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Posts from the ‘Analytics’ Category

Top 10 Ways Internet Of Things And Blockchain Strengthen Supply Chains

  • The majority of enterprises are prioritizing their blockchain pilots that concentrate on supply chains improvements (53%) and the Internet of Things (51%) according to Deloitte’s latest blockchain survey.
  • By 2023, blockchain will support the global movement and tracking of $2T of goods and services annually based on a recent Gartner
  • By 2020, Discrete Manufacturing, Transportation & Logistics and Utilities industries are projected to spend $40B each on IoT platforms, systems, and services.
  • The Supply Chain Management enterprise software market is growing from $12.2B in 2017 to $20.4B in 2022, achieving a 10.7% Compound Annual Growth Rate (CAGR) according to Gartner’s latest market forecast.
  • Of the many blockchain and IoT Proof of Concept (POC) pilots running today, track-and-trace shows the most significant potential of moving into production.

Combining blockchain’s distributed ledger framework with the Internet of Things’ (IoT) proven real-time monitoring and tracking capability is redefining supply chains. Blockchain shows potential for increasing the speed, scale, and visibility of supply chains, eliminating counterfeit-goods transactions while also improving batching, routing and inventory control. Blockchain’s shared, distributed ledger architecture is becoming a growth catalyst for IoT’s adoption and commercial use in organizations.

Blockchain and IoT are defining the future of supply chains based on the initial success of Proof of Concept (POC) pilots focused on the logistics, storage and track-and-trace areas of supply chains across manufacturing. Supply-chain centric pilots are the most popular today, with enterprises looking at how they can get more value out of IoT using blockchain. One CIO told me recently his company deliberately spins up several POCs at once, adding “they’re our proving grounds, we’re pushing blockchain and IoT’s limits to see if they can solve our most challenging supply chain problems and we’re learning a tremendous amount.” The senior management team at the manufacturer says the pilots are worth it if they can find a way to increase inventory turns just 10% using blockchain and IoT. They’re also running Proof of Concept pilots to optimize batching, routing and delivery of goods, reduce fraud costs, and increase track-and-trace accuracy and speed. Of the many pilots in progress, track-and-trace shows the greatest potential to move into production today.

The following are the top 10 ways IoT and blockchain are defining the future of supply chains:

  • Combining IoT’s real-time monitoring support with blockchain’s shared distributed ledger strengthens track-and-trace accuracy and scale, leading to improvements across supply chains. Improving track-and-trace reduces the need for buffer stock by providing real-time visibility of inventory levels and shipments. Urgent orders can also be expedited and rerouted, minimizing disruptions to production schedules and customer shipments.  The combination of blockchain and IoT sensors is showing potential to revolutionize food supply chains, where sensors are used to track freshness, quality, and safety of perishable foods.  The multiplicative effects of combining IoT and blockchain to improve track-and-traceability are shown in the context of the following table from the Boston Consulting Group. Please click on the graphic to expand for easier reading.

  • Improving inventory management and reducing bank fees for letters of credit by combining blockchain and IoT show potential to deliver cost savings. A recent study by Boston Consulting Group, Pairing Blockchain with IoT to Cut Supply Chain Costs, completed a hypothetical analysis of how much a $1B electronics equipment company implementing blockchain-as-a-service, a decentralized track-and-trace application, and 30 nodes that share among key supply chain stakeholders could save. The study found that the electronics equipment company could save up to $6M a year or .6% of annual sales. A summary of the business case is shown here:

  • Combining blockchain and IoT is providing the pharmaceutical and healthcare industry with stronger serialization techniques, reducing counterfeit drugs and medical products. Pharmaceutical serialization is the process of assigning a unique identity (e.g., a serial number) to each sealable unit, which is then linked to critical information about the product’s origin, batch number, and expiration date. According to the World Health Organization (WHO) approximately 1 million people each year die from counterfeit drugs, 50% of pharmaceutical products sold through rogue websites are considered fake, and up to 30% of pharmaceutical products sold in emerging markets are counterfeit according to a recent study by DHL Research. DHL and Accenture are finalizing a blockchain-based track-and-trace serialization prototype comprising a global network of nodes across six geographies. The system comprehensively documents each step that a pharmaceutical product takes on its way to the store shelf and eventually the consumer. The following graphic illustrates the workflow.

  • Improving distribution and logistics, tracking asset maintenance, improving product quality, preventing counterfeit products and enabling digital marketplaces are the use cases Capgemini predicts blockchain will have the greatest impact. IoT’s potential contribution in each of these five use case areas continues to accelerate as real-time monitoring dominates manufacturing. Tracking provenace, contracts management, digital threads, and trade financing also show potential for high adoption. The following graphic illustrates blockchain use cases in the supply chain.

  • Combining blockchain and IoT is enabling manufacturers to pursue and excel at digital twin initiatives across their value chains. A digital twin is a dynamic, digital representation of a physical asset which enables companies to track its past, current and future performance throughout the asset’s lifecycle. The asset, for example, a vehicle or spare part, sends performance data and events directly to its digital twin, even as it moves from the hands of the manufacturer to the dealer and ultimately the new owner. Blockchain can be used to securely document everything related to the asset and IoT provides the real-time monitoring and updates. Microsoft and VISEO are partnering to use blockchain to connect each new vehicle’s maintenance events to the vehicle’s digital twin. The graphic below illustrates how digital twins streamline additive manufacturing.

  • 54% of suppliers and 51% of customers are expecting the organizations they do business with to take a leadership position on blockchain and IoT. The majority of suppliers and customers expect the manufacturers, suppliers, and vendors they do business with to take a leadership position on these two emerging technologies and define a vision with them in it. Deloitte’s excellent study, Breaking Blockchain Open, Deloitte’s 2018 Global Blockchain Survey, provides insights into how supplier and customer expectations are a factor in driving blockchain and IoT adoption, further helping to shape the future of supply chains.

  • Consumer products and manufacturing lead adoption of blockchain today, followed by life sciences according to the latest Deloitte estimates. IoT adoption is flourishing in manufacturing, transportation & logistics and utilities. By 2020, each of these industries is projected to spend $40B each on IoT platforms, systems, and services. The following graphic compares blockchain adoption levels by industry. Given how dependent manufacturers are on supply chains, the high adoption rates for blockchain and IoT make sense. Please click on the graphic to expand for easier reading.

  • 32% of enterprises are adopting blockchain to gain greater speed compared to existing systems, and 28% believe blockchain will open up new business models and revenue sources. The majority of manufacturers, transportation & logistics and utilities companies have real-time monitoring running on their shop floors and across their production facilities today. Many are transitioning from Wi-Fi enabled monitoring to IoT, which creates a real-time data stream that blockchain ledgers categorize and track to provide greater track-and-trace speed and accuracy. A recent Capgemini survey found that 76% of manufacturers also plan to have a product-as-a-service strategy to drive revenue in less than two years.

  • Blockchain has the potential to deliver between $80B and $110B in value across seven strategic financial sectors when supported by IoT, redefining their supply chains in the process. McKinsey completed an extensive analysis of over 60 viable use case for blockchain in financial services where IoT would provide greater visibility across transactions. The combination of technologies has the potential to deliver over $100B in value.

