Saturday, 25 November 2017

Small doesn’t necessarily mean simple: Implementing SAP S/4HANA and SAP MII

Just 10 short years ago, OMR Group was a small automotive company, based in Italy, with two owners and 50 or so employees. They were satisfied with the paper-based manual processes and systems that OMR had used for over 40 years. But OMR had the drive and ambition to move to the future and expand worldwide. Recently, they’ve experienced tremendous growth in production, employees and subsequently, revenue. Their fast-growing family-owned business has become much more complex and complicated. Simply put, they’ve outgrown their paper-based process.

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Before now, OMR had no experience with technology. Moving to a technology-based system is a huge step forward, but it also means that the move to technology-based systems would take them out of their comfort zone. Their growth had forced them to review their internal procedures and processes and, ultimately, they realized that they had to make the move.

After much consideration, IBM and SAP were chosen to help transform their business. The customer appreciated our expertise, and our friendly and gentle approach. We designed the project journey as a team. However, implementing an SAP project in a small company doesn’t mean that it’s simple.

IBM presents the flexible approach

In a small family-owned company, the owners maintain the authority to make changes to processes, systems and their organization. And sometimes, it’s tough to convince the owners to embrace change.

Owners that are accustomed to paper-based reports with a specific format, down to a specific font, cannot always recognize the value and power that new technologies can offer. Using analytics tools that allow the user to surf through the data, aggregate and simulate reports online, on any device, without a paper trail can be difficult to accept. Letting go of paper-based, manual processes is not as easy as it sounds.

IBM needed to take a different approach to this project with OMR. We had to tailor our way of working to better meet the company’s culture, rather than forcing an unwanted culture onto them. We addressed OMR’s apprehension with:

◈ Short meetings with the owners to make key decisions instead of long discussions with all managers
◈ Simple presentations instead of long documents with too many details
◈ A prototype approach instead of a long blueprint, with no system demo

Most importantly, IBM placed the decision-making back into the owner’s control, instilling confidence in the overall project and gradually convincing them to embrace new technologies.

Implementing the latest SAP ERP

In OMR, we implemented their innovative solution based on the latest SAP ERP product, SAP S/4HANA and SAP MII (Manufacturing Intelligence and Integration). To date, OMR is currently running SAP Finance in four legal entities as well as live with a foundry (all supply chain processes, plus finance). We are planning to rollout to five more plants soon.

We spread the system out to all employees in the company, including factory operators. With the previous systems, only “white-collar employees” were given access to the systems to report data (such as sales orders, purchase orders, invoice). Operators were asked to report their production data (number of produced goods, number of defects, machine downtime, scraps) on paper, and the day after, the white-collar employee put this information into the system. Real-time data simply did not exist—and the risk of mistakes due to transcription was very high.

With the new S/4HANA and SAP MII architecture, operators now have direct access to MII with touch screen monitors placed in the factory, and they can report what they did in real time. This new approach has helped OMR make more timely, targeted decision-making at the executive level and enhances the ability to trace products and monitor quality.

By implementing the integrated solutions, OMR now has the ability to connect production systems right through to delivered products. Making these advances are crucial to driving international growth.

Friday, 24 November 2017

Cognitive Analytics and Mobility Can Empower Maintenance Service Personnel

One of the important KPI’s of Maintenance is to reduce the “Mean Time to Repair” of the equipment. As in the Mining (any) industry the maintenance personnel are always hard pressed for time to rectify/ service the equipment in the shortest possible time and return it in a safe operating condition to its potential capacity. Maintenance personnel need to allocate jobs, allocate and withdraw spares & tools, refer to the hard copy manuals during the execution of the job, and connect with OEM for expert support. Assume maintenance personnel with tools in one hand and continuously referring equipment manual during the rectification or service of the equipment. The mobility & cognitive analytics will provide another mobile tool in the hands of maintenance personnel and empower them to reduce the maintenance time and increase the equipment utilization.

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Asset Life cycle of Mining Machinery

The total asset life cycle starts from its conception till scrapping during which, it passes through multiple stages of the life cycle.

There are two players for Asset Maintenance

1. Original Equipment Manufacturer

◉ Direct OEM – Annual Maintenance Contract
◉ Through Dealer – Annual Maintenance Contract

2. Equipment User – Internal Maintenance

Let us discuss the cases.

