openSAP

The Internet of Things with SAP

Week 1 Unit 1

00:00:06 Hello, and welcome to unit one of the openSAP course The Internet of Things with SAP.
00:00:12 My name is Nir Rostoker and I'm head of the IoT product management team here at SAP.
00:00:17 My team and I are very excited to kick off this course and share with you the latest
00:00:21 and greatest on IoT. If you participated in one of the previous courses,
00:00:26 or if this is your first one, brace yourself for an exciting journey
00:00:30 with lots of innovation and fun together. The first thing you might ask yourself
00:00:36 is what is IoT and most importantly, why should it matter to you?
00:00:41 Let's start by taking a look at a few definitions of IoT.
00:00:45 Gartner calls IoT the network of physical objects that contain embedded technology
00:00:51 to communicate and sense or interact with their internal states
00:00:55 or the external environment. Wikipedia calls out other aspects,
00:00:59 like the software involved and the fact that these physical devices
00:01:03 are collecting and exchanging data. On the other hand, Digital Trends focuses on the fact
00:01:08 that these connected things understand what we as humans are doing
00:01:13 in order to make our life easier and better. Those definitions complement each other nicely
00:01:20 and show different ways in which people understand IoT today.
00:01:26 But more than pure definition, IoT is also the enabler
00:01:29 of the ongoing fourth industrial revolution which is also known as industry 4.0.
00:01:36 Historically, there've been three earlier industrial revolutions.
00:01:40 The first one, around the 1800s, refers to the introduction of production facilities
00:01:45 powered by water and steam. The second one was driven by the introduction of electricity
00:01:51 and led to mass production. The third industrial revolution, around the 1970s,
00:01:57 introduced electronics and IT, which further automated the production process.
00:02:02 The fourth industrial revolution, or industry 4.0, is driven by connected devices
00:02:08 and assets resulting in further productivity and efficiency gains,
00:02:12 and enabling more custom-tailored industrial production, personalization and rapid innovation
cycles.
00:02:21 Let's look together the building blocks of IoT. Obviously, IoT needs sensors.
00:02:27 Without sensors, no physical device could sense its own state
00:02:31 or the external environment. It also needs a destination to send its data to.
00:02:36 It could be public cloud or corporate data center. The term edge stands for the edge of the
network
00:02:42 as opposed to the center of the network being in the cloud. The edge is the place where
sensors
00:02:48 or IoT devices reside. And if we do not want to send all the data to the cloud,
00:02:53 or we simply cannot afford to do that, then we need to store the data
00:02:57 and process it at the edge in the so-called edge computing device.
00:03:02 We will discuss later the benefits of each approach. But what exactly is a sensor?
00:03:11 A sensor is a small device that can sense information from its surroundings,
00:03:15 then sends the information to the edge or to the cloud for further analysis.
00:03:20 What kinds of sensors exist? And what do they measure?
00:03:24 You can see many examples on this slide. There are sensors that measure humidity,
00:03:29 temperature, pressure, while others measure location, movement, and position.
00:03:34 There are chemical sensors, which measure contamination levels.
00:03:38 There are vision sensors recognizing light, colors, and even complex patterns like defects in
materials.
00:03:45 The good news is that, due to recent technology innovation, there's an abundance of sensors
on the market
00:03:50 for almost any use case you might imagine. There is one important thing to be aware of
00:03:58 when talking about IoT sensors. And that is that the measurement of a sensor
00:04:02 is very often only a technical value with no immediate business relevance attached to it.
00:04:09 As an example, let's look at a silo that contains cement.
00:04:13 Fill level sensors typically use radar or ultrasonic technology
00:04:17 to measure the distance from the sensor to the upper material surface in the silo.
00:04:23 But for your business scenario, you may not need the distance
00:04:26 but rather the volume, weight, or consumption rate instead. For example, in order to calculate
the volume of the material,
00:04:35 we need some master data about the silo. We need to know the exact position of the sensor
00:04:40 in the silo and the measurement of its geometry. Or if you want to calculate the weight of the
material,
00:04:47 we will need the material master data, such as type of cement in the silo.
00:04:53 This is a simple example of the importance of combining IoT data
00:04:57 with business data, allowing you to turn a technical sensor value
00:05:01 into a meaningful business outcome. As I've mentioned, cloud and edge
00:05:08 are two key building blocks of most IoT solutions. Cloud computing simply means
00:05:13 providing data storage and processing on a network of remote servers.
00:05:19 Edge processing refers to data processing locally across to the source of data.
00:05:24 As we know, big data can be very difficult and expensive to move around.
00:05:29 We also know that the volume of data is growing exponentially
00:05:32 with billions of devices producing more data every day. This is why edge processing and pre-
processing
00:05:39 of sensor data plays such an important role in IoT today. When we refer to the edge,
00:05:47 we mean places that are outside of the corporate cloud data center.
00:05:51 It could be a remote location with high latency, or well-connected locations,
00:05:56 where real-time performance is needed. From a hardware perspective,
00:06:01 this could be edge or IoT gateways with built-in connectivity,
00:06:06 it could also be industrial PCs, remote servers, or even mini Raspberry Pi devices.
00:06:13 Across industries, there is huge variety of what an edge location could be.
00:06:18 In oil and gas, we talk about oil rigs and drill ships. Quite often, they depend on satellite
communication,
00:06:25 which makes connection to the cloud unreliable and expensive.
00:06:29 In the mining industry, we talk about remote locations, often deep underground.
00:06:34 In transportation, we talk about trains, planes, boats, and even self-driving vehicles and cars.
00:06:41 In retail, we talk about warehouses or stores. In manufacturing, we have shop floors equipped
with
00:06:47 many, many sensors monitoring and controlling the production process.
00:06:52 We also have defense customers operating army vehicles or drones in harsh environments

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00:06:57 with limited or no connectivity. There are many more examples in almost any industry today.
00:07:04 This is it for the first learning unit of this course. We began by looking at a few definitions of
IoT.
00:07:10 Then we covered different types of sensors generating IoT data.
00:07:15 Next, we discussed the key building blocks of IoT, cloud and edge computing.
00:07:19 We also learned the importance of combining master data with sensor data for meaningful
business outcomes
00:07:26 through real-life examples. In the next unit, we will talk about SAP's IoT strategy
00:07:32 and how SAP IoT unlocks the Intelligent Enterprise. Thank you very much for watching
00:07:38 and stay tuned for more exciting learning about IoT together.

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Week 1 Unit 2

00:00:05 Hello, and welcome to unit two of the openSAP course The Internet of Things with SAP.
00:00:12 My name is Frank Rambo, and I'm a product manager of SAP Leonardo IoT
00:00:16 and SAP Edge Services. Traditionally, IoT is seen as a network
00:00:22 of physical devices and the focus is set very much on
00:00:25 how they connect and exchange data. But at SAP, we see much more in it.
00:00:31 We see IoT as a key enabler of the Intelligent Enterprise where data enables intelligence
00:00:37 and feeds process automation and innovation. In this unit, I'll touch on SAP strategy for IoT,
00:00:45 and how IoT can unlock the Intelligent Enterprise. But first things first,
00:00:50 what do I mean by an Intelligent Enterprise? Enterprises know what's happening
00:00:57 because they have systems that capture operational data
00:01:01 about customer transactions and supplies, about manufacturing and spending,
00:01:07 and the activity of the workforce. They can see their data through reports and dashboards.
00:01:13 They can see trends and predict what will happen next. But if they want to influence what
happens next,
00:01:21 they need the other half of the picture as well. They need insights about interactions
00:01:26 that people have with their products, their employees, their business,
00:01:30 and their brand. They need intelligent interpretation
00:01:34 of all the experiences that they are delivering. In order to connect the dots
00:01:39 and understand the interdependencies, they need an experience platform
00:01:43 that captures it all in one place. Experience data captures beliefs,
00:01:49 emotions, opinions, perceptions, essentially, why something is happening.
00:01:57 And if you know why, or if you know and understand why something is happening,
00:02:02 you can decide on the best way to respond. SAP believes that to win in the experience
economy,
00:02:10 Intelligent Enterprises connect experiences with operations. They combine experience
00:02:17 and operational data on an ongoing basis to guide their business decisions
00:02:22 and even to automate some of them. Intelligent Enterprises collect insights
00:02:29 from customers, employees, products, and brands at every touchpoint.
00:02:35 And they use powerful technologies to automate and integrate their data,
00:02:38 processes, and applications. And to sense opportunities, risks, and trends.
00:02:46 And they turn this intelligence into action across every part of their business.
00:02:51 Intelligent Enterprises turn insight into action to win in the experience economy.
00:03:00 SAP offers a strategy, expertise, solutions, and an ecosystem to deliver on this vision.
00:03:09 Qualtrics is SAP's solution to optimize customer, employee, product, and brand experience.
00:03:16 The intelligent suite provides a suite of applications to run day-to-day business operations
00:03:22 and the business technology platform delivers the intelligence connecting experiences
00:03:28 with operations, and drives the digital transformation. It comes with capabilities
00:03:38 in the area of database and data management, application development and integration,
00:03:43 analytics, and includes intelligent technologies. The intelligent technologies include data-driven
insights,
00:03:53 intelligent robotic process automation, artificial intelligence, and IoT cloud and edge.
00:04:02 In this openSAP course, we will focus on IoT cloud and edge
00:04:05 as one of the key drivers for the Intelligent Enterprise. Why is IoT driving the Intelligent
Enterprise?

