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AI and IoT: A new kind of automation is coming

AI will combine with new-generation sensors to create a new kind of business automation. Digital twins will help companies see their businesses anew, with shared simulations that offer security in investment and product development – and blockchain will shed its negative perceptions, emerging as an enabler, not a disruptor.

The next digital evolutionary stage will see sensor-enabled IoT technology merge with AI-driven technology to produce a new wave of autonomous business processes. The most advanced, competitive businesses will take advantage of this by actively exploring new ways to enable their physical devices, whether in their systems or their customers’, to be powered by AI-driven autonomous capabilities, prompting a permanent, escalating trend.

This article first appeared in ESI Africa Issue 3-2019.
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Together, AI and IoT will create fluent, proactive, automated functions. If you think ‘robots’ when you think automation, think again. This kind of automation will be swift, responsive, way faster and more agile than rigid-programming automation. Take autonomous vehicles. They’re already in full-speed development with many major car manufacturers. The speed, safety and fluency of the automated driving experience is beyond ‘robotic’.

Acting algorithmically on realtime weather and GPS data, connecting onboard sensors, cameras, and the cloud, these ‘next-generation’ vehicles merge AI and IoT into a beautiful ballet of autonomous action. No wonder Gartner predicts that by 2021, 10% of new cars will have autonomous driving capabilities, compared with less than 1% in 2018.

AI-driven autonomous processes will appear

Today, AI stops at the point where actions need to be taken. It gathers data, compares them to historical data, and suggests a change of course. Soon the first AI enterprise engines clearing that final hurdle to drive enormous improvements in efficiency will appear.

The opportunities for improved efficiency and savings in time and money will drive forward AI/IoT-automated business decisions. Gartner predicts that by 2022, at least 40% of new application development projects will have AI co-developers on the team. The first real-life, high-impact examples of AI/IoT automation will unfold in the enterprise asset management (EAM), and field service management (FSM) space, where we will see the kinds of sophisticated AI currently in use in financial services start to appear.

Automated business and operational processes will cut decision times and make business processes more complex with faster response times. The question we should be asking is: How will companies be able to stay in control of such speed and complexity? Further, how will they be able to simulate complex, accurate business models? How will they know what their actual business reality is – in a world where humans may not control many of their processes and decisions?

Digital twins will open new panoramas and perspective

In an AI/IoT-automated world, how can you be sure that your business is doing what you think it’s doing? How can you know exactly how it is performing, in every market, unit and link of its supply chain? Digital twins are digital simulations of processes, machines, components or entire businesses. They’re already being developed by the likes of GE, Siemens and Philips to design and simulate everything from large-scale energy grids to e-cars to medical conditions and diagnoses. Globally, many industries and businesses can be sure that if they don’t implement digital twins, their competitors will. Digital twins are likely to develop in two stages:

Stage 1: The aha! moment

Imagine seeing, for the first time, what your business looks like with every feature and detail rendered with hyperreal digital precision. Digital twins reveal exhilarating new panoramas, possibilities and perspectives for businesses. For many, they show the discrepancy between how their business works, and how they think it works. They also deliver insights into how it will work over time.

Stage 2: Simulation = action

For CFOs and CTOs, digital twins reduce risk significantly through watertight simulations that can foolproof new investments and product development. It will come as no surprise that Gartner predicts that by 2021, half of all large industrial companies will use digital twins, resulting in a 10% improvement in effectiveness. There is scope for asset-intensive industries like energy and utilities, and fast-moving industries like logistics and supply chain to increase their use of digital twins. [Ed: read ESI Africa Issue 5 2018 pages 32 to 34 for more on digital twins]

Current enterprise applications like Enterprise Operational Intelligence enable digital twinning to a highly sophisticated extent with robust capabilities for mapping, monitoring and managing the business. Later this year, more concrete applications and cases implemented will emerge. In an industrial scenario, where simulations proliferate, often across companies, continents and systems, how will businesses definitively know the whole truth, status and history of a system or component? That brings us to blockchain.

Changing the popular perception of blockchain

Twenty years ago, companies would not have believed it if you’d told them that one day they would be storing and accessing all their financial and customer information in the cloud, on the same servers as their competitors! It is the same with blockchain, which is technologically already a proven concept. More cases will come into operation as we see the perception of blockchain changing because it is primarily a perception that is currently holding this tool back.

Already blockchain has been adopted far more than many give it credit for. Businesses write it off at their peril. It is already used extensively in the finance and banking sector, accounting for 30% of all current operating blockchain. Last year saw many large banks trying out decentralised technology and blockchain.

Other sectors are also implementing blockchain, including aviation. Less public industries like food and beverage manufacturers have long seen the improved food traceability blockchain can deliver. In December 2017, IBM, Walmart and Chinese super-retailer JD.com began a Blockchain Food Safety Alliance to boost food tracking and safety in China. In September 2018, Walmart announced that all suppliers of leafy green vegetables for its Sam’s and Walmart stores need to upload their data to its new food safety blockchain solution by September 2019.

In supply chain businesses, in particular, blockchain promises to be huge, with many cases already rolled out, including active competitive players in China and applications built on proven technology that’s been doing successful business since 2013. The number of successful blockchain cases is on the increase. Although widespread uptake is likely to happen around 2020 to 2021, this year will be the pivotal year when the broader business community will comprehend the true nature of blockchain.

As we move towards technologies and scenarios like the two above (AI/IoT automation and digital twin), blockchain will emerge not as a disruptor but as an essential enabler. Blockchain will start to free itself from its associations with deregulated, dodgy cryptocurrencies. Increasingly, people will see it for what it is: a rock-solid, 100% reliable tool for product verification. In an evershifting market of automated processes and simulated models, blockchain will deliver real, inarguable value. ESI

About the author

Chief product officer at IFS, Christian Pedersen is a passionate innovator who believes that developing, refining and adapting technology can make a real difference for businesses. He joined IFS from SAP, where he served as global chief product officer. Before that, he worked for 14 years in several positions at Microsoft, most recently as general manager of enterprise ERP.

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The views expressed in this article by the author are not necessarily those of the publishers and/or association partners. While every effort is made to ensure accuracy, the publisher and editors cannot be held responsible for any inaccurate information supplied and/or published.