As the data generated by the equipment is available since its manufacturing stage, the usage of the data from the entire life cycle can be utilized for maintenance depending on OEM or the equipment user. The characteristics or attributes values help in deriving the root cause analysis of the failures. The problems / faults and the associated actions will generate a historical data which will help in deriving the future maintenance activities and reduce the rectification or service time. All these data will be available on maintenance supervisor or maintenance executioner depending on role and responsibility.

How cognitive analytics can support during the entire life cycle

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The Manufacturer can utilize the data generated by the user as per the feedback and support required from time to time and help reduce the SLA’s during the AMC and Equipment user can utilize their own historian and online help from the OEM for maintenance.

Further these analyses can also help in remote support using mobile as Internet of Things (IoT) for better decision framework where the OEM can monitor the attributes remotely and suggest actions or remedies.

Monday, 20 November 2017

Malls of the future will harness tech to make tenants and shoppers happier

The rise of online shopping has not been kind to malls. Traffic is declining, jobs are dwindling, and many malls are disappearing altogether. By 2022, analysts estimate, one out of every four malls in the U.S. could be out of business. But while more malls will certainly shut down in the years ahead, those that remain will evolve to become more vital than they’ve ever been.

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Traditionally, shopping malls have been at the heart of communities across the world. To continue to play that important role, mall operators need to reconsider the operating model that has serviced them for decades. By combining physical and digital capabilities, mall operators can create new sources of revenue and offer unique experiences for tenants and consumers alike.

Imagining solutions

Smarter city analytics, predictive modeling and advanced analytics could dramatically improve decision making at all levels in malls. Traditional reporting could be replaced with mobile dashboards and workflows could be automated to improve efficiency and response times across the ecosystem of service providers.

The entire tenant lifecycle, meanwhile, could be digitized, allowing tenants frictionless access to a mall’s services. Lead management, CRM, master data management and mobile apps could support the prospect to contracting cycle.

In the future, mall operators could, for a fee, offer non-traditional services beyond the traditional leasing contract, such as access to commerce platforms, digital marketing and campaign services, consumer segmentation services, in-store apps, and IoT solutions. Smaller brands that can’t be accommodated within the physical mall could be accommodated in the digital mall.

For shoppers, malls could offer guided navigation, AI-driven digital concierge services, personalized marketing, proximity based offers, seamless Wi-Fi (both inside stores and outside in common areas), and ticketless parking. A mall could even offer services in collaboration with third-party service providers. For instance, a mall could partner with Uber to provide free rides to the mall and back after a set number of visits.

Crafting experiences

Malls of the future will need to offer unique experiences to incentivize shoppers to visit. Some of today’s most successful stores are already offering such experiences. At historic French department store Le Bon Marché, for instance, in addition to shopping the world’s top clothing brands, shoppers can have lunch, buy music on vinyl, and take in an exhibition. Delivering such signature experiences depends on a comprehensive understanding of the customer base, so mall operators will need to gain the ability to mine insights from consumer data for segmentation and targeting.

Mall operators can learn from the collective experience of other industries and avoid the pitfalls of disjointed solutions, opting instead to centralize core capabilities that can be exposed across various channels. We call this collection of centralized capabilities the “Mall Operating System” or “Mall OS” of the future.

With key digital technologies, malls can improve business agility, lower spends, and create differentiated experiences. Far from presenting an existential threat, digital technology is the key to the malls of the future.

Friday, 17 November 2017

Risk Management: New Frontiers for Metal Companies

It’s high time for metal producers and consumers to explore new frontiers in risk management strategies due to increased volatility, risk and regulatory compliance. Enterprise wide risk management requires an integrated view of market, credit, operational and Geo-political risk. Managing market risk is vital to managing profitability. There are many factors effecting market risks for metal companies – foreign exchange, interest rate, commodity prices (ore, alloys, finished products, energy etc). An effective risk management policy includes all levers of influence like derivatives trading, hedging; revising contracting-payment terms; pricing policies; capacity utilization & shutdowns; inventory policy etc. In this blog, I focus on market risk specifically commodity cost, price fluctuations effecting producers and consumers.

Due to increased volatility in metal markets prices, both consumers and producers want to secure their profit margins. Volatility is further intensified by demand forecast errors, increased raw material price liquidity, trading arbitrage, shifting customer delivery dates. These effects impact entire supply chain. The degree and maturity in commodity trading varies among consumer and producers. Some execute basic strategies to manage risk exposure and others are deriving profits from trade activities (significant revenue component).