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00:04:14 Let me answer this with three examples. The first one is about automation.
00:04:20 Automation driven by data. In an era where customer experience matters greatly,
00:04:26 efficiency and productivity gains via automation are very important.
00:04:32 Imagine you are in the business of producing chemicals so you rely on having the right
ingredients
00:04:38 at the right time in the right quantity to meet your customer demand.
00:04:44 Before IoT, when it was a manual and a tedious process to measure the actual material
inventory in a receptacle.
00:04:54 Now imagine sensors attached to receptacles that measure real-time inventory levels,
00:05:01 and consumption for materials. And IoT can automatically trigger a replenishment process,
00:05:08 based on predefined business rules and patterns. Situational awareness, based on data from
business systems
00:05:16 correlated with IoT data, helps drive automated, data-driven decisions.
00:05:25 Yet it's not only about productivity. We live in an experience economy
00:05:30 and in the end, it's about customer experience. IoT-enabled business processes
00:05:37 can help your company elevate customer satisfaction. How do we do that?
00:05:44 Imagine you are a manufacturer of machines. What your customers rely on
00:05:50 is the uptime availability of your machines, the quality of the product the machines produce
00:05:57 and the service you provide for your machines. So, how will these manufacturers go about
transforming
00:06:03 their businesses with IoT? You may think it's about having connected machines
00:06:09 and ingesting the IoT data from these machines. Yes, it is but it's much more.
00:06:14 You need to enrich IoT data with business data. And you need to detect potential problems
00:06:20 and quality issues before they occur. Doing so will help improve
00:06:26 customer satisfaction significantly. So how does IoT help increase the quality
00:06:32 of service you provide? Well, imagine the connected machine encounters an incident,
00:06:38 IoT can automatically create a ticket for you, enriched with the necessary
00:06:43 customer information and context. Or picture a scene involving a service technician
00:06:49 with access to full IoT usage data and events on a mobile application.
00:06:54 This increases the quality of service. However, there's more.
00:07:00 It is also about enabling new business models and new revenue streams for your company.
00:07:06 One of our customers wanted to reduce the risk of investments into renewable energies.
00:07:13 What did they do? They onboarded sensors to machines
00:07:18 and connected them to our IoT solution to monitor and gather data.
00:07:23 IoT data is then enriched with financial data as well as weather data.
00:07:27 The customer now operates more efficiently by planning downtimes when energy commodity
prices
00:07:33 are extremely low. Or by scheduling maintenance when the weather conditions
00:07:38 are not good enough to produce profitable renewable energy. Thus, IoT increase profitability of
the business,
00:07:46 and frankly, it reduces risks for investors. Now, IoT takes place at both ends,
00:07:55 in the cloud and at the edge, close to the source of IoT data.
00:08:00 And that's why SAP offers, with SAP Leonardo IoT and SAP Edge Services, solutions
00:08:07 for IoT data ingestion and processing in the cloud and at the edge.
00:08:13 Both solutions are built on one digital platform, the business technology platform I mentioned
earlier.

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00:08:22 Whenever we talk about IoT, having an open ecosystem and collaborative partnerships are top
priority for SAP.
00:08:30 Leonardo IoT is about a vendor-agnostic solution that allows companies the freedom
00:08:35 to choose any device management connectivity solution to integrate a heterogeneous
centered landscape
00:08:41 into business processes. Since last year, SAP has been engaging in partnerships
00:08:48 with hyperscalers, such as Microsoft Azure and Amazon Web Services
00:08:53 for device management and connectivity at both ends, in the cloud and at the edge.
00:09:01 Today we support interoperability with both hyperscalers in the cloud,
00:09:05 and with Microsoft Azure already at the edge as well. These partnerships show that SAP is
committed
00:09:12 to an open ecosystem with IoT. What's the value that SAP delivers
00:09:18 to our customers in these partnerships? There's a clear answer to it.
00:09:23 All the use cases I shared with you earlier are about achieving business outcomes.
00:09:28 And here is how we do it. Firstly, we embed IoT into our LoB applications.
00:09:36 Secondly, we extend business processes with IoT. And thirdly, we enable partners and
customers
00:09:45 to create new IoT applications while keeping core business processes stable.
00:09:51 Later in the course, we will walk you through examples to make this more tangible.
00:09:56 Yet there's more. Whenever we talk about IoT,
00:09:59 we talk about huge amounts of data. And you do not always have to transfer all IoT data
00:10:05 into the cloud. Extending business processes to the edge,
00:10:10 close to the source of data is the key value to offer IoT-enabled business processes
00:10:15 in a scalable and efficient way. The edge and the cloud are the two pillars
00:10:20 of SAP's IoT portfolio. They come with the capability to flexibly run IoT workloads
00:10:27 as needed, in the cloud or at the edge, a concept that we call edge-cloud hybrid.
00:10:34 And that's the end for unit two. In this unit, we have touched
00:10:39 on the concept of the Intelligent Enterprise, and how IoT can drive situational awareness,
00:10:44 superior customer experience, and new business models.
00:10:49 In the next unit, our chief product owner of SAP Leonardo IoT,
00:10:53 Martin Ebert, will talk more specifically about what SAP has to offer for IoT in the cloud.
00:11:00 Thank you very much for watching and stay tuned.

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Week 1 Unit 3

00:00:06 Hello, and welcome to unit three of this openSAP course. My name is Martin Ebert.
00:00:12 I am the chief product owner of SAP Leonardo IoT, and in this unit, I will touch on IoT in the
cloud,
00:00:18 with our solution, SAP Leonardo IoT. Well, you heard already in unit two that SAP Leonardo
IoT
00:00:27 is about enabling the Intelligent Enterprise, and driving business outcomes.
00:00:32 And you learned that SAP Leonardo IoT offers four paths to innovation.
00:00:37 Number one is Embed. So you embed device and telemetry data into SAP applications,
00:00:44 such as S/4 HANA, C/4 HANA, or the Digital Supply Chain, and for an IoT-enabled Intelligent
Enterprise Suite.
00:00:54 Number two is Extend. So, you enable developers to extend existing
00:00:59 SAP business processes by gaining information and insight from previously unconnected
devices.
00:01:06 So, like machines, products, or assets, and thereby extending the value of existing
00:01:13 SAP applications and processes. Number three is Evolve.
00:01:18 And that empowers partners and customers to pursue open innovation, and create new IoT-
enabled business models
00:01:26 in the context of SAP business systems, while keeping core business processes stable.
00:01:33 And number four is Edge-Enabled business processes. And that provides intelligent data
processing at the edge,
00:01:42 orchestrated from the cloud. So, SAP Leonardo IoT runs business transactions
00:01:47 correlated with device data, close to the source of IoT data, at the edge.
00:01:52 So no matter which path you are going to choose, at the end you will be able to
00:01:58 turn signals into real business outcomes. Here are two examples now, to make this
00:02:07 a little bit more tangible for you. But let me focus in this unit on the first one.
00:02:13 It continues the use case of IoT-driven replenishment of receptacles, such as silos or
containers,
00:02:23 we had already briefly touched on in units one and two. Let's recall that fill-level sensors in
silos
00:02:31 usually measure the distance from the sensor to the surface of the material inside the silo.
00:02:38 But what you need for the business process is the volume or the weight of the material in the
silo,
00:02:44 to order the right quantity of the material, to replenish the silo at the right point in time.
00:02:51 And this means you need to transform the distance into a weight.
00:02:56 And you saw already in unit one that this needs master data describing the geometry of the
silo,
00:03:03 and the density of the material. You can also go one step further and calculate,
00:03:09 from the weight measured at current time and the weight from the previous measurement,
00:03:14 a consumption rate. And that consumption rate can be used
00:03:19 as an additional insight to more precisely determine the right point in time for replenishment.
00:03:31 But to automatically trigger the replenishment business process,
00:03:35 you need also data about the plant and the storage location, because that's information your
ERP system
00:03:42 needs to trigger the process. And this means we need a number of capabilities or services
00:03:49 to drive a business process more intelligently from a physical asset, like a silo equipped with a
sensor.

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00:03:58 And we need the capabilities to connect the physical asset to the cloud and ingest the sensor
data.
00:04:04 We need the capabilities to associate the sensor data with master data, and transform it
00:04:10 to generate business insights. Well obviously, we need the ability to store sensor data
00:04:17 and deal with high data volumes depending on the use case that you are trying to achieve.
00:04:24 This means we need a big data storage capability as well. And then, we need to analyze the
data.
00:04:32 But more than that and very importantly, we need powerful integration services
00:04:36 to trigger business processes in the intelligent suite, so that your employees can use IoT data

00:04:44 and replenishment in the work environment they're used to. So, let's dig a bit deeper into the
use case
00:04:56 I have just elaborated. In the flow diagram you see on this slide,
00:05:01 you can see how sensors collect the fill level of multiple receptacles.
00:05:08 They could all store the same material. And based on the so-called streaming rules,
00:05:13 consumption rates are monitored. If the fill level across all silos
00:05:19 falls below a predefined limit, an event gets created, which then triggers an action,
00:05:26 for example, an automated purchase requisition. And subsequently, a supplier receives a
sales order
00:05:34 automatically in the company system, which then triggers the just-in-time delivery
00:05:40 so that we can ensure that materials are always available on site.
00:05:45 And with that, our customer has been able to refill the optimal quantity at the optimal point in
time.
00:05:52 And this saves cost, time, and money. But how can this be achieved with SAP Leonardo IoT?

