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Smart Business Design In The Age of The Internet of Things


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Are The Blind Leading The Vision-Impaired?

As networks have invaded the “physical” world, designers and engineers are seeing the growing values that come from communications within and between sensors and machines. Electronic, mechanical and other related subsystems that used to have unique interfaces and components are now becoming standardized. Efficient support of products and equipment is only the first benefit of this trend.

The convergence of collaborative systems and machine communications will enable entirely new modes of services delivery and customer interactions. This implies a total paradigm shift. The depth of this shift has begun to suggest itself, but it is by no means accomplished.

The implications are enormous. No product development organization will be able to ignore these forces, nor will their suppliers. Product and service design will increasingly be influenced by the use of common components and subsystems. Vertically defined, stand-alone product and application markets will become part of a larger “horizontal” set of standards for hardware, software and communications.

As it becomes easier and easier to design and develop smart systems, competitive differentiation will shift away from unique, vertically focused product features. The new focus will be on how the product is actually used -- how it fosters interactions between and among users in a networked context. All of these trends lead us to the simple question...

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Smart Business Design In The Age of The Internet of Things

  1. 1. smart systems and business design Page 28 Design and development of all hardware/software/service elements for launch Alliance network and/or ecosystem mapping and definition Coordination of common information sources and partner protocols Development plan 3 1 4 2 Software Information Devices (from embedded to Web services) User Information“Devices”(from end- user to service provider) Data/Information Sources (liquid flow of information throughout system) Activities/Information Design (defines the business blueprint and currency) Formulate business capitalization requirements 5 Venture Development For The Internet of Things Requires A Different Approach ....... An Approach That Can Span From Very Early Stage To Growth Maturity ..... Early stage nurturing of new technology ventures is really a “no-man’s” land today These types of opportunities are not well addressed by either corporate venture programs or institutional investors The “spread bet” mode of venture capitalists & private equity firms has been increasingly trending towards more and more conservative investments for several years ..... Corporations have become addicted to acquisitions and consolidation as a growth mechanism ........ companies are willing to overpay for established businesses to mitigate risk ........ players need to understand that to create sustaining value they must take risks .....but how? Existing schemas, institutions and approaches for new venture development are, for the most part, broken.... The complexity, interdependent relationships and related timing required for new growth ventures in the Internet of Things arena only compound the challenges Diversifed Industrial Players Need To Completely Re-Think How To Create New Growth Ventures... In Most Businesses Today, New Venture Development Is Broken ...
  2. 2. smart systems and business design Page 2 In Most Companies Today, People, Functions & Processes Are Too Disconnected To Realize New Smart Systems Opportunities.... Large organizations have many rules and policies that often seem completely disconnected. We have created language, business processes and systems that seem to be a triumph of technique over value and performance. Consequently, most businesses today are organized around functional disciplines that only interact on an“as needed”basis. 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. In many companies, lean practices have been applied so aggressively that people are simply consumed by“running the business.” It restricts their ability to harness the collective intelligence available throughout a company and its networks to ensure timely decisions and creative solutions. In our work, we see‘disconnects’around us all the time - between people, functions, organizations and leadership. This reminds us that life and business are complex, and as new business designers and developers, we must resist the seduction of simplicity and the safety of Byzantine processes and decision models that allow good ideas to fade too quickly. In this environment growth is dependent on interacting in new and creative ways. Linking functions by breaking down the barriers to communication is the first step, but it can’t stop there. The key is building collaborative networks. It’s Not Just About Ideation, Strategy, Design or Planning .......... R&D & New Business Development Marketing & Sales Purchasing & Strategic Sourcing
  3. 3. smart systems and business design Page 1 The solutions we are describing here have no managerial hierarchy, command and control decision making or proprietary ownership of ideas. These networks will be self-organized by people who are motivated to explore and develop ideas they care deeply about. Collaborative innovation will extend beyond ideas about new products and services to the very manner in which business is conducted. To discover, design and develop innovative systems, organizations must consider all the elements involved and the context they fit into. Developing Solutions