How Digital Transformation and IoT Can
Contribute to the UN Sustainable
Development Goals
An Industrial Internet Consortium and IoT Alliance Australia Joint White Paper

2020-06-22Authors
Peter Klement (Associate Partner, DXC Technology), Frank Zeichner (CEO, IoT Alliance Australia),
Brian Subirana (Director, MIT Auto-ID Lab), Asif Gill (Director, UTS DigiSAS Lab)

Editors

Stephen Mellor (CTO, Industrial Internet Consortium)

Contributors1

Chaisung Peter Lim, D.Phil. (Konkuk University, Korea)

1

Individuals who have provided valuable comments and inputs that have substantially improve the qualityof this white paper.

How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals

THE GENESISIn Simon Sinek’s book Start With Why 2, he explains theGolden Circle (Why-How-What) which is essential to inspire
people to take action and necessary to achieve the United
Nations’ Sustainable Development Goals (UN SDGs) byleveraging digital transformation in organizations.
This paper uses a modified version of the Golden Circle,changing the original sequence to Why-What-How toapproximate how organizations currently operate andthereby increase the chances of achieving the relevant UNSDG.

Figure 1: The Golen Circle

WHY?
In the World Economic Forum’s (WEF) 2018 report on the Internetof Things Guidelines for Sustainability 3, researchers clearly show
how existing IoT projects support UN SDGs, even though in mostcases this was not the organization’s objective in executing theproject.
IoT only represents one technology in the digital technology stackand is combined in business solutions with other digitaltechnologies, like mobile, cloud, drones, robotics and artificial
intelligence (AI), all to support digital transformation. One use casecould involve getting sensor data streams into an integrated data
management and analytics platform for the purpose of predictive
maintenance and displaying the relevant information in an
augmented reality (AR) application on a smart phone. Therefore,
the WEF study results can be applied to digital transformation,
which is enabled by IoT.

Figure 2: Internet of Things
Guidelines for Sustainability

The climate change discussion over the last 12-to-18 months clearly demonstrates the relevanceof this topic in societies worldwide as big investors like Blackrock shift their portfolios towards
sustainability and social impact. Blackrock’s Letter to the CEO 4 by CEO Larry Fink is a highlyrecommended piece of thought leadership.

Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action, Penguin LCC US, 2011https://www.weforum.org/whitepapers/internet-of-things-guidelines-for-sustainability/
4
https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter23-2-

How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals
With high street and main street joining forces, not aligning digital transformation initiatives withUN SDGs can be a high-risk for any organization. This is evident from current trends such asconsumers voting with their wallets and switching to product and service alternatives thatconsider environmental and social impact along the cradle-to-grave life cycle.

WHAT?
Organizational activities are driven by business strategy and its execution in the form of initiatives
that transform the operating model. Digital technologies play a key role in many transformation
activities. What we need to achieve is to link UN SDGs to digital transformation initiatives of anorganization. While UN SDGs are clearly defined, digital transformation lacks a clear and accepted
definition; this paper provides a potential definition below.

WHAT ARE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS?
UN SDGs are 17 interconnected goals to achieve a better andmore sustainable future for all. 5 They were unanimously
adopted by all UN Member States in 2015 to end poverty,
protect the planet and ensure all people enjoy peace andprosperity by 2030.

WHAT IS DIGITAL TRANSFORMATION?
Although there is no single agreed digital transformation
definition, there is common understanding that it relates toFigure 3: UN Sustainablebusiness change, related outcomes and effects enabled byDevelopment Goals
digital technologies (e.g., IoT). Essentially, digital transformationis adapting to change using digital technologies. This likewise draws attention to adaptive digitalcapabilities. 6 We can define a Digital Transformation Maturity Model by considering what IoTand other digital technologies can enable from a business transformation perspective.

56

https://sustainabledevelopment.un.org/
Korhonen, JJ and Gill, AQ, "Digital Capability Dissected" (2018). ACIS 2018 Proceedings. 27.