00:06:05 I would like to give an overview of our tool set and services that comes with SAP Leonardo
IoT.
00:06:12 Let's start bottom-up with the SAP Leonardo IoT Edge Services.
00:06:17 The Edge brings together local compute, persistency, and business transactions at the edge,

00:06:24 and thereby enables you to extend the Intelligent Enterprise to the edge.
00:06:31 And at its core, SAP Leonardo IoT offers the enablement of the digital twin,
00:06:38 which is the digital representation of your physical asset. I will share more details in the
upcoming slides.
00:06:46 With the data ingestion and big data storage, we offer secure, flexible, reliable, and cost-
effective
00:06:53 services for IoT data ingestion and storage. And offer that all as a service for the customer.
00:07:01 Amongst others, these services include validation and mapping of incoming data, automatic
data tiering,
00:07:08 considering hot, warm, and cold storage. And a very central functionality for IoT use cases,
00:07:15 we offer services for gaining actionable insight by analyzing and evaluating streamed
00:07:21 and persisted data on top of the digital twin. These are event services to keep track of
00:07:29 time-series related event history, severity, and status on the rule-processing results.
00:07:35 And rules, both for streaming rules and rules on persisted data.
00:07:40 And these rules allow triggering actions that could be integrated to business processes,
00:07:45 such as in S/4HANA, As well as to stand-alone IoT business applications,
00:07:57 or your own IoT-enabled customer applications. And last but not least, the offering comes with
powerful

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00:08:06 analytic services and aggregation management to further analyze your IoT data
00:08:11 in the relevant business context. So, let's have a look at each of the main building blocks
00:08:17 in the next couple of slides. The SAP Leonardo IoT offering offers a powerful model,
00:08:28 whose properties you can configure to your needs. It comes along with a powerful device,
onboarding,
00:08:36 connectivity, and lifecycle management. And this is what you need to connect and manage
00:08:42 millions of devices using industry-proven and highly scalable lifecycle management.
00:08:49 It supports you managing your devices at scale, from onboarding to operations and
decommissioning.
00:08:59 Okay, data context and transformation. So with the services Master Data and Semantics,
00:09:07 Geo Service and Floorplan, and Derive and Transform Data, you can now enrich and
transform the time- series data,
00:09:15 based on its business context and location. Master Data and Semantics gives you additional
context
00:09:21 through enriched master data integration with business partner, geo location,
00:09:27 and customer master data support. With Geo Services and Floorplan,
00:09:34 you are able to manage and consume points of interest, areas of interest, and even floorplans.

00:09:41 Additionally, space hierarchies are supported as well. And with the service Derive and
Transform Data,
00:09:48 you are able to define calculations on the time series, the telemetry data that was measured,
00:09:55 using an easy-to-use formula editor. And with that, it is possible to turn single data points
00:10:01 into meaningful business trends. If you remember our replenishment scenario.
00:10:11 Let's continue with our service for IoT data ingestion and storage.
00:10:15 The service Data Ingestion supports you in the validation of incoming data, and with a flexible
mapping
00:10:22 from a device model to a thing model. On top of that, it harmonizes different sensor types
00:10:29 in a semantically aligned model, and offers human-readable master data for mappings.
00:10:35 Big Data Storage is an automatic data tiering service considering hot, warm, and cold storage.

00:10:43 The hot storage supports you with a high- performance, flexible selections with full SQL
access.
00:10:52 And warm storage data has a retention period of multiple months, whereas cold store
00:10:58 has a retention period of multiple years. And the retention period,
00:11:02 can be adjusted to the customer's needs. Finally, our Time Series Management is an
integrated Big Data,
00:11:09 multi-tier time-series management, and offers simple APIs to transparently access
00:11:16 raw data in warm and cold store, or to run analytics on time-series aggregates.
00:11:27 Finally, gaining actionable insight by analyzing and evaluating streamed and persisted data is
enabled
00:11:36 with the Analytic Services and Aggregation Management. You can define data aggregates
based on the dimension,
00:11:44 measures, and roles. And on top, we are offering dedicated calculation views
00:11:49 for live data connection from the SAP Analytics Cloud. With our two types of rules for
streaming
00:11:58 and rules for persisted data, you can either process data as it comes in
00:12:03 in high volumes in your ingestion stream, or you can process your rules on persisted data
00:12:12 with time windows and scheduling. Event Services enable you to keep track of time series-
related

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00:12:19 event history, severity, and status, with pub/sub capability on the rule-processing results.
00:12:26 And last but not least, Actions, Integration, and Decision Support Services
00:12:32 support action-driven business integration to embed IoT in LoB scenarios to provide IoT
context
00:12:40 to the business processes, and decision support for response options.
00:12:49 Now let me share an actual customer example, a reference story, we have with our customer
Zentis.
00:12:57 Zentis is a German food company, and produces jam and sweets.
00:13:02 And Zentis was able to transform their business by digitizing insights into non-discrete
00:13:08 product quality and consumption. Zentis is using SAP Leonardo IoT to increase
00:13:15 the transparency of material consumption in their various silos.
00:13:19 The silos are all equipped with sensors, which send the fill level, temperature,
00:13:25 and also the humidity information to SAP Leonardo IoT. In SAP Leonardo IoT, the sensor data
is then enriched
00:13:35 with business context from the ERP system, such as the material type,
00:13:39 the respective plant, and the storage location. An automated integration from SAP Leonardo
IoT
00:13:46 to the ERP system corrects the book inventory of the silo in the ERP system,
00:13:53 with the physical inventory from the sensor. Business rules in Leonardo IoT send alerts and
notifications
00:14:00 to employees if any critical situation occurs. So, for example, a low fill level, a high
temperature,
00:14:09 or the humidity being too high, which could spoil the material.
00:14:14 Thereby, they gain the following benefits. They ensure adequate product supply
00:14:19 by monitoring consumption rates. They maximize sales with
00:14:24 just-in-time inventory replenishment. They're able to reduce the risk of product spoilage
00:14:29 by ensuring optimal storage conditions, and they increase customer satisfaction
00:14:35 through first-rate user experiences. Now having said this,
00:14:44 I would like to close the session with some final remarks. You should now have a good
understanding
00:14:50 on the capabilities of SAP Leonardo IoT, and how it helps you to transform signals
00:14:56 into real business outcomes by giving the data the right business context,
00:15:02 and you can run your IoT solution either in the cloud, or at the edge.
00:15:07 Thanks for joining this unit. We continue the course with unit four,
00:15:13 which is about IoT at the edge, and goes into a little bit more detail around processing at the
edge.
00:15:19 Thank you for joining this session.

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Week 1 Unit 4

00:00:06 Hello, and welcome to unit four of the openSAP course, The Internet of Things with SAP.
00:00:12 My name is Subha Ramchandran. I serve as the chief product owner
00:00:16 for SAP Edge Services here at SAP. You already learned that IoT data processing
00:00:24 can take place at both ends, in the cloud and/or at the edge.
00:00:29 In the previous unit, Martin introduced you to SAP Leonardo IoT
00:00:33 as our solution for IoT data processing in the cloud. In this unit, I'll talk about SAP Edge
Services,
00:00:41 SAP's solution for IoT edge computing. With SAP Edge Services,
00:00:47 we provide similar capabilities at the edge, which we deliver with SAP Leonardo IoT in the
cloud.
00:00:54 We process IoT data at the edge, we can purchase IoT data,
00:00:59 and we analyze and contextualize with business semantics and drive business actions
00:01:04 and outcomes at the edge. Our cloud and edge products work together.
00:01:08 We call this the cloud-edge hybrid, because in reality, it's not one or the other.
00:01:15 Whether I process my IoT data in the cloud or at the edge, is often a combination,
00:01:20 depending on the characteristics of the locations where your IoT data is generated.
00:01:25 You have the choice to do both or either. Now, if I had to explain what SAP Edge Services
00:01:32 is about in a single sentence, I would say this: it is bringing your business processes
00:01:39 close to the source of IoT data for immediate business outcomes.
00:01:44 Thus, enhancing your customer experience, employee productivity,
00:01:49 and boosting operational efficiencies. You might wonder, what do I mean when I say edge?
00:01:56 Specifically, what kind of locations am I referring to? Well, it varies across industries.
00:02:03 I often refer to the edge as three Ds. Edge is diverse, it's distributed,
00:02:09 and it may have a dynamic communication channel. In this slide, you see a few examples of
edge.
00:02:16 Vessels on the high seas, offshore oil rigs, armored tanks in the field, or retail stores.
00:02:24 It could also be manufacturing production plants in discrete or process industries
00:02:29 or cranes equipped with anti-collision systems at construction sites.
00:02:34 Now what all these examples have in common is they are all exposed to at least one
00:02:39 of three key challenges you see on this slide. When sensors generate tons of IoT data,
00:02:46 the challenge is often about bandwidth, data volumes, and quite frankly, the economics
00:02:52 of sending all that raw sensor data up to the cloud. Second, when you're dealing with sensor
data
00:02:59 from the physical world, you typically would want to process
00:03:02 and respond to it right away. For example, to avoid a collision of a crane
00:03:07 at a large construction site or to monitor production processes,
00:03:11 leveraging high frequency sensor readings. And this is when latency becomes a challenge.
00:03:18 What you need in many use cases is sub-second response times
00:03:21 for real-time decision making and actions. And lastly, many of these locations
00:03:27 you're often struggling with intermittent connectivity to the cloud.
00:03:32 Being temporarily disconnected means no access to business data,
00:03:35 no access to transactions, if all those are only provided by the cloud.
00:03:40 Hence, being temporarily disconnected can heavily impact your business operations,