  • Reducing product waste and perishable foods’ product margins while increasing traceability is attainable by combining blockchain and IoT. IBM’s Food Trust uses blockchain technology to create greater accountability, traceability, and visibility in supply chains. It’s the only consortium of its kind that connects growers, processors, distributors, and retailers through a permissioned, permanent and shared record of food system data. Partners include Carrefour, Dole, Driscoll’s, Golden State Foods, McCormick and Co., McLane Co., Nestlé, ShopRite parent Wakefern Food Corp.,  grocery group purchasing organization Topco Associates  The Kroger Co., Tyson Foods, Unilever and Walmart. An example of the Food Trust’s traceability application is shown below:

Additional Research:

Abdel-Basset, M., Manogaran, G., & Mohamed, M. (2018). Internet of Things (IoT) and its impact on supply chain: A framework for building smart, secure and efficient systems. Future Generation Computer Systems86, 614–628.

Boston Consulting Group, Pairing Blockchain with IoT to Cut Supply Chain Costs, By Zia Yusuf, Akash Bhatia, Usama Gill, Maciej Kranz, Michelle Fleury, and Anoop Nannra. December 18, 2018

Capgemini Research Institute, Does blockchain hold the key to a new age of supply chain transparency and trust?, 2018 (PDF, 32 pp., no opt-in)

DHL Trend Research, Blockchain In Research,  Perspectives on the upcoming impact of blockchain technology and use cases for the logistics industry (PDF, 28 pp., no opt-in)

Deloitte, Breaking Blockchain Open, Deloitte’s 2018 Global Blockchain Survey,48 pp., PDF, no opt-in. Summary available here.

Deloitte, Continuous Interconnected Supply Chain, Using Blockchain & Internet-of-Things in supply chain traceability (PDF, 24 pp., no opt-in)

Deloitte University Press,  3D opportunity for blockchain Additive manufacturing links the digital thread, 2018 (PDF, 20 pp, no opt-in)

EBN, How IoT, AI, & Blockchain Empower Tomorrow’s Autonomous Supply Chain, June 18, 2018

Forbes, How Blockchain Can Improve Manufacturing In 2019, October 28, 2018.

Forbes, 10 Charts That Will Challenge Your Perspective Of IoT’s Growth, June 6, 2018

Gettens, D., Jauffred, F., & Steeneck, D. W. (2016). IoT Can Drive Big Savings in the Post-Sales Supply Chain. MIT Sloan Management Review, 60(2), 19–21. Accessible on the MIT Sloan Management Review site here.

Jagtap, S., & Rahimifard, S. (2019). Unlocking the potential of the internet of things to improve resource efficiency in food supply chains. Springer International Publishing© Springer Nature Switzerland AG.

McKinsey & Company, Blockchain beyond the hype: What is the strategic business value?, June, 2018

McKinsey & Company, Blockchain Technology in the Insurance Sector, Quarterly meeting of the Federal Advisory Committee on Insurance (FACI) Jan 5, 2017

McKinsey & Company, The IoT as a growth driver, By Markus Berger-De Leon, Thomas Reinbacher, and Dominik Wee. March 2018

McKinsey & Company, How digital manufacturing can escape ‘pilot purgatory’,  by Andreas Behrendt, Richard Kelly, Raphael Rettig, and Sebastian Stoffregen. July 2018

Miller, D. (2018). Blockchain and the Internet of Things in the Industrial Sector. IT Professional20(3), 15-18.

PwC, Global Blockchain Survey, 2018.

Queiroz, M. M., & Wamba, S. F. (2019). Blockchain adoption challenges in supply chain: An empirical investigation of the main drivers in India and the USA. International Journal of Information Management46, 70-82.

Reyna, A., Martín, C., Chen, J., Soler, E., & Díaz, M. (2018). On blockchain and its integration with IoT. Challenges and opportunities. Future Generation Computer Systems88, 173–190

Smith, K. J., & Dhillon, G. (2019). Supply Chain Virtualization: Facilitating Agent Trust Utilizing Blockchain Technology. In Revisiting Supply Chain Risk (pp. 299-311). Springer, Cham.

Tu, M., Lim, M. K., & Yang, M.-F. (2018). IoT-based production logistics and supply chain system – Part 1. Industrial Management & Data Systems118(1), 65–95.

Tu, M., K. Lim, M., & Yang, M.-F. (2018). IoT-based production logistics and supply chain system – Part 2. Industrial Management & Data Systems118(1), 96–125.

Wall Street Journal, 5 Supply Chain Use Cases for IoT, Blockchain, November 8, 2018

Which Analytics And BI Technologies Will Be The Highest Priority In 2019?

  • 82% of enterprises are prioritizing analytics and BI as part of their budgets for new technologies and cloud-based services.
  • 54% say AI, Machine Learning and Natural Language Processing (NLP) are also a high investment priority.
  • 50% of enterprises say their stronger focus on metrics and Key Performance Indicators (KPIs) company-wide are a major driver of new investment in analytics and BI.
  • 43%  plan to both build and buy AI and machine learning applications and platforms.
  • 42% are seeking to improve user experiences by automating discovery of data insights and 26% are using AI to provide user recommendations.

These and many other fascinating insights are from the recent TDWI Best Practices Report, BI and Analytics in the Age of AI and Big Data. An executive summary of the study is available online here. The entire study is available for download here (39 PP., PDF, free, opt-in). The study found that enterprises are placing a high priority on augmenting existing systems and replacing older technologies and data platforms with new cloud-based BI and predictive analytics ones. Transforming Data with Intelligence (TDWI) is a global community of AI, analytics, data science and machine learning professionals interested in staying current in these and more technology areas as part of their professional development. Please see page 3 of the study for specifics regarding the methodology.

Key takeaways from the study include the following:

  • 82% of enterprises are prioritizing analytics and BI applications and platforms as part of their budgets for new technologies and cloud-based services. 78% of enterprises are prioritizing advanced analytics, and 76% data preparation. 54% say AI, machine learning and Natural Language Processing (NLP) are also a high investment priority. The following graphic ranks enterprises’ investment priorities for acquiring or subscribing to new technologies and cloud-based services by analytics and BI initiatives or strategies. Please click on the graphic to expand for easier reading.

  • Data warehouse or mart in the cloud (41%), data lake in the cloud (39%) and BI platform in the cloud (38%) are the top three types of technologies enterprises are planning to use. Based on this finding and others in the study, cloud platforms are the new normal in enterprises’ analytics and Bi strategies going into 2019. Cloud data storage (object, file, or block) and data virtualization or federation (both 32%) are the next-most planned for technologies by enterprises when it comes to investing in the analytics and BI initiatives. Please click on the graphic to expand for easier reading.

  • The three most important factors in delivering a positive user experience include good query performance (61%), creating and editing visualizations (60%), and personalizing dashboards and reports (also 60%). The three activities that lead to the least amount of satisfaction are using predictive analytics and forecasting tools (27% dissatisfied), “What if” analysis and deriving new data (25%) and searching across data and reports (24%). Please click on the graphic to expand for easier reading.

