TOWARDS INTERNET OF THINGS ENABLED SERVITIZATION · Business value from IoT Disruptive innovation...

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TOWARDS INTERNET OF THINGS ENABLED SERVITIZATION

(HANS MULDERS, ATHENS DECEMBER 8TH 2016)


Introduction

Business value from IoT

Disruptive innovation with smart manufacturing / I4.0

Strategies to make digital innovation happen; stepwise towards servitization

Demystifying servitization; business model design & example

IoT-enabled servitization & references

Knowing where to start

TOPICS


PA CONSULTING GROUP – Consulting, Innovation and Technology

• Consumer and Manufacturing

• Transport and Logistics

• Financial services

• Energy & Utilities

• Life sciences

• Healthcare

• Defence and security

• Government and public services

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Boston

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Washington, DC

London

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Belfast

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Dublin

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Munich

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EuropeNordics

US

Gulf Asia

Pacific

Introduction

Our Cambridge Technology Centre is a key differentiator, with a team of 300 scientists and engineers able to design and deliver innovative smart devices and sensors


HANS MULDERS

Experience

• Informatics Management Consultants

• Oracle

• Xerox

• Cumae Engineers

• PA Consulting Group

Education

• BSc Software Engineering

• MSc Technical Mathematics & Informatica

• MSc Industrial Management

• Master Enterprise Architecture

• Postgraduate Corporate Finance

Introduction


THE TIME IS RIGHT: BUSINESS VALUE FROM IoT

A combination of new technology and economic factors are

driving rapid growth in the development of the Internet of

Things.

In many industries, IoT is disrupting traditional business

models causing companies to ask the fundamental question,

what business am I in – selling products or selling

services?

• China planning to invest €1.2 trillion to transform their

manufacturing sector

• US planning to replace 20% of industrial equipment over

the next 5 years

• EU earmarked €1.1 billion for the Factory of the Future

initiative

• German companies investing €40 billion annually in IoT

projects

This is leading many private and public sector organisations to

ask how can we use the Internet of Things to create new

sources of value.

“If you went to bed last night as the CEO of an

industrial company…this morning you’re going

to wake up the CEO of a software company”

Jeff Inmelt, CEO of GE

30 billion

devices connected to the

Internet of things by 2020

$11 trillion

Impact on the global

economy by 2025

Source: IDC, McKinsey 2015

Introduction


BUSINESS VALUE CREATION FROM DISRUPTIVE INNOVATION

Disruptive

Innovation

Disruptive innovation

Market Pull

Technology Push

Joseph Alois Schumpeter

(1883 – 1950)

https://nl.wikipedia.org/wiki/1883

https://nl.wikipedia.org/wiki/1950


DISRUPTIVE INNOVATION: SMART PRODUCTS & SMART FACTORIES/I4.0

Source: Prof. dr. dr. A. W. Scheer CeBIT 2015



STRATEGIES TO MAKE DIGITAL INNOVATION HAPPEN

Source: Prof. dr. dr. A. W. Scheer CeBIT 2015

: Build – Own - Operate



DEMYSTIFYING SERVITIZATION

Central theme: “Product as a Service”

Current: output focus (e.g. expertise & advise)

Ambition: towards managed solution (i.e. value add within

existing/only slightly modified business model)

Central theme: “Field Service Management”

Current: product focus (i.e. planning of engineers on

the road and spare parts logistics)

Ambition: from reactive to predictive maintenance via

remote sensing & actuation (i.e. applying enabling

technology: IoT & data-analytics potential)

Solution

Maintenance

Managed

Solution

Central theme: “Solution as a Service”

Current: outcome focus (e.g. turn-key

full-business service concept)

Ambition: innovation (i.e. completely new

business activities & new business

model)

ServitizationCan be building block for…

Can be building block for…

Smart services


Servitization: example New Business Model Innovation: Philips Healthcare

OF

FE

RIN

GS

MARKETS

Se

llin

g

Pro

du

cts

Se

llin

g

Ou

tpu

t

Se

llin

g

Ou

tco

me

Buying

Products

Buying

OutputBuying

Outcome


Deliver CT scanner

Become customer

centric for hospitals

Deliver Scans

Build database

Add Algorithms

Support

diagnosis

Smart services


IoT ENABLED SERVITIZATION

Creating value through IoT

IMPROVING EFFICIENCY

NEW SERVICES AND BUSINESS MODELS

Remote asset

management

Predictive

maintenance

Better decision

makingProcess

automation

Improved product

performance

Deeper customer

relationships

Service-based

business models

Monetising data

& insight

Organisations are using the

Internet of Things to create

new value in two ways;

• improving operational

efficiency and

• launching new services

and business models

IoT enables Servitization


NEW BUSINESS MODELS HAVE TO BE DESIGNED: PA’s BD METHOD

market model

market value

customer model

customer needs segments customer value propositions channels and partners

capability model how to deliver value for our customers?

which resources

ENTERPRISE ARCHITECTURE

&

SKILLED PEOPLE

how to organise

ORGANISATIONAL

GOVERNANCE AROUND

DELIVERY OF PRODUCTS AND

SERVICES

what to source from outside?

