dan yarmoluk...digital transformation confidential and private 12 • digital business is the...
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Dan Yarmoluk
• Business Development, ATEK AssetScan
• Podcast “All Things Data”• MBA• Graduate Degree - Data Science • Twitter: @YarmolukDan• LinkedIn: Dan Yarmoluk• Email: [email protected]• www.vertiai.com Community
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Complex to Simple
Sensors, Hardware, Things,
Cloud, Platform, Ecosystem, Analytics
Data
Where is the value and how can we provide it?
Value
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Data-driven Strategy for Business Outcomes
• Digital Transformation
• Journey in Industrial Internet of Things
• IT/OT Roles and Need to Converge
• Subject Matter Expertise, Data Science and Business Models
• Rethinking the Definition of Value
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Finding Meaning and Mindset
• Ideas From Billionaire Mindsets and Where You Fit In
– Agility trumps size • Kodak went bankrupt in 2012 and Instagram was
bought by Facebook for $1 billion with only 13 employees
• Disrupt Yourself, or Someone Else Will – Estimated that 40% of the Fortune 500 companies
will be gone in 10 years
– Digitizing a service (think AirBnB and Uber)
– Digitizing maintenance that leads to efficiency gains, savings on breakdowns and costly downtime ~ if maximized = competitive advantage
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Beyond
2010s
2000s
1990s
Digital Eras
Business
Value
E-commerce beginnings
Websites
Social Media
Mobile
Digital Marketing
IoT
Digital Transformation
Data Science
Digital Business
Autonomous Business
Artificial Intelligence
2020s
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Exponential and Enabling Technologies
• Technology to Change the World and Create the Next Billion-
Dollar Organizations
– Computational systems/infinite and cloud computing
– Networks and sensors
– Artificial intelligence
– Robotics
– Digital Manufacturing
– Medical technology/nanodiagnostics/digital health/biotechnology = DNA
sequencing, genome mapping, CRISPR, preventative vs. reactive
medicine and making 100 the new 60
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“Cheap sensors are enabling the little guys”, Microsoft IoT Executive
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Global Innovation driving demand for smart systems or
“Fourth Industrial Revolution” Industry 4.0
Big Data
Contextual Computing
senseMaking
Cognitive Computing
•Climate
•Oil Exploration
•Asset/Supply Chain
•Tsunami/Earthquake warning
•Smart Grid/Smart Cities
•Structural monitoring
CeNSE – trillion nano sensors
Internet of Things
Agricultural
Technology
Robotics
Digital Health
Nanodiagnostics
Industrial IoT “IIoT”
Wearables
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Technology Adoption Drag…
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Technology Adoption Drag…presents opportunity
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DIGITAL TRANSFORMATION
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Digital Transformation
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• Digital Business is the creation of new business
designs blurring the digital and physical worlds
• New business designs refer new kinds of products and
services, business models, industry models as well as
new ways creating value for customers
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Digital Business Examples
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• BJP, India’s largest political party, used holograms to
project a virtual version of its leader to election rallies
• Carmakers betting big on new forms of mobility
innovation and one day, autonomous cars
• Zappos, a retailer that believes it can take a 3D scan
of your foot and provide a better shoe
• Seoul National University Hospital is managing better
outcomes for diabetes patients by remote monitoring
of glucometers in their own homes
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Example: GoodYear Tire
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• ServiTIZE the Product
• Service-led Competitive
Strategy
• Participate in a Larger Value
Chain/Stream
• Value-based Pricing in an
Otherwise Commodity, Cost-
Plus Environment
• Must Understand the
Customer’s Business Process
and Determine the Right
Business Model
Extended Value Chain Opportunities
Advanced Services
Intermediate Services
Integrated Products/Systems
AugmentedProduct
Use information to MoveBeyond the Product
Use Information to SellThe Product as a Service
Use Information to ImproveThe Product in Use
Use Information to ImproveThe Product
Product Monitoring
ServicesSupportingCustomers
ServicesSupporting
Products
Categories of Value Creation from IoT
Source: Goodyear Global Innovation Dept.