  • 82% of enterprises are looking to broaden the base of analytics and BI platforms they rely on for insights and intelligence, not just stay with the solutions they have in place today. Just 18% of enterprises plan to add more instances of existing platforms and systems. Cloud-native platforms (38%), a new analytics platform (35%) and cloud-based data lakes (31%) are the top three system areas enterprises are planning to augment or replace existing BI, analytics, and data warehousing systems in. Please click on the graphic to expand for easier reading.

  • The majority of enterprises plan to both build and buy Artificial Intelligence (AI) and machine learning (ML) solutions so that they can customize them to their specific needs. 43% of enterprises surveyed plan to both build and buy AI and ML applications and platforms, a figure higher than any other recent survey on this aspect of enterprise AI adoption. 13% of responding enterprises say they will exclusively build their own AI and ML applications.

  • Capitalizing on machine learning’s innate strengths of applying algorithms to large volumes of data to find actionable new insights (54%) is what’s most important to the majority of enterprises. 47% of enterprises look to AI and machine learning to improve the accuracy and quality of information. And 42% are configuring AI and machine learning applications and platforms to augment user decision making by giving recommendations. Please click on the graphic to expand for easier reading.

10 Ways Machine Learning Is Revolutionizing Sales

  • Sales teams adopting AI are seeing an increase in leads and appointments of more than 50%, cost reductions of 40%–60%, and call time reductions of 60%–70% according to the Harvard Business Review article Why Salespeople Need to Develop Machine Intelligence.
  • 62% of highest performing salespeople predict guided selling adoption will accelerate based on its ability rank potential opportunities by value and suggest next steps according to Salesforces’ latest State of Sales research study.
  • By 2020, 30% of all B2B companies will employ AI to augment at least one of their primary sales processes according to Gartner.
  • High-performing sales teams are 4.1X more likely to use AI and machine learning applications than their peers according to the State of Sales published by Salesforce.
  • Intelligent forecasting, opportunity insights, and lead prioritization are the top three AI and machine learning use cases in sales.

Artificial Intelligence (AI) and machine learning show the potential to reduce the most time-consuming, manual tasks that keep sales teams away from spending more time with customers. Automating account-based marketing support with predictive analytics and supporting account-centered research, forecasting, reporting, and recommending which customers to upsell first are all techniques freeing sales teams from manually intensive tasks.

The Race for Sales-Focused AI & Machine Learning Patents Is On

CRM and Configure, Price & Quote (CPQ) providers continue to develop and fine-tune their digital assistants, which are specifically designed to help the sales team get the most value from AI and machine learning. Salesforces’ Einstein supports voice-activation commands from Amazon Alexa, Apple Siri, and Google. Salesforce and other enterprise software companies continue aggressively invest in Research & Development (R&D). For the nine months ended October 31, 2018, Salesforce spent $1.3B or 14% of total revenues compared to $1.1B or 15% of total revenues, during the same period a year ago, an increase of $211M according to the company’s 10Q filed with the Securities and Exchange Commission.

The race for AI and machine learning patents that streamline selling is getting more competitive every month. Expect to see the race of sales-focused AI and machine learning patents flourish in 2019. The National Bureau of Economic Research published a study last July from the Stanford Institute For Economic Policy Research titled Some Facts On High Tech Patenting. The study finds that patenting in machine learning has seen exponential growth since 2010 and Microsoft had the greatest number of patents in the 2000 to 2015 timeframe. Using patent analytics from PatentSight and ipsearchIAM published an analysis last month showing Microsoft as the global leader in machine learning patents with 2,075.  The study relied on PatentSight’s Patent Asset Index to rank machine learning patent creators and owners, revealing Microsoft and Alphabet are dominating today. Salesforce investing over $1B a year in R&D reflects how competitive the race for patents and intellectual property is.

10 Ways Machine Learning Is Revolutionizing Sales

Fueled by the proliferation of patents and the integration of AI and machine learning code into CRM, CPQ, Customer Service, Predictive Analytics and a wide variety of Sales Enablement applications, use cases are flourishing today. Presented below are the ten ways machine learning is most revolutionizing selling today:

 

  1. AI and machine learning technologies excel at pattern recognition, enabling sales teams to find the highest potential new prospects by matching data profiles with their most valuable customers. Nearly all AI-enabled CRM applications are providing the ability to define a series of attributes, characteristics and their specific values that pinpoint the highest potential prospects. Selecting and prioritizing new prospects using this approach saves sales teams thousands of hours a year.
  2. Lead scoring and nurturing based on AI and machine learning algorithms help guide sales and marketing teams to turn Marketing Qualified Leads (MQL) into Sales Qualified Leads (SQL), strengthening sales pipelines in the process. One of the most important areas of collaboration between sales and marketing is lead nurturing strategies that move prospects through the pipeline. AI and machine learning are enriching the collaboration with insights from third-party data, prospect’s activity at events and on the website, and from previous conversations with salespeople. Lead scoring and nurturing relies heavily on natural language generation (NLG) and natural-language processing (NLP) to help improve each lead’s score.
  3. Combining historical selling, pricing and buying data in a single machine learning model improves the accuracy and scale of sales forecasts. Factoring in differences inherent in every account given their previous history and product and service purchasing cycles is invaluable in accurately predicting their future buying levels. AI and machine learning algorithms integrated into CRM, sales management and sales planning applications can explain variations in forecasts, provided they have the data available. Forecasting demand for new products and services is an area where AI and machine learning are reducing the risk of investing in entirely new selling strategies for new products.
  4. Knowing the propensity of a given customer to churn versus renew is invaluable in improving Customer Lifetime Value. Analyzing a diverse series of factors to see which customers are going to churn or leave versus those that will renew is among the most valuable insights AI and machine learning is delivering today. Being able to complete a Customer Lifetime Value Analysis for every customer a company has provides a prioritized roadmap of where the health of client relationships are excellent versus those that need attention. Many companies are using Customer Lifetime Value Analysis as a proxy for a customer health score that gets reviewed monthly.
  5. Knowing the strategies, techniques and time management approaches the top 10% of salespeople to rely on to excel far beyond quota and scaling those practices across the sales team based on AI-driven insights. All sales managers and leaders think about this often, especially in sales teams where performance levels vary widely. Knowing the capabilities of the highest-achieving salespeople, then selectively recruiting those sales team candidates who have comparable capabilities delivers solid results. Leaders in the field of applying AI to talent management include Eightfold whose approach to talent management is refining recruiting and every phase of managing an employee’s potential. Please see the recent New York Times feature of them here.
  6. Guided Selling is progressing rapidly from a personalization-driven selling strategy to one that capitalized on data-driven insights, further revolutionizing sales. AI- and machine learning-based guided selling is based on prescriptive analytics that provides recommendations to salespeople of which products, services, and bundles to offer at which price. 62% of highest performing salespeople predict guided selling adoption will accelerate based on its ability rank potential opportunities by value and suggest next steps according to Salesforces’ latest State of Sales research study.
  7. Improving the sales team’s productivity by using AI and machine learning to analyze the most effective actions and behaviors that lead to more closed sales. AI and machine learning-based sales contact and customer predictive analytics take into account all sources of contacts with customers and determine which are the most effective. Knowing which actions and behaviors are correlated with the highest close rates, sales managers can use these insights to scale their sales teams to higher performance.
  8. Sales and marketing are better able to define a price optimization strategy using all available data analyzing using AI and machine learning algorithms. Pricing continues to be an area the majority of sales and marketing teams learn to do through trial and error. Being able to analyze pricing data, purchasing history, discounts are taken, promotional programs participated in and many other factors, AI and machine learning can calculate the price elasticity for a given customer, making an optimized price more achievable.
  9. Personalizing sales and marketing content that moves prospects from MQLs to SQLs is continually improving thanks to AI and machine learning. Marketing Automation applications including HubSpot and many others have for years been able to define which content asset needs to be presented to a given prospect at a given time. What’s changed is the interactive, personalized nature of the content itself. Combining analytics, personalization and machine learning, marketing automation applications are now able to tailor content and assets that move opportunities forward.
  10. Solving the many challenges of sales engineering scheduling, sales enablement support and dedicating the greatest amount of time to the most high-value accounts is getting solved with machine learning. CRM applications including Salesforce can define a salesperson’s schedule based on the value of the potential sale combined with the strength of the sales lead, based on its lead score. AI and machine learning optimize a salesperson’s time so they can go from one customer meeting to the next, dedicating their time to the most valuable prospects.