MAK / BUY DECISIONS

how to

manage?

which resources to get from suppliers?

financing model how to realise value?

how to realise value

how to manage finance



Following the Business Model, at PA we design, develop and deliver highly scalable and secure IoT Solutions with our Clients.

DESIGN IOT STRATEGY

Agree business objectives | Define market opportunity | Design new customer propositions | Identify new capabilities

SECURE THE IOT SYSTEM

Identify security risks | Develop security solutions | Ensure compliance with security & privacy regulation

DESIGN AND BUILD THE IOT SYSTEM

Sensors &

devices

Wireless

comms

Cloud

storage &

services

Analytics &

data

visualisation

User services

& experience

Drive

business

objectives

COLLECT ANALYSE VISUALISE ACT & AUTOMATE

DESIGNING AND BUILDING END-TO-END IOT SOLUTIONS



IoT REFERENCE ARCHITECTURE (Scalable and Secure)

Collect Analyse Visualise Act/Automate

Device

Endpoints

Device

Manager

Data Storage

Analytics

Rule Engine

Application

UI & APIs

Messaging &

AlertsMachine

Learning

Device

Gateway

Stream

Processing

Integrate

with

enterprise

systems &

processes

Applications

Security / Encryption and Authentication

CAD

PLM

CRM

ERP

MES

Advanced

Integration

Platform

Cyber Physical System



IoT & Data Analytics as a Servitization act itself

Measurement data

Mathematical Model

Goal-optimized scenario

Revised systems set-up &

control signals

Controlled CPS

(Cyber Physical System)

IoT & Data Analytics

Basis material, partial-

product

Machine / manufacturing

equipment

Consumer goods & capital

assets

Product-related service as

solution

Service-related managed

solution

Servitization

input

produce

use/apply

input

simulate

actuation

sensing

predict & implement

recycle

product

enhancement

proposalsunburden & own

machine

learning

Product

Output

Outcome



Challenges in bridging `business systems world´ and `industrial automation world´

Aggregation of high volume unstructured data

into structured data

Bridge digital signal processing and business

transaction processing worlds (hybride cloud)

Networking & interfacing standards and

protocols

Secure systems integration and secure

(external) data exchange

Cyber business

applicationsCyber-Physical-Systems

(of Systems)

Business transaction

processingDigital signal processing

Volatile, streaming & high-

volume unstructured data

Archived, structured and

aggregated data

Real-time and process-

status change triggers

Periodic & business event

triggers

Closed factory / equipment

automation systemsOpen & collaborative

business systems

(A)Synchronous systems integration and data

processing

Register-process-report-

archive-BI cycle

Sense-pre-analyse-decide-

actuate cycleUse status data to adapt business systems set-

up, simulate & optimize for adaptive control loop

Cyber

ecosystem

Secure

Integrated

Data

standardized

Adaptive

controlled

Synchronized

ERP IoT/IoSChallenges

MES

Objectives


CPS


DRIVE AND RELEASE CHANGE EFFECTIVELY: PA’s CM Framework

Build and communicate

a compelling case

for change

Design and drive

the programme

Design the business

Enable change

leadership

Engage and

enable people

Embed new

behaviours

MAKE ITESSENTIAL

MAKE ITREADY

MAKE ITHAPPEN

MAKE ITSTICK

Developcase for change

Communicatechange narrative

Trackbenefits

Realiseand communicate

benefits

Agreescope and

governance

Developdetailed plan

Deliveragainst project

milestones

Review and support

transition to BAU

Designoperating model

change

Deliverbusiness design

changes

Developimprovements and

embed KPIs

Formand develop

guiding coalition

Buildcapability

Drive commitment

Personifychange as the new normal

Assess impact and engage

change agents

Providetraining and support

transition

Maintain engagement activity

and feedback

Definethe desired behaviours

Identifybehavioural gaps

and levers

Implementchanges, empower

staff

Anchor changes, celebrate

successes

Definechanges to

business model

Identify and understand

stakeholders



Internet of Things – helping you create new source of value



5. Roll out scalable and secure IoT

system

3. Develop and

test proof of

concept

prototype

1. Define IOT strategy,

business goals and concepts

4. Design and operate pilot

Finish: continuous

improvement6. Operate, sense, optimize, actuate

2. Build demonstrator

1

Ideation

2

Learn &

Create

Awareness

4

Pilot5

Implement

t

6

Exploit

How we work

Our goal is to quickly demonstrate the value IOT can deliver

for our Clients. We take an agile approach allowing us to

build, test and learn stepwise. This way Clients build

confidence in their solution before investing in the next

stage. We can start at any stage in the process depending

on specific needs of each Client.

How we Design, Develop and Deliver highly scalable and secure IoTsolutions with our Clients

3

Prototype

Where to start


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THANK YOU !

TOWARDS INTERNET OF THINGS ENABLED SERVITIZATION · Business value from IoT Disruptive innovation...

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