1. INTRODUCTION TO SMART, CONNECTED PRODUCTS
2. DRIVERS FOR THE ADVENT OF SMART DEVICES
3. REDIFINING INDUSTRY BOUNDARIES AND COMPETITION
4. IoT TO IOT
5. STRATEGY FOR SUSTAINABLE COMPETITIVE ADVANTAGE
2. AGENDA
• INTRODUCTION TO SMART, CONNECTED PRODUCTS
• DRIVERS FOR THE ADVENT OF SMART DEVICES
• REDIFINING INDUSTRY BOUNDRIES AND COMPETITION
• IoT TO IOT
• STRATEGY FOR SUSTAINABLE COMPETITIVE ADVANTAGE
• Q&A
• REFERENCES
5. The Internet of Things (IoT) is a system of interrelated computing
devices, mechanical & digital machines, objects, animals or people that
are provided with unique identifiers & the ability to transfer data over a
network without requiring human-to-human or human-to-computer
interaction.
Internet of Things (IoT)
Social Media
Mobile Computing & Communication
Analytics
Cloud Computing
DEFINITIO
N
6.
7. DRIVERS FOR THE ADVENT OF SMART DEVICES
Cheap connectivity
ports, low cost
wireless technology
Big data analytics
Energy efficiency of
sensors and
batteries
IPv6 internet
registration system
Breakthroughs in
performance and
miniaturization
9. CAPABILITIES OF SMART, CONNECTED PRODUCTS
Monitoring
• Sensors and
external
sources
provide
monitoring
of product’s
condition,
operation &
usage
Control
• Build ICT
capabilities
for customer
centric
products and
improve
operational
efficiencies
Optimization
• Enhance
product
performance
and allow
predictive
diagnostics,
service and
repair
Autonomy
• Autonomous
product
operation,
self
coordination
with other
systems,
diagnosis
and service
12. FIVE FORCES THAT SHAPE INDUSTRY COMPETITION
Rivalry
among
existing
competiti
on
Threats
of new
entrants
Bargainin
g power
of buyers
Threat of
substitut
e
products
or
services
Bargainin
g power
of
suppliers
13. MANUFACTURING OPERATIONS
MANAGEMENT
BATCH
CONTROL CONTINUOUS
MANAGEMENT
DISCRETE
CONTROL
A NEW PERSPECTIVE ON I‘O’T
Level 0: Production Process
Level 1: Sensing & Manipulating
the Production Process
Level 2: Monitoring, supervisor
control & automatic control of
the production process
Level 3: Manging workflow &
maintaining records
Level 4: Establishing the basic
plant schedule production,
material use, delivery & shipping,
determining inventory levels
Level 5: Managing commercial
activities as well as product
development
15. MOTIVATION FOR THE CONVERGENCE
Cost reduction
Risk Reduction
Enhanced performance
Flexibility gains
16. CHALLENGES IN IMPLEMENTATION OF I‘O’T
STRATEGIC
CHALLENGES
ORGANISATION
AL CHALLENGES
TECHNOLOGY
CHALLENGES &
TRENDS
17. CONVERGENCE
STRATEGIES
Central Data and Security Management
Harmonization of Strategies, Processes and Organization:
1. Duplication
2. Key performance indicators (KPIs)
3. Common governance mode
Re-skilling of Resources
20. • “The Internet will disappear… you won’t even sense it, it will be part of
your presence all the time.”— Eric Schmidt, Google chairman
• “If you think that internet has changed your life, think again. The IoT is
about to change it all over again!” — Brendan O’Brien, Co-Founder, Aria
Systems
• “The IoT will augment your brain” — Eric Schmidt, Google chairman
• “IoT is changing & transforming everything from business to life”— Mehul
Nayak, Tech.co
• “IoT is bringing more and more things into the digital fold every day,
22. What
Capabilities
& Features
to be
perused?
Extent of
functionalit
y
embedded
in the
product vs
cloud?
Open or
Close
system?
In-house
developmen
t or sourcing
from
Vendors?
What data to
be captured,
secured and
analysed?
Ownership
& access
rights to
the data?
Disintermedia
te distribution
channels or
service
networks?
Change
the
business
model?
Monetizing
data
through
outside
parties?