Which CRM Applications Matter Most In 2018

 

According to recent research by Gartner,

  • Marketing analytics continues to be hot for marketing leaders, who now see it as a key business requirement and a source of competitive differentiation
  • Artificial intelligence (AI) and predictive technologies are of high interest across all four CRM functional areas, and mobile remains in the top 10 in marketing, sales and customer service.
  • It’s in customer service where AI is receiving the highest investments in real use cases rather than proofs of concept (POCs) and experimentation.
  • Sales and customer service are the functional areas where machine learning and deep neural network (DNN) technology is advancing rapidly.

These and many other fascinating insights are from Gartner’s What’s Hot in CRM Applications in 2018 by Ed Thompson, Adam Sarner, Tad Travis, Guneet Bharaj, Sandy Shen and Olive Huang, published on August 14, 2018. Gartner clients can access the study here  (10 pp., PDF, client access reqd.).

Gartner continually tracks and analyzes the areas their clients have the most interest in and relies on that data to complete their yearly analysis of CRM’s hottest areas. Inquiry topics initiated by clients are an excellent leading indicator of relative interest and potential demand for specific technology solutions. Gartner organizes CRM technologies into the four category areas of Marketing, Sales, Customer Service, and Digital Commerce.

The following graphic from the report illustrates the top CRM applications priorities in Marketing, Sales, Customer Service, and Digital Commerce.

Key insights from the study include the following:

  • Marketing analytics continues to be hot for marketing leaders, who now see it as a key business requirement and a source of competitive differentiation. In my opinion and based on discussions with CMOs, interest in marketing analytics is soaring as they are all looking to quantify their team’s contribution to lead generation, pipeline growth, and revenue. I see analytics- and data-driven clarity as the new normal. I believe that knowing how to quantify marketing contributions and performance requires CMOs and their teams to stay on top of the latest marketing, mobile marketing, and predictive customer analytics apps and technologies constantly. The metrics marketers choose today define who they will be tomorrow and in the future.
  • Artificial intelligence (AI) and predictive technologies are of high interest across all four CRM functional areas, and mobile remains in the top 10 in marketing, sales and customer service. It’s been my experience that AI and machine learning are revolutionizing selling by guiding sales cycles, optimizing pricing and enabling CPQ to define and deliver smart, connected products. I’m also seeing CMOs and their teams gain value from Salesforce Einstein and comparable intelligent agents that exemplify the future of AI-enabled selling. CMOs are saying that Einstein can scale across every phase of customer relationships. Based on my previous consulting in CPQ and pricing, it’s good to see decades-old core technologies underlying Price Optimization and Management are getting a much-needed refresh with state-of-the-art AI and machine learning algorithms, which is one of the factors driving their popularity today. Using Salesforce Einstein and comparable AI-powered apps I see sales teams get real-time guidance on the most profitable products to sell, the optimal price to charge, and which deal terms have the highest probability of closing deals. And across manufacturers on a global scale sales teams are now taking a strategic view of Configure, Price, Quote (CPQ) as encompassing integration to ERP, CRM, PLM, CAD and price optimization systems. I’ve seen global manufacturers take a strategic view of integration and grow far faster than competitors. In my opinion, CPQ is one of the core technologies forward-thinking manufacturers are relying on to launch their next generation of smart, connected products.
  • It’s in customer service where AI is receiving the highest investments in real use cases rather than proofs of concept (POCs) and experimentation. It’s fascinating to visit with CMOs and see the pilots and full production implementations of AI being used to streamline customer service. One CMO remarked how effective AI is at providing greater contextual intelligence and suggested recommendations to customers based on their previous buying and services histories. It’s interesting to watch how CMOs are attempting to integrate AI and its associated technologies including ChatBots to their contribution to Net Promoter Scores (NPS). Every senior management team running a marketing organization today has strong opinions on NPS. They all agree that greater insights gained from predictive analytics and AI will help to clarify the true value of NPS as it relates to Customer Lifetime Value (CLV) and other key metrics of customer profitability.
  • Sales and customer service are the functional areas where machine learning and deep neural network (DNN) technology is advancing rapidly.  It’s my observation that machine learning’s potential to revolutionize sales is still nascent with many high-growth use cases completely unexplored. In speaking with the Vice President of Sales for a medical products manufacturer recently, she said her biggest challenge is hiring sales representatives who will have longer than a 19-month tenure with the company, which is their average today.  Imagine, she said, knowing the ideal attributes and strengths of their top performers and using machine learning and AI to find the best possible new sales hires. She and I discussed the spectrum of companies taking on this challenge, with Eightfold being one of the leaders in applying AI and machine learning to talent management challenges.

Source: Gartner by Ed Thompson, Adam Sarner, Tad Travis, Guneet Bharaj,  Sandy Shen and Olive Huang, published on August 14, 2018.

The State Of IoT Intelligence, 2018

  • Sales, Marketing and Operations are most active early adopters of IoT today.
  • Early adopters most often initiate pilots to drive revenue and gain operational efficiencies faster than anticipated.
  • 32% of enterprises are investing in IoT, and 48% are planning to in 2019.
  • IoT early adopters lead their industries in advanced and predictive analytics adoption.

