Guest Feature By Andreas Graesser
It was a gray and wet November day in 2019 when I met with Tom Pfister center-city Philadelphia. As usual, I took the train to get into the city’s heart, avoiding the nerve-racking traffic in and out of the city. It wasn’t that cold, but it was great to sit together at La Colombe over a great-tasting coffee. I can’t say we, Tom and I, were longstanding friends at the time, but we came from the same forge, both “old” SAP colleagues and members of the SAP Alumni network.
While we experimented with new collaboration approaches before, such as our Design Thinking workshop with the Pentimenti Gallery, we just got together to talk about a potential book project I had in mind. Of course, I wanted to tap into Tom’s vast experiences within the technology space and to get his opinions and advice. So, straight-forward as I only can be with Suisse or German guys or gals, I asked him about his take on the Top Five Trends in Information Technology.
“Artificial Intelligence is the number one trend that I foresee to lead the trends,” he said right away. “AI is needed not only to handle the huge amount of data but also to draw meaningful conclusions out of it. See, for example, the electronic performance and tracking systems used across many sports categories. Usually, these AI tools are tablet-based systems where sports teams can share information with their coaches in real-time. Automatically, it captures player stats from their connected wearables for immediate insights. It also analyses the motions and tactics of the entire team. Take soccer, for example. SAP Sports One is such an AI-based sports solution. Player performance always requires healthy stars. Therefore, the AI solution collects all the data points from the players and calculates and predicts their fitness levels. Match Insights analyzes players of both teams and provides strategies to influence the outcome of the games.”
I was laughing a bit and said, “No wonder that Bayern Munich just won the Bundesliga championship early,” as I know that the club is a longstanding SAP customer.
Tom pointed me to another AI scenario that goes way beyond the sports and entertainment sector. Considering his touchpoints with many businesses around the globe, he knows that Customer Service makes or breaks the success of any company. AI helps to deliver successful customer interactions using tons of technological innovations such as face recognition, real-time processing of sentiment data, and speech recognition.
In Tom’s mind, the AI space is indeed his top IT trends for the next five years despite some challenges. “AI is still expensive. And many business leaders don’t know how to use it best, getting the biggest bang for the buck. The dependency of the machines can become worrisome, also because only the new Data Elite will be able to manage and control the AI models and algorithms.”
“And what about jobs?” I’m asking. “Not so much concerned about those. Situations always changed, and people had to adapt. In the future, job profiles will adapt, too. I wouldn’t predict a net loss of jobs caused by AI.”
Internet of Things (IoT)
“Very close to AI, I do see IoT trending on my top-five list. On top of my mind stands the smart homes. I’m using Alexa all the time for questions, inquires, and also to control my connected light bulbs and power plugs. Connected thermostats help me to work comfortably at my apartment. And when I think further, the entire infrastructure here where I live utilizes so many sensors to collect data from the building. It is an IoT reality. And I see this IoT trend multiplying into smart cars, smart cities, intelligent manufacturing plants, faster deliveries, and on and on. While we have today an average of four connected devices per person, I think we will have 15 devices each in 2030. Think about all the data these devices and sensors and data collectors produce and use, billions of devices and gadgets. Unbelievable.
For businesses, these enormous amounts of data could be used to identify trends based on personalized buying histories or consumption patterns. We see this effect today already within the eCommerce space. My favorite example is Burberry, a British luxury fashion house headquartered in London’s Regent district. After years of struggling and lagging peers, Burberry’s CEO Angela Ahrendts started in 2006 to develop a Digital Strategy, and they revolutionized their in-store experience. As I remember, Burberry consolidated all their data onto one single platform, SAP HANA: operational data, customer data, social media data, POS data, everything. Using the analytical and predictive capabilities of the backend platform, store associates could efficiently serve any known customer coming into the store, producing their buying preferences in real-time and proposing things they supposedly like. Burberry also used social media to outreach to its target audiences via Twitter, Facebook, and Instagram. eCommerce at its best.”
“Do you see also challenges and threats coming with the ‘goodies’?”
“Certainly, I do foresee several challenges coming with IoT. The more devices, the more vulnerability. Therefore, I see Cybersecurity as a significant IT trend within the next five years. We need to boost security capabilities to defend ourselves. See it this way, Andreas: the more devices, the more potential doors that hackers and criminals can threaten you. Therefore, every single device needs to be protected against cybercriminals and their hacking attempts. And look, I struggle already today keeping up with all my passwords for the hundreds of sites I’m signed up. Each single device could be attacked. And do you know what a DDoS attack is? It’s a Distributed Denial of Service attack which aims to overwhelm websites with internet traffic. The more devices you can use to send requests to a targeted site, the more likely it is that the attacked website breaks. So, the DDoS aims to make websites and online stores unavailable. And the attacked companies have to halt their websites and services for hours.