11
00:03:46 your worker productivity, and asset up times. Now how can you overcome challenges like
intermittent bandwidth,
00:03:53 high latency, and intermittent connectivity at the edge? Well, we need the edge to be more
autonomous
00:04:00 and more intelligent. Reducing your dependency on latency,
00:04:04 bandwidth, and connectivity, while ensuring that your business processes
00:04:09 stay in sync with your core systems in the cloud. And this is exactly what SAP Edge Services
helps you do.
00:04:17 It brings together business semantics and processes, local compute, and persistency to the
edge,
00:04:24 reducing your dependency on connectivity, bandwidth, or latency.
00:04:29 Now let's look at a customer use case, how SAP Edge Services works in practice.
00:04:34 We have our customer, an equipment manufacturer providing services for their equipment.
00:04:40 The equipment is operated at their customers' premises. Their customers need the equipment
operation issues
00:04:46 to be identified and resolved in a timely manner to avoid costly down times.
00:04:52 SAP Edge Services runs on an edge computing device near the equipment
00:04:57 and processes live data from the equipment. It analyzes the IoT data streams
00:05:02 and detects abnormal equipment conditions. As SAP Edge Services extends the business
processes,
00:05:09 such as Field Service Management, to the edge, close to the source of IoT data,
00:05:16 it can automatically respond based on IoT data and create a service call.
00:05:22 The service call includes embedded IoT data, and is synchronized with the Field Service
Management
00:05:27 running in the cloud when connected. At the manufacturer's office,
00:05:33 the planning and dispatching agent then assigns the service call to a technician.
00:05:37 The service technician accepts the job, travels to the customer's site,
00:05:42 and once on site, he can access IoT data, locally persisted by Edge Services,
00:05:48 to help with troubleshooting, and thus resolving the issue in his first visit,
00:05:53 to the customer's satisfaction. This is just one example of bringing business processes
00:05:58 close to the source of IoT data. I will return to this scenario
00:06:03 in a demo vignette in a few minutes. The example shows how SAP Edge Services' key
capabilities,
00:06:12 local compute, persistency, and bringing business semantics
00:06:16 and processes to the edge work as a tri-factor to realize business outcomes.
00:06:23 What we offer with SAP Edge Services are micro-services to be deployed at the edge
00:06:28 to extend the processing part of the cloud to the edge. You see them on this slide.
00:06:34 First there is the policy service. It provides management at scale from the cloud
00:06:40 for a vast number of edge nodes. Think about what is it that you wish to do
00:06:45 in a particular plant? Or in a particular retail store?
00:06:48 Or in a certain geography? So, you have lifecycle management
00:06:53 of Edge Services that govern the topology of your edge nodes and also the business actions
00:06:58 you wish to have therein. The policy service allows you to manage,
00:07:03 configure, and mass deploy micro-services to your edge nodes, all centrally from the cloud.
00:07:10 It provides the control plane. It allows you to centrally set policies,
00:07:15 such as auto-update of services at edge nodes. Now, at the edge
00:07:21 you have the essential business function service. This brings in business context,

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00:07:25 meaning business semantics and business processes from the cloud or core to the edge.
00:07:32 It could be service calls or work orders and subsequent workflows,
00:07:36 it could be purchase requisitions, goods receipt and associated workflows,
00:07:41 it could be inventory lookup. And not just individual atomic steps,
00:07:45 it can be an entire process change. Now, I mentioned earlier processing of IoT data.
00:07:52 Processing means the data needs to be analyzed, thresholds need to be defined,
00:07:57 rules need to be applied. This function is performed by our streaming service.
00:08:03 Lastly, IoT data needs to be locally persisted at the edge. You may not want to send all the
raw data
00:08:10 to the cloud for economic reason, or if you send it right away it chokes up your bandwidth.
00:08:16 The persistence service enables you to persist your data locally
00:08:21 as well as providing the ability to execute data retention expiration policies for this data.
00:08:28 Think about the complete stack briefly. This stack provides the powerful capability
00:08:32 to bring your business processes to the edge, close to IoT data, while keeping these
processes at the edge
00:08:40 in sync with cloud and core. Your business processes can be varied.
00:08:46 It can be related to products, assets, factory settings, or workers, assets,
00:08:50 or products in offsite or remote locations. And we will go over some real-life customer
examples later.
00:08:59 When we are looking at business processes at the edge, we understand that a lot of our
customers
00:09:04 are longstanding customers of SAP ERP. They would like to see enablement
00:09:09 for ERP business processes at the edge. Therefore, we are happy to share
00:09:15 that we enable classic processes, like plant maintenance, materials management, inventory
management,
00:09:21 and environmental health and safety at the edge. When we look at C/4HANA,
00:09:27 I've already walked through the example earlier of the field service technician
00:09:31 and Field Service Management. And that's the part of bringing your business processes
00:09:36 to the edge, close to the source of IoT data. This is not all, there's more to it.
00:09:43 Our architecture allows for customer extensions to extend other SAP or non-SAP
00:09:49 business functions to the edge. The streaming service analyzes incoming IoT data
00:09:58 in real time, based on business rules over time windows. When rules are triggered,
00:10:04 business processes are automatically set into motion. The streaming cloud service can also
00:10:09 do smart data compression for data sent to the cloud, modulating from low fidelity to high
fidelity
00:10:17 as the signal curve gets more interesting. The persistence service provides the ability
00:10:24 to store data and also to host customer applications at the edge that feed from this data.
00:10:30 Customer applications can securely access persisted IoT data and business contexts
00:10:35 via a rich set of APIs. IoT is not the only intelligent technology
00:10:43 we enable at the edge. SAP Edge Services also enables
00:10:47 artificial intelligence at the edge. It sends the needed data samples to the cloud
00:10:52 to train predictor models there. Then through the policy service,
00:10:56 you can deploy the trained models to their destination edge nodes
00:11:00 to run locally, close to IoT data. This allows for the integrated execution
00:11:06 of predictive models. You can initiate respective business processes
00:11:11 right at the edge and certain patterns or anomalies are recognized in the local IoT data.
00:11:20 Now, to make our Field Service Management example a bit more tangible,

13
00:11:24 I recorded a demo vignette. This slide shows an overview of the demo scenario.
00:11:30 As a first step, let me introduce you to the different personas involved.
00:11:35 First there is Lisa. She's an equipment operator at Silicon Valley Power,
00:11:40 an energy solution company that operates multiple boilers at their site.
00:11:45 As one of Alpha Boiler's customer, Silicon Valley Power relies on Alpha Boiler
00:11:50 for any boiler repair and maintenance service needs. Eric is an Edge Services citizen
developer,
00:11:56 or you could also say admin user and configurator for Alpha Boiler.
00:12:01 Eric leverages SAP Edge Services policy service to centrally manage and deploy SAP Edge
Services
00:12:08 to edge gateways or edge nodes running at his customers.
00:12:12 He also configures these services, so that when abnormal boiler operation
00:12:16 conditions are detected, SAP Edge Services will automatically trigger
00:12:21 a service call in SAP Field Service Management. Next is Rita.
00:12:27 She is a Planning and Dispatching Agent at Alpha Boiler. Her responsibilities include planning
service activities
00:12:34 and dispatching appropriate service technicians. And lastly, we have John.
00:12:39 John is a field service technician at Alpha Boiler. Now what you see on the screen here
00:12:46 is the policy service UI. It runs in the cloud and allows Eric
00:12:50 to centrally manage and deploy Edge Services to many IoT edge nodes running at his
customers.
00:12:57 Here I've already defined a project, which contains sensor models,
00:13:01 business rules and actions, that are needed to create
00:13:04 a field service call automatically. Based on the sensor models,
00:13:09 I've created the edge rule. The rule contains two conditions.
00:13:14 The first one is a condition when pressure is above a certain threshold.
00:13:19 And the second one is a condition when temperature is higher than a certain threshold.
00:13:23 Both conditions need to be matched to trigger the rule. And the output of this rule is an action

00:13:29 of creating a service call. Eric can centrally deploy this service configuration
00:13:34 to gateways or groups of gateways. For instance, US Gateway is a gateway group.
00:13:41 In my case, I'm going to deploy to the single Edge gateway that's installed
00:13:46 at my customer Silicon Valley Power. Three edge micro-services
00:13:51 have already been installed on this gateway, Essential Business Functions,
00:13:55 Persistency, and Streaming, to analyze the live sensor data based on business logic.
00:14:05 Here, under Configurations, you see the streaming service configuration
00:14:09 we looked at earlier in edge designer. And it's activated.
00:14:13 Now let's return to Lisa, the equipment operator at Silicon Valley Power.
00:14:18 Lisa, at the edge location, monitors the boiler, she needs to ensure that all equipment is
running
00:14:26 at optimal conditions. Here is a boiler monitored by an application running locally
00:14:32 on SAP Edge Services. Master data for this boiler is pulled
00:14:38 directly from the SAP backend, giving it the necessary business context.
00:14:44 The sensor data charts show that the temperature and the pressure
00:14:47 of the boiler are currently normal. Now I'm going to artificially simulate
00:14:52 abnormal sensor readings, triggering business rules at the edge.
00:14:57 I observe that an edge event is generated, notifying me that a service call has been created.

