Experience Behaviors smart Framing Smart systems Systems and Data & Content Relationships Services Growth design Opportunities
Skills Technology
B o u l d e r Z u r i c h ?
what are smart systems and the internet of things? Why Is It So Important?
Global expansion; re-engineering; What unrealized lean practices; mergers and technology, acquisitions. For most companies system and where are the biggest these strategies for growth and market leadership opportunities are value creation have reached the Which combination growth opportunities? available in the point of diminishing returns. As of customer value smart systems Smart Systems networks continue to integrate the elements will How Should We Think About Framing Opportunities? and IoT arena? Growth physical and virtual worlds, what differentiate us? How Opportunities The assumption that the role of new business design worked in the past to drive growth can we make, partner of acquire those and development is only about making existing is less likely to work now or in the elements? products or services more attractive no longer future... works. We believe smart systems design needs to transcend discreet product or service innovation. What business design, Business developers need to creatively imagine fully revenue model and developed systems and whole marketplaces. management priorities will help build long term success? To discover, design and develop innovative smart systems, organizations will need new and uniquely how should our facilitated processes... organization respond? What Are The Success Factors? Diverse collaborative networks will be self-organized by people who are motivated to explore and develop ideas they care deeply about. Business innovation will extend beyond ideas about new products and services to the very manner in which business is conducted. Building new ventures for the Internet of Things requires new and very different modes of design and development – organizations will need to push the boundaries of collaboration to include many new and unfamiliar participants... CONTENTS
01 Framing Smart Systems Growth Opportunities Page 04 02 Smart Systems Growth Models and Strategies Page 14 03 Smart Systems Design Process and Methods Page 28 04 Smart Systems Design Client Cases Page 38
smart systems design
Relationships Strategy & & Interactions Business Model 3 01 framing
smart systems
growth opportunities Framing smart Smart Systems systems Growth and services Opportunities innovation
Smart Systems and the framing Internet of Things Stack
Smart Systems are quickly becoming a Technology massive, global digital nervous system smart systems conecting billions of people, tens of billions of devices, and trillions and more data points through a network of unprecedented scale Overview
growth User Relationships Market Experience opportunities Business
smart systems 5 design smart Framing systems Smart Systems and services Growth innovation Opportunities
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smart systems design 6 Framing smart Smart Systems systems Growth and services Opportunities innovation
“User Experience” is the sum of our relationship with Overview technology. It encompasses the practical—like which User Experience senses, gestures, and inputs we use to interact with our devices and surrounding Layer environment—as well as the emotional: how the interaction makes us feel.
Context
Interfaces
TIme Embedded Internal Adhere/Patches Visual / Textile Audio / Tactile / Identity Accessories Clipped Strapped Footwear Gaze Tracking Facial Expression Tracking Earbuds Eyewear Headware Emotion Recognition Voice Recognition Handheld / Mobile Haptic Sensors Pressure Sensors Location / Fixed Taste/Smell Sensors Surroundings Joysticks / Mice Device
smart systems 7 design smart Framing systems Smart Systems and services Growth innovation Opportunities
From the design of silicon to the end-user experience, the technologies of Overview Overview the IoTFrom are the driven design by data.o si icon to the end user e perience the techno ogies o TTechnologyechnology the o are driven y data Sensors, software, and networked infrastructure collect, analyze, transmit ayerLayer and Sensors present data so twa forr thee and users networ ed and devices in rastructu who needre co ect it most. ana y e transmit and present data or the users and devices who need it most
Supply Chain & Logistics Security / Data Policies & Governance Asset Management Energy Management SaaS PaaS Security Management Cloud Services IaaS Customer Support Protocols / Frameworks Core Messaging / Application Application Enablement TCP / UDP CoAP OneM2M SMPP (Short Message REST API Analytics & Dashboards IPv4 / IPv6 MQTT DDS Peer to Peer) Node JS - API Services HTML 5 XMPP DTLS Virtual IC SMS - Application Enablement Tools RESTful HTTP uIP OMA Device Management Web Sockets AMQP Telehash CPE WAN Management JSON/JSONP LWM2M UPnP Protocol (CWMP) Thread AllJoyn Weave Mobile & Collaboration Data: Agg / Transformation / MGMT // Edge Processing Value Added Applications - Storage - Statistical Analysis Diagnostics - Data Normalization - Streaming Analysis - Data Classification - Real-Time (time series) Analysis Prognostics - Data Governance - Presentation & Visualization - Ad Hoc Queries - Event Processing System Applications Automation / Analytics - Rules Engine Location & Tracking Monitoring & State Device Management & Connectivity Network Services - Upgrades and Versioning - Firmware Management - System Configuration - Gateway Management - Device Registry Wireline WLAN - Identify, Security and Encryption - Ethernet - WiFi WWAN - Device Provisioning & Commissioning - Modbus - DECT Connectivity & - Cellular (4G/LTE - 2G/GSM - Powerline - Thread Device Enablement 3G GPRS) - WiMax WPAN - Bluetooth - Power LPWAN Routers & Gateways - Sensors - 6LoWPAN Physical - Sigfox - 2G, 3G, 4G Routers - Residential Gateways - Actuators - NFC - LoRA - Ethernet Routers - Set Top Box - RFID - Gateways & Proxy Servers - Voice Gateway - Data Aggregator - WAP Gateway Software Network Hardware
Silicon / Embedded Intelligence - 64 bit Microcontrollers - DSP Controllers - 32 bit Microcontrollers - Graphic Processors - 16 bit Microcontrollers - System on a Module Device Management Security & Encryption Operating System Comms Stacks - 8 bit Microcontrollers - Systems on a Chip - FOTA (Firmware Over the Air) - Security / Anti-Virus - Preboot Verification - Virtualization S/W - Wireline - 4 bit Microcontrollers - Single Board Computers - Distributed Version Control - Encryption - IP SEC - Desktop and Mobile GUI OS - WPAN - Configuration Management - Patch Mgmt - Certificate Management - Embedded / GUI based RTOS - WLAN - Software Versioning - End Point Authentication - Cryptography - Commercial RTOS - LPWAN - Device Drivers - Anti-Device Tampering - Data at Rest Encryption - Open RTOS - WWAN - Boot Loaders / Comm’s stacks
smart systems design 8 Framing smart Smart Systems systems Growth and services Opportunities innovation
Some markets adopt new technologies faster than others, but no sector of the Overview Market economy is immune to the expanding influence of the IoT. Layer While there are similarities that apply across the board, each vertical has its own set of needs and challenges that shape the way networked technologies add value.
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Overview Integrating smart systems into business processes requires restructuring Business long-held assumptions about how products and services are brought to market. Layer Collaboration between and among users, customers, developers and partners will be a minimum requirement for success.