These and many other fascinating insights are from Dresner Advisory Services’ latest report,  2018 IoT Intelligence® Market Study, in its 4th year of publication. The study concentrates on end-user interest in and demand for business intelligence in IoT. The study also examines key related technologies such as location intelligence, end-user data preparation, cloud computing, advanced and predictive analytics, and big data analytics. “While the market is still in an early stage, we believe that IoT Intelligence, the means to understand and leverage IoT data, will continue to expand as organizations mature in their collection and leverage of sensor level data,” said Howard Dresner, founder, and chief research officer at Dresner Advisory Services. 70% of respondents work at North American organizations (including the United States, Canada, and Puerto Rico). EMEA accounts for about 20%, and the remainder is distributed across Asia-Pacific and Latin America. Please see pages 11, 15 through 18 of the study for specifics regarding the methodology and respondent demographics.

Key insights gained from the study include the following:

  • Sales, Marketing and Operations are most active early adopters of IoT today. Looking to capitalize on IoT’s potential to gain real-time customer feedback on products’ and services’ performance, Sales and Marketing lead all departments in their prioritizing IoT’s value in the enterprises. 12% of Operations leaders say that IoT is critical to attaining their goals. Executive Management and Finance have yet to see the value that Sales, Marketing and Operations do.

  • Manufacturers see IoT as the most critical to achieving their product quality, production scheduling and supply chain orchestration goals. Insurance industry leaders also view IoT as critical to operations as their business models are now concentrating on automating inventory and safety management. Insurance firms also track vehicles in shipping and logistics fleets to gain greater visibility into how route operations can be optimized at the lowest possible risk of accidents. Financial Services and Healthcare are the next most interested in IoT with Higher Education and Business Services assign the lowest levels of importance by industry.

  • Investment in IoT analytics, application development and defining accurate, reliable metrics to guide development is the most critical aspect of IoT adoption today. Investments in the data supply chain including data capture, movement, data prep, and management is the second-most critical area followed by investments in IoT infrastructure.  Analytics, application development, and accurate, reliable metrics guiding DevOps are consistent with the study’s finding that early adopters have an excellent track record adopting and applying advanced and predictive analytics to challenging logistical, operations, sales, and marketing problems.

  • IoT early adopters or advocates prioritize dashboards, reporting, IoT use cases that provide data streams integral to analytics, advanced visualization, and data mining. IoT early adopters and the broader respondent base differ most in the prioritization of IT analytics, location intelligence, integration with operational processes, in-memory analysis, open source software, and edge computing. The data reflects how IoT early adopters quickly become more conversant in emerging technologies with the goal of achieving exponential scale across analytics and IoT platforms.

  • The criticality of advanced and predictive analytics to all leaders surveyed is at an all-time high. Attaining a (weighted-mean) importance score of 3.6 on a 5.0 scale, advanced and predictive analytics is today considered “critical” or “very important” to a majority of respondents. Despite a mild decline in 2017, importance sentiment (the perceived criticality of advanced and predictive analytics) is on an uptrend across the five years of our study. Mastery of advanced and predictive analytics is a leading indicator of IoT adoption, indicating the potential for more analytics pilots and in-production IoT projects next year.

  • The most valuable features for advanced and predictive analytics apps include support for a range of regression models, hierarchical clustering, descriptive statistics, and recommendation engine support. Model management is important to more than 90% of respondents, further indicating IoT analytics scale is a goal many are pursuing. Geospatial analysis (highly associated with mapping, populations, demographics, and other web-generated data), Bayesian methods, and automatic feature selection is the next most required series of features.

  • Access to advanced analytics for predictive and temporal analysis is the most important usability benefit to IoT adopters today. Second is support for easy iteration, and third is a simple process for continuous modification of models. The study evaluated a detailed set of nine usability benefits that support advanced and predictive activities and processes. All nine benefits are important to respondents, with the last one of a specialist not being required important to a majority of them at 70%.

How Blockchain Can Improve Manufacturing In 2019

  • The business value-add of blockchain will grow to slightly more than $176B by 2025, then exceed $3.1T by 2030 according to Gartner.
  • Typical product recalls cost $8M, and many could be averted with improved track-and-traceability enabled by blockchain.
  • Combining blockchain and IoT will revolutionize product safety, track-and-traceability, warranty management, Maintenance, Repair & Overhaul (MRO), and lead to new usage-based business models for smart, connected products.
  • By 2023, 30% of manufacturing companies with more than $5B in revenue will have implemented Industry 4.0 pilot projects using blockchain, up from less than 5% today according to Gartner.

Blockchain’s greatest potential to deliver business value is in manufacturing. Increasing visibility across every area of manufacturing starting with suppliers, strategic sourcing, procurement, and supplier quality to shop floor operations including machine-level monitoring and service, blockchain can enable entirely new manufacturing business models. Supply chains are the foundation of every manufacturing business, capable of making use of blockchain’s distributed ledger structure and block-based approach to aggregating value-exchange transactions to improve supply chain efficiency first. By improving supplier order accuracy, product quality, and track-and-traceability, manufacturers will be able to meet delivery dates, improve product quality and sell more.

Capgemini Research Institute’s recent study, Does blockchain hold the key to a new age of supply chain transparency and trust? provide valuable insights into how blockchain can improve supply chains and manufacturing. A copy of the study is available here (PDF, 32 pp., no opt-in). Capgemini surveyed 731 organizations globally regarding their existing and planned blockchain initiatives. Initial interviews yielded 447 organizations who are currently experimenting with or implementing blockchain. Please see pages 25 & 26 of the study for additional details regarding the methodology.

Key takeaways of the study include the following:

  • Typical product recalls cost $8M, and many could be averted with improved track-and-traceability enabled by blockchain. Capgemini found that there was 456 food recalls alone in the U.S. last year, costing nearly $3.5B. Blockchain’s general ledger structure provides a real-time audit trail for all transactions secured against modifications making it ideal for audit and compliance-intensive industries.

  • Gaining greater cost savings (89%), enhancing traceability (81%) and enhancing transparency (79%) are the top three drivers behind manufacturer’s blockchain investments today. Additional drivers include increasing revenues (57%), reducing risks (50%), creating new business opportunities (44%) and being more customer-centric (38%). The following graphic from the study illustrates the manufacturer’s priorities for blockchain. Capgemini finds that improving track-and-traceability is a primary driver across all manufacturers, consistent with the broader trend of manufacturers adopting software applications that improve this function today. That’s also understandable given how additional regulatory compliance requirements are coming in 2019 and those manufacturers competing in highly regulated industries including aerospace & defense, medical devices, and pharma are exploring how blockchain can give them a competitive edge now

  • Digital marketplaces, tracking critical supply chain parameters, tracking components quality, preventing counterfeit products, and tracking asset maintenance are the five areas Capgemini predicts blockchain will see the greatest adoption. Based on interviews with industry experts and startups, Capgemini found 24 blockchain use cases which are compared by level of adoption and complexity in the graphic below. The use cases reflect how managing supplier contracts is already emerging as one of the most popular blockchain use cases for manufacturing organizations today and will accelerate as compliance becomes even more important in 2019.

  • Manufacturers have the most at-scale deployments of blockchain today, leading all industries included in the study. Blockchain adoption is still nascent across all industries included in the study, with 6% of manufacturers having at-scale implementations today. Customer products manufacturers lead in pilots, with 15% actively [purusing blockchain in limited scope today. And retailers trail all industries with 91% having only proofs of concept.