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Figure 4: Digital Transformation Maturity Model

Customer experience entails using digital technologies to improve the experience of customers
in buying and using existing products and services. This is not limited to online experiences, but
includes the brick-and-mortar shopping world. Information regarding availability of goods instores can be provided using sensor technology (e.g., smart shelves). The maturity model canstart with the customer experience, as customer demand drives everything else, including
business model innovation.
Business model innovation changes the way an organization currently operates. This could mean
moving from products to services, creating new digital products or changing channels to themarket. The IoT Business Model Builder in the Industrial Internet Consortium’s (IIC) Business
Strategy and Innovation Framework can be used to shape business model innovation. Selling
flight hours instead of jet engines is an IoT-enabled innovation that engine manufacturers like
General Electric and Rolls-Royce have embraced. Once the new business model is defined, thebusiness operations of the organization can be optimized using digital solutions.
Operational excellence entails optimizing the operating model using digital technologies. This iswhat Jeanne Ross from Massachusetts Institute of Technology (MIT) calls digitization. Many,especially asset-intensive, industries use the word automation. For example, IoT helps with theautomation of business processes, using intelligent assets like autonomous mining trucks. Afterthe processes are reengineered and optimized, the final step is to improve the employee
experience. In the end, people create the customer experience. Sadly, this is often overlooked ina drive to “optimize the hell out of operations with automation and lean approaches”.
Employee experience explores the work environment while attempting to make it moreproductive, safe and enjoyable. However, different industries have different priorities in thisrespect. In manufacturing, productivity tops the list; in mining safety is the priority; while increative industries a more enjoyable working environment is the focus. Vital sign sensors can bebuilt into safety vests or smart helmets in factories to monitor employee health in real-time.

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In the white paper Realizing the Internet of Things: A Framework for Collective Action 7 five pillars
for the successful introduction of IoT are described and as IoT is a digital technology, those pillars
are likewise key to the success of the digital transformation of an organization.
1. Architecture and standards: Reference architecture enables the development of standards,
by disclosing the areas of a technology landscape or organization where standards add value
by influencing the technology vendors to distance themselves from proprietary solutions.
Reference architectures also provide best practices in the form of blueprints to accelerateand deescalate digital solution implementation risk.
2. Security and privacy: Sensors and IoT devices provide an additional attack surface for end-toend business solutions and data collected from sensors may be linked back to an individual
person and needs to be protected accordingly.
3. Shared value creation: Value from investment in digital technologies, like IoT, may only occur
in the long-run and benefits may be realised by other organizations and individuals that did
not make the technology investment. A shared business case in a value network is key toincentivise investments in digital technologies.
4. Organizational development: Personnel will require new skills to use digital technologies, butalso to operate in an organization that may change significantly due to the impact oftechnology on the business model and operations.
5. Ecosystem governance: Digital solutions require the input and participation of multiple
organizations in a value network. They form an ecosystem and how to steer that ecosystem
towards a common goal requires a governance structure. Industry associations like theIndustrial Internet Consortium (IIC) and the WEF have a key role to play.
Those pillars are critical success factors for the successful implementation of digitaltransformation and hence key for achieving the UN Sustainable Development Goals anorganization has decided to pursue.

WHAT IS THE CONNECTION BETWEEN UN SDGS AND DIGITAL TRANSFORMATION?
UN SDGs can be used to shape the business strategy and goals of an organization. Depending onan organization’s answer to the question “What is our digital vision and how do we want toachieve it?”, some UN SDGs are relevant to the digital transformation of an organization. Whatis not apparent is how UN SDGs fit into the strategic planning process, which is addressed next.

7Merritt J. and Sarma S., “Realizing the Internet of Things: A Framework for Collective Action” (2019),
World Economic Forum in collaboration with the Massachusetts Institute of Technology-5-How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals

HOW?
STRATEGIC PLANNING IN THE DIGITAL AGE
The Object Management Group’s Business Motivation Model (BMM) 8 and the Balanced Score
Card (BSC) 9 are two tools often used in strategy planning and execution and are certainly relevant
to digital transformation. The BMM contains vision, goals and objectives, while the BSC
categorises objectives and links them to the strategic initiatives. These tools can likewise be used
to link UN SDGs to the business strategy as illustrated below.