14
00:15:03 Now let's switch to Rita, a planning and dispatching agent at Alpha Boiler.
00:15:09 Rita, at the edge location, monitors the boiler and she notices that a new service call
00:15:14 has just been created. The origin, IoT Source, indicates to her
00:15:19 that this service call is automatically generated by IoT data.
00:15:23 IoT sensor data has been embedded into the service call. This gives her some idea about the
type of problem
00:15:31 and helps her assign an appropriate service technician. At the dispatching board,
00:15:37 she can confirm the technician assignment, based on availability.
00:15:41 She releases the assignment to the technician, so that it will show up on this mobile app.
00:15:48 Now let's turn to John, our field service technician at Alpha Boiler.
00:15:53 At the start of his day, he logs in to his FSM mobile app,
00:15:57 he finds the new service call, he accepts it, he travels onsite, and onsite,
00:16:03 he can access the relevant IoT data, stored locally at the edge location.
00:16:09 The chart here reveals a sudden jump in both pressure and temperature sensor values.
00:16:13 Such insights from IoT help him more effectively troubleshoot.
00:16:19 As a recap, in this demo, we have showcased three things.
00:16:25 First, how SAP Edge Services enables an equipment maintenance service provider
00:16:32 to configure business rules and deploy them to the edge nodes
00:16:35 at their customer locations. Second, how SAP Edge Services can automatically
00:16:41 trigger a business process, in this case, a service call in Field Service Management,
00:16:46 based on the IoT workloads processed at the edge. Lastly, how SAP Edge Services can help

00:16:52 a service technician more effectively troubleshoot, providing access to relevant IoT sensor
data
00:17:00 when they arrive on site. Now let's resume this unit
00:17:05 with three examples of how customers are using SAP Edge Services today in productive
scenarios.
00:17:12 The first is a case study from a manufacturer of processing and packaging machines
00:17:16 for consumer goods such as coffee, tea, and others. Their machines are operated at their
customers' plants.
00:17:24 SAP Edge Services processes the IoT data from the machines and allows their customers to
remotely monitor production
00:17:32 and predict service needs. From the perspective of this manufacturer,
00:17:37 the business outcome is an enhanced customer experience, because service offerings can
now be better personalized
00:17:43 while machine down time is significantly reduced. The delivery of this project has been a
milestone
00:17:50 for this customer in their transition to product as a service business model,
00:17:55 based on operating time for their equipment. The next case study is taken
00:18:01 from a large electronics contract manufacturer in Asia. What's interesting here is that SAP is

00:18:08 also engaging in OEM partnerships. This allows a contract manufacturer

00:18:14 to offer an integrated hardware software solution for their manufacturing customers
00:18:19 to analyze equipment IoT data and trigger meaningful business processes
00:18:25 locally at their production plants. The solution helps their customers reduce latency,
00:18:31 improve production efficiency, and save implementation costs,
00:18:35 while helping the contract manufacturer transform into an integrated hardware/software
solution provider.

15
00:18:44 Our last example is a private shipping group with gas tanker and dry cargo lines of business.
00:18:51 They own more than 100 shipping vessels. The challenge is that out in the high seas,
00:18:57 satellite connectivity is both costly and intermittent. They need to conserve this limited
available bandwidth
00:19:04 for critical vessel operations, which means that all other IT infrastructure on board
00:19:10 is in a state of being occasionally connected only. Today the customer is running,
00:19:16 or shall we say sailing live with SAP Edge Services deployed
00:19:20 on all vessels across their entire fleet. Their use case is improving the productivity
00:19:27 of crew members at sea by extending the business processes to their shipping vessels.
00:19:32 The functional scope spans inventory management, crew management, and financial
transactions
00:19:39 for the maritime business. In this unit, we discussed how SAP Edge Services
00:19:47 makes the edge more intelligent and business context aware
00:19:51 by bringing processes close to the source of IoT data.
00:19:55 For immediacy of outcomes immune to bandwidth constraints and independent of an always-
on, two-way, reliable connection
00:20:03 to the cloud or core. We also looked a bit more closely at running business processes
00:20:09 at the edge, via a demo that showed how SAP Field Service Management
00:20:13 can be extended to the edge. In summary, SAP Edge Services extends business processes
00:20:20 to the edge, reducing dependency on latency, bandwidth, and connectivity.
00:20:27 In the next unit, David Yawalker will cover a few examples of how to innovate with SAP
Leonardo IoT.
00:20:33 Thank you very much for watching, and stay tuned.

16
Week 1 Unit 5

00:00:07 Hello, and welcome to unit five of the openSAP course, The Internet of Things with SAP.
00:00:15 My name is David Yawalkar, and I'm a Product Manager for SAP Leonardo IoT.
00:00:20 Our unit today will cover different approaches of how to innovate with SAP Leonardo IoT.
00:00:29 As my colleague, Martin Ebert, explained in a previous unit,
00:00:33 we have four different approaches of how to drive innovation with IoT.
00:00:38 First, we embed IoT into line-of-business applications. Second, we extend existing business
processes with IoT.
00:00:49 Third, evolve completely new business models. And fourth, edge-enable scenarios directly
00:00:56 at the source of data. During this unit, I would like to use the time
00:01:01 to make these four approaches more tangible by giving you business scenario examples for
each of them.
00:01:09 So, let's get started. At SAP, one of our major goals is to make
00:01:16 our line-of-business applications more intelligent. And IoT can contribute to this mission
00:01:23 of the Intelligent Enterprise by embedding telemetry data directly into line-of-business
applications.
00:01:30 In this context, I would like to highlight our delivery insight scenario,
00:01:35 which we deliver to customers as of S/4HANA Cloud 2002, which is February 2020.
00:01:42 So, what is this scenario about? Transparency on deliveries that are shipped to customers
00:01:49 is key for companies to ensure proactive instead of reactive decision-making
00:01:53 if something goes wrong. As I would like to show you
00:01:58 a demo of this process in the system in a minute, let's first take a closer look at the scenario
flow.
00:02:07 It all starts with the new outbound delivery created in S/4HANA, which bundles all important
pieces
00:02:15 of information required in the following steps. After doing so, a virtual representation
00:02:21 of this outbound delivery is created in the IoT world for making the delivery conditions
monitorable
00:02:28 based on IoT data. In the next step,
00:02:32 an already onboarded piece of IoT sensor hardware, which is attached to a physical handling
unit,
00:02:37 is technically assigned to the new virtual delivery. Thereby, we bring together the raw sensor
data
00:02:45 from the attached hardware device with the business contacts of the delivery from S/4HANA.
00:02:50 As the connection between the IoT world and the business world is established now,
00:02:56 we can go ahead and monitor the conditions of this IoT-enabled delivery
00:03:01 through the entire shipping process based on predefined rules and actions
00:03:05 set in SAP Leonardo IoT to get the full visibility
00:03:10 into critical parts of the delivery based on the combination of sensor and business data.
00:03:16 If the measured values indicate any violation of permissible shipping conditions
00:03:22 applicable for the shipped material, a new so-called situation
00:03:28 is created in the S/4HANA situation handling framework and directly embedded
00:03:33 in the Manage Sales Order application. Typical examples of irregular delivery conditions,
00:03:41 which involved parties might want to detect before the delivery arrives,
00:03:45 include broken cold chains of perishable goods, sudden shocks or drops of fragile products,
00:03:52 or inappropriate air humidity while shipping seeds. Based on the situation S/4HANA,

17
00:04:00 the sales rep responsible for the affected sales order will receive a notification that indicates
what went wrong
00:04:07 with the monitored outbound delivery. From this IoT-based situation,
00:04:13 the person responsible for the sales order can take a look at the sales order itself
00:04:17 to trigger suitable follow-up actions to resolve this situation.
00:04:23 As possible actions, the responsible sales rep, for example, might want to send
00:04:29 an immediate replacement order and inform the affected customer that something went wrong

00:04:34 with the initial delivery while being en route. Let's now get into the system demo
00:04:45 of the delivery insights scenario to show you how IoT data can be embedded
00:04:50 into the day-to-day operations of an S/4HANA business user. Let's look at the sales order
relevant for this demo,
00:05:01 namely sales order 23444, including its delivery items. The sales order contains a product HIB
vaccine.
00:05:11 I can see, among other information, the net value of the sales order
00:05:14 as well as the delivery status. Now, let's take a look at the behind the scenes.
00:05:23 Every delivery that is tacked with a sensor will automatically create a digital twin
00:05:29 in the SAP Leonardo IoT system. Let me now show you how the digital twin is modeled.
00:05:35 The delivery is reflected in SAP Leonardo IoT with the following basic data;
00:05:41 customer ID, customer name, delivery, delivery item, the relevant handling unit
00:05:47 to which the sensor is physically mounted, as well as the material contained in the sales order.