  • Combining IoT and blockchain at the shipping container level in supply chains increases authenticity, transparency, compliance to product and contractual requirements while reducing counterfeiting. In highly regulated industries including Aerospace & Defense (A&D), Consumer Packaged Goods (CPG), medical devices, and pharma, combining IoT and blockchain provides real-time data on the shipping container conditions, tamper-proof storage, each shipment’s locational history and if there have been changes in temperature and product condition. Capgemini sees use cases where a change in a shipment’s temperature as measured by a sensor change sends alerts regarding contractual compliance of perishable meats and produce, averting the potential of bad product quality and rejected shipments once they reach their destination.

  • Capgemini found that 13% of manufacturers are Pacesetters and are either implementing blockchain at scale or have pilots in at least one site. Over 60% of Pacesetters believe that blockchain is already transforming the way they collaborate with their partners. Encouraged by these results, Pacesetters are set to increase their blockchain investment by 30% in the next three years. They lead early stage experimenters and all implementers on three core dimensions of organizational readiness. These include end-to-end visibility across functions, detailed and defined supportive processes, and availability of the right talent to succeed.

  • Lack of a clear ROI, immature technology and regulatory challenges are the top three hurdles Pacesetter-class manufacturers face in getting blockchain initiatives accepted and into production. All implementations face these three challenges in addition to having to overcome the lack of complementary IT systems at the partner organizations. The following graphic compares the hurdles all manufacturers face in getting blockchain projects implemented by the level of manufacturers adoption success (Pacesetter, early-stage experimenters, all implementers).

Source: Capgemini Research Institute, Does blockchain hold the key to a new age of supply chain transparency and trust? October, 2018

Google Needs To Make Machine Learning Their Growth Fuel

  • In 2017 Google outspent Microsoft, Apple, and Facebook on R&D spending with the majority being on AI and machine learning.
  • Google needs new AI- and machine learning-driven businesses that have lower Total Acquisition Costs (TAC) to offset the rising acquisition costs of their ad and search businesses.
  • One of the company’s initial forays into AI and machine learning was its $600M acquisition of AI startup DeepMind in January 2014.
  • Google has launched two funds dedicated solely to AI: Gradient Ventures and the Google Assistant Investment Program, both of which are accepting pitches from AI and machine learning startups today.
  • On its Q4’17 earnings call, the company announced that its cloud business is now bringing in $1B per quarter. The number of cloud deals worth $1M+ that Google has sold more than tripled between 2016 and 2017.
  • Google’s M&A strategy is concentrating on strengthening their cloud business to better compete against Amazon AWS and Microsoft Azure.

These and many other fascinating insights are from CB Insight’s report, Google Strategy Teardown (PDF, 49 pp., opt-in). The report explores how Alphabet, Google’s parent company is relying on Artificial Intelligence (AI) and machine learning to capture new streams of revenue in enterprise cloud computing and services. Also, the report looks at how Alphabet can combine search, AI, and machine learning to revolutionize logistics, healthcare, and transportation. It’s a thorough teardown of Google’s potential acquisitions, strategic investments, and partnerships needed to maintain search dominance while driving revenue from new markets.

Key takeaways from the report include the following:

  • Google needs new AI- and machine learning-driven businesses that have lower Total Acquisition Costs (TAC) to offset the rising acquisition costs of their ad and search businesses. CB Insights found Google is experiencing rising TAC in their core ad and search businesses. With the strategic shift to mobile, Google will see TAC escalate even further. Their greatest potential for growth is infusing greater contextual intelligence and knowledge across the entire series of companies that comprise Alphabet, shown in the graphic below.

  • Google has launched two funds dedicated solely to AI: Gradient Ventures and the Google Assistant Investment Program, both of which are accepting pitches from AI and machine learning startups today. Gradient Ventures is an ROI fund focused on supporting the most talented founders building AI-powered companies. Former tech founders are leading Gradient Ventures, assisting in turning ideas into companies. Gradient Venture’s portfolio is shown below:

  • In 2017 Google outspent Microsoft, Apple, and Facebook on R&D spending with the majority being on AI and machine learning. Amazon dominates R&D spending across the top five tech companies investments in R&D in 2017 with $22.6B. Facebook leads in percent of total sales invested in R&D with 19.1%.

  • Google AI led the development of Google’s highly popular open source machine software library and framework Tensor Flow and is home to the Google Brain team. Google’s approach to primary research in the fields of AI, machine learning, and deep learning is leading to a prolific amount of research being produced and published. Here’s the search engine for their publication database, which includes many fascinating studies for review. Part of Google Brain’s role is to work with other Alphabet subsidiaries to support and lead their AI and machine learning product initiatives. An example of this CB Insights mentions in the report is how Google Brain collaborated with autonomous driving division Waymo, where it has helped apply deep neural nets to vehicles’ pedestrian detection The team has also been successful in increasing the number of AI and machine learning patents, as CB Insight’s analysis below shows:

  • Mentions of AI and machine learning are soaring on Google quarterly earnings calls, signaling senior management’s prioritizing these areas as growth fuel. CB Insights has an Insights Trends tool that is designed to analyze unstructured text and find linguistics-based associations, models and statistical insights from them. Analyzing Google earnings calls transcripts found AI and machine learning mentions are soaring during the last call.

  • Google’s M&A strategy is concentrating on strengthening their cloud business to better compete against Amazon AWS and Microsoft Azure. Google acquired Xively in Q1 of this year followed by Cask Data and Velostrata in Q2. Google needs to continue acquiring cloud-based companies who can accelerate more customer wins in the enterprise and mid-tier, two areas Amazon AWS and Microsoft Azure have strong momentum today.

IoT Market Predicted To Double By 2021, Reaching $520B

  • Bain predicts the combined markets of the Internet of Things (IoT) will grow to about $520B in 2021, more than double the $235B spent in 2017.
  • Data center and analytics will be the fastest growing IoT segment, reaching a 50% Compound Annual Growth Rate (CAGR) from 2017 to 2021.
  • IoT customers are planning and executing more proof of concept pilots, with many balancing their expectations regarding broader adoption.
  • Cloud Service Providers (CSP) are emerging as influential providers of IoT services, consulting and analytics for enterprises, leaving smaller opportunities for other providers in niche industries.
  • Security, integration with existing technology and uncertain returns on investment are the three biggest barriers to great IoT adoption in the enterprise.
  • Bain sees the need for vendors to concentrate on a few core industries with greater intensity to deliver more targeted industry solutions.

Enterprises adopting IoT are finding that vendors aren’t making enough progress on lowering the most significant barriers to adoption in the areas of security, ease of integration with existing information technology (IT), operational technology (OT) systems and uncertain returns on investment. As a result, enterprises are extending their expectations of when their use cases will reach scale and delivered results. These and many other fascinating findings are from Bain’s latest IoT research brief, Unlocking Opportunities in the Internet of Things. The PDF is downloadable here (PDF, 12 pp, no opt-in).