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Three key areas where we need to integrate our risk management and commodity trading strategies

1. Derivatives Trading – Multiple exchanges for metal trading, where producers (miners and metal/steel refiners/manufacturers) can hedge risk exposure caused by metal price volatility. Financial instruments used for hedging include forward transactions, futures contracts, warrants, zero cost collar options etc. It is important to monitor open positions (mark to market, net exposure) on physical and financial trades at transaction level. This can be achieved by end to end supply chain integration and visibility.

2. Supply chain integration with end to end transaction visibility & analytics – in order to manage risk, we first need to make visible our risk positions across sales, inventory (raw material, work in progress and finished goods), operations (production, quality, transportation) and procurement. Lets start with sales contract creation. Companies use complex pricing mechanisms based on market, exchange linked prices for quotational periods in provisional offers, final delivery including formulas based on metal characteristics. Further we need to monitor our exposure position based on the open contractual agreements and mark to market values of both physical and traded transactions including movement of physical commodity. This further integrates to production and quality where assay characteristics are used to calculate bonus, penalties for provisional, final invoices. Similar concept extends throughout the supply chain to procurement.

3. Monitoring & Reporting – Regulatory compliance’s for Hedge Accounting, Fair Value Disclosures, Value at risk and monitoring other risk categories linked to credit risk, Geo-political risk and operational risk.

Let us take one case example from stainless steel. Stainless steel requires input (iron ore, coal, alloys –chromium & nickel, energy) to produce finished product. Composition of alloys chromium and nickel varies from 10-30%; 2-10% respectively. Price fluctuations in Nickel which trades around US $14,000-20,000 per ton significantly effects cost of goods sold compared to Chromium which trades at $2300-2500 per ton. In order to manage Nickel fluctuations company is updating their pricing policies, formulas and implementing commodity management solution that provide end to end supply chain visibility to manage risk and profitability at customer order line level.

Conclusion – Enterprise wide risk management needs to support the growth strategy of a company including financial targets. In metals companies, Market risk is seen as a major risk category. In order to effectively manage Market risk we need to go beyond the excel workbook of a day trader and deploy technology solutions that provide end to end supply chain visibility, analytics with real-time integration of sales, planning, production, quality, transportation, inventory and procurement transaction. Further we see metal markets (including steel) are heading towards increased liquidity like oil, gas. In these liquid markets producers can explore opportunities to decouple their supply chain in terms of supply, production and demand. In future risk management and commodity trading will be an integral part of consumers, producer’s strategy influencing entire supply chain for sustainable profitability.

Wednesday, 15 November 2017

Use the power of digital and win

I board a flight and call my rental car company to book a vehicle. I land at the major airport where my reservation is confirmed but encounter one small detail: all the cars are rented. The manager apologizes, smiles and hands me a coupon for a free day. When changing cities in midweek and trying to be productive, it is pointless for me to argue that I have a reservation. Instead, I find the supervisor and start chatting about whether IBM could help the company fix its planning and scheduling system challenges. Before long, my car arrives and I dial into my next work call.

Monday, 13 November 2017

The role of the Energy Integrator

Continuing disruption in the energy sector is pervasive worldwide and it is driving structural, technical and commercial changes in the industry. In the midst of this disruption, utilities need to embrace the role of the Energy Integrator. Three precepts are at the core of what it means:

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◉ The essential grid
◉ The power of markets
◉ The mantle of sustainability

The essential grid

Although the electric grid will be a central element of the electricity system for the foreseeable future, it will have to operate a new grid with operating characteristics that are more complex than the grid of today. Although significant amounts of automation and new technology can be used, the energy integrator will still be required to operate the grid.

The power of markets

The energy integrator will use marketplace mechanisms to support a robust marketplace for electricity and associated required products and services. An open market construct for price is preferred as attempts are made to integrate renewable technology and demand-side technologies into the supply mix as dispatchable resources in the future.

The mantle of sustainability

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Sustainability as a social objective and political imperative increasingly is being adopted on a global basis. Embracing, fostering and promoting sustainability is a foundational concept for the energy integrator. Sustainable energy production is a fundamental aspect of the energy integrator’s mission and offers opportunities for innovation.