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Challenge: Lots of Pieces and Parts
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1
2
3
4
5
6
7 People and Process
Connectivity/Edge Computing
Things
Global Infrastructure
Platforms Data Ingestion
Data Analysis
Applications
Transformational Decision Making Based on “Thing” Apps and Data
Custom Apps Built Using “Thing” Data
Reporting, Mining, Machine Learning
Big Data, Harvest and Storage of “Thing” Data
Cloud Infrastructure (public, private, hybrid, managed)
Communications, Protocols, Networks, M2M, Wi-Fi, Telecom, HW Kits
Devices, Sensors, Controllers
7 Layers of the Internet of Things (IoT)
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IOT is Creating New Space for Value Creation
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The Internet of Things is Everywhere
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Trillion Dollar “Mega-Trend”
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2015:
$500Billion
Projected Spending on IoT
2019:
$1.3Trillion
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IoT: Explosive Growth Occurring
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IoT: What is the growth really?
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B x P x T
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IoT: What is the growth really?
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B x P x T is:
• Businesses x People x Things– Estimated 130 million enterprises
– 3 billion people on internet and growing
– 2020 25 billion things will be connected to
Internet
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What do we mean by IoT?
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ConsumerA
BIndustrial
Consumer
Mass Adoption
Amazon Alexa, Echo
iWatch/Smart Watch
Connected Home
Fitbit
Connected Car
AIndustrial IoT or IIoT
Scalable Business
and Historical with
TankScan
Monitoring Machines
Location GPS
Condition Monitoring
Digital Plant
Predictive Analytics
Digital Twin
B
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What is the Industrial Internet of Things Value?
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• IIoT is creating a universe of sensors, which enable an
accelerated, deep learning of existing operations
• These data tools allow for rapid contextualization, automatic
pattern and trend detection
• Furthering this of manufacturing operations will finally allow for
true quantitative capture of formerly “expert” qualitative
operations
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IIoT Business Drivers
• Compliance with New Regulations
– FDA’s FSMA (food safety), DOT’s FCSMA (driver e-logs), EPA, OSHA
• Cost Reduction / Avoidance
– Field service, predictive maintenance, logistics, supply chain
• Product Differentiation
– Adjunct offering, avoid commoditization, reliability/uptime, new premium
SLAs, better roadmaps
• New Revenue Streams / Models
– Managed Hardware-as-a-Service offering, recurring revenue
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The IIoT is Many Things
I
EnergyBuildings
Government & Smart Cities Medical
Industrial
Digital Oil Field
Smart Meters
Solar & Wind
Electric Vehicle Charging StationsTank Monitoring
Public Safety Vehicles
Water Treatment
Parking
Street LightsSecurityTraffic
Medical Devices
Pharma Safety
Patient Monitoring
Manufacturing Automation
Heavy Machinery
Smart Agriculture
Asset Monitoring
HVAC Security
Lighting
Public Transit
Transportation
Fleet ManagementSmart Railways
Asset Tracking
Automation
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WHAT IS THE VALUE?
