Smart, connected products are emerging everywhere nowadays as manufacturers and service providers embrace technologies, embedded systems connected to the cloud, social networks, analytics for processing large amounts of data, automation, global integration, generating a lot of cross-functional data that can be leveraged with multiple functional groups, bridging internal organizational silos and across the wider enterprise, reaching out new customers and suppliers (…). These connections represent opportunities for new products, new applications of exiting and new products, services, generating value from different types of integration, rapid access to and interpretation of complex data that can be simplified and streamlined for various purposes.
In discussing changes brought by “smart, connected products“, Porter and Heppelmann (1) (2) noted that:
- The external environment is directly impacted by technologies, embedded systems, Internet of Things (IoT), big data, analytics, etc. This is altering industry rivalry as new opportunities are created (both from a product and service perspective); existing players will have to adapt to the new solutions, offerings, and related skills required to deliver those. New players might have an advantage as they are more agile and carry less ‘legacy inertia‘; they are also prone to be quicker in adopting new technologies.
- The internal environment (enterprise wide and into the supply chain – depending on where the boundaries are set for the discussion) will also have to adapt to new ways of working, new operating models, new engagement models, new customer requirements, new skills, new organizational structures, etc. Old hierarchical structures of management and thought will be challenged with smart data and smart people – in new ways of working, new operations, new ways to collaborate, lead, manage, create, innovate, etc.
Perhaps the next episode of the publication series will be on “how smart, connected products are transforming society“?
Moreover, “smart” and “connected” refer to opportunities as various levels in the eco-systems, when viewed as a “system of systems”. Micro and macro views of the same can derive different (or connected) opportunities that have the potential to go “viral” in directions that might not have been anticipated or “designed” in the first place. As “things” and people get more and more connected and data flows “freely” across various systems and devices, the requirement for cyber-security will grow and new “connected” solutions will emerge.
Smart, connected systems
Not only data is used differently across purposes and applications, but also it can be interpreted differently dependently of the point of view. Traceability between systems coupled with understanding of data and product maturity contribute to convert information into business knowledge and insights, that can in turn become competitive advantage, in terms of:
- Enabling and improving decision making through automated analytics and business intelligence: analyze large volumes of data, connect the dots and identify relevant patterns, feeding back (loop) to the process to support decision and enhance both products and processes.
- Enhancing existing or creating business, cost models linked to new product and services capabilities (perhaps in the form of new value incubators which bring new attractiveness).
- Innovating with new products and new services by enhancing connectivity and integration, innovating across new dimensions or new levels of maturity that were not explored or even known before.
- Optimizing not only products but also enterprise-wide processes across the traditional functional silos, internally (design, engineering, manufacturing, sales and marketing, finance, people, etc.) and externally (supply chain, multiple geographies, partners, etc.). These bring new opportunities to monitor, automate, control, optimize and create ‘intelligent‘ products and services.
- Accessing / finding the right data at the right time for the right purpose is the requirement that joins the dots between the above considerations: as data change or evolve during the life-cycle of a product or service, it will go through different levels of consistency, accuracy and completeness. The link between data maturity, product and process maturity is not that obvious. e.g. a new product will be represented by inconsistent, inaccurate and incomplete data that is not suspect in context of where it sits in terms of maturity and in the context of change management.
Smart, connected products
New technologies enable products to offer new range of applications, leveraging system to system integration and greater human interactions by combining new services and products. This provides new opportunities to access and make sense of data into new approaches, new analytics and feeding new operating models.
Smart, connected platforms
In the manufacturing space, families of products can be grouped in platforms where data is shared, reused, integrated to enable efficiencies (economies of scale) and common purposes (economies of scope). Carryover data and common libraries are critically integrated between various programs and platforms. This suggests data traceability to a new level, across product lines, purposes and libraries. So that new ways to optimize processes and products can be discovered.
Smart, connected processes
Integrated processes that cover high level sections of New Product Introduction (NPI) will benefits from data alignment and relevant automation across systems to manage complexity. Process integration requires common a framework to cover the end-to-end business capabilities of an enterprise, linking people, data with the relevant technology.
Smart, connected factories
Successful digital experience come from augmented reality, digital manufacturing, consuming digital and virtual product and enterprise data: e.g. in the manufacturing world, this translates by a robust integration of PLM-ERP-MES-CXM, but also by the ability to digitally simulate factory operations prior to physical implementation or improvement. This is also referred to “Industrie 4.0” in Europe and “Advanced Manufacturing” in North America.
Smart, connected eco-systems
The above also expands across other functional areas (beyond than Product Development and Manufacturing Engineering), but also into the extended enterprise and the supply chain. This hyper-connectivity also reaches new grounds beyond devices, technologies, middleware, but linking more strongly to the customer base.
Smart, connected services
Augmented reality will bring new services and skill requirements. Customer / product experience integration becomes the center of new relationships, feeding into value chain enhancement and integration at new levels.
Smart, connected people
People-centric solutions include people-to-people and people-to-things interactions: with smarter interactions, transparent and unobstructive to the user, while being content and context-aware, bridging the gap between IoT and the beneficiary of technology.
What are your thoughts?
- Porter E, Heppelmann J (2014) How Smart, Connected Products Are Transforming Competition, HBR
- Porter E, Heppelmann J (2015) How Smart, Connected Products Are Transforming Companies, HBR
This post was originally published on LinkedIn on 6 December 2015.