Figure 5: Business Motivation Model and The Balanced Scorecard

UN SDG AND BUSINESS STRATEGY MODELS
A specific UN SDG maps to a goal in the BMM that is linked to a set of objectives. An objective inthe BMM can be mapped to an objective in the BSC. The next step is linking the objective in theBSC to an organization’s supporting digital transformation projects so that UN SDGs relevant toan organization can be directly traced to its project portfolio. The BSC provides this mechanism
as it links objectives to initiatives and initiatives are the main building block of a digitaltransformation project portfolio.

Figure 6: Digital Transformation Project Portfolio

Business Motivation Model, Object Management Group, https://www.omg.org/spec/BMM/AboutBMM/
9Norton, David P. and Kaplan Robert S., “The Balanced Scorecard: Translating Strategy into Action”,
Harvard Business Press (1996)
8-6-

How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals

UN SDG AND DIGITAL TRANSFORMATION INITIATIVESWhile we now have a way to link UN SDGs to an organization’s strategic planning process, wenow need to create the link to the operating model of an organization, coming up next.

MODEL DRIVEN ENTERPRISE FOR DIGITAL TRANSPARENCY
Digital transformation initiatives change the business operating model and technology landscapein a way that supports the achievement of UN SDGs. An organization’s current and futurebusiness operating models along with its technology landscape can be documented using
Enterprise Architecture Models (EAMs). The MIT Centre for Information Systems Research(CISR) 10 defines enterprise architecture as an enabler for business strategy execution. Strategyexecution occurs through digital transformation projects that use solution architecture designs
to describe the future state of the part of the organization or value network that is transformed.

Figure 7: Current and Future Enterprise Architecture States

EAMs can describe the whole organization consistently and create transparency by documenting
the different parts of an enterprise and the relationships between them. Using the right tools tomodel the enterprise and solution architectures in the organization’s current and future state
facilitates identification of dependencies and relationships. Questions that can then be answered
include:••10

If I switch off this server, what business processes are affected?
If I re-engineer this process, what IT systems are affected?

https://cisr.mit.edu/content/classic-topics-enterprise-architecture-7-

How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals•

If this project does not succeed, what UN SDGs are affected?

The outcome of using a standardised and integrated modelling tool landscape is a consistent andcurrent EAM.
The enterprise model covers strategy, business operations and technology landscape. Its powerlies in the transparency generated which aids understanding how the organization operates andalso provides the ability to run “what-if” scenarios.

Figure 8: Enterprise Model

This enterprise model is a virtual representation of the real world. A model-driven enterpriseconnects the enterprise model to the real world of business and technology operations as a new
approach of managing an organization. Business and technology operations have two aspects:
the actual execution and the monitoring of business activities. The monitoring is necessary tocompare the enterprise model with what is happening in real world operations. Gartner
describes the combination of modelling, monitoring and execution as the “Digital Twin of theOrganization”.11

https://www.gartner.com/en/documents/3901491/create-a-digital-twin-of-your-organization-tooptimize-y

11-8-

How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals

Figure 9: Model-Driven Enterprise

UN SDGs are defined in the enterprise model, achieved through operational execution, measured
via business activity monitoring and compared to the target values in the enterprise model. Withsensor technology and IoT, business operations can be monitored in near real-time and hence
target UN SDG achievement can be tracked in a timely fashion.
There are a couple of partial model-driven enterprise solutions available with a focus on
monitoring execution and target to actual comparison. To deliver products or services to acustomer one enterprise is insufficient and a supply chain or value network is needed. With all
the different modelling tools, operational systems and monitoring solutions from different
vendors, interoperability is the main challenge in achieving a model-driven enterprise let alone amodel-driven value network that supports the achievement of UN SDGs.
To address this challenge the MIT Auto-ID Lab (IoT birthplace) and the University of Technology
Sydney DigiSAS Lab have initiated an industry-driven research collaboration on the model-driven
enterprise starting with data exchange formats for models and other relevant information.