Additional key takeaways the research brief include the following:

  • The combined markets of the Internet of Things (IoT) will grow to about $520B in 2021, more than double the $235B spent in 2017. Data center and analytics will be the fastest growing IoT segment, reaching a 50% Compound Annual Growth Rate (CAGR) from 2017 to 2021. System integration, data center and analytics, network, consumer devices, connectors (or things) and legacy embedded systems are the six core technology and solution areas of the IoT market. The following graphic compares the CAGR of each area in addition to defining the worldwide revenue for each category.

  • Enterprises are still optimistic about IoT’s business value and potential to deliver a positive ROI; however many are planning less extensive IoT implementations by 2020. Bain finds that enterprises are still running more proofs of concept than they were two years ago. They’ve also discovered that more customers are considering trying out new use cases: 60% in 2018 compared with fewer than 40% in 2016.

  • Security, integration with existing technology and uncertain returns on investment are the three biggest barriers to great IoT adoption. Bain found that enterprises would buy more IoT devices and pay up to 22% more on average for them if security concerns were addressed. Integration continues to be a barrier to greater IoT adoption as well. Bain found that vendors haven’t simplified the integration of IoT solutions into business processes or IT and OT as much as enterprises have expected. The report calls for vendors to invest in learning more about typical implementation challenges in their customers’ industries so they can suggest more strategic, end-to-end solutions.

  • IoT vendors including CSPs generating the most sales are concentrating on two to three industries to scale the depth of their expertise quickly.  More than 80% of vendors still target four to six industries which makes it difficult to reach an expertise and knowledge scale that wins new clients. Bain finds that when vendors and CSPs concentrate on two or three domains, they gain mastery of specific markets faster and can provide insights to enterprises more effectively. Gaining expertise in two to three core industries is also an excellent differentiation strategy for vendors and CSPs who compete against price-driven IoT service providers.

  • Interest in remote monitoring and real-time monitoring is flourishing in IoT making this one of the fastest-growing use case categories. Being able to monitor production systems to the machine or asset level remotely and having the option to turn the data stream into a real-time source of knowledge is a fast-growing area of IoT adoption today. Based on interviews with manufacturers the popularity of Overall Equipment Effectiveness (OEE) is growing, fueled by the options available for remote and real-time monitoring of production assets. Bain discovered that industrial equipment leader ABB bundles remote monitoring into its connected robotics systems and connected low-voltage networks, which allows customers to troubleshoot and quickly identify issues requiring greater attention.
  • Cloud Service Providers (CSP) are emerging as influential providers of IoT services, consulting and analytics for enterprises, leaving smaller opportunities for other providers in niche industries. Amazon Web Services (AWS) and Microsoft Azure have emerged as the dominant CSP leaders of the fast-moving global market for IoT software and solutions. Bain finds that CSPs are successful in lowering barriers to IoT adoption, allowing for simpler implementations and making it easier to try out new use cases and scale up quickly. The study finds that the broad horizontal services provide little optimization for industry-specific applications, leaving a significant opportunity for industry solutions from systems integrators, enterprise app developers, industry IoT specialists, device makers and telecommunications providers.

Global State Of Enterprise Analytics, 2018

  • 71% of enterprises globally predict their investments in data and analytics will accelerate in the next three years and beyond.
  • 57% of enterprises globally have a Chief Data Officer, a leadership role that is pivotal in helping to democratize data and analytics across any organization.
  • 52% of enterprises are leveraging advanced and predictive analytics today to provide greater insights and contextual intelligence into operations.
  • 41% of all enterprises are considering a move to cloud-based analytics in the next year.
  • Cloud Computing (24%), Big Data (20%), and AI/Machine Learning (18%) are the three technologies predicted to have the greatest impact on analytics over the next five years.
  • Just 16% of enterprises have enabled at least 75% of their employees to have access to company data and analytics.

These and many other fascinating insights are from MicroStrategy’s latest research study, 2018 Global State of Enterprise Analytics Report.  You can download a copy here (PDF, 44 pp., opt-in). The study is based on surveys completed in April 2018 with 500 globally-based enterprise analytics and business intelligence professionals on the state of their organizations’ analytics initiatives across 20 industries. Participants represented organizations with 250 to 20,000 employees worldwide from five nations including Brazil, Germany, Japan, the United Kingdom and the United States. For additional details on the methodology, please see the study here. The study’s results underscore how enterprises need to have a unified data strategy that reflects their growth strategies and new business models’ information needs.

Key takeaways from the study include the following:

  • Driving greater process and cost efficiencies (60%), strategy and change (57%) and monitoring and improving financial performance (52%) are the top three ways enterprises globally are using data and analytics today. The study found that enterprises are also relying on data and analytics to gain greater insights into how current products and services are used (51%), managing risk (50%) and attain customer growth and retention (49%). Across the five nations surveyed, Japan leads the world in the use of data and analytics to drive process and cost efficiencies (65%). UK-based enterprises lead all nations in their use of data and analytics to analyze how current products and services are being used.  The report provides graphical comparisons of the five nations’ results.

  • Cloud Computing, Big Data, and AI/Machine Learning are the three technologies predicted to have the greatest global impact on analytics over the next five years. Japanese enterprises predict cloud computing will have the greatest impact on the future of analytics (28%) across the five nations’ enterprises interviewed. AI/Machine Learning is predicted to have the greatest impact on analytics in the U.K. (26%) globally as is Big Data in Germany (29%). Please see the study for country-specific prioritization of technologies.

  • 52% of enterprises are leveraging advanced and predictive analytics today to provide greater insights and contextual intelligence into operations. Additional leverage areas include distribution of analytics via e-mail and collaboration tools (49%), analytics embedded in other apps including Salesforce (44%) and mobile productivity apps (39%). Japanese enterprises lead the world in their adoption of advanced and predictive analytics (60%). German enterprises lead the world in the adoption of analytics for collaboration via e-mail and more real-time data and knowledge-sharing methods (50%).

  • 59% of enterprises are using Big Data Analytics, leading all categories of intelligence applications. Enterprise reporting (47%), data discovery (47%), mobile productivity apps (44%) and embedded apps (42%) are the top five intelligence applications in use globally by enterprises today. Big Data’s dominance in the survey results can be attributed to the top five industries in the sampling frame is among the most prolific in data generation and use. Manufacturing (15%) is the most data-prolific industry on the planet. Additional industries that generate massive amounts of data dominate the survey’s demographics including software technology-based businesses (14%), banking (13%), retail (11%), and financial services/business services (6%).

  • 27% of global enterprises prioritize security over any other factor when evaluating a new analytics vendor. The three core attributes of a scalable, comprehensive platform, ease of use, and a vendor’s products having an excellent reputation are all essential. Enterprises based in four of the five nations also prioritize security as the most critical success factor they evaluate potential analytics vendors to do business with. Enterprise scalability is most important in the U.S., with 26% of enterprises interviewed saying this is the most important priority in evaluating a new analytics vendor.

  • Data privacy and security concerns (49%) is the most formidable barrier enterprises face in gaining more effective use of their data and analytics. Enterprises from four of the five nations say data privacy and security are the most significant barrier they face in getting more value from analytics. In Japan, the greatest barrier is access limited to data across the organization (40%).