Physical Product Region Transaction Type North America, Europe, S. & Central America, B2B / B2C / C2B / ETC Software Asia, Africa, Oceania, Worldwide
Data
Service Subscription • Usage-based • Transaction • Flexible - Capped • Tiered / Freemium • Value-based • Open / One -time Revenue Type • Unit-based • Timed • P2P Type Pay-per • Per site • Per seat • One-time • Royalty • Per device • Per application
Cloud • Loyalty Open Source Indirect • Internal Use Co-location Apache / BSD / GPL / GNU / MIT Mozilla / Eclipse / Creative Commons R evenue Model Model Hosted / Public / LGPL / AGPL Bundled / Hybrid Proprietary - Shareware
On Premise Proprietary - Commercial Systems Integrators System Selection / Integration Delivery License License & Delivery VARs Distributers & Wholesalers Training Professional / Tech Services Maintenance / Service Monitoring OEM / ODM Direct After-Market Support & Logistics Market Delivery Channel Direct Services
smart systems design 10 Framing smart Smart Systems systems Growth and services Opportunities innovation
Overview Relationship he so utions we are descri ing here wi have ayer no manageria hierarchy command and contro decisions or proprietary ownership o ideas
Strategic Venture Ventures I-Banks hese re ationshipsThe solutions wi e we se organi ed are describing here will have much less Managed Services managerial hierarchy, command and control decisions Suppliers Private y Equity peop e who are motivated to e p ore and Investments or proprietary ownership of ideas. Appls andPublic Funding deve op ideas they care deep y a out strategic alliances Investors channel These relationships will be self-organized by Systems End Use o a orative innovation wi e tend vendors people who are motivated to explore and de- Products Tech eyond ideasvelop a outideas they new care productsdeeply about. OEMs Value-Adders sourcing and services to the very manner
marketing customers in which usiness is conducted Technology Healthcare Collaborative innovation will extend beyond ideas Ops Industrial about new products and services to the very man- Enablers Transportation ner in which business is conducted Channels venues Buildings
Tools technology Smart OEMs Energy Developer Kits Devices Machines ResearchGateways
Users & Devices Power CustomersSensors LANs Infrastructure
Facilities
Wireless
smart systems 11 design smart Framing systems Smart Systems and services Growth innovation Opportunities
Overview Smart Systems and the nternet o hings wi e ui t rom comp e interre ationships etween the stac nteractions ntegrating these ayers together are myriad
Overview Interactions Smart Systems and the nternet o hings wi e ui t success rom comp e will inter increasinglyre ationships etween go the to stac those that nteractions i directiona effectively in etween digita utilize user the combined potential e periences and ntegrating the physica these wor d ayers together are myriad Interactions
i directiona in etween digita user e periences and the physica wor d Relationships
Overview Smart Systems and the nternet o hings wi e ui t Business rom comp e interre ationships etween the stac Market nteractions ntegrating these ayers together are myriad Tech Interactions User ExperiencRelationshipse i directiona in etween digita user Business e periences and the physica wor d Market Tech User Experience Relationships Business Market the interactions represent the convergenceTec hof users, devices, systems, data, and networks User Experience
smart systems design 12 Framing smart Smart Systems systems Growth and services Opportunities innovation
re-thinking things and products as systems
Your Product / Service RELATIONSHIPS
Formal Who are our natural allies?
Informal Who are we best poised with?
USER EXPERIENCE
Context What is the context “in use” for device?
Usage What are the expected usage needs?
Device What is the device form factor?
Interaction What is the nature of interactions?
TECH
Connectivity & What is the native intelligence of device and Device Enablement communications mode?
Network Services How are comms services provided?
System Applications What platform, devie management and related functions provided?
Value Added Applications What applications and functions are required?
INTERACTIONS BUSINESS Security / Data Policies How will identity mgmt, access and security work? Connections Revenue Model What is best path to monetization? MARKET eop e What is the nature of relation- License & Delivery Sector Which industry segments and applications rocesses ships, interactions, requirements Where used; via what services model? provide best opportunities? and dependencies between and terna Market Delivery Device Application What specific use cases and apps will need to among systems elements? What channel partners are required? Systems be addressed? Revenue Type License, transactions or what?
questions to frame your smart systems opportunity
smart systems 13 design 3 02
smart systems growth models and strategies
Smart smart Systems systems Growth Models and services and Strategies innovation
smart systems and IoT solutions are comprised of complex solutions development and delivery chains often, multiple parallel “upstream” technology enablers are adopted by ”mid’stream” OEMs and/or services providers who, in turn, deploy solutions into “downstream” vertical end use segments
IT Infrastructure & Machine and End Users and Software Providers Equipment OEMs End Customer Accounts
Core Enabling Technologies OEMs and Services Providers End Users
while the business models for developing and delivering core technologies are relatively stable, the rapidly evolving business and revenue models for OEMs and services providers are anything but......
smart systems 15 design smart Smart systems Systems and services Growth Models innovation and Opportunities
core smart systems technologies will impact all end use segments
Energy & Buildings & Healthcare Transportation Manufacturing Utilities Facilities
Fusing patient Timeline to Ability to balance Ability to Artificial Automation of data sets and AI completion grids, manage optimize energy Intelligence driverless capable of and sensing demand and requirements and Machine trucking fleets diagnosing faults during provide services and resource Learning patients production usage as users and customers have become more familiar with digital and IoT capabilities, they are Building systems Ticketing Renewable realizing these technology innovations will push the Application Predictive that leverage Telehealth and analytics for energy Development maintenance data across boundaries of how products, systems wearables demand and production and Developer and workflow lighting, HVAC, applications for asset tracking/ trends and and equipment are used and managed within their Tools applications alarms, fire wellness scheduling predictions detection operations which, in turn, has increased pressure on machine builders and equipment Internal vehicle Analytics on Information Cross-leveraging manufacturers to embrace these capabilities. End information production Analytics on Distributed access and data data from access and individual processes Data and set fusion for various building customers in factories, hospitals, buildings and more coordinated with machines and systems Information disease and facility urban systems improve for equipment are coming to see how these technologies work Architecture management sources efficiencies optimization together in new and novel ways to solve operational and business problems. As a result, specification and Real-time Transport Syncing global Building owners High- Power patient data systems operations for & operators are adoption of digital and IoT enabled equipment and Performance distribution, and medical schedule and collaboration able to share Networks & automation systems is beginning to shift towards a “shared” set of application resources to fit and efficient data across Infrastructure and control updates demand cycles management facility roles between end customers and their OEMs.
Medical staff Fleet tracking Substation Integrated Sensors & Remote machine and critical and road monitoring mechanical and Sensor Data maintenance, asset tracking & condition and process energy sensors Fusion health and monitoring monitoring diagnostics monitoring for multi-use
smart systems design 16 Smart smart Systems systems Growth Models and services and Strategies innovation
OEMs are uniquely positioned to capture smart systems values
IT Infrastructure & Machine and End Users and Software Providers Equipment OEMs End Customer Accounts
Core Enabling Technologies OEMs End User Speci cation and Buying In uencers Provide horizontal technologies and If enabled with the right tools, OEMs can help End customers want to adopt smart services solutions, tools that must be contextualized for disseminate these solutions to end customers due to but are wary of working with tech suppliers who may speci c industries and customers their application expertise and existing relationships not have industry expertise--OEMs can ll this role
Software Mobile Automation Applications Network Equipment and Controls Hardware Software Tools Medical Test and Energy & Buildings & and Platforms Connectivity Machines Measurement Utilities Facilities Components Software Industrial Electrical/Power Infrastructure Machinery Distribution Electronic Components Value Added Power Advanced Services Equipment Components Infrastructure Components Network Building Diversified HealthcareHealthcare TransportationTransportation ManufacturingManufacturing Services Equipment Manufacturers
smart systems 17 design Mobile Mobile construction, Equipment agriculture, mining and material handing machines
Medical Healthcare imaging, diagnostic Machines and patient monitoring and care equipment smart Smart systems Systems and services Growth ModelsDiversified Portfolio players with no LoB innovation and Opportunities Manufacturers accounting for more than 40% of revenues
Industrial Fixed machines and machineryMachinery andmachinery equipment systems primarily OEMs across all segments are facing dramatic used in manufacturing changes in their business and in their competitive arenas ...... Building Sub-system equipment within Equipment buildings including HVAC, lighting, transport and safety