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Cost Improvements Seen as Most Value
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Manufacturing is leader in IoT spending
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Value in Service, Applications & Analytics
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Uneven Progress Capturing Value from Analytics
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Potential Impact Value Captured Barriers
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Data not being utilized
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Transformation lies in people and workflow
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IIoT Success Requirements = Domain + Connectivity +
Analytics + Integrate into Action
Value
1 2
3
4
5
Domain Expertise
Business Analysis
Instrumentation Expertise
Mechanical Engineering
Electrical Engineering
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Suppliers and organizations need to think about processes…
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Need to Process Map
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Value Proposition
• Essential Asset Monitoring vs. Critical Asset only
• Continuous Asset Monitoring vs. Monthly Diagnostics
• Automated Alerting to Various User Groups
• Dashboards and Analytics to Visually Explore; Root Cause
• Reduce Unplanned Maintenance – 30, 60 or 90 days in advance
• Reduced Planned Maintenance on Healthy Assets
• Operator Confidence Up and Less Operator Error
• Reduction in Expedited Logistics and Premium Pricing
• Integration into Workflow and Repair
• OPEX Pricing Model
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Value Proposition vs. Constraints
• Extremely Lean Staff: Break-fix or periodic maintenance --
putting fires out
• Legacy Systems have Critical (not Essential) Assets
integrated with SCADA or PLC systems
• Cannot utilize current reports nonetheless new automated
alerting nor reporting – no expertise or no time or do not trust
• Budgetary constraints anything above a maintenance budget
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IIoT Predictive Maintenance Today
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Value Proposition vs. Constraints
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• No Time• No Expertise• No Budget• Not Enough People• Primitive Diagnostics• Users of machines are different than repair
technicians• Has enough problems• Does not to need to be informed of
another problem but rather having a solution for the issue scheduled to be fixed
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Real Value Proposition
• Periodic blood pressure check
• Continuous blood pressure monitoring
• Radiologist (domain expert) to read results
• ALERT! Signs of a heart attack
• Sound alarm; schedule and perform surgery
• The real prescription is HOW to deliver the value in a
business MODEL
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Human Interjection to Maximize Automation
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Human Interjection to Maximize Automation
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IIoT Predictive Maintenance Model Should Include
• Technology Solution that has easy “bolt on” connectivity
outside SCADA or IIoT
• Automated Alerting and Dashboard Reporting
• People and Process to Interject with Alerting
• People and Process with Domain Experience to Diagnose
and offer Prescriptive Solution
• People and Process to Schedule Maintenance
• People and Process to Repair Equipment
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Condition Monitoring Example
• Monitoring solution with accelerometer, thermistor, etc. with gateway, cloud and dashboard
• Combined with Emerson Reliability Team and Technology
• Read high amplitude sound signature to perform predictive maintenance with vibration analysis
• Reliability team that has account access, maintenance contract
• Reliability and Maintenance team that constantly maintains equipment and interjects with alerts over time
• Reliability and Maintenance team to perform equipment diagnostics, root cause and repairs
• Delivered in monthly subscription model
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IT/OT Role Convergence
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OT Roles Today
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• No Time• No Expertise• No Budget• Not Enough People• Primitive Diagnostics• Users of machines are different than repair
technicians• Has enough problems• Does not to need to be informed of
another problem but rather having a solution for the issue scheduled to be fixed
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OT Roles Today
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• Cannot consume streaming dashboards• Skeptical of Data Science, Technology
solutions without real world testing• Conservative work culture• Positions and goals aligned around “break
fix mentality” keeping them employed• Incentives, tools and re-educating is
needed to move the needle
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OT/IT Convergence – an Evolution
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• IT roles will have to facilitate discussions between
subject matter experts, operations, and new
technologies to prove value to a skeptical audience
• IT roles will require more domain expertise
• OT roles will require more analytical expertise
• Education and lifelong learning and a culture to learn
will be required
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OT/IT Convergence – an Evolution
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OT/IT Convergence – an Evolution
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RETHINKING VALUE AND VERTICAL A.I.
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Full Stack Products
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• Full-stack fully integrated solution to the end customer
problem from the interface that solves for the need all
the way down the stack to the functionality, models and
data
• Ecosystem is more defensible than just proprietary data or models
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Subject Matter Expertise
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• Full-stack solutions requires deep subject matter
expertise
• Selling these products requires trust, respect and
relationships within the industry
• Teams combining SME and technical are able to model
domain richly and drive innovation from thinking
outside the box by understanding what the box is
• Teams with domain only are stuck in the box, and Silicon Valley are stuck out in left field
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Proprietary Data
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• Defensible AI are built on proprietary data by aggregating
public data and enriching it in some challenging way,
running simulations and training datasets
• Adding more to the “data flywheel” to capture unique data to
serve needs of unique models and needs of customer
• Data Value Chain ensures the customer’s motivation is
aligned with your motivation that compounds value of
proprietary dataset
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AI Delivers Core Value
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• Amazon, FB and Netflix are all companies that use AI
to drive very high percentage of lift in revenue and
engagement but is delivering ecommerce, social media
and video entertainment
• Vertical AI is not the core value, but an attachment that optimizes the core value
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What is Value
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“People don’t need a drill, they need a three inch hole”
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What is Value – Another Iteration
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