industrial internet, should i be interested?
TRANSCRIPT
Industrial Internet,Should I be Interested?
Mikko SainioionSign Oy
Things Are Changing…“25 billion connected things by 2020.”
Gartner, 2014
“38 billion connections by 2023.”Machina Research, 2015
“Spending on the IIoT $500 billion by 2020.”
“Value created by IIoT $15 trillion by 2030 .”
Accenture, 2014
“Economic impact $11.1 trillion by 2025 .”
“70% of value in B2B applications.”McKinsey, 2015
What Industrial Internet?Creating better solutions to needs people encounter
(in their work or personal life)
by using the data that things
(machines, devices, systems…)
are producing.Industrial Internet: Pushing the Boundaries of Minds and MachinesPeter Evans and Marco AnnunziataGeneral Electric White Paper, November 2012
What Smart, Connected Products?Physical component+ Smart component+ Connectivity component= Smart, connected productHow Smart, Connected Products Are Transforming CompetitionMichael E. Porter and James E. Heppelmann Harvard Business Review, November 2014
A
BA
B
C
D
E A
B
C
D
E
One-to-One One-to-ManyMany-to-One
Many-to-Many
Why Now?Now it’s possible.
Industry Boundaries ReshapeServices Equal Products – and Go
Beyond
How Smart, Connected Products Are Transforming CompetitionMichael E. Porter and James E. Heppelmann Harvard Business Review, November 2014
What Can Smart, Connected Products Do?
How Smart, Connected Products Are Transforming CompetitionMichael E. Porter and James E. Heppelmann Harvard Business Review, November 2014
Four IoT Opportunities Applied Most OftenEmil Berthelsen, Machina Research, March 2015
“Industrial manufacturing companies are leading the IoT implementation”Internet of Things: The Complete Reimaginative Force TCS Global Trend Study, July 2015
The successful implementers tell us to…
Internet of Things: The Complete Reimaginative Force TCS Global Trend Study, July 2015
1. Digitally reimagine your business to create substantial value for clients
2. Create that value with a new business model
3. See the breakthrough potential of IoT4. Organize to act fast based on what data
tells5. Deal with the internal resistance to
accepting what the data tells and enables
6. Bet on reliable and secure field technology
7. Start small, invest as you go
New Customer Value – Where?
Service•Service to need, not to schedule
•Spare parts to need, not to stock
•Remote diagnosis and repairs
•Only planned shutdowns•Adding features to supplied products – open-ended manufacturing
Product development
•How is the product used?
•In what conditions is the product used?
•What systems is the product connected to?
•What product features are used?
•What product features are lacking?
•Client specific tailoring
New business•24/7 support to users•Maximise capacity, uptime and energy efficiency
•Maximise investment value by optimisation
•Targeted after sales•Move from product to service business
•Enable use of less qualified personnel
Liabilities•Prevent failures and performance shortages before they appear
•Dig into causes of claims
•Reveal operating errors
•Reveal risky and harmful operating conditions
•Clarify supplier and operator duties
•Milder personnel qualification demand
Make better informed decisions in farming simply by knowing what’s happening.OnFarm made an effort to collect all data, relevant to the farmer, in one location.
A traditional scented candle factory thinks out of several boxes.The result:Remotely monitored and maintained scent impression solution for businesses.
So You’re Connected. Now What?”The relationship a firm has with its products – and with its customers – is becoming continuous and open-ended.”
• This has consequences.
How Smart, Connected Products Are Transforming CompaniesMichael E. Porter and James E. Heppelmann Harvard Business Review, October 2015
The Value Chain Transforms
Interoperable systems, evergreen design. Customizable at low cost, new user interfaces & business models, connected service & quality control.
Product Development
Smart factories with simplified components & reconfigured assembly processes, open-ended manufacturing, all through product life cycle.ManufacturingContinuous tracking of goods and fleet with data on condition & surrounding environment. Driverless logistics.LogisticsFocus on continuous value creation with product systems change segmenting, customer relationships, business models.
Marketing & Sales
Remote diagnosis enables remote or one-stop local, and preventive service. New services to e.g. optimize equipment utilization.
After-Sale Service
IT security cuts across all functions. Data security may become a key source of value.SecurityThe transformed product design, manufacturing & delivery requires new expertise, new cultures, new compensation models.
Human Resources
Companies must shape accordingly
How Smart, Connected Products Are Transforming CompaniesMichael E. Porter and James E. Heppelmann Harvard Business Review, October 2015
10 New Strategic Choices1. Which set of smart, connected
features to pursue?2. What features to build in the product
and what in the cloud?3. Should we build an open or a closed
system?4. What to do internally and what to
outsource to vendors and partners?5. What data to capture to maximize
customer value?
6. How to manage data ownership and security?
7. Keep or kick distribution and service networks?
8. Rethink the business model?9. Does the data give birth to new
business?10.Should we expand company scope?How Smart, Connected Products Are Transforming CompetitionMichael E. Porter and James E. Heppelmann Harvard Business Review, November 2014
Avoid the Pitfalls• Only add features, that the client is willing to pay for• Don’t underestimate security and privacy risks• Anticipate new competitive threats• Start early• Assess internal capabilities realistically
How Smart, Connected Products Are Transforming CompetitionMichael E. Porter and James E. Heppelmann Harvard Business Review, November 2014