Power Equipment for electrical power Mobile Mobile construction, Equipment generation, transmission, Equipment agriculture, mining and distribution and storage material handing machines
Automation Components, products and Medical Healthcare imaging, diagnostic and Controls systems for control incl electrical, Machines and patient monitoring and flow, regulatory and pneumatics care equipment
Test & Sensors, instruments and Diversified Portfolio players with no LoB Measurement measurement devices for testing, Manufacturers accounting for more than 40% analyzing equip and systems of revenues
Industrial Fixed machines and Low and medium voltage Electrical Machinery machinery systems primarily Power Dist components utilized for power used in manufacturing distribution and switching
Advanced Diverse precision or multi- Building Sub-system equipment within function mechanical and/or buildings including HVAC, Components Equipment electronic devices lighting, transport and safety
Power Equipment for electrical power Equipment generation, transmission, distribution and storage
Automation Components, products and and Controls systems for control incl electrical, flow, regulatory and pneumatics smart systems design 18 Test & Sensors, instruments and Measurement measurement devices for testing, analyzing equip and systems
Electrical Low and medium voltage Power Dist components utilized for power distribution and switching
Advanced Diverse precision or multi- function mechanical and/or Components electronic devices Smart smart Systems systems Growth Models and services and Strategies innovation
....which, in turn, is driving new impacts to their business models
Climate/HVAC Building Security and Access Equipment Lighting Elevators/Escalators Application-Focused Fire & Safety Portfolio Construction Equipment Companies with business Trad’l Power Gen Mobile Mining Equipment Power models focused on inter- Alt Power Gen Equipment Agricultural Equipment Equipment related product portfolios that Power T&D Equip Mobile Mat’l & People Handing can be integrated into Energy Storage Imaging and Diagnostic Equip Machine Focused applications such as smart Patient Monitoring Equip Automation Electrical buildings, machine control Medical Companies with business Patient Care Equipment and Controls Fluid/Flow systems, and test systems Machines models focused on the Surgical Devices Pneumatics Leveraging digital and IoT for: development and production Process/Regulatory • easier systems integration of a single class of machines, Food Processing Equip • expanded services/support such as metal working, off- Electrical/Electronics Diversified Printing Test & • help customers optimize Textile Machinery road vehicles, medical Manufacturers Measurement Life Sciences the use of their products Glass Machinery imaging machines, and similar Laboratory and Analytical within systems Papermaking Machinery Leveraging digital and IoT for: Navigation and Weather Plastics Machinery • after market services Industrial Material Handling Equip expansion Machinery Robotics • improve costs and Metalworking Equip efficiencies LV/MV Switchgear Electronics & Semi Equip • expand customer support Electrical Power Dist Power Quality Electrical Components Component Focused Companies with business models focused on Advanced Vision and Imaging Devices Advanced Sensor Systems components and subsystems. Components Leveraging digital and I0T for: Mechanical Power Transmission Equipment • channel enablement • higher efficiencies • new customer interactions
smart systems 19 design smart Smart systems Systems and services Growth Models innovation and Opportunities
OEM current state is one of confusion and excitement
many OEMs provide basic customer support services, but OEMs face open questions in expanding smart systems and services to provide new business values for customers
Evolution of Digital Manufacturing Services Maturity High Provide Challenges Business “Real-Time Leverage Value Adding Process [Managed] Partners To Extend Business What does service & support mean for me? How will Improvements Services” Processes & Risk Services definitions of service & support change in the future?
How do we create valuable services that will Systems & Application Use proven KPIs to incentivize customers to adopt these new solutions? Improve Deployment expand platform to Operating entire customer base How should we frame the resistance towards data Efficiency ownership and security? Basic Smart Service Development & Integration What services should be prioritized in development for customers?
Customer Benefit Customer Identify anchor end-customers and “Basic Customer partners to develop How do we identify partners for scalable relationships in offering services? Support Services” connected solutions via platforms Enhance Provide Engineering How will the future market for services evolve? What Technology & Technical Support steps must we take to support customers? Infrastructure Low Customer Tech Support Today “Provide Collaborative Solutions”
Customer Experience
smart systems design 20 Smart smart Systems systems Growth Models and services and Strategies innovation
diverse challenges hindering digital and IoT adoption although challenges vary among OEMs, the issues fall into the general categories of technology, business and customers
Clear Strategy To Start With… Developing a clear strategy to engage internal support and quickly gain customer adoption by generating tangible value; Lack of Consensus & Leadership Support knowing what to do and how to do it Developing a shared understanding of digital and gaining top level support Aligning the Business to Support Services Planning for the Future Moving from decades-old cultures resistant to Understanding and being flexible in technology change; becoming a service-driven and solution development today to be prepared for organization, both structurally and culturally future technology developments
New business Recruiting The Right Talent Technology Managing Complex Data and revenue Finding and hiring leaders and evangelists Collecting, transforming and integrating models Business that can help drive the development and data from complex machines and processes diffusion of digital throughout the company to enable new application values
Determining Organization & Relationships New work New modes Walling off digital initiatives and operating of interaction styles and Data Ownership & Security processes independently from the mothership to drive speed and Customers are increasingly aware of the freedom has advantages, but can also just deprive mew value and importance of their data, and are ventures of investment, capabilities and resources concerned about the security of their IP Customer Finding your Place in the Ecosystem Poor User Experience Finding and engaging the right partners to help fill capability Industrial suppliers typically do not consider or emphasize user gaps and add value to smart solutions, while not creating experience in the development of smart systems and services, tension with current partners, channels or customers resulting in diminished value and use of these systems Fragmented Customer Requirements While equipment may be easy to customize or configure to specific customer scenarios, doing the same for software and services is difficult
smart systems 21 design smart Smart systems Systems and services Growth Models innovation and Opportunities
OEMs will need to design and develop new business and operating models
Solo Driven Partner Driven Open Collaboration Driven
Embedded System Value Chain Solutionist Collaborator Community Innovator Professional Aggregator
Largely focused on Leverages services Builds broad support Collects, organizes data Builds and extends value via Drives value via extensive remote support automation to feed capabilities across the entire with aim to optimize collaboration with customers, multi-party systems and automation & data value diverse needs across life cycle of target equipment interactions across single channels and providers collaboration and by for speci c product product provider or delivery chain provider dominant delivery across collective delivery leveraging private, public, and delivery chain chain chains partnered information sharing
Simple
Compound
Complex
smart systems design 22 Smart smart Systems systems Growth Models and services and Strategies innovation
new business models are progressive; open collaboration drives innovation
Foster Multi- Vendor, Multi-User Open Interactions & Collaboration Cooperative Mgmt
Adoption Driven Manage System/User by Mix of End Experience & Delivery Chain Customers, OEMs Relationships, Intelligence
n and Services and Interactions o Providers ss i e r
g Adoption Driven Builds broad support o r
P Mainly by capabilities across the l
Partner e Machine and d entire life cycle of Driven o Device OEMs
M equipment or service ss
e delivery chain n i s u B Leverages services automation to feed diverse needs across product provider delivery chain Largely focused on remote Solo support automation & data value Driven for speci c product
Application Complexity Simple Compound Complex
smart systems 23 design smart Smart systems Systems and services Growth Models innovation and Opportunities
new business models also require new monetization and new revenue models
Pricing Models
Hardware-Centric Cost-Plus Pricing Market-Based Pricing Product-Based w/ Subscription Only Cost-Plus pricing is Disruptive Services Without adding significant exactly what you think it is: Often the easiest transition In this model, customers still Figure out the cost to value that differentiates Collaborative to a connected product, incur a substantial your offering from the deliver your offering, customer pays a one- percentage of the cost of competition, prevailing multiply by an acceptable time/up-front fee and hardware (if not the entire market conditions will margin, and set a price. In receive connectivity at no cost), but also pay an dictate your pricing. a commodity market, this Value-Based incremental costs. ongoing subscription fee. might work.