  • Globally 41% of all enterprises are considering a move to the cloud in the next year. 64% of U.S.-based enterprises are considering moving to a cloud-based analytics platform or solution in the next year. The U.S. leads enterprises from all five nations in planned cloud-based analytics cloud adoption as the graphic below illustrates.

10 Ways To Improve Cloud ERP With AI And Machine Learning

Capitalizing on new digital business models and the growth opportunities they provide are forcing companies to re-evaluate ERP’s role. Made inflexible by years of customization, legacy ERP systems aren’t delivering what digital business models need today to scale and grow.

Legacy ERP systems were purpose-built to excel at production consistency first at the expense of flexibility and responsiveness to customers’ changing requirements. By taking a business case-based approach to integrating Artificial Intelligence (AI) and machine learning into their platforms, Cloud ERP providers can fill the gap legacy ERP systems can’t.

Closing Legacy ERP Gaps With Greater Intelligence And Insight

Companies need to be able to respond quickly to unexpected, unfamiliar and unforeseen dilemmas with smart decisions fast for new digital business models to succeed. That’s not possible today with legacy ERP systems. Legacy IT technology stacks and the ERP systems they are built on aren’t designed to deliver the data needed most.

That’s all changing fast. A clear, compelling business model and successful execution of its related strategies are what all successful Cloud ERP implementations share. Cloud ERP platforms and apps provide organizations the flexibility they need to prioritize growth plans over IT constraints. And many have taken an Application Programming Interface (API) approach to integrate with legacy ERP systems to gain the incremental data these systems provide. In today’s era of Cloud ERP, rip-and-replace isn’t as commonplace as reorganizing entire IT architectures for greater speed, scale, and customer transparency using cloud-first platforms.

New business models thrive when an ERP system is constantly learning. That’s one of the greatest gaps between what Cloud ERP platforms’ potential and where their legacy counterparts are today. Cloud platforms provide greater integration options and more flexibility to customize applications and improve usability which is one of the biggest drawbacks of legacy ERP systems. Designed to deliver results by providing AI- and machine learning insights, Cloud ERP platforms, and apps can rejuvenate ERP systems and their contributions to business growth.

The following are the 10 ways to improve Cloud ERP with AI and machine learning, bridging the information gap with legacy ERP systems:

  1. Cloud ERP platforms need to create and strengthen a self-learning knowledge system that orchestrates AI and machine learning from the shop floor to the top floor and across supplier networks. Having a cloud-based infrastructure that integrates core ERP Web Services, apps, and real-time monitoring to deliver a steady stream of data to AI and machine learning algorithms accelerates how quickly the entire system learns. The Cloud ERP platform integration roadmap needs to include APIs and Web Services to connect with the many suppliers and buyer systems outside the walls of a manufacturer while integrating with legacy ERP systems to aggregate and analyze the decades of data they have generated.

  1. Virtual agents have the potential to redefine many areas of manufacturing operations, from pick-by-voice systems to advanced diagnostics. Apple’s Siri, Amazon’s Alexa, Google Voice, and Microsoft Cortana have the potential to be modified to streamline operations tasks and processes, bringing contextual guidance and direction to complex tasks. An example of one task virtual agents are being used for today is guiding production workers to select from the correct product bin as required by the Bill of Materials. Machinery manufacturers are piloting voice agents that can provide detailed work instructions that streamline configure-to-order and engineer-to-order production. Amazon has successfully partnered with automotive manufacturers and has the most design wins as of today. They could easily replicate this success with machinery manufacturers.

  1. Design in the Internet of Things (IoT) support at the data structure level to realize quick wins as data collection pilots go live and scale. Cloud ERP platforms have the potential to capitalize on the massive data stream IoT devices are generating today by designing in support at the data structure level first. Providing IoT-based data to AI and machine learning apps continually will bridge the intelligence gap many companies face today as they pursue new business models. Capgemini has provided an analysis of IoT use cases shown below, highlighting how production asset maintenance and asset tracking are quick wins waiting to happen. Cloud ERP platforms can accelerate them by designing in IoT support.

  1. AI and machine learning can provide insights into how Overall Equipment Effectiveness (OEE) can be improved that aren’t apparent today. Manufacturers will welcome the opportunity to have greater insights into how they can stabilize then normalize OEE performance across their shop floors. When a Cloud ERP platform serves as an always-learning knowledge system, real-time monitoring data from machinery and production assets provide much-needed insights into areas for improvement and what’s going well on the shop floor.

  1. Designing machine learning algorithms into track-and-traceability to predict which lots from which suppliers are most likely to be of the highest or lowest quality. Machine learning algorithms excel at finding patterns in diverse data sets by continually applying constraint-based algorithms. Suppliers vary widely in their quality and delivery schedule performance levels. Using machine learning, it’s possible to create a track-and-trace application that could indicate which lot from which supplier is the riskiest and those that are of exceptional quality as well.
  2. Cloud ERP providers need to pay attention to how they can help close the configuration gap that exists between PLM, CAD, ERP and CRM systems by using AI and machine learning. The most successful product configuration strategies rely on a single, lifecycle-based view of product configurations. They’re able to alleviate the conflicts between how engineering designs a product with CAD and PLM, how sales & marketing sell it with CRM, and how manufacturing builds it with an ERP system. AI and machine learning can enable configuration lifecycle management and avert lost time and sales, streamlining CPQ and product configuration strategies in the process.
  3. Improving demand forecasting accuracy and enabling better collaboration with suppliers based on insights from machine learning-based predictive models is attainable with higher quality data. By creating a self-learning knowledge system, Cloud ERP providers can vastly improve data latency rates that lead to higher forecast accuracy. Factoring in sales, marketing, and promotional programs further fine-tunes forecast accuracy.
  4. Reducing equipment breakdowns and increasing asset utilization by analyzing machine-level data to determine when a given part needs to be replaced. It’s possible to capture a steady stream of data on each machine’s health level using sensors equipped with an IP address. Cloud ERP providers have a great opportunity to capture machine-level data and use machine learning techniques to find patterns in production performance by using a production floor’s entire data set. This is especially important in process industries where machinery breakdowns lead to lost sales. Oil refineries are using machine learning models comprise more than 1,000 variables related to material input, output and process perimeters including weather conditions to estimate equipment failures.
  5. Implementing self-learning algorithms that use production incident reports to predict production problems on assembly lines needs to happen in Cloud ERP platforms. A local aircraft manufacturer is doing this today by using predictive modeling and machine learning to compare past incident reports. With legacy ERP systems these problems would have gone undetected and turned into production slowdowns or worse, the line having to stop.
  6. Improving product quality by having machine learning algorithms aggregate, analyze and continually learn from supplier inspection, quality control, Return Material Authorization (RMA) and product failure data. Cloud ERP platforms are in a unique position of being able to scale across the entire lifecycle of a product and capture quality data from the supplier to the customer. With legacy ERP systems manufacturers most often rely on an analysis of scrap materials by type or caused followed by RMAs. It’s time to get to the truth about why products fail, and machine learning can deliver the insights to get there.
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