WHERE?
Here we show three real-world examples of how UN SDGs were unintentionally achieved byorganizations. This demonstrates that many organizations implicitly support UN SDGs and hence
miss an opportunity to improve their reputation and brand. All the case studies do not implementa model-driven enterprise, but the main intent behind sharing the examples below is to illustrate
how IoT and digital transformation can be used to achieve UN SDGs. To honour organizational
confidentiality the names of the organization cannot be disclosed.
1. Global Mining Operator: Mine sites are dangerous working environments and mostorganizations in the industry have a strategic goal of zero harm. Worker fatigue affects thesafety of mine operations. Fatigue has many contributing factors and predicting it is difficult.
Hence, guidelines are provided to the employees and preventative fatigue management
programs are implemented. Available health data, including real-time sensor data in personal-9-How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals
protective equipment can be correlated using machine learning to allow for near real-time
prediction of fatigue risk. This is aligned with UN SDG #3: Good Health and Well-Being.
2. Industrial Equipment Hire Company: Amongst other assets, industrial clients hire diesel
generators from an industrial equipment hire company for use in regular operations orwhenever the electricity grid has an issue. Diesel generators have a large carbon footprint.
Through sensor data and AI, generator fuel consumption can be minimized. Also based on
consumption, carbon offset credits can be purchased to enable their clients to hire a carbonneutral diesel generator. This supports UN SDG #13: Climate Action.
3. Container Terminal Operations: Container terminals are traditionally dangerous working
environments where people die. There is limited visibility around the corners inside thecontainer stacks. Straddles are 65-ton vehicles that bring containers from point A to point B.
Just imagine a straddle colliding with a forklift. An Australian operator equipped the container
terminal with sensors and removed the straddle driver thereby converting them toautonomous straddles. IoT sensor data, combined with data analytics allowed the Australian
operator to reduce its injury rate by over 95% within one year of introducing these digitaltechnologies which supported UN SDG #3: Good Health and Well-Being.
4. Smart Farming12: Sugar cane farming requires intensive work from farmers. Because of aging
farmers and a younger generation avoiding manual work, farming faces a serious problem: alack of workers. To solve this problem, an agriculture company in Thailand, with six sugar
mills, four ethanol generation plants and around 5,000 contract sugar cane farmers, devised
a smart farming solution, using GPS, sensors and autonomous tractors. This example
illustrates typical challenges of adoption of IoT technologies in developing countries. Thecompany needs to use expensive radio frequency, because IoT networking technology is not
yet available in Thailand. Market adoption of smart farming solutions are difficult, due to therequired investment, the difficulty of farmers understanding the benefits of the solution andnot having the necessary skills to operate the solution. Solving those issues for IoT adoption
in developing countries could contribute to solving the problem of a decreasing work force.
This Smart Farming Solution supports UN SDG #9: Industry, Innovation, and Infrastructure.

CALL FOR ACTION
This paper illustrated how digital transformation can support relevant UN SDG, by including themin the strategic planning and execution of digital transformation activities. The model-driven
enterprise concept can link to business operations and the technology landscape, making theprogress towards UN SDGs measurable and transparent. We recommend including the modeldriven enterprise in your digital vision and strategy and implement it one digital transformation
project at a time, starting with a proof of concept to show the value to the business.
12Lee, J. (2018) EECi demand articulation and strategy development, STIPI, mimeo. Bangkok, Thailand- 10 -

How Digital Transformation and IoT Can Contribute to the UN Sustainable Development Goals

AUTHORS AND LEGAL NOTICEThis document is a work product of the Industrial Internet Consortium Digital Transformation
Working Group, co-chaired by Jim Morrish (TransformaInsights), Dirk Slama (Bosch) and Bassam
Zarkout (IGnPower).

Copyright© 2020 Industrial Internet Consortium, a program of Object Management Group, Inc.
(“OMG”).
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