3 minute read 26 Mar 2019

How to unleash the full potential of the IoT

3 minute read 26 Mar 2019

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We need to approach the IoT differently before it can deliver its full transformative potential.

Everyone knows that the Internet of Things (IoT) is huge. There are hundreds of millions of connected devices and counting – but around the globe there are, so far, only a handful of examples of companies who have really made a success of it.

To make an IoT implementation successful, there are many factors organizations need to consider; some of them obvious – like change management, leadership and sponsorship – but more importantly what we could call the SAD considerations:

  • Speed of technology
  • Asymmetry of information
  • Digital twin and IP protection

Speed of technology

To really benefit from IoT, we need speed – across the full stack of technology.

The vast data lake that IoT devices generate demand cloud-processing power, with AI to process it and RPA (not people) to execute the operations quickly. All of these things are beyond human speed:

  • IoT is the medium to establish the data flows and capture the value networks of things, devices and sensors.
  • AI recognizes the patterns of IoT interactions.
  • RPA increases the asset utilization and operational excellence by responding to pattern deviations in milliseconds.
  • Blockchain enables real-time accounting of indisputable, secure transactions.

Asymmetry of information

This is ultimately how organizations make money out of IoT: using IoT data, organizations can build a bridge between themselves as a product or service provider and the customer.

Let’s use a ride-hailing platform as an example: the asymmetry of information here is that the platform knows where both customers and drivers are, and the app is the bridge that connects them. However, in this example, the asymmetry only lasts minutes before the transaction. Where organizations need to get to is the process of building that asymmetry over weeks, months and years.

For example, we will soon see car tires being manufactured with sensors inside them. After their service life of 1 to 3 years, the tires are returned for recycling, and the information the sensors have gathered about their usage and performance in, for example, different climates, will re-educate the tires’ digital twin. This will provide huge insight into how to make the product better, and opportunities to make more focused products for different geographies.

Digital twin and IP protection

IoT technology allows us to learn more about the world around us than ever before, record this experience and build a full digital twin to simulate it.

This is critical to businesses in the future because the data collected will be the basis of competitive advantage – and it needs to be protected. At the same time, organizations need to decide what to keep locked up, and what to share with or sell to customers, partners and even competitors.

In the IoT-based digital economy, no organization can be an island – everyone must exchange information with partners and competitors. Even major players that gather and control data via software, apps and cloud platforms need to buy the kind of service or product they believe will make theirs better, richer, faster.

In the IoT-based digital economy, no organization can be an island – everyone must exchange information with partners and competitors.

The crucial point is deciding exactly what part of the data you generate and gather is the unique asymmetry that will drive profit, and what the organization can afford to have overlapping with competitors through sharing or sale.

As yet, most organizations don’t have any idea how to do this. Which is why EY helps design this concept.

SAP Leonardo is the foundation for IoT

The basis for successful IoT implementations like this is the SAP Leonardo platform. It enables storage of data from different sources and multiple layers, whether blockchain, an AI engine, or data from ERP and CRM systems. Most importantly, Leonardo interfaces with a network of other IoT platforms to collect data quickly and build asymmetry over the long term.

In the coming years, this will enable organizations to build asymmetry of information on connected services as well as connected products, and measure user experience to drive continuous improvement of both.


In the next two to three years, the business narrative will no longer be about IoT or AI, but simulations. This is the next evolution of today’s digital twin. But instead of duplicating what already physically exists and behaves in the world, simulations of entirely new business models will be built based on the asymmetry of information assembled from massive amounts of IoT data.

For organizations to keep up, it is imperative that they get on board with the SAD requirements, all underpinned by a common platform like SAP Leonardo.


A successful IoT implementation relies on many factors. But for organizations to keep up, there are three key factors they must consider.

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