Bundled Subscription-Centric Model w/ Hardware
Value-Based Pricing Disruptive Pricing Relational This approach attempts to Subscription-based services Market-Based blend the best of both worlds with customers typically Value-based pricing Transformation of this type – some investment up front incurring some modest allows you the flexibility to happens when your with a modest recurring expense up front usually at price your offering offering is so compelling expense. or near cost. dependent on the value and delivers so much
you deliver to your unique value that it literally Customer with Relationship customer- whether it is changes the way Cost-Plus dollars saved, dollars customers experience and Managed Services Collaborative Services earned, any combination purchase for the entire Focused Focused of the two, or any category. intangible savings or Transactional A more common model in Builds and extends value benefit. the age of smartphones, Cost-Plus Value-Based via collaboration with customers receive the customers, channels and product at no cost and providers across collective Digital and IoT Monetization Models vendor provides a delivery chains complete ”managed” experience
smart systems design 24 Smart smart Systems systems Growth Models and services and Strategies innovation digital and IoT requires different modes of strategy development
How do we address systemic issues with our organizations ability to fully address the new opportunity? Does our go-to-market system design align well with the opportunity and market? Design & Architect Which trends, forces and disruptions Platform & Services likely will shape the future Develop & Deploy competitive environment? Solution Are our products, systems or Develop Strategy services correctly spec’d and & Business Model configured? Which players, events and technologies Discover Trends, should we care about? Forces & Disruptions
Validated System & Solution Are there new combinations of technologies, Opportunities products, services and partners that can drive Identify Apps, sustained differentiation? Which value elements should we Use Cases & develop, which obtain by partnering Solution Concepts User, Customer, and which by sourcing? Partner Interactions & Learnings Frame New Growth Opportunities What value elements will increase and Research, Analysis extend the value to the customer of our & Investigations core offerings? What formal and informal relationships among allies might exist in the future?
smart systems 25 design smart Smart systems Systems and services Growth Models innovation and Opportunities
business model design and development needs to be truly creative ......
Business Design and Core Capabilities Systems and Solutions Customer Engagement
Revenue Enabling Processes Technology Function & Platform Delivery Target Customer Sales & User Structure Ecosystem Model Skills & Systems & IP Content Capabilities Services Engagement & Brand Channel Experience
BUSINESS ORGANIZATION and DESIGN SMART SYSTEMS and SERVICES OFFERINGS USER and CUSTOMER EXPERIENCE Configuring core skills and relationships within an OEM are the basis for new innovation models Organizing customer and user innovations Structuring the elements to enable unique user and customer interactions
Monetization and Value Creating Networks Alignment, Leverage and Unique / Distinct Features, Augmenting Capabilities Positioning, How Offerings Are Uniquely Enabled Ways To Make Money and Relationships Development of Resources Functions and Capabilities and Services/Support Empathy and Affinity Delivered Users Interactions
Subscriptions Micros Services Technology Sourcing Intellectual Property Leadership Style Customization Integrated Offerings Behavioral Segmentation Context Specific UX/UI Effectiveness Flexible Pricing Premium Commercial Alliances Knowledge Mgmt Company Culture Modularity Direct Add-ons Industry Segmentation Cross-Selling Ease of Use Freemium Risk-Sharing Customer Collaboration Organizational Design Decentralized Manageability Third Party Extensions User Segmentation Diversification Functionality Installed Base Scaled Transactions Partner Collaboration IT Sys and Integration Incentive Systems Best-in-Class Performance Bundled Functions Affinity Experience Center Look, feel & Style Licensing Switchboard Franchising Lean/Flex Production Team Structures Environment/Sustainability Guarantee Empathy Flagship Store Configurability Membership Ad-Supported Open Innovation Logistics Systems Staff Development Productivity and Efficiencies Financial Incentives (e.g. lease) Community Go Direct Personalization Metered Auction Crowdsourcing Process Automation Staff Education Resource Utilization Loyalty Programs Values Alignment Indirect Distribution Curation Transactions Bundled pricing Merger/Acquisitions Process Efficiency Planning Systems Content Elements Personalization Status and Recognition Multi-Level Marketing Automation Financing Cost Leadership Minority Investments Standardization Corp Venture Dev Safety Self-Service Brand Leverage/Extension Non-Traditional Channels Enabling Disaggregated Pricing Analytics Development Service Supplements/Range Co-Branding On Demand Simplification Strategic Design Incubators User Communities Modular Branding Pop-Up Presence Curation Innovation Modes Competency Centers Support Systems Private Labeling
What Business Design and What Business Design Should What Management What Unrealized Technology What Unrealized Market Which value elements in How Can We Best Use Architecture Will Build We Pursue; Which Combination Priorities Will Allow and Innovation Opportunities Leadership Opportunities which segments will give Technological & Market Long-Term Success For Of Value Elements Will Give Us Us To Realize Our Are Available To Our Are Available To Our us a sustainable Uncertainty To Our Our Company? An Advantage? Strategy? Company? Company? advantage? Advantage? What configuration of How can we best make, partner What organizational Which trends, forces and What creative and disruptive What characteristics should we use Do our systems and solutions business skills, partners, or acquire those value levers will best disruptions likely will shape players are present in the arena; to describe our user’s and possess unique features and business model and elements; who are the allies we operationalize these the future competitive what new competitive structure customer’s needs; how should we functionality that captivate systems drives uniqueness? should cultivate? priorities? How should environment? might these trends forge? segment our world? customers? they be configured? Can we monetize our Are there new combinations of What value elements (e.g. What is the evolving competitive Which actual or potential segments Does the company deliver its offerings in ways that are technologies, products, What are our most embedded logic, networked and value structure and how can are most attractive; which offerings to customers and users different from competitors services and partners that can important capability gaps devices, software, analytics, we align but distinctly? opportunities should we focus on? in ways that challenge industry or industry norms; can we drive sustained differentiation? to fill? wireless, etc.) will increase norms? make money and better and extend the value to the How open and interoperable are Are customers measurably pleased margins via multiple Which value elements should How can we align customer of our core our solutions; can we integrate with our offerings; do customers Do diverse partners help sell or revenue streams from we develop, which obtain by investment resources offerings? and connect with peers in unique speak directly about their deliver the company’s offerings? different constituencies? partnering and which by with our chosen strategy? ways? interactions with our company; does sourcing? Can we design a superior our brand reflect unique attributes? What top management solution offering that Does the company offer modular What formal and informal priorities will lead to the dominates market share or products and services that can Are there robust partners and relationships among allies most effective fulfillment earns a substantial also be integrated or purchased as communities that enhance users’ might exist in the future? of our market role? premium? packages? experience?
smart systems design 26 Smart smart Systems systems Growth Models and services and Strategies innovation
OEMs need new ways to interact to create new growth strategies
Most knowledge comes from human experience and expertise. Today, however, knowledge and expertise largely resides in functional silos and systems dispersed across organizations. Acting singularly, functional organizations are constrained by the resources under their control. Legacy processes and habits inhibit any natural ability to communicate and work together to solve big problems or create new solutions.
Transformative IoT and Digital Vision
Strategic Assets Sales force Products & content Partnership network Customer knowledge Sales & channels Product innovation Brand Culture • Defining a digital and IoT vision and strategy based on understanding new and IoT and Digital Building Blocks IoT and Digital Governance novel requirements for manufacturing
Customer Operational Business and customers Experience Process Model • Development and acceleration for new Process & Manufacturing Customer Understanding Digitally-Modif ied Business smart systems, services and solutions Digitization
Customer Touch Points Worker & Process New Digital Partnered • Supported by new internal processes, & Experiences Enablement Models skills and roles required to adopt new tech IoT and Digital Engagement Digital and IoT
New Revenue and Value and capabilities New Top Line Growth Performance Management Realization • Supported by building and sustaining partner and ecosystem values Skills Infrastructure Investment Initiatives
Iterative Transformation Roadmap
smart systems 27 design 04 smart systems design process and methods
Smart Systems smart Design and systems Development and services Process innovation
recognizing the need for new methods and processes is a minimum requirement...
