W5: Porter & Heppelmann (2015): How Smart, Connected Products are Transforming Companies

Question 1

Study’s aim

Answer 1

Examines the external implications to the firm, looking in detail at how smart, connected products affect rivalry, industry structure, industry boundaries, and strategy. It explores the internal implications to the firm, how the nature of smart, connected products substantially changes the work of virtually every function within the manufacturing firm

Question 2

Technology stack

Answer 2

New supporting technology infrastructure that required by smart, connected products. It provides a gateway for data exchange between the product and the user and integrates data from business systems, external sources, and other related products. It also serves as a platform for data storage and analytics. This enables new product capabilities

Question 3

Big data analytics

Answer 3

Employ a family of new techniques to understand patterns that can often unearth powerful insights. A challenge is that the data from smart, connected products and related internal and external data are often unstructured

Question 4

‘Data lake’

Answer 4

A repository in which disparate data streams can be stored in their native formats. This is the emerging solution for the challenge with big data analytics

Question 5

Digital twin

Answer 5

A 3D virtual reality replica of a physical product. It allows to visualise the status and condition of a product that may be thousands of miles away. It also provides insights into how a product can be better designed, manufactured, operated, and serviced

Question 6

Product cloud

Answer 6

Consists of smart product applications, rules/analytics engine, application platform, and a product data database

Question 7

Network communication

Answer 7

The protocols that enable communications between the product and the cloud

Question 8

Product software

Answer 8

An embedded operating system, onboard software applications, an enhanced user interface, and product control components

Question 9

Product hardware

Answer 9

Embedded sensors, processors, and a connectivity port/antenna that supplement traditional mechanical and electrical components

Question 10

External information sources

Answer 10

A gateway for information from external sources, e.g. weather, traffic, that informs product capabilities

Question 11

Integration with business systems

Answer 11

Tools that integrate data from smart, connected products with core entire business systems, e.g. ERP, CRM

Question 12

Identity and security

Answer 12

Tools that manage user authentication and system access, as well as secure the product, connectivity, and product cloud layers

Question 13

Smart product applications

Answer 13

Software applications running on remote servers that manage the monitoring, control, optimisation, and autonomous operation of product functions

Question 14

Rules/analytics engine

Answer 14

The rules, business logic, and big data analytical capabilities that populate the algorithms involved in product operation and reveal new product insights

Question 15

Application platform

Answer 15

An application development and execution environment enabling the rapid creation of smart, connected business applications using data access, visualisation, and run-time tools

Question 16

Product data database

Answer 16

A big-data database system that enables aggregation, normalisation, and management of real-time and historical product data

Question 17

Evergreen design

Answer 17

Smart, connected products are continuously upgraded via software

Question 18

Augmented reality applications

Answer 18

Tap into the product cloud and generate a digital overlay of the product through a smartphone or tablet

Question 19

Logistics

Answer 19

Involved the tracking of movement of production inputs, outputs, and delivery. Now, smart, connected products take tracking to a new level. It can be done continuously, wherever products are, and provides rich information about location, condition, and environment

Question 20

One-stop service

Answer 20

Because technicians can diagnose problems remotely, they can have the parts needed for repairs in their trucks the time they arrive

Question 21

Remote service

Answer 21

Smart, connected products make delivering services via connectivity increasingly feasible

Question 22

Preventive service

Answer 22

Using predictive analytics, organisations can anticipate problems in smart, connected products and take action

Question 23

Augmented-reality-supported service

Answer 23

The vast amounts of data that smart, connected products gather are creating new ways for service personnel to work individuallly, together, and with customers

Question 24

Hackers

Answer 24

Can take control of a product or tap into sensitive data that moves between the manufacturer and the cusomter

Question 25

Software

Answer 25

Is becoming an essential part of products

Question 26

Classic organisational structure

Answer 26

A manufacturing business is divided into functional units, e.g. R&D, sales, finance etc. This model is broken down with the emergence of smart, connected products. The need to coodinate across product design, cloud operation, service improvement, and customer engagement is continuous. Ongiong coordination is necessary. Functional roles overlap and blur

Question 27

IT

Answer 27

Must assume a more central role. Currently, only IT has the skills to support the software-based technologies and related infrastructure that smart, connected products require. Various new business models are emerging. Some companies are embedding IT teams with R&D departments, or cross-functional product design teams that include IT representation

Question 28

Unified data organisations

Answer 28

Because of the growing volume, complexity, and strategic importance of data, it is no longer desirable or feasible for each function to manage data by itself, build its own data analytics capability, or handle its own data security. Most companies are creating dedicated data groups and are responsible for making data insights available across functions and units

Question 29

Development-operations groups (Dev-ops)

Answer 29

A collaborative, cross-functional software development and deployment method. It is a new functional group. It is responsible for managing and optimising the ongoing performance of connected products after they have left the factory

Question 30

Customer success management

Answer 30

A new organisational unity responsible for managing the customer experience and ensuring that customers get the most from the product. It acts as the primary responsibility for customer relationships after sale. With smart, connected products, the product itself becomes a sensor that gauges the value customers are receiving

Question 31

Stand-alone business unit

Answer 31

The unit aggregates talent and mobilises the technology and assets needed to bring such new offerings to market. It is free from the constraints of legacy business processes and organisational structures

Question 32

Centre of excellence

Answer 32

A separate corporate unit houses key expertise on smart, connected products

Question 33

Cross-business-unit steering committee

Answer 33

This approach involves convening a committee of thought leaders across the various business units, who champion opportunities, share expertise, and facilitate collaboration