00:05:53 The measured values show us that for this particular use case,
00:05:58 we are measuring the temperature, the acceleration, and the relative humidity.
00:06:05 What you have just seen in Leonardo IoT in the digital twin is the behind the scenes.
00:06:11 Now, let's switch gears and I'll act as a sales rep again. I can see that there's a new notification

00:06:18 in the top right corner of the screen. Let's see what's going on.
00:06:24 I'm informed that the delivery for one of my customers with an HIB vaccine, which is very
temperature- sensitive,
00:06:31 is outside of its permissible temperature range. Let's take a closer look at the sales order in the
screen.
00:06:39 Here's more information concerning the outlier with regards to the temperature-sensitive
vaccine.
00:06:45 I can see the sales order item and the handling unit affected
00:06:49 as well as the permissible temperature range versus the actual temperature
00:06:54 and therefore the significance of the temperature breach. I can now inform my customer,
Medlife Pharmacy,
00:07:01 about the situation of the delivery. When these follow-up actions have been triggered,
00:07:06 I mark the situation as Resolved and dismiss it. I can now continue with my regular work, as
delivery insights
00:07:14 will continue to monitor the delivery conditions of all my IoT-enabled outbound deliveries for
me.
00:07:22 So this demo shows you how Internet of Things information in conjunction with a business
process,
00:07:28 in this case, a delivery, drives value to the business user to take the right decision in real time

00:07:35 when delivery issues occur but to also guarantee a higher customer satisfaction
00:07:41 by resolving issues right away. Let's now move on to the Extend approach.

18
00:07:48 Here it is all about enabling developers to extend existing SAP business processes
00:07:55 by gaining information and insights from previously unconnected devices,
00:07:59 like machines, products, or assets, and thereby extending the value
00:08:05 of existing SAP applications and processes. An example for an extended scenario
00:08:14 is our replenishment use case with IoT, which Martin Ebert shared with you
00:08:19 in detail in a previous unit. Here, we are extending a current S/4HANA process
00:08:25 by integrating IoT-related fill level or stock quantity information into S/4HANA,
00:08:32 giving customers the opportunity to work with physical instead of book values.
00:08:40 With Leonardo IoT, customers and partners also have the opportunity to pursue open
innovations
00:08:47 and evolve completely new IoT-enabled business models, all while keeping the core clean.
00:08:56 Here's a business scenario for that. Imagine you are a manufacturer of power tools.
00:09:03 By equipping your power tool, for example, a power drill, with a sensor and by leveraging
00:09:09 transformation and derivation services of Leonardo IoT, you can determine how your
customers are using your product.
00:09:17 Are they drilling into the wall, the floor, or the ceiling? Knowing that and analyzing the data,
00:09:24 you can proactively offer maintenance support with service tickets created by IoT
00:09:31 based on the individual drilling behavior of your customers. In this example, IoT helps to
maximize
00:09:38 a customer's brand experience by guaranteeing the best possible product life cycle.
00:09:47 As a last topic in this learning unit, let's look at an example
00:09:51 of an edge-enabled business transaction, in which it is all about operating close
00:09:56 to the source of data. Latency and intermittent connectivity
00:10:05 are challenges in edge locations such as remote plants. Let's take an oil rig as an example,
00:10:12 which depends on high latency satellite communication. Yet, you need your remote workers in
these locations
00:10:20 accessing business transactions anytime and with low latency such that they can efficiently
complete their work.
00:10:29 SAP Edge Services allows the running of business processes at the edge in an autonomous,
disconnected,
00:10:36 and low latency mode while preserving transactional integrity
00:10:40 with the cloud or the data center. Let's assume a persona called Tom.
00:10:46 Tom is an electrician at an offshore plant. He often works in an environment
00:10:52 with intermittent connectivity. Through SAP Edge Services,
00:10:57 Tom can access and update maintenance work orders for the faulty equipment.
00:11:03 This enables Tom to take action despite intermittent connectivity
00:11:08 and repair the equipment before it affects business operations.
00:11:13 The work order is stored in the internal persistence of the essential business function service

00:11:19 and synced back with the ECC or S/4HANA plant maintenance when back online.
00:11:26 This enables teams working in remote locations, such as offshore plants, to create or update
00:11:32 maintenance work orders at land-based speed even when temporarily disconnected from the
core.
00:11:41 Let's conclude. In this unit, we have outlined
00:11:44 a couple of business scenarios that can benefit from IoT data in various ways.
00:11:50 Are you keen to learn more? In the next unit, we will talk about more specifically
00:11:55 what SAP has to offer for IoT in the context of Industry 4.0.

19
00:12:01 Thank you very much for watching, goodbye.

20
Week 1 Unit 6

00:00:06 Hello and welcome to unit six of the open SAP course Internet of Things with SAP.
00:00:13 My name is Corinna Kramer and I am a product manager for SAP Leonardo IoT and SAP
Edge Services.
00:00:21 In this unit, I will touch on Industry 4.0 and how companies embrace it to create new
opportunities.
00:00:30 Industry 4.0, or the industrial Internet of Things, is about industrial transformation
00:00:35 using new digital technology that makes it possible to gather and analyze data across
machines
00:00:41 and business systems, enabling faster, more flexible, and more efficient processes to produce
higher quality,
00:00:48 individualized goods at lower costs. So, what is driving this trend of Industry 4.0?
00:00:57 There are three main drivers. First, the introduction of 5G is transforming
00:01:02 a variety of areas that go beyond just mobile connections. In fact, the high-speed connections,
lower latencies,
00:01:09 and extended locations that go hand-in-hand with 5G allow for new IoT use cases.
00:01:16 We are still in the early stages of a 5G revolution. Although it doesn't currently have the ability

00:01:22 to completely overhaul the IoT industry, over the next year we should expect to see
00:01:28 it advance significantly. Second, data processing at the edge is on the rise.
00:01:35 Edge computing refers to every device that gathers data outside of a large data center.
00:01:40 Traditionally, devices did not have the level of compute or the storage capabilities
00:01:45 required to hold and analyze data. So, it was sent to the cloud to be examined.
00:01:51 However, more frequently, data is now processed and analyzed with edge technology
00:01:57 running close to its source and extending business services to the edge.
00:02:02 That way, remote locations, from oil platforms to retail stores and logistics centers
00:02:07 can also utilize IoT technology. Last, IoT 4.0 is a trend in itself
00:02:15 as digital becomes the new norm. The digitalization of products, processes, and services
00:02:21 is a way to react to the increased customer demand but poses a number of challenges in itself.

00:02:27 Manufacturing companies are challenged to increase productivity

00:02:31 while producing individualized products with high quality in an environment
00:02:35 of constantly changing and varying customer demand. So, why should you care about these
trends?
00:02:45 The result of a 2019 McKinsey study on capturing value with IoT suggests that enterprise IoT
is poised for strong growth because of its ability
00:02:55 to improve the customer experience, increase productivity, and enable the development
00:03:00 of innovative products and services. In fact, Industry 4.0 is estimated
00:03:05 to have value creation potential for manufacturers and suppliers of $3.7 trillion in 2025.
00:03:15 Thus, it is not surprising that 75% of IoT decision makers see high value by embedding IoT
capabilities
00:03:24 into critical business systems. And 5G will help to make communication
00:03:29 up to 100 times faster than with the current 4G standard. Let's look a little deeper into what
exactly 5G is,
00:03:38 and how it supports Industry 4.0. 5G is the fifth generation of wireless technology
00:03:48 for digital cellular networks, each generation providing for faster data transfer speed.