Smart systems design is a new discipline that lies Convergence of design, strategy and innovation processes is smart systems design between the fault lines of existing disciplines creating a new smart systems design process
Business Strategy
Line of Product & Innovation Graphic Industrial Services Interaction Complex Innovation Corporate Design Strategy & Business Service Design Design Design Design Systems Processes Processes Design Thinking Portfolio Strategy Strategy process and & Mgmt Mgmt
Product Related & Service Disciplines Design & Fields methods Smart Systems Design
Today, with the emergence of connected products and information- Design, as well as strategy, is concerned with creating values and making them based services, even more complexity has arisen in the design of visible, not to mention profitable. Business strategy and design today need to systems and services as well as in the core of the product. extend to the experience that customers will have with connected products, services, spaces or a mix of these and, therefore must integrate the processes Because networks add yet more complexity to the process and and systems that are behind these experiences with decisions related to both because just about everything will get connected, we strongly design and strategy. believe this environment requires combinations of several disciplines and methods in order to fully address the nature of smart The convergence of design with strategy and related innovation processes will connected business opportunities. inevitably lead to a new integrated set of processes, methods and disciplines -- the advent of what we are calling Smart Systems Design.
smart systems 29 design smart Smart Systems systems Design and and services Development innovation Process
we need a radically new frame of reference...that leverages the convergence of design, strategy and innovation processes
How can we better understand How can we drive empathy, customer experience through the participation and motivation? How user’s eyes and through the creativity can we put human sensibilities and of multiple parallel participants? behaviors at the center of the solution?
Experience Behaviors
How can we bettter How can an organization turns understand the value its workers, partners, and of data and information customers into believers and coming from products, Data & Content Relationships contributors? How can we solve systems and people? really big problems or create unique new offerings?
Skills Technology
Skills echnology
T How can we move beyond a conventional view of How can we deliberately organize to technology where all tangible and intangible skills anticipate technologies that are disruptive or and assets including people, brands, technologies, sustaining in nature.....innovation that creates relationships, and processes are fully leveraged? new (and unexpected) opportunities?
smart systems design 30 Smart Systems smart Design and systems Development and services Process innovation
its also about doing things differently...... developing new smart systems and services innovation requires abandoning traditional protocols; critical success factors include..
1 Designing New Experiences & Systems: Organizing Clever Combinations of Smart By looking at the customer experience through the 2 user’s eyes and through the creativity of multiple Systems Technology: parallel participants, players can gain a deeper Companies can deliberately anticipate sustaining appreciation of the viability of their offering. technologies ...... innovation that creates Domain knowledge provides a rich context in new (and unexpected) opportunities can which to address new opportunities and it also be systematically developed by leveraging minimizes the time investment to get new business cross-industry perspective to solve development teams moving forward. problems in radically new ways.
3 Rapid Experimentation & Business Systems Innovation: 5 Aligning The “Business Architecture” With The “Technology Architecture”: Success will depend upon understanding and choosing new or modified business models and acting quickly. Continuous For the first time in the evolution of networked experimentation is a must as new opportunities will often fail businesses, these two “architectures” must be viewed and re-form as learning grows. in close proximity. The two thrusts need to be mutually supportive without inhibiting one or the other. However, trying to coordinate and leverage the respective roles of technology architecture and business architecture often creates contention. We see the continuously evolving 4 Extending Skills Through Relationships, Ecosystems and “Strange Bedfellows”: relationship between these two dimensions as fertile ground for innovation. They need to be interwoven and Seemingly superior offerings can often fail because there is little understanding of how to participate mutually supportive. In fact, we believe success in either or incentivize to participate at all. Inviting users’, customers’ & partners’ participation facilitates an increasingly goes to the company that effectively utilizes acute understanding of the customer experience and the potential business system to support the the combined potential of both. solution. New solutions will increasingly be comprised of coalitions of self-motivated participants that pursue a common goal, not mere subcontractors tied to “command and control” schemes.
smart systems 31 design smart Smart Systems systems Design and and services Development innovation Process
1 designing radically new systems and experiences...
assuming that the role of technology is only about making existing products or services more attractive no longer works; players need to creatively imagine fully developed systems and whole marketplaces
The Interactions & Relationships Between & Amongst Devices, People & Systems Will Drive Future DIfferentiation - Not Just Features & Isolated Capabilities
smart systems design 32 Smart Systems smart Design and systems Development and services Process innovation
2 organizing clever combinations of smart systems technologies & capabilities
Technologies & Innovation Driving The Internet of Things & People Mobile & Transport Systems Residential & Personal Commercial & Institutional Resources, Industrial & Security
Managed Services Development of Evolution of Wireless Carrier Platforms Out-Sourced Services & Support Systems Evolving Software Architectures Commercial Vehicle Fleet Management GPS / Navigation Systems Explosion of Advanced Military Command & Control Location / Social Networking Cellular Mobile Presence Communications
Wireless & Sensor Networks Aerospace Telemetry Systems Communications & Command/Control Human-Machine Interfaces & Software Vehicle Navigation / UI/Dashboard Systems Consumer Game Systems Industrial Military Training Control & Automation & Simulation Systems Embedded Control Financial Trading Algorithms Systems Cellular Mobile Vehicle Communications Industrial Control HVAC & Power Control Power Control Electronics & Smart Actuators Industrial & Utility Control Systems Marine, Rail, Aero & Vehicle Power Control Smart Sensors & Switches Military Navigation, Consumer Electronics Industrial Vehicle Sensors Guidance & & Smart Phone Communications Systems & Utility & Systems Developments Control Mixed Signal Systems Processing Cellular Mobile Communications
Vehicles
Air Transport Rail Systems
Marine Transport Security Systems Finance Systems Communications Command/Control Domestic ServicesHome Automation Office Automation Utility/Grid Systems Telemetry/Guidance Intelligent Transport Medical / Healthcare Back-Office Systems Building Automation Consumer Electronics Factory/Process Control Resources/Environment smart systems 33 design smart Smart Systems systems Design and and services Development innovation Process
3 rapid experimentation and customer innovation & collaboration becomes defacto
Discover/Define Develop Deploy
Technology Sourcing & Alliance System Prototypes & Customer Participatory Options Pilot Designs Pilot Product or Rapid Low Cost Design Service Concept Simulations & Larger Scale Customer Defined End-To-End Testing Higher Fidelity Participation & Testing Identifying unmet Experience User Participatory Concept Simulations Needs Information User Design Customer “End-To-End” Architecture Experience Experience Developing System Contextual & Systems Concepts Design Design Understanding leveraging discovery Internal & External Behaviors and experiential processes fosters communications Rapid Concept Development driven Synergies drive new design Launch across traditional V 1 Experiments V 2 by co-evolutionary V 3 thinking, advanced features, and V 4 Releases For Insights inputs & process business model iteration Model functions and creates work streams that cross disciplines and Understanding boundaries to drive & Discovering Initial Business Innovation Assets Models & Prototyping new value Business Trade-Off Understanding User Analysis Eco-System Modeling & Partner Concepts & Future Road Map & Design Relationships & Develop RIsk Development Interactions Models & Options
smart systems design 34 Smart Systems smart Design and systems Development and services Process innovation
4 extending skills through relationships and ecosystems....