Friday, 10 November 2017

Mobility in the Energy and Utility industry

Use of smartphones and tablets by utility employees and customers have forced utilities to deal with the challenges of the new mobile era. Mobility has affected the speed of the utility’s digital transformation, with employee and customer expectations increasing rapidly. Utility employees are awaiting dynamic and configurable services and processes with similar level of experience as their consumer mobile apps. Customers require a personalized and interactive mobile experience.

The line between personal and professional use of mobile devices has blurred, with more and more employees using their personal devices to get work done. Mobility has expanded our world beyond simple smart devices, creating a new digital world, which means both the IT and business unit leaders in a utility are faced with the challenge of taking advantage of the technology while addressing security and privacy issues.

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Even though many organizations have acknowledged the mobile transformation trend, there are still many utilities that do not have a formal mobile strategy. According to IDC Energy Insight,1 more than 37% of utilities consider mobility a top priority for 2016, however, more than 40% of utilities do not have a mobile strategy. It is clear that mobile is disrupting virtually every existing business and technology process and is forcing utilities to develop a sound mobility strategy.

Why is mobile important?

Mobile technology is helping Energy and Utility organizations become more nimble, responsive and efficient. When outages occur, speed of response and public safety are paramount. From user-centric and process specific apps, to apps configured “on the fly” in an outage situation and the ability to provide front-line workers detailed information about outage location, customers, network status and external data, as well as enabling collab oration between personnel, mobility is changing the way utilities work.

Mobility enables organizations to improve customer service by providing field workers access to technical data and documentation when and where it is needed. Mobile field crews can be dispatched to the right location with the right inventory, and enabled to collaborate with colleagues in the field or other departments to resolve issues while at the scene. Mobility improves overall efficiency by enabling direct updates from the field, real-time data/picture/video collection and analytics on asset status.

Example, a European water utility with a significant mobile workforce needed to integrate many of its enterprise applications — such as Enterprise Asset Management, Resource Planning and Customer Relationship Management — to make specific data accessible to its field workers’ various mobile devices (supporting multiple operating systems and form factors). It was imperative for this utility to provide its field workforce with up-to-date status information on assets, work orders and customer requests, and for the work to be provisioned as well as updated while in the field. Thanks to the utility’s well-thought-through mobile strategy, the workforce in the field is now able to address an asset failure or deal with a customer request more efficiently by accessing information from the company core operational systems and combining that with data updated in the field, with pictures, voice recordings, and videos added to the work order and system of record.

Expanding mobile capabilities for the field workforce are providing utilities with clear benefits, such as reduction of asset paperwork and manual reporting, crew member dispatching and communication in the field, workforce safety, best practice procedures, managing timesheets, network maps and documentation. Utilities are also offering mobile and flexible solutions to not only their field workers, but to their office workers and customers as well. All of these activities mean that utilities are facing the challenges inherent in implementing mobility; i.e. device management, security, communication networks and mobile application development.

To take full advantage of mobile transformation, utilities must be able to fully address the business impact of mobile solutions within the entire enterprise – not just for workers in the field. A utility can do this by effectively integrating the unique capabilities offered by mobile devices and technology into its business operations. Mobile app development should focus on dramatically changing the way work is done, integrating mobile with analytics and helping employees make decisions and do their jobs in the way they could never do before. Some examples include:
  • Mobile technology can enable first responders to communicate with each other in “real-time” and respond faster to emergency situations, which can increase safety for both employees and the public.
  • Enabling employees to collaborate within the organization can improve workforce efficiency, boost their skills and enable knowledge management.
  • Providing real-time access to information, location and status of employees and assets can help boost efficiency across the organization, improve reliability and improve customer satisfaction.
Utilities are in the midst of a fundamental transformation. The industry has many challenges, such as distributed renewable energy, energy efficiency, microgrids, smart metering, carbon emission regulations, grid infrastructure, severe weather events, security, customer expectations and competitive retail market. However, leading utilities are adopting and leveraging the technologies to help them deliver more services and respond more quickly and effectively to employees, customers, regulators and other stakeholders.

Wednesday, 8 November 2017

The Smart Grid was your first Internet of Things project

For many electric power utilities, the Smart Grid was their first Internet of Things project. Just as some early smart grid projects were started before the term became popular, and were then known as an intelligent utility network or advanced distribution automation project, so too was smart grid an early version of internet of things for utilities.