21
00:03:54 While with 1G only analog voice communication was possible, 2G already allowed for text
messaging
00:04:01 and digital voice communication and 3G enabled data transmission
00:04:06 and development of applications, such as video calls and mobile internet access.
00:04:12 4G is the fourth generation of broadband cellular network technology, succeeding 3G.
00:04:21 It provides high-speed data for phones and other mobile devices and is laying the foundation
00:04:26 for the Internet of Things. 5G networks provide ultra-fast communication at scale
00:04:33 with ultra-low latency, enabling near real-time processing of data and boosting the Internet of
Things
00:04:40 at massive scale. I had already mentioned that
75% of IoT decision makers
00:04:46 see high value by embedding IoT capabilities into critical business systems.
00:04:52 What are the market dynamics that lead to this and how can technology help
00:04:56 turn challenges into opportunities? Today, new market dynamics are emerging
00:05:04 that present complex challenges and put supply chain and manufacturing at the center, not
only of business success,
00:05:11 but also of a company's differentiation strategy. Customers are better informed than ever and
demand products
00:05:19 that fit their exact needs at competitive prices. The ability to capture customer requirements
effectively,
00:05:26 especially in terms of sustainability and quality, and drive mass customization is key.
00:05:32 This is, for instance, possible through tailor- made products in a pay-as-you-go and usage-
based pricing model,
00:05:38 which leaves even more responsibility with the manufacturer. Think of car sharing systems, or
rental,
00:05:44 rather than selling, of office equipment, such as printers and coffee machines.
00:05:50 As industry boundaries are blurring, business pressure is rising.
00:05:54 Former partners begin to compete. Think of private parking companies and local authorities
00:05:59 equipping their parking spaces with sensors and competing for the best customer experience.

00:06:06 Many companies recognize that utilizing the right technology is a strategic priority to turn
current market dynamics
00:06:13 into opportunities, and have turned to Industry 4.0. Industry 4.0 is driven by technologies,
00:06:21 such as edge computing, which enables execution of cloud-managed application modules
00:06:26 at the production site. Other technology enablers are cloud scalability,
00:06:31 in-memory computing, robotics, and IoT- connected devices as well as intelligent algorithms.
00:06:39 Now, let's look at the answers that manufacturers have found to secure their position in the
market
00:06:44 and embrace Industry 4.0. Let me give you a few examples.
00:06:54 Industrial production requirements are changing more and more towards automation.
00:06:59 Companies, for example, develop intelligent solutions for remote condition monitoring of
assets
00:07:05 to increase overall equipment efficiency and reduced service efforts and costs.
00:07:10 Increasing efficiency in the production process from raw material usage
00:07:15 to machines and equipment utilization to the quality and footprint of the end product
00:07:20 is also an increasingly important strategy for addressing resource scarcity.
00:07:26 To address customer demand, product complexity, and variety rises, resulting in mass
customization.

22
00:07:33 This means product configuration applies machine learning to historical data to streamline the
quotation process
00:07:40 for configurable products for better win rates. With more and more devices being connected,

00:07:48 there is an increasing volume of data. This requires Big Data solutions,
00:07:52 so as to get the right information in time, for instance, for insights that enable key stakeholders

00:07:58 of manufacturing operations to take tactical and strategic decisions

00:08:03 that help companies achieve best-in-class performance. Companies also start to grow their
manufacturing networks,
00:08:10 for instance, by offering new digital services through an IoT platform
00:08:15 to connect and integrate customers' machines. This leads to increased revenue
00:08:20 and reduction of customer churn Let's look a bit deeper into some of the approaches
00:08:27 to Industry 4.0. First, engineer-to-order production models
00:08:36 are found in industries like shipbuilding, high-end machinery, and aerospace,
00:08:41 executing on small or individual production orders and strive for high efficiency
00:08:46 in manufacturing, down to lot size one. Customers moving from mass production
00:08:55 to individualized products see benefits from the tight integration
00:08:58 between engineering and manufacturing. Mass-customized production is another approach,
00:09:06 typically in automotive, agriculture equipment, and industrial components.
00:09:11 It aims at maintaining high-sequence throughput, and consistent quality despite increased
product variances.
00:09:19 In the case of mass-customized production, where every product is unique, product-specific
information
00:09:24 needs to be integrated automatically from the shop floor to customer-facing roles.
00:09:32 Third, high-volume production manufacturers focus on the efficiency
00:09:37 and seamless operation of their plant. These include manufacturers of electrical
00:09:42 and electronic components like Endress+Hauser. The company has combined automated
manufacturing
00:09:48 and manual assembly into one digital process, enabling digitally networked manufacturing
00:09:55 and leading to harmonized global production processes. This resulted in increased flexibility,
00:10:01 more robust processes, and higher uptime. Other examples can be found in the packaging
industry,
00:10:07 where companies like Pregis remotely manage, control, and service the sensor-equipped
machines
00:10:12 it maintains at customers' distribution centers. The result is a digital system
00:10:17 that helps keep customers supplied with the raw materials they need, and lets experts address
mechanical issues
00:10:24 before they become problems, leading to increased throughput, improved uptime,
00:10:28 and lower capital expenditure on shop floor equipment. To summarize, we are on a journey
00:10:39 to intelligent manufacturing in smart factories. Industry 4.0 will radically change production
00:10:46 across all industries. It will enable manufacturers to increase productivity
00:10:50 and asset efficiency while delivering a larger number of customized
00:10:54 as well as personalized product variants. Across production facilities,
00:11:00 logistics will be digitalized and executed by increasingly smarter and autonomous robots and
vehicles.
00:11:07 Production machinery will become highly autonomous, with robots performing increasingly
complex tasks.

23
00:11:14 Classic assembly lines will be replaced by flexible manufacturing islands,
00:11:19 with modular production assets, like flexible robots and fixtures, storage vehicles,
00:11:24 or flexible production processes like 3D printing. Machine vision can be used
00:11:30 to automatically detect quality issues, classify inventory, and control processes.
00:11:37 The way humans work in production will also change. Smart glasses or similar devices and
augmented reality
00:11:44 will be increasingly relevant, for example, in complex assembly
00:11:48 or hazardous work environments. Wearables will help protect the workforce
00:11:53 by detecting critical situations, such as fatigue or accident risk,
00:11:57 and automatically call for help when there's an accident. Consequently, the required skill set
00:12:04 for the manufacturing workforce will evolve, requiring manufacturers to undertake
00:12:09 significant cultural change. Production IT will become ever more important
00:12:15 to drive further automation and higher productivity through digital orchestration of the
production process.
00:12:22 Across production facilities, edge computing will be critical to ensure reliability
00:12:27 of crucial execution functions and efficient processing of data.
00:12:32 However, with increasing digitalization and use of Industry 4.0 come new threats.
00:12:39 To prevent hackers shutting down factories or misusing critical assets,
00:12:43 a cybersecurity infrastructure meeting the highest standards will become increasingly
important.
00:12:52 In this unit, we have touched on the concept of Industry 4.0 and how utilizing the right
technology
00:12:58 is a strategic priority to turn current market dynamics into opportunities.
00:13:05 In the next unit, we will talk more specifically about what SAP has to offer for Industry 4.0.
00:13:12 Thank you very much for watching, and see you in the next unit!

24
Week 1 Unit 7

00:00:06 Hello, and welcome to unit 7 of this openSAP course. My name is Martin Ebert,
00:00:12 I am the chief product owner of SAP Leonardo IoT. And in this unit I will introduce the topic
00:00:18 SAP and Industry 4.0 to you. I would like to start this session
00:00:26 with the industry 4.0 building blocks. Let's have a look at the industrial IoT themes.
00:00:32 We want to help companies running industry 4.0 projects get started quickly
00:00:38 with their digitalization and automation. We see that the following four use cases are the ones

00:00:45 where the highest and fastest success can be recognized for better outcome.
00:00:51 Number one is intelligent products, which includes innovation, design,
00:00:57 and production engineering processes. Number two is the intelligent factory,
00:01:02 including production or a network of manufacturing plants. And number three is intelligent
assets,
00:01:09 which includes asset and machine utilization and availability to predict outcome and increase
performance
00:01:17 of your manufacturing operations. Number four is empowered people,
00:01:23 to inform the worker on the plant level and management on the operational level
00:01:30 with the right information for fast decisions. SAP's solution for industry 4.0
00:01:36 leverages the applications from the Intelligent Enterprise to bring these four use cases to life,
00:01:41 and is built on a powerful technology foundation. The technology foundation includes Big Data
management,
00:01:50 to ingest, process, store, analyze, and distribute the enormous amounts of operational data
00:01:57 that is generated in your factory. We are also leveraging artificial intelligence,
00:02:04 and with intelligent algorithms and applications working on your industrial data.
00:02:10 And modern manufacturing platforms integrate not only vertically, but also horizontally
00:02:16 between different domains and business systems. But how do these so-called industry 4.0
building blocks
00:02:27 enable the Intelligent Enterprise? SAP has the broad solution portfolio
00:02:32 to unlock the value of industry 4.0, combining the power of intelligent manufacturing
00:02:38 in factories and plants with end-to-end business process execution across the supply chain.
00:02:46 SAP's industry 4.0 approach combines three business priorities in one leading strategy.
00:02:54 Number one is the front office. So you focus on customers, so their input
00:03:00 and preferences are the source of all you do. Number two is the supply chain,
00:03:07 to reinvent production and logistics using intelligent assets and processes
00:03:12 that dynamically adapt to changing priorities and deliver customization at scale.
00:03:19 And then, of course, you have the back office, where you connect the entire company,
00:03:24 orchestrating sales, service, and logistics with production to transform how you work.
00:03:35 Now, having set the stage, I would like to dig a little bit deeper
00:03:38 into industry 4.0 themes. Intelligent products are more complex than classic ones,
00:03:45 and most often they are individualized with lot size one. Handling these products in the
different lines of business
00:03:55 and leveraging the advanced capabilities of these products requires special IT capabilities.
00:04:01 And typically, industry 4.0 use case examples for fully integrated manufacturing engineering
processes
00:04:09 cover the handover. So, handing over information from engineering
00:04:17 to manufacturing usually takes a long time and includes a high number of manual