force.com Google Tridium SkyFoundry Cimetrics Qualcomm SunGrid Ebay Axeda Qualtech Systems Richards-Zeta M2M Datacorp IBM BlueGrid Amazon Wyless Jasper Wireless NextNine Wireless Matrix V2com Facebook Box Telematics Numerex Management Ei3 Skytel eDevice Verizon Aeris Kore Telematics Orbcomm BT Esprida Iridium Smart Signal Pedigree Tech T-Mobile Crossbridge ATT Airbiquity Imetrik Telefonica / O2 smart system technologies Comtech M2M Sprint Nextel Vodafone are giving rise to a whole new Orange MAYA Design Telenor GridAgents Mocana China Mobile generation of technology and Palantiri Systems Deloitte Accenture Orchesys SAIC Oracle services enabling players who Wind River Raytheon CSC Lockheed Martin Microsoft are linking users, producers Enernoc QNX Wipro Freescale SmartSynch Comverge Apple and intermediary channels Sensus Infosys Atos Origin Symantec Elutions Trilliant
Integration Elster DeepStream SAP in new ways; players need Silver Spring Sigma Designs CapGemini VM Ware Itron GridPoint Control4 IBM to envision their market role Eurotech Crestron CA 4Home to address product, service Apprion Cisco Systems Sensinode Hewlett Packard EnOcean Sentilla Tendril Arch Rock and business systems in a EKA Systems Dust Networks Millennialnet Meshnetics Crossbow SynapSense Nokia Daintree EMC world of infinitely expanding Helicomm RF Code Avid Wireless Echelon Greenpeak Echelon Sierra Wireless NetApp interactions and relationships Advantech Belden Opto-22 B&B Electronics LantronixMoxa Lantronix Data Online Ruggedcom Digi Int’l Motorola Enfora Telit Cinterion Comtrol NexAira Sixnet CalAmp DPAC Laird Technologies RF Monolithics Connect One Jennic Ember Qualcomm Intel
Atmel Freescale Samsung ST Micro
Hardware Texas Instruments Hitachi
“Platform” Focus “Portfolio” Leverage Focus
smart systems 35 design smart Smart Systems systems Design and and services Development innovation Process
5 aligning the “business architecture” with the “technology architecture”...
Technology Platform Information and Collaboration Tools Interaction Models
The continuously evolving relationship between these Trying to coordinate and leverage the respective Integrating two dimensions is fertile Business Design ground for innovation. They roles of technology architecture and business and Information architecture often creates contention and Technology need to be interwoven and Architecture mutually supportive. Success in either increasingly goes to the company that effectively utilizes the combined potential of both
Business Strategy Competitive Positioning Go-To-Market System
smart systems design 36 Smart Systems smart Design and systems Development and services Process innovation
to conceive and design smart systems, organizations need an integrated approach...
SYSTEMS DESIGN We believe design needs to transcend discrete product or service innovation. Assuming that the role of design is only about making existing products DISCOVER or services more attractive no longer works. Business designers need to creatively imagine fully developed systems and whole marketplaces. How to use customer experience and technology Companies need to envision the design role as one that can address product, uncertainty to reveal new User experience service and business systems. opportunities and understanding
RELATIONSHIPS DEFINE Problem solving for new Smart Systems opportunities must address DEPLOY Specific development opportunities including tough questions: how can an organization turns its workers, partners, and Align investments formal and informal Understand with strategy and customers into believers and contributors? How can we make changes that likely evolution relationships model can impact multiple functions and organizations and ultimately solve really of competitive environment big problems or create unique new offerings? We are firm believers in the human element - the community as a manifestation of the system and visa Business model design and vali- versa. Behaviors of users, customers, teams, functions, leadership, all need dation to considered. Understanding empathy, participation, motivations - putting human sensibilities and behaviors at the center of the solution is key. DEVELOP System and services SKILLS delivery modes including Companies need to move beyond a conventional orientation to technology go-to-market design skills and knowledge. Organizations need a disciplined process focused on optimizing all tangible and intangible skills and assets including people and competencies, brands and positioning, technologies and intellectual property, alliances, relationships and business and operational processes.
smart systems 37 design 05
smart system design client cases
2018 2019 2020 2021 2022 Methodologies smart and systems Client and services Cases innovation
the Internet of Things demands that we think about opportunities as...... systems not products....
Innovators like Thomas Edison and Steve Jobs understood the value of “systems thinking” ...... each understood the value of product innovation and the business system that has created entire industries around their products. Their genius lies in the ability to look beyond discrete innovations and conceive of entirely new smart systems experiences that become new marketplaces.
Creating New Value For Customers Through Capturing Value For Stakeholders New Smart Systems Technologies Through Business System Innovation
High High
Understanding User Understanding Business Behavior & Experience Models
Managing Managing “Complexity” “Ambiguity”
Ease of Use Ease of Use + Confidence Confidence
Harnessing The Value Rapid Testing & of Technology Experimentation
Low Low
smart systems 39 design smart Smart Systems systems Design and and services Development innovation Process
smart systems design is driven by a core set of critical questions...... Discovering Emerging Smart Systems Explore Conceive Opportunities Who are our customers? What are their Who will be the users and customers experiences? potentially participating in our solution?
What personas, applications, devices & What needs, concepts and solutions will Model systems does our product or service touch? serve our users, customers and partners? What characteristics should we use to What is the nature of the interactions? Who are our natural allies (players; devices; segment our users, custoemrs, markets Architect and articulate the benefits of our What are the key systems and Discover How can we best use technological and peers); what companies will play or contribute to the new system; who is best proposed offering? ecosystem design factors? How will our market uncertainty to our advantage? poised to help develop our opportunity? role or the role of others evolve? Discovering Experience Which actual or anticipated segments are Emerging What formal and informal relationships most attractive? What is the business system that will best Smart System What primary customer activities can we might exist in the future? enable the customer experience Opportunities observe; be involved with? What role/s can we/they play in the Building Participate How should the new system be Anticipating proposed system? The Which activities represent opportunities for Is there an explicit (or implicit) community Experiences, positioned in the marketplace? Deploy Platform Define Interactions us? Do these activities benefit from smart of participants? If so, which participants What ecosystem configuration best and devices and/or services? interact with which value elements? supports our strategy; open; closed; Invest Relationships hierarchical; select members? How can we align investments and Determining What adjacent activities can we observe; be What manner of interactions can we use to resources with our chosen strategy? Value Creation involved with? Will these activities benefit drive empathy? involvement? innovation? Role Which value elements should we own; from smart devices and/or services? which should we obtain by partnering? How should we approach critical make, Who can we invite to collaborate? Which buy, partner decisions? Map potential participants can help us best Develop What are the business model alternatives; What elements will combine to create value understand the user/system experience? which is best aligned with the offering? Build for the customer? What benefits can be What is our system development and How can we best present, iterate and test added over time & what advantages will Innovate launch plan? they bring? our system concepts; hypothesis? What technology innovation is available
to enhance or extend our system’s value? What technology allies will be required Are there special challenges in making the Prototype for product / service / system realization? value salient to the customer? How should we prototype the customer and What is the architectural “blueprint” partner experiences? behind the customer experience? What organization levers will best drive Do these elements extend existing product or this business? What leadership priorities service offerings or are they completely new? What are the critical information interfaces? What technology alllies will be required will drive the most effective market role? Interactions? How will information flow for system/service realization? Based on desired peer interaction & between and among constituents? What are the critical path elements that technology maturity, is the timing right? need to addressed: activities; timing; What are the key system elements & design Validate How can we best test our business responsibilities; costs; uncertainties? factors? Defining Interactions, design? What is the best means to prove What key on-going support elements Collaboration & System Values How can we quickly iterate our assumptions our system’s value in the field? need to be in place to continue to to learn more? Developing Value How attractive are the economics of the enhance our objectives? Creation Model & Role business case; what will it cost to bring the system to market? Will it result in cost What will be the mode of iteration for savings; new values; new experience? improving and expanding the business? Deploying The Smart System
smart systems design 40 Smart Systems smart Design and systems Development and services Process innovation
client case: customer needs analysis for platform and interaction design A well known manufacturer of power distribution devices and energy management equipment and systems came to Harbor looking to better understand customer experience and requirements for a potential new “connected” services offering. Our team worked closely with their technologists and support organization to facilitate a group of customer and user participatory design workshops to enhance and validate their development plans and road maps.
