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Augmented Reality and Strategy

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Presentation done by Michale Porter, Professor, Harvard Business School on Augmented Reality and Strategy at the India's National Competitiveness Forum & #PorterPrize 2018.

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Augmented Reality and Strategy

  1. 1. This presentation draws on ideas from Professor Porter’s books and articles, in particular his work with Jim Heppelmann including: “How Smart, Connected Products Are Transforming Competition” (Harvard Business Review, 2014); “How Smart, Connected Products Are Transforming Companies” (Harvard Business Review, 2015); and “Why Every Organization Needs an Augmented Reality Strategy” (Harvard Business Review, 2017). No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without permission. Additional information and references may be found at the website of the Institute for Strategy and Competitiveness, www.isc.hbs.edu. Why Every Organization Needs An Augmented Reality Strategy Professor Michael E. Porter Harvard Business School Porter Prize India May 30th, 2018
  2. 2. Copyright 2018 © Professor Michael E. Porter2Porter Prize India- May 30th, 2018 Mechanical Products & Manual Processes Value Chain Automation Value Chain Dispersion and Integration Smart, Connected Products 1800s 1960s 1980s 2000s Beyond IT automates processes and information collection activities within the value chain The internet enables coordination and integration across the value-chain, across geography, and with customers and business partners IT is embedded in products themselves, expanding the way products create value and shifting the nature of competition Products were mechanical/ electrical, and information processing and storage was manual Waves of IT Driven Competition
  3. 3. Copyright 2018 © Professor Michael E. Porter3Porter Prize India- May 30th, 2018 Expanding and Shifting Industry Boundaries Farm Equipment Weather Data System Irrigation System Seed Optimization System Farm Equipment System Rain, humidity, temperature sensors Weather maps Weather forecasts Weather data application Farm performance database Seed database Seed optimization application Field sensors Irrigation nodes Irrigation application SYSTEM OF SYSTEMS Farm Management System Platform TILLERS PLANTERS TRACTOR FLEETS Farm Equipment System COMBINE HARVESTERS PRODUCT SYSTEM + + SMART, CONNECTED PRODUCT + SMART PRODUCT PRODUCT
  4. 4. Copyright 2018 © Professor Michael E. Porter4 DATA GROWTH* (ZETTABYTES) * IDC's Digital Universe study, 2014 2013 4.4 2015 8.5 2017 16.4 2020 44.0 The Deluge of Data and Choices Porter Prize India- May 30th, 2018 Proliferating Analytics
  5. 5. 5Copyright 2018 © Professor Michael E. Porter5 SMELL TOUCH HEAR SEETASTE How Humans Access and Process Information
  6. 6. 6Copyright 2018 © Professor Michael E. Porter6Porter Prize India- May 30th, 2018 The Gap Between Digital and Physical: Cognitive Distance
  7. 7. 7Copyright 2018 © Professor Michael E. Porter7 WHAT IS AUGMENTED REALITY (AR)? • A set of technologies that superimposes digital data, images, and controls onto the physical world Porter Prize India- May 30th, 2018
  8. 8. Copyright 2018 © Professor Michael E. Porter8 Integrating Digital and Physical Heads Up Display Porter Prize India- May 30th, 2018
  9. 9. Copyright 2018 © Professor Michael E. Porter9Porter Prize India- May 30th, 2018 INDUSTRIAL ROBOT Interact Superimpose relevant data to visualize/instruct/guide An AR-enabled device identifies a physical object AR app retrieves relevant data and superimposes it on the object AR app connects with a “digital twin” of the object in the cloud The user employs the app to interact with the object Data streams to the cloud from the object, and other data sources User control commands are received and sent to the object Control Sensor Data Connect ANALYTICS DIGITAL TWIN AR EXPERIENCE 010001010110 100110000010 111101011110 0110101 85O TEMP. 16KG WEIGHT V2 How AR Works 1. 2. 3. 6.5.4. 245 3 6 Computer Vision 1
  10. 10. 10Copyright 2018 © Professor Michael E. Porter10 Screens Heads-up Display Wearables • AR has emerged using tablets and smartphones • Smart glasses allow information to be superimposed directly onto the user’s view, and free up the user’s hands to take action • Wearables will increasingly be how people interface with the physical and digital world Microsoft Hololens ODG R-7 Google Glass Enterprise Porter Prize India- May 30th, 2018
