What exactly is a Smart Connected Product and why do you need to know?
A Smart Connected Product (Sometimes referred to as Smart Connected Thing) are essentially products, assets and other things embedded with processors, sensors, software and connectivity that allow data to be exchanged between the product and its environment, manufacturer, operator/user, and other products and systems.
The future is arriving quickly, and manufacturers are rapidly realising the benefits that can be had from making their products Smart, there has been a 50% year on year growth over the last 4 years and by next year, Smart Connected Products will add up to $685 billion to manufacturing revenue.
However, for some manufacturers the transition is challenging and in some ways a bit of a balancing act. They know there is no other option than to invest in these new technologies but at the same time, the priorities they face between sustaining their core business and making the investment into digital is going to be a lot of hard work. On the plus side, this hard work will pay dividends in the long run with industry experts predicting gains to exceed $1trillion dollars within the next couple of years, solely as a result of IoT implementations.
In Maciej Kranz book “Building the Internet of Things” he describes some of the industry gains that will be achieved across different industry segments via the introduction of IoT – the list is as follows:
With figures like these, digital transformation is very much happening and for manufacturers with their finger on the pulse, they are already making significant progress and totally transforming their business models and reaping the rewards. For lagging organisations that are hesitant and sticking with traditional business models, closed systems and not looking to integrating Internet of Things (IoT) their future is looking very bleak indeed
With the rate of change now accelerating across all major industries, through the convergence of new technology and revamped business models, industry structures are changing which also exposes companies to both new competitive opportunities as well as a number of threats.
This means that in order to survive, product companies will be required to rethink their strategies, business roadmaps, digital capabilities and fundamentally transform their current products and offerings if they want to remain relevant in the digital age.
A product in this new digital age is no longer just a sold item, it becomes a vital source of information for its manufacturer in many ways – below are four to be thinking about:
Improving customer experience – by being able to proactively monitor one of their products, the manufacturer can leverage data from that product and improve the service, support and usability for its customer. Such as proactively monitoring and identify issues and fixing them before they break down.
Optimising business processes – combine real time data with existing systems to increase efficiency and reduce costs.
Drive new revenue streams – Unlock new business models and realise new value-add opportunities. e.g Pay per use billing or product as a service (PAAS)
Differentiate offering – increase pace of product and service innovation for faster time to first value.
The above are just four ways in which Smart Connected Products benefit both the manufacturer and the end user, there are others and - in the not so distant future - you will see them becoming highly customisable and even more personaliseable.
Developing a smart connected product is a journey, and the departure from the old world to the new must start now. Businesses who dither for too long, run a significant risk of being pushed from the market as new entrants (often from completely different sectors) will be causing massive disruption.
What’s needed is a clear roadmap and for companies to rethink their product strategy and engineering processes and in some cases their entire product range.
No longer is it the case of just selling a product, manufacturers will also need to figure out how to build a business around SCPs and the data they produce. This is no small job, as they will now be navigating unfamiliar ground – for example, maintaining service-orientated relationships with customers instead of just selling them products.
Because every company is unique, there is no clearly paved path to becoming a connected products business but there are three core categories that SCP fall into:
Monitoring – keeping track of the products condition, environment, and usage, which enables product usage insights and predictive maintenance
Control – remote management of product functions, performance enhancements and personalisation of the user experience.
Automation – independent operation, diagnosis, service and coordination with other products.
First you need to explore your options…
Virtually all businesses who are interested in Smart Connected Products, first need to lay the groundwork for their offering, which always starts with the customer as the foundations. By keeping your customers’ needs in mind and being familiar with their pain points and understanding how they will benefit from the technology, this is what will help you take the first step on the path to connected products.
To get you started on the right path with your connected products strategy and discuss what approach will be right for you, arrange a call with one of our team and see how InVMA can tailor a solution to meet your IoT needs. Alternatively, register to our Connected Product event at Cranfield University 19 September 2019.
InVMA has in depth expertise in IoT solutions such as PTC ThingWorx® and InVMA AssetMinder® we can design, develop and implement these software as well as hardware solutions that use real-time data from machines, sensors, devices and things to change the way our customers work.
By linking data to your current systems and processes, we can help you create new revenue streams, enhance customer satisfaction and improve overall operational efficiency.
If you would like a discovery call with one of our team, simply click on this link and complete the short form, leave your details and we will get back to you straight away to arrange a time.
In their second Harvard Business Review article, How Smart, Connected Products Are Transforming Companies, co-authors Michael Porter of the Harvard Business School and Jim Heppelmann, President and CEO of PTC, examine the impact of the Internet of Things on companies' operations and organisational structure.