INQUIRY INVESTIGATIONS IMPACT
Use Cases Our work encompassed the entire 2 What key elements in the design of the 1 We talked with internal We organized multiple product development and user customer’s “connected” experience should staff as well as industry participatory design experience: from research to we be focusing on? What new connectivity, experts and developed workshops based on a set of use cases we interaction design to platform content, or data values can our client a short list of target uniquely leverage? How will these new developed with the selection. participants who were client capabilities impact our customers? not familiar users of our clients products We conducted extensive field Defining Platform & Interaction and services research to understand what Requirements What connected products and services are users, stakeholders and operators already in the market today and how are they monitored in use. We prototyped applied? What will the requirements be for a platform usage and interactions data management/ service delivery platform that received data from sensors, solution? How will stakeholders and users and detailed requirements interact with these new systems? How can 3 we make user experience a differentiating for a system and platform for element in our offerings? We hosted in-depth 4 We functionally managing equipment, users, and the design sessions validated key elements communications remotely. Validating Opportunities with users, having of the system and Using a workshop approach, we helped them evaluate the refined client’s view of client gain direct inputs from users concepts including customer benefits and and stakeholders to quickly iterate its creation of their related economics/ assumptions driving this program. We own mock-ups and values as well as were able to give client the confidence to selection of mock-ups presentation organized make new investments in core sensing and they valued most for developing platform technologies and helped build a support with senior road map and roll out program. management
smart systems 41 design smart Smart Systems systems Design and and services Development innovation Process
client case: heavy equipment manufacturer validates user needs and data values Excavators can do more than just move dirt. With the addition of GPS, telematics, and other technology, these machines are now also information devices, producing and releasing vast amounts of data about what they know. One of the world’s largest manufacturers of heavy machinery, asked Harbor to perform in-depth research throughout China to understand the business value of this information and how it might be used.
INQUIRY INVESTIGATIONS IMPACT
Field Research We conducted dozens of stakeholder interviews The result: a new platform and and performed field research in nine cities underlying data architecture with throughout the country to make certain that our user interfaces that provided a insights were grounded in real-world needs and quick overview of the system’s possibilities. performance, with the ability Persona and User Mapping to dig deeper into the numbers Our research revealed a complex landscape in using a “bubble up, drill down” which social constructs, such as national identity approach allowing diverse users and personal relationships, were as important to to easily evaluate states, usage the business as the value of the information. and diagnose problems on Validating User Needs their own. User needs analysis We found that the data captured by our client’s approach combined with a future- machines proved to be of great interest to proofed design helped create a potential new customers and markets, such as sustainable design for the client resale and insurance to take to market. Platform Road Map By investing in data architecture, collaborating with key stakeholders, and developing new and targeted products and services, our manufacturing client could avoid some unforeseen pitfalls and accelerate growth.
smart systems design 42 Smart Systems smart Design and systems Development and services Process innovation client case: hygiene chemicals manufacturer and services provider develops digital and IoT strategy A leader in hygiene and cleaning chemicals wanted to embrace digital and IoT technologies to help differentiate new solutions for customers. Being uncharted territory for the client, our team worked closely with their business leaders, technologists, and services management to understand future user needs, new business models, solution packaging, pricing and monetization as well as establish an IoT architecture and platform strategy, including the development of new data management and analytics capabilities.
INQUIRY INVESTIGATIONS IMPACT
Anticipating Future Customer Needs- Scenario Planning How will this market likely evolve? How will IoT change customer By first helping our client to needs, buying behaviors and requirements? What will be the impact on form a digital and IoT strategy the market, competitive structure and the existing suppliers if our client 1 2 We then Identified team and charter, we assisted in develops a family of new digital and IoT solutions? How can we utilize We conducted a focused assessment key platform organizing over 15-20 disparate future scenarios to guard against the unexpected? and architecture of future customer projects and unifying a digital needs and requirements; Digital Strategy Development requirements and including addressing strategy process to evaluate Which internal projects are worth funding, what are the business cases, utilized them in the the development which projects were worth in- which technologies should we source and which should we develop scenario planning of supporting vesting in. directly? How should we organize a new digital and IoT initiative? Who workshops to build business cases and should be involved? How should our digital and IoT team align itself a view of future revenue models for different solutions Subsequently, developing an with the existing organization; what should be their role, mission and market needs and configurations architecture, platform and tech- objectives? What critical investments should we be considering? requirements nical development and sourcing Platform Requirements partner strategy helped the or- What products and services are already in the market today and how ganization to put its arms around are they applied? What will the requirements be for data management/ To help make these the many and diverse and con- 3 4 service platform solutions? How can we leverage data sciences and Given the key strategies a reality, we fusing technologies required. created a comprehensive analytics to address new optimization opportunities? requirements, we analyzed implementation plan the competitive outlining the phases or In parallel, developing a business Strategies and Business Models landscape and both technical and market case methodology and project What business models are likely to be adopted and which ones will determined development involved, selection process increased con- be most successful? How will revenue models evolve? How can we and the likely future potential maneuvers fidence in the organization that accelerate adoption rates and how can these tactics play into a broader for differentiated adoption cycles based on deep modeling. Based on strategy? What business case framework, methodology and metrics solutions and the best projects and programs market development this modeling, we helped were being developed. should we utilize to focus on the best opportunities? build an investment plan, requirements skills acquisition strategy Road Map and organizational model The combination of the above What investments should we prioritize: platform innovations, data to help support market processes has accelerated the roll out. architecture and analytics, collaboration with key stakeholders, etc. market development of a suite for development of new services? How can we organize our skills, of new solutions within targeted capabilities and functional organizations to accelerate our market customer segments. development for new solutions?
smart systems 43 design smart Smart Systems systems Design and and services Development innovation Process
client case: transforming industrial operations in hot dip galvanizing with internet of things strategy The largest after-fabrication galvanizing business in North America with 40+ plant locations wanted to reduce the subjective nature and overly manual processes in their operations. Considered one of the leading galvanizing businesses in the world, leadership wanted to overcome the barriers to adopting Industrial Internet of Things technologies and completely re-think the relationship between new digital technologies and their operations.
INQUIRY INVESTIGATIONS IMPACT
Identifying Obstacles We conducted interviews with stakeholders to The result: our client realized determine most critical needs, requirements and significant improvements in hurdles to adoption. Emphasis focused on barriers throughput, safety, quality, raw to new technology adoption. materials utilization, on- Pilot Plant Program time deliveries and customer Our research indicated best approach would be to satisfaction. pilot a master operating platform for all plants (40+ facilities) in a target plant first, including: The IIoT program has been rolled »» Dynamic machine and production monitoring, out to over 20 facilities and has control, and automation »» Real-time product visibility increased quality levels, resource »» Digital order entry, order life-cycle tracking, management and utilization and automated invoicing ultimately leading to a consistent increase in operating profits at Integration and Transformation Successfully piloting and integrating new IoT each plant. technologies with existing systems helped eliminate need for “rip-and-replace” implementation. This allowed client to be able to deliver today’s most advanced technology and sensors to optimize & automate operations and enable future innovation.
Platform Road Map By planning or and investing in next gen platform and data architecture, collaborating with key stakeholders, and developing new sensor and data acquisition capabilities, our client has significantly and cost effectively upgraded capabilities and technologies for galvanizing operations and established a blueprint for plant roll outs and future innovations.
smart systems design 44 Smart Systems smart Design and systems Development and services Process innovation
client case: market analysis and modeling to support iot and platform strategy development A leader in silicon technology was looking to validate a new opportunity that could enable them to disrupt the Internet of Things arena much as they had previously disrupted the mobile phone and device market. We used our Smart Systems and IoT quantitative forecast model to help uncover the scale of opportunity across select markets, venues and application segments and used this understanding to co-develop scenarios that could predict the long-term value creation opportunity for our client.