25
00:04:22 and very error-prone steps. SAP S/4HANA Manufacturing solution
00:04:28 provides capabilities to keep the engineering and manufacturing information in sync.
00:04:36 Then there's the change impact, so understanding the business impact of engineering
00:04:40 or sales order configuration changes is a very tedious process today.
00:04:46 And SAP S/4HANA Manufacturing solution intelligently identifies impacted objects within the
system
00:04:53 and gives advice on where to incorporate these changes. The intelligent factory is agile and
adaptable
00:05:02 and will support different production scenarios. It also is elastic, and able to deal
00:05:09 with varying production volumes and easily support new manufacturing technologies,
00:05:15 such as additive manufacturing, for example. Intelligent factory uses manufacturing operations

00:05:23 and management with predictive and prescriptive capabilities, real-time data,
00:05:30 feedback loops with engineering and ERP, and network capabilities for design collaboration.
00:05:39 Consumers today expect products that are tailored to their needs and wishes.
00:05:44 SAP has a product portfolio with the width and the depth to support this end-to-end scenario,
00:05:51 starting with the sales process, and followed by material and capacity planning,
00:05:57 all connected to machines and operators to make sure the product is produced as ordered,
00:06:05 and lot size one actually becomes reality. Transport production and logistic operations
00:06:13 are another important piece in the puzzle, to help ensure a smooth production material
staging,
00:06:20 transport between operations, and put away of finished products that are key for higher
throughput
00:06:27 with minimum inventory and space. To achieve high quality,
00:06:33 product manufacturers use structured methods like Six Sigma, 8D, FMEA, and others.
00:06:41 And based on this, products are being inspected at various stages in the process chain,
00:06:47 data driven with intelligent technologies. Let's look more closely at the intelligent assets now.
00:06:59 In many companies today, the actual asset health is unknown, and data is collected and
handled in several silos
00:07:07 where it is actually useless for the business. And this often leads to a significant amount
00:07:13 of avoidable downtime and inefficiencies. And typical industry 4.0 use case examples
00:07:20 for leveraging assets intelligently are OEM agnostic equipment onboarding,
00:07:27 connecting to business processes and business networks as plug and play,
00:07:33 including creating the digital twin of the asset, establishing connectivity, and enabling data
ingestion.
00:07:44 Asset maintenance is a significant cost factor for many companies.
00:07:49 Especially in asset-intensive industries, and the goal is to increase operational asset
performance
00:07:56 and reduce cost. Moving from reactive to data-driven asset management
00:08:02 helps manufacturers reach this objective. Finally, let's think also about the empowered people,

00:08:10 who are important in your factory. Although the degree of automation will increase further,
00:08:18 people in the plant will still continue to play an important role.
00:08:22 Operators will fulfill tasks that cannot be automated, and more complex tasks that are often
related
00:08:29 to decision making. IoT solutions need to provide more support to people
00:08:34 with tailored information, or really recommendations that fix the problem in real time.

26
00:08:44 Typically, industry 4.0 use case examples with people empowered by intelligent IoT systems
are the following
00:08:52 Unforeseen situations requiring ad hoc decisions in near-real time.
00:08:58 SAP intends to use artificial intelligence to help the operator and the supervisor
00:09:05 make decisions faster, taking different options into consideration.
00:09:11 Access to corporate business data, combined with live data from sensors, assets, and
products,
00:09:17 such as usage data, can help operators reduce delays and response times,
00:09:24 and to detect problem sources more quickly. Now, protecting your workforce is paramount.
00:09:31 SAP's intelligent environmental health and safety system can help prevent incidents by alerting

00:09:38 and guiding workers in real time. It combines IoT-enabled condition monitoring,
00:09:44 geo-fencing, real-time analytics, and integration technology to help workers avoid
00:09:50 unsafe areas and tasks in the workplace. Now, let's have a closer look at the intelligent factory

00:10:04 by putting some light on its underlying characteristics. These are, focusing on creating
intelligent processes,
00:10:13 products, equipment, and enabling people to work in this environment.
00:10:19 All those components will communicate with each other as naturally as in a social network,
00:10:25 without human intervention. And as sensor technologies become available,
00:10:31 almost any process can be enhanced. Now, the tight collaboration between factory workers
00:10:38 and robots is also important, as well as the routine tasks, as well as hard manual work
00:10:44 that will be taken over by machines. And complex, experience-based tasks and decisions
00:10:51 will still reside with humans. Okay, to make this a little bit more tangible,
00:10:59 I would like to explain to you the following example. Based on the characteristics and
automation capabilities,
00:11:07 an intelligent factory brings production and logistics operations with automated production
supply
00:11:13 and execution to the next level. Let's follow this example here from left to right.
00:11:20 The production flow starts with the machine itself, triggering a request for material
00:11:26 based on the underlying production order. In the next step, the material is automatically picked

00:11:32 by a robot and staged to the production line. And in the next step, the machine consumes
00:11:39 the delivered material. The semi-finished good is directly transferred
00:11:43 from the robot body to the hands of the human, where the finishing touches are executed.
00:11:51 This means robots and human workers are integrated in the production chain and work jointly
together.
00:11:59 Finally, the finished good gets stored in the warehouse. If you are now questioning yourself
00:12:10 whether this is already supported by SAP products and tightly integrated partner technology,
00:12:15 the simple answer is yes. This slide gives you a good overview
00:12:19 of the applications SAP is offering to realize your industrial themes.
00:12:24 This is powered by a solid foundation and additionally supported by partner technology
00:12:29 to support eye tracking, gesture control, or visualization solutions for machine
00:12:35 or factory digitalization. One key enabler for realizing the industry 4.0 use cases
00:12:48 is SAP Leonardo IoT. SAP Leonardo IoT is offering multiple paths to innovation,
00:12:55 accompanied by a comprehensive set of industry-specific business services and IoT
capabilities.
00:13:02 Let me shortly summarize those again, because we have already touched upon them briefly

27
00:13:08 in unit three of this course. Number one is embed, so you embed device
00:13:13 and telemetry data into SAP LoB applications. Number two is extend, so you are enabling
developers
00:13:22 to extend existing SAP business processes to adapt them or extend them to the use case.
00:13:29 And number three is evolve, where you empower partners and customers to create completely
new
00:13:35 IoT enabled business models. And with number four, you can now bring processes
00:13:42 from the cloud down to the edge. And that provides intelligent data processing at the edge
00:13:48 in the context of our industry 4.0 solutions. And we at SAP also intensively use
00:13:54 our SAP Leonardo IoT business services, as they are embedded in many solutions today,
00:14:01 like in SAP Predictive Maintenance and Service, and SAP Asset Intelligence Network, the AIN,

00:14:08 just to mention prominent examples. Now, the Open Industry 4.0 Alliance.
00:14:17 SAP has helped integrate this Open Industry 4.0 Alliance. The purpose of the alliance is to
create customer value
00:14:25 in factories, plants, and warehouses within the IT/OT infrastructure.
00:14:32 Members of the alliance provide a modular solution and professional service offerings that are
compliant
00:14:38 with the guidelines of interoperability. And the aim of the alliance is to create the yellow pages

00:14:44 of the members' offerings, products, and professional services that are compliant
00:14:50 with Open Industry 4.0 in order to provide companies with a broad range of interoperable
components
00:14:57 that differentiate in their feature and functionality rather than on proprietary interfaces.
00:15:06 And by ensuring collaboration between operators and OEMs, this enables both owners and
operators of factories
00:15:14 and plants to ultimately pay less for connectivity and integration, which at the same time
00:15:20 allows them to spend more on industry 4.0- related value. And it is intended to cover up to
80% of the shop floor
00:15:29 of our customers and ease connectivity and integration on the OT and IT levels
00:15:36 in the industrial IoT solution stack. The alliance creates guidelines
00:15:41 for interoperability of solution components based on existing standards, using best practices
00:15:48 where standards are missing. And this initiative was started in the German region
00:15:54 with SAP as one of the founding members, with a plan to expand to Europe,
00:16:00 followed by North America, and then worldwide. With more than 40 members today, and open
to new members,
00:16:10 the Open Industry 4.0 Alliance will continue to grow. Thanks for joining this openSAP course.

00:16:22 You can find more information on our Web site, sap.com, or in our community network,
community.sap.com,
00:16:33 and under the topic Internet of Things, which you can simply search for.
00:16:37 And if you have subscribed to the SAP Learning Hub, Edition for IoT and Digital Supply Chain,

00:16:43 you will also be able to access the SAP Leonardo Internet of Things Learning Room and
Learning Journey
00:16:50 with more learning assets. I look forward to engaging with you in the discussion forum.
00:16:56 Good luck with the course assignment.

28
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