Of course, all the other cybersecurity threats such as Phishing, Ransomware, Social Engineering, and Malvertising are dominant threats over the coming years. I think you explained these cyber risks pretty well within your newest book The Transformers – Simplification Strategies for the Digital Enterprise.”
When I think about all the IoT technologies, they have two sides. They ease our lives and make them more comfortable and integrated, but they also serve more threats and dangers that could potentially impact our lives severely.”
“I fully agree with you; it’s a kind of blessing and curse of the 21st century. What do you see coming over the next years, more blessing or more curse?”, I’m asking Tom with a pretty loaded question.
“Andreas, don’t force me to take sides,” Tom says, smiling. “Certainly, I’m optimistic all the time, and I always lean toward the positive things in life. I think, with the right focus, we can keep the cyber threats at bay. And I see a huge trend emerging, the 5G networks. In my mind, this is a mobile internet connectivity revolution, the next big thing. Even here in the City of Philadelphia, I see it emerging everywhere. 5G offers an unprecedented transmission speed that far surpasses its predecessor, 4G. And since we’re talking gigabytes per second transfer rate, 5G is actually faster than virtually any home broadband available.”
Getting curious, I’m asking, “What does this mean for business and people?”
“Well, during these COVID-19 times, we have some bandwidth capacity problems even on broadband. What ii everybody uses their device to connect directly, stream videos, conduct video calls, and even collaborate across the continent in real-time? I see that the 5G capabilities will provide a fantastic foundation for the post-COVID-19 era. Work from home, wherever ‘home’ might be for the individual person or business leader.”
“Do you see some drawbacks from 5G networking?”
“Good question. 5G is still far from complete. If you see the flashing marketing ads of the big 5G providers, they lure you into a notion everything is ready to consume. But certainly, 5G isn’t even available in certain countries and areas as of now. Even in Germany, they are approaching only the start stage of 5G, still struggling with 4G coverage in rural areas outside the bigger cities. Lots of cell towers must be built to support the network’s ridiculous speed. But optimistic as I am, it’s a big IT trend that will be closed to finish when we go into 2025.
And I see another big trend, that doesn’t sound like IT at first glance, but indeed is.” I’m looking astonished, “What do you mean?” “I do mean Sustainability. Let me explain.”
“I know that you are invested in solar energy and use the sun to power your house. That’s an approach, but honestly, it’s only a drop into the ocean. Imagine that solar energy as a renewable energy source is being used widely across the United States? Such a solar panel usage scenario would point in the right direction. But the energy providers would have to know the amount of energy the Photo Voltaic installations produce at any time. Does the grid have a surplus of energy that feeds back into the grid, and so on. The smart meters measure all the data points, by the way, another example of an IoT device, and transferring all measurements back to the central data platform of the energy provider. Here comes the predictive analytics into play. The energy provider must have the platform capabilities and, simultaneously, the control of energy distribution throughout the grid. Imagine, instead of one energy plant they must manage production and consumption of thousands of PVs throughout the entire network.
And I see Sustainability emerging on other fronts as well. Companies, such as SAP SE, have to report on Sustainability, demanded by customers and investors. Manual tracking of energy consumption isn’t an option. Their energy management solution is built and integrated into the entire enterprise software solution, reaching into travel management, fleet management, infrastructure management, and many areas more. Without Information Technology, Sustainability couldn’t be managed and reported, despite the data center consuming more substantial and more significant portions of the societies’ energy balances. For me, it’s a no-brainer that emissions must be reduced to achieve zero net greenhouse gas emissions. Tracking and tracing emissions and pollution require sophisticated IT platforms and analytical capabilities.
When I’m thinking about the responsible business leaders that I know around the world, I’m convinced we can make it. The sustainability policies issued by large companies will affect many smaller enterprises, partners, customers, and competitors, too. I see this definitely as a kind of grass-roots movement crawling into the Boardrooms. I’m very optimistic about these happenings.”
“Tom, wow, very insightful! Thanks so much for sharing your thoughts and your guidance. Great to have you as a friend!” We shook hands, and I walked back to the Suburban Station, taking the train home to Wayne. And by the way, the book project I talk in the beginning is successfully finished. It’s called “The Transformers – Simplification Strategies for the Digital Enterprise,” and we already sold more than 1,000 copies.