Monday, 6 November 2017

The energy integrator spheres of operation

The energy integrator provisions the systems of engagement to sustainably balance distribution-side energy supply and demand safely, reliably and securely. The energy integrator operaEnergy integrator_Spheres of operationstes within three core spheres of operation:

Friday, 3 November 2017

Transacting in real-time: IBM launches new payment systems with Zelle

Earlier this year the Federal Reserve released the second part of its long-anticipated report from its Faster Payments Task Force. The report outlines a path to modernizing the U.S. payments network by 2020.

The Clearing House’s Real-Time Payment System has just come online after two years of development, opening the floodgates for Real Time ACH.

NACHA is marching forward from same-day credit ACH transaction, launched last September, to sub-10 second debit transaction, putting pressure on legacy systems, while setting an aggressive expectation for the industry.

Fintechs like Venmo, PayPal, and TransferWise have revolutionized peer-to-peer payments, capturing a latent market beholden to slow ACH processing. They’ve set the bar for customer expectations, and the American banking industry is rapidly responding.

Over the past 18 months, and accelerating into this year, everything in the payments ecosystem has changed. Banks are now expected to settle transactions faster than ever before, putting new pressure on existing platforms and processes. Further complicating the issue is the fact that as the speed of payments increase, so does the speed and complexity of payment fraud.

So here we are. Financial Institutions are scrambling for the necessary infrastructure, innovation and expertise to support the new world of faster payments.

Having seen the writing on the wall, IBM began collaborating with The Clearing House and the Zelle network to figure out how to help customers manage these changing market dynamics. At Money20/20 this week, IBM announced that it has integrated its Financial Transaction Manager (FTM) software within Zelle’s payment network.

This big step forward allows customers of banks that use FTM to have immediate access to the Zelle network, to send and receive money in minutes.
While seemingly daunting in scope, the potential of this connected, high-speed payments network allowing all U.S. banks to begin dealing with real-time payments is achievable with the right approach to making hardware, transactional cost, and security blend seamlessly together.


In addition to supporting traditional distributed hardware platforms, IBM is uniquely positioned to take advantages of history’s most enduring computing platform: the mainframe.  What might be a little-known fact is that the vast majority of financial institutions in North America run massive amounts of transaction processes on IBM mainframes. Solutions running on IBM Z Systems have the necessary computing power, speed, security and connectivity to host payments workloads. With October’s announcement of FTM for ACH and Real-time payments now supported on the mainframe—with very strong integration capabilities to legacy settlement systems—this new solution is facilitating a better way to tackle the real-time payments challenge.

Transactional Cost

Given that mainframes have always had the computing power, security, and capacity to run payment workloads, why haven’t we seen widespread adoption in the past? The answer comes down to cost.  Historically, mainframe software costs are based on consumption usage models—how much compute power and capacity are they using across the subsystem stack. Banks have become very good at predicting daily consumption usage, but payment volumes introduce unpredictable spikes, throwing a wild card into the equation. From one day to the next, a bank could see spikes in payments, so their consumption usage could go outside the expected range, adding significant cost to the system.

IBM introduced a new pricing model that mitigates the risk of consumption spikes. The model prices payments by transaction, not on the consumption used by the transaction. This makes running real-time payments on Z Systems much more economically viable.


More and faster digital transactions, means more and faster payments fraud. Via IBM’s Safer Payments solution, fraud detection is now possible with ever increasing accuracy and in sub-second timeframes. Safer Payments is powered by an Artificial Intelligence (AI) engine which learns and optimizes its fraud detection algorithms as it processes more transactions. This allows the system to detect emerging fraud patterns and adapt to them in a way that traditional manually trained systems would otherwise miss. Safer Payments is unique in the industry because as fraud detection goes up, false positives come down. In the emerging world of real time payments, real time fraud detection is a must.

We’re thrilled by the new integration of FTM with the Zelle network because it means a better delivery of service to end-user customers, lower costs to banks, and stronger protection against fraud. In this rapidly changing landscape of payments, innovative enterprise thinking builds the right solution for modern banking.

Wednesday, 1 November 2017

Payment Services Directive 2 and open banking

Payment Services Directive II (PSD2) is a European Directive that is mandating that financial institutions open-up their core infrastructure to third parties to allow access to product, customer and transaction data plus payment services. The scope only covers certain types of financial products. However, the UK’s Open Banking initiative extends PSD2 further and requires institutions to provide reliable financial advice. This includes ensuring customers have the best product and deal, offering product comparison services, clear and capped overdraft charges and alerting customers when certain events affect them (e.g. the closure of a nearby branch).