Developing new digital solutions, Agile, Sprint, Proof of Concepts, Measurement, Digital Strategy - How ABB Process Industries develop digital solutions

1. —NOVEMBER 2018
Digital Solutions Development and Measurement at ABB
Helsinki Chamber of Commerce - Kuinka kehität yrityksesi digitaalisia palveluita
Mikko Marsio, Global Digital lead/SVP, Process Industries

2. Improved productivity (+200%), reduced energy (-30%), & longer product life (+30%)
November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 2
Digital operations for industry
SELECTION

3. Reduced installation time (-40%), maintenance costs (-50%) and outage time (-50%)
November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 3
Digital operations for utilities
SELECTION

4. Proactive detection of faults (90%), reduced maintenance costs (-20%) and energy costs (-5%)
November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 4
Digital operations for transport & infrastructure
SELECTION

5. November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 5
ABB Ability™ solutions & platform
ABB Ability™
Provides ABB with
efficiency and scale
Delivers customer benefit
(uptime, speed, yield…)
What
How
Platform
(common technologies for device, edge, and cloud)
Utilities
solutions
Industry
solutions
Transport &
Infrastructure
solutions
ABB Ability™ solutions

6. November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 6
BU Process Industries
Industry specific tailored offerings for safe, reliable and efficient operations
We deliver complete electrification and
automation solutions, industry-specific
products and lifecycle services
– Local presence backed by a global
network
– Global project execution centers
create standardization and efficiency
– Deep industry knowledge
– Seven Hub BUs, more than 40 LBUs
– Approx. 4.000 employees
– 1.400 million USD in revenue
Mining / Minerals processing
Mining, grinding, mineral
processing, hoisting, material
handling
Aluminium / Cement
Primary aluminum production
and cement manufacturing
Metals
Primary metals production, hot
and cold rolling mills
Pulp & Paper
Pulp and paper manufacturing,
OEMs
Scope of supply

7. ABB Process Industries digital framework
ABB PROCESS INDUSTRIES DIGITAL
Local
Automated
Connected &
optimized
Collaborative
& mobile
Autonomous &
economic
optimization
Partly
Automated
Control Products
Electrification
Products
Automation Systems
Electrification Systems
Domain specific
Applications
Advanced Applications
Enhanced connectivity
Process step improvements
Asset Condition Monitoring
ABB AbilityTM Cloud based
services
ABB AbilityTM Integrated
collaborative solutions
and platforms
Connected and optimized
productivity and availability
across value chain
Remote automation
Safety
Artificial Intelligence
Key framework how we develop digital offerings
Digital Maturity phases of customers and their mills/mines/plants
Expected/required value proposition from ABB
November 19, 2018 Slide 7
Customer: OT
Customer: IT

8. View from one business line (2016)
Measurement – Balancing R&D investments against digital maturity phases
Devices and Sensors Connected and Optimized Systems Collaboration and Mobile Workforce Autonomous EnterpriseLocal
Automated
Connected &
optimized
Collaborative
& mobile
Autonomous &
economic optimization
Partly
Automated
Digital Maturity phases of customer and their mills/mines/plants
ABB PROCESS INDUSTRIES DIGITALSlide 8

9. Portfolio at your service
Collaborative digital services available today
November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 9
ARMOR Room
Remote
Diagnostics
Cyber Security
Condition Monitoring Performance
Monitoring
Asset Portal
Advanced Process
Control
Manufacturing
Execution System
Condition-based
Maintenance
Fleet Intelligence
Analytics Control Room

10. ABB AbilityTM Collaborative Operations turn data into savings at single plants & across enterprises
Leading solutions for collaborative operations
November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 10
Customer
Operations
Center / HQ
ABB
Collaborative
Operations
Center
Customer assets
e.g. rigs, mills, vessels
Analytics and
Visualization
Simulation
Analytics
Cyber
Security
Cyber and Safety
Safety
Management
Operations and
Technical Support
Alarm
Management
Emission
Monitoring
Energy
Optimization
Performance
Optimization
Optimization
Ops support Predictive maintenance
Condition
Monitoring
Asset Health Predictive
Maintenance
Control
Control
Centers

11. Digital Solutions Development Process
November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 11
 Development
portfolio & Roadmap
 Solutions life-cycle
mgmt.
 Business design
 Concept design
 UX Prototyping
 Technology
Architecture
Capabilities Development
Go-to-market development
Prototype sales
Technology Development
 Version development
 Launch (not release)
 Commercial
operations
 Technical support
Part of our internal digital transformation roadmap
Technology Development
 Business design
 UX
MVP/First Release
Sales & Development
(Business model design)
Technical Support
MVP/Beta
Launch
OLD MODEL
’DIGITAL WAY’

12. Digital Prototyping and PoCsDigital Development
Digital driven companies ensure fast and agile development in customer front
Digital Transformation in Offering Development
November 19, 2018 ABB PROCESS INDUSTRIES DIGITALSlide 12
Timeframe mindset +1 years 1w – 12 months 1 day to weeks
Investment mindset X00k - xM X0k – x00k x0k
Functional Owner in digital
world
R&D Digital/Customer front/R&D Digital/Customer front
Characteristic
Engineer superior products – ‘One time
right’, (Agile)
MVP, version based, customer/
ecosystem co-creation, Agile
Convince customers about our digital,
fast results to drive excitement
Technology complexity
Complex engineer products with h/w,
s/w components
Software/IoT products, Apps, digital
services with APIs/system integratios
Prototypes, Apps, User interfaces, APIs
no system integration
Development model
 Engineering driven; Develop
technology to match customer need
 ABB 100% (exceptions in place)
 Business/UX/Design driven
 ABB 0-100%
 Business/UX/Design driven
 ABB 0-100%
Financial model (pricing
model)
CAPEX/fixed funding from customer(s)
to cover costs
OPEX; subsriptions, pay for use/
performance/user, PoC funding
From USD 0 to skin in the game
Installation and Value
delivery
On-premise (with cloud components) Ideally Cloud (cloud or edge secondary) Ideally Cloud (cloud or edge secondary)
’Traditional’ R&D

13. Digital development measurement
November 19, 2018 Slide 13
KPIs need to change once maturity of the ‘product’ progresses
Goal Innovate Validate idea
Deliver customer
benefit
Prove this is not
a 1-off
Learn how to sell
faster & better
Gain efficiency
Phase 0
“Idea”
Phase 1
1st Customer pilot
Phase 2
1st Customer
deployment
Phase 3
5 Next customers
Phase 4
25 customers
Phase 5
1000+
KPI
Portfolio gaps and
how to close
PoC delivery time
Time to Minimum
Viable Product
1) Quantified
customer ROI
2) Reference-ability
1) Replicability
→ Productization
2) How well can we
teach larger group
3) No of
opportunities
1) Scalability
(efficiency).
2) Reduce time
to win a customer
Revenue & profits
Replicate ScaleInnovate
ABB PROCESS INDUSTRIES DIGITAL