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Systems of Things: The building blocks for the next internet revolution

July 8, 2014 • Company News, Top Stories

Pfungwa-Serima-CEO-SAP-Africa.

Pfungwa Serima, CEO of SAP Africa.

The promise of the connected world we live in is an alluring one. Someday, we will be healthier because our doctors will have access to all the data they need about our health. Our vehicles and appliances will monitor themselves and will let us know when it is time to service them. We will never have to make a decision without the data we need to make smart decisions.

Thanks to the so-called Internet of Things, that day is coming sooner than you think. We all know there are more connected devices then people in the world today. By 2020, it is estimated there will be 50 billion connected devices globally. However, businesses and society will not benefit from connected devices if there are no systems in place to gather, analyse and gain insights from the massive volumes of data generated by these connected devices.

Let’s take a step back here. We spent last half of the 20th Century building what Geoffrey Moore calls Systems of Record – the structured transactional data that is the core of every business. These Systems of Record capture every dimension of our lives, be it financial transactions, human resources, order processing, inventory management, customer relationship management, supply chain management, product lifecycle management or more. These Systems of Record have paved the way for enormous economic expansion over the last 50 years.

With the explosion of the Internet in the last few years, Enterprise IT saw a shift towards Systems of Engagement, encompassing the edge of the business, leveraging social networks, and processing loosely structured data that is constantly changing. This shift towards Systems of Engagement resulted in more agile business processes, seizing new business opportunities at the edge of the business.

These systems depend on gathering and analysing large volumes of data from various sources in real-time to generate actionable insights for fast decision-making. For instance, a clothing retailer can now offer highly personalised real-time discount offers to online shoppers after analysing their shopping behavior, social media sentiment, likes and dislikes.

Today, we are witnessing another massive revolution where enterprises will need to build Systems of Things in parallel to Systems of Engagement to harness the Internet of Things. As the previously dumb devices on the edge become intelligent and get connected, Systems of Things will be needed to source, capture, analyse, predict and act on the data in real time.

A recent report by Morgan Stanley predicts that the Internet of Things could be an opportunity for several large industries, driving potential changes in business models and significant cost savings.

What does this mean for us in Africa? I believe it’s a great opportunity for us not only to create entire new business models for companies, moving the value proposition from products to services, but to use technology to make a real impact at socio-economic level.

In the utility sector, Africa’s utility companies need to meet the growing demands of urbanising populations and booming industrial sectors. IoT can help with smart metering and distribution, to be able to accurately measure and predict demand and generation. In agriculture, we could be using IoT technologies to improve yields. In healthcare, there’s a real opportunity to use IoT to use our human capital more effectively, and deliver better services. In the capital goods sector, we could be streamlining industrial processes and helping marginal mining operations do more with less.

What do African companies need to do to take advantage of this? For the Internet of Things, and billions of connected devices, to become useful, we need Systems of Things – and luckily, the foundational blocks of this are the same as those of Systems of Engagement and Systems of Records: big data, fast data, predictive analytics, cloud, and mobile. If African companies get these building blocks right, and are able to embed their Internet of Things applications directly into their existing business processes, they will be able to chart their own destiny.

Pfungwa Serima, CEO of SAP Africa

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