  11. 11. Copyright 2018 © Professor Michael E. Porter11Porter Prize India- May 30th, 2018 Capabilities of Augmented Reality Visualize Instruct/Guide Interact Simulate Where needed, virtual reality adds a fourth capability that can be incorporated into AR to overcome practical constraints such as distance, time, size, and hazardous environments Enhance the user’s ability to understand the physical world by overlaying relevant real-time digital information or possible future states Train or guide users to perform tasks via overlaying digital data and instructions, or enabling real-time expert guidance AR as an interface enabling control of the product via overlaid graphics or natural user interfaces such as voice commands, gesture control, or sight tracking • Augmented reality enhances the capabilities of smart, connected products
  12. 12. Copyright 2018 © Professor Michael E. Porter12Porter Prize India- May 30th, 2018 Impact of AR on Competition Improving Productivity in the Value Chain Differentiating the Product
  13. 13. Copyright 2018 © Professor Michael E. Porter13 AR and Product Differentiation Porter Prize India- May 30th, 2018
  14. 14. 14Copyright 2018 © Professor Michael E. Porter14 AR Across the Value Chain Product Development Manufacturing Operations Logistics Marketing & Sales Service Human Resources N = 107. Average of 2.3 functional areas chosen per respondent. 18%17% 17% 14% 19% 13% • Collaborative Design Review • Digital Design Review • Maintenance Work Instructions • Operator & Assembly Work Instructions • Virtual Product Companions • Augmented Brand Experience • Retail Space Optimization • Augmented Operator Manual • Heads-up Display • Augmented Interface • Service Manual and Instructions • Service Inspection & Verification • Remote Expertise and Coaching • Job Specific Training • Safety & Security Training • Expert Coaching Porter Prize India- May 30th, 2018
  15. 15. Copyright 2018 © Professor Michael E. Porter15 AR: Production Line Interface Wemo sheet-metal production line includes an AR interface that allows an operator to monitor and run several machines at once and switch using gesture commands Porter Prize India- May 30th, 2018
  16. 16. Copyright 2018 © Professor Michael E. Porter16 Logistics DHL is using AR to access pick lists and guide workers through the warehouse to the location of each product to be picked Porter Prize India- May 30th, 2018
  17. 17. Copyright 2018 © Professor Michael E. Porter17
  18. 18. Copyright 2018 © Professor Michael E. Porter18 Marketing & Sales Porter Prize India- May 30th, 2018
  19. 19. Copyright 2018 © Professor Michael E. Porter19 Service
  20. 20. Copyright 2018 © Professor Michael E. Porter20 AGCO uses a 3x3 cross-training model where each employee knows how to perform three jobs, and each position has three people who can do it. • Before AR it took 50-90 days to train a new hire in one operation • Now it’s 30-45 days for multiple operations Bradley Quinn Manager of training and development Training
  21. 21. Copyright 2018 © Professor Michael E. Porter21Porter Prize India- May 30th, 2018 3 4 5 1 2 AR Requires Additional Strategic Choices What is the range of AR opportunities, and in what sequence should they be pursued? Product Differentiation Where will AR have the greatest impact on cost reduction? Should the company make AR design and deployment a core strength, or will outsourcing or partnering be sufficient? How will AR change broader communications with stakeholders? Which Opportunities?Shifting Communications Model AR Talent and Resources How will AR reinforce a company’s product differentiation? Operational Effectiveness
  22. 22. 22Copyright 2018 © Professor Michael E. Porter22 Machine Advantages: • Physical power • Consistency • Resistance to harsh environments • Calculating power Human Advantages: • Power of sight • Flexibility • Ideation/creativity/ innovation • Broad sensory pattern recognition • Complex communication • Sophisticated sensorimotor skills Human-Machine Interface Implications for Humans Porter Prize India- May 30th, 2018 ?
  23. 23. 23Copyright 2018 © Professor Michael E. Porter23 ANALYTICSDIGITAL TWIN Smart, Connected Products Machines Advance Porter Prize India- May 30th, 2018
  24. 24. 24Copyright 2018 © Professor Michael E. Porter24 Augmented Reality ANALYTICSDIGITAL TWIN Smart, Connected Products AR the Equalizer: Smart Connected Humans Porter Prize India- May 30th, 2018
  25. 25. 25Copyright 2018 © Professor Michael E. Porter25 HBR AR
  26. 26. 26Copyright 2018 © Professor Michael E. Porter26
  27. 27. Copyright 2018 © Professor Michael E. Porter27Porter Prize India- May 30th, 2018 @MichaelEPorter@Michael.E.Porter.Harvard @meporter.hbs www.isc.hbs.edu Follow on Social Media

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