INQUIRY OUTCOMES IMPACT
Network Architecture Evolution How does information flow around the networks in these By providing our client with a applications and markets? What topologies and protcols are creative combination of strong in use; which will win in the future? 1 2 We conducted a We then Identified data modeling and creative Standards Adoption focused assessment key network insights we were able to better What standards do we believe will be used in key markets? of available and requirements; inform their strategic decisions Which ones are already established? Which standards are anticipated networks including sizing, and the potential risks. emerging and which ones show promise? What do we believe to best understand timing, adoption rates the timing will look like for the adoption of these networks size, impacts of tech- and barriers to entry Given the complex nature of the and what factors will most impact adoption timing? nology and potential new tech adoption environment, future states the scenarios that we created Scenario Planning helped our client make and How will this market likely evolve? What will be the impact on the market, competitive structures and the existing suppliers balance important decisions that if our client develops a disruptive strategy? How can we could generate long-term value utilize future scenarios to guard against the unexpected? and allow them another chapter of market leadership. Platform Requirements What products and services are already in the market today 3 We analyzed the 4 We developed an and how are they applied? What will the requirements be for architecture and data aggregator / service platform solutions? landscape and determined needs ecosystem plan outlining the device quantities and requirements Strategies and Business Models involved, and all the What business models are likely to be adopted and which to determine a players producing ones will be most successful? How can our client accelerate proposed architec- solutions coupling adoption rates and how can these tactics play into a broader tire and road map their financial strength strategy? to our scenarios as a means to determine Risk Assessment likely outcomes to the What are some potential disruptive strategies? What will be proposed strategy the impact on the market, competitive structures and the existing suppliers if our client develops new unexpected network technology? What are the risks for the client and how should they be weighted?
smart systems 45 design smart Smart Systems systems Design and and services Development innovation Process
client case: portfolio expansion acquisition analysis and due diligence Recently, we engaged with an industrial communications provider who was looking to make a series of acquisitions to help them drive growth and expand into the smart connected systems space. After being recently acquired by a private equity firm, it was vital that the acquisition targets were well coordinated and could generate significant returns and synergies.
INQUIRY INVESTIGATIONS IMPACT
Targeting Candidates With the target analysis Based on our understanding of the Smart complete our client successfully Systems and Services market and the market’s We conducted in- 1 2 We created a highly acquired the candidate as likely future states, which candidates will make depth assessment detailed view of the recommended and is now the best targets? of the acquisition opportunities facing well-positioned to expand their candidate compa- the candidate pre- Screening For Strategic Factors nies comparing the customer base, generating and post acquisition How will economic indicators, regulations, group to it peer com- significant ROI, and insulate and leveraged to application opportunities, and technology panies in the market themselves against potential model and quantify development combine to impact our clients as well as to existing threats from competitors. the opportunities in future market and acquisition decision-making capabilities in our regions and markets criteria? clients portfolio At the end of the project, our client not only had the Product Portfolio information that allowed them In order to create the most value, what should our clients end product portfolio look like? to make a informed decision, but In terms of scope, breadth and depth, how under our counsel, they were does our client stack up against that their able to understand the breadth competitors pre and post acquisition? of information that was required 3 4 Finally, we organized and to make a complicated decision Technology Synergies presented the informa- We then visited a and, most importantly, act upon How does the short list of candidates tion to ensure our client, short list of candidate it in a very compressed time line. potentially extend existing capabilities the private equity firm within our client? What are the strengths companies to validate and their bankers had a and weaknesses that can be enhanced and and further research comprehensive frame- supported? our findings to rank work of information from the short list of can- which to make their Target Candidate Due Diligence didates acquisition decisions and How does our client’s target candidate stack also to help support their company integration pro- up against their competitors and peer group gram post acquisition in the marketplace? How do their customer bases, product mix, financial situation and market positions align?
smart systems design 46 Smart Systems smart Design and systems Development and services Process innovation
client case: market, player and technology tracking and briefings Being a large, established leader in networking technologies, our client was interested in understanding how key Internet of Things innovations could impact their business. As part of a broader research subscription, they could participate in our on-going market and player tracking services and couple these to briefing forums with thought- leaders and innovators to build a view of the future that helped the client understand potential competitive scenarios and identify key opportunities to pursue
INQUIRY INVESTIGATIONS IMPACT
Technology and Player Tracking What new technologies and disruptive capabilities will By providing an outsiders perspec- customers value? What elements in a Smart Systems and 2 1 tive, we were able to help our client Services offering will drive sustaining value? We configured From our base of a defined set of research and client generate new insights about where Customer Drivers and Use Cases technologies and work, we organized the most attractive growth oppor- What key elements in the design of the customer’s players and utilzied use cases and busi- tunities were and what capabilities “connected” experience should we be focusing on? What our research ser- ness model portrayals were required to penetrate and new connectivity, content, or data values can our client vices platform and to help the client develop these opportunities. uniquely leverage? tracking services to understand new build a knowledge- growth and disrup- Additionally, we were able to estab- Market Modeling, Sizing and Dimensioning base for the client tion opportunities. lish an on-going market intelligence What new markets and types of applications should our focused on high These were presented and player tracking system for the client be looking to address in the future? Which segments impact market virtually to diverse will drive innovation and/or disruption in connected client’s organization to help diverse intelligence internal staff constit- services? staff functions keep up with rapidly uents changing market conditions New Business Models What evolving business system and business model design 4 elements can be leveraged to our client’s advantage? How 3 will these elements impact our client’s business model and We leveraged our go-to-market strategy? deep market un- We utilized out alliance derstanding and and ecosystem mapping Ecosystem Partners the firm’s Smart capabilities such that the Who are our client’s natural allies in a Connected Services Systems architec- client could screen and model? Who is poised in the future to help develop this ture and forecast rank potential value add- opportunity? How might the ecosystem evolve and how model to help the ing and solution delivery could this impact our client? client pinpoint alliances and partners Validating Growth Opportunities specific custom- er, segment and How can our client quickly iterate its assumptions driving this program to learn more? Are there any ecosystem application targets participants that could help our client best understand the and size/scope potential for future customer and marketplace impact? these for further evaluation
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value created from our new model is informed by community interactions...
The relationships and interactions we help foster serve as a context for deep insight and more value creation. Every relationship building event, every workshop and platform project, regardless of its focus, is enhanced by the range and depth of these relationships.
Harbor seeks out clients whose strategic and business develop- ment mode shows a desire to drive disruption and manage change effectively, both in their organiza- Industria l Energy & Infrastructure Buildings Healthcare Transportation Consumer tion and through their relationships in the marketplace. These are the forward looking competitors who can benefit most directly from the breadth of knowledge and process skills embodied in Harbor.
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our approach is simple: help clients create and capture value by combining accurate data discovery and analysis with strategy development and creative systems-thinking We plan and build new businesses and growth opportunities by leveraging deep analysis, thoughtful interactions and unique systems and business model design and development tools
Harbor Research Inc. has nearly 30 years of experience supporting new business creation and development. We continually strive to Revenue & Growth generate deep insight into what drives value Business Opportunity Assessments DESIGN creation and competitive advantage in our STRATEGY Models clients’ businesses and the economy as a whole. Harbor helps companies outperform their peers Domain Adoption Forums Player & Event Tracking Platform otype Mo and rivals by instilling innovation into the core of Prot del te In pa no ici va their business development processes. We help rt te Tech Discovery Forums Pa V Smart Systems Framework e al client’s foster creative thinking, facilitate diverse iv D id e E E a c N V t n FI E e Innovation Workshops o E LO perspectives and unconventional insight and, C D P A r most importantly, we directly participate. The Research, Analysis, Forecasts, p c a h Smart Systems Lab i M t Content & Reports e c result is increased certainty around vital new t
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building their capabilities for the future - we are passionate about creating lasting impact. We believe that innovation can be driven from systematic methods and that enduring capabilities and processes can be built to reduce the risks associated with new growth To discover, design and develop innovative smart systems, organizations must ventures. Every solution we propose is informed consider all the elements involved and the context they fit into. The benefits that by a combination of real world experience and will flow from the recognition that traditional strategy and product development unique processes and methods that are tailored protocols will not meet the needs of a connected business are nearly infinite. to the dynamics of your organization.
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