Scope
Expansio
n?
STRATEG
Y
23. EXAMPL
ES
AO Smith Rolex GE
Healthcare
Philips
Healthcare
Tesla Motors
Capabilities & Features Open or Closed System
Disintermediate
distribution channels
SONOS Bose
Functionality in Cloud vs
Product
Carrier Corp.
Scope Expansion
SPECTIO
TECH.
Spectio Tech.
Inhouse or Outsource
Pepsi Americas
24. CHALLENGES…..
Political & Civil commitment: A strong will from the government & public to
overcome efforts to block progress.
Deployment of IPv6: The world ran out of IPv4 addresses in February 2010.
While no real impact has been seen by the general public, this situation has
the potential to slow IoT’s progress since the potentially billions of new
sensors will require unique IP addresses.
Standards & Regulations: While some progress has been made, more is
needed, especially in the areas of security, privacy, architecture, and
communications.IoT has the potential to change the world as we know it today—for the better. How quickly we get
there is up to us...
26. REFERENC
ES
How smart, connected products are transforming competition, Michael
E. Porter & James E. Heppelmann, HBR Article No. R1411C, Nov 2014.
“The Internet of Things (IoT): Applications, investments, and challenges
for enterprises”, I. Lee, K. Lee, Business Horizons (2015) 58, pp. 431-
440, Kelly School of Business.
“Spectio: A Digital Lighting Company”, Rajiv Lal & Sarah Mcara, HBS
Case No. 9-517-002, Sept 23, 2016.
“IT/OT Convergence – Bridging the Divide”, Derek R. Harp & Bengt
Gregory-Brown, NexDefense.
“The Internet of Things - How the Next Evolution of the Internet Is
Changing Everything”, Dave Evans, Cisco Internet Business Solutions
Group (IBSG), April 2011.
http://www.dyogram.com/2015/09/the-industrial-internet-the-next-
Notas del editor
Disconnection: Separate IT and OT Silos: Technology Misalignment ; Ownership and Governance; Cultural Aspects
Foundation of competitive advantage is Operational Effectiveness & developing a distinctive strategic positioning!
If a company is not continuously OE, it will fall behind rivals in cost & quality. Yet this alone is not sustainable as rivals will adopt best practices themselves & catch-up.
To move beyond OE a company must define a dist. Strat. Positioning. Doing things well + doing them differently!
To achieve success in implementation of IOT –
Design – Achieve hardware standardization through software based customization. Harmonization of the hardware & software development/updation cycle.
Marketing – Analyse data to understand how to create value for customers. Mare tailored marketing strategies.
HR – Recruit new skill sets – Most manufacturing don’t have software developers, big data analytics, relationship managers.
Security – Protecting data is now a serious issue. Data flowing from products to the cloud needs to be protected from hackers and unauthorized access.
After Sales – Predictive maintenance. Early warning of impending failures.
The path to competitive advantage ultimately rests on strategy.
So most industries face 10 strategic choices. Each decision involves a trade-off & hence must reflect the company’s unique circumstances. Together they form a coherent strategy for the success of IOT.
Capabilities & Features – what will add value to the customers? What market segment it wants to serve? Reinforce competitive positioning?
Functionality in product vs cloud – Whether the enabling tech. for each feature should be embedded in the product (raising cost) vs delivered through cloud or use both?
Closed o open? – Closed: Aims to have customers purchase the entire IOT products system from a single manufacturer. Open: enables the end users to assemble the parts of solution from different companies.
In-house or outsource? Most successful is a combina tion of both.
Which data? Collecting data requires sensors adding to cost. Also more sensitive data needs more securtity.
Ownership – Maintain transparency in collection of data and establish a joint ownership. NDAs, right to share / sell etc. needs to be established.
Middlemen – both pros & cons.
Business Model: From product to product as a service. Instead of selling spare parts, companies like whirlpool can retain ownership of the product and charge only for usage. Middle path a better option.
Selling data to 3rd party – Firm could hide individual data and sell combined or bundled data.
Scope expansion: going from product to a whole set of solutions across the value chain. Carrier as intelligent HVAC systems. But is has not moved into smart building or home automation space. Why? Capabilities required a different and also the cost.
