevalent. Our customers with large moving assets — fleets, cars, trucks — they just want to track and trace where they are at any given time in the world and better maintain those assets,” she said.

In addition, Nayyar said SAP is seeing a huge uptake in the oil, gas, chemical and mining industries. Within a year, though, she expects to see increased IoT activity in agriculture, healthcare, cities and the financial industry.

“In the insurance industry, for example, they want to track how you’re using your vehicles and then tailor your insurance to how you’re using it. It’s a very recent phenomenon, and it surprised me, but we’ve seen a few insurance customers interested in doing it,” Nayyar said.

SAP IoT on HANA helps energy company find efficiencies

Through all of these industries, a common challenge for SAP users is making sense of hundreds of thousands, if not millions, of data points created by IoT sensors — and then using it to create business value.

One SAP customer, EDF Renewable Energy, is using the SAP HANA IoT Connector by OSIsoft to move sensor data collected by OSIsoft’s PI System, an operational intelligence platform, into a HANA in-memory database to achieve efficiencies in the wind farms it operates in North America. OSIsoft says its PI System is running in 19,000 sites and is used by more than 1,000 utilities as well as 38 of the top 40 oil and gas companies.

SAP and OSIsoft entered a reseller agreement earlier this year for the SAP HANA IoT Connector.

“A big thing for wind farms is monitoring lubrication fluids and the inverter — those parts break the most,” said Michael Kanellos, a technology analyst for OSIsoft. He said EDF Renewable Energy has more than 300,000 sources of data that arrive in 250 different formats.

“EDF is getting all that data into their SAP system so they can monitor it in real time and move out of a regimented maintenance schedule into more preventative maintenance,” Kanellos said, adding that preventative maintenance is a key driver for cost savings and efficiency gains for many industrial operations, which can avoid having technicians work on equipment whether it needs it or not.

The next steps that OSIsoft’s customers are taking tend to focus on combining operational data with outside factors, including weather forecasts and market demand, which makes it possible for a utility company to make near real-time decisions. For example, Kanellos said utilities want to do things like ramp up wind-power generation during periods of sustained wind while gently reducing output from natural gas generators, yet still meet demand for a city full of air conditioners on a hot summer day.

“This data has often been stranded, but you’re going to see it being used in business decisions moving forward, not just for maintenance and maximizing efficiency, but [for] capital decisions,” Kanellos said. “They’re considering things like, ‘OK, we’ve got this data and now we’re getting higher than expected productivity … do we need to build a new gas plant or wind farm — or can we postpone that two years?'”

Manufacturer’s transformation hinges on SAP IoT asset management

By closely monitoring key data points with SAP IoT, some users are able to rethink their business models.

“A compressor company in Germany evolved their business model to not only sell compressors but to also sell compressed air,” Nayyar said. “Another example is a tire company that’s looking at not selling tires but selling mileage as a service. Now that they can monitor tires and get constant feedback, they know how much mileage those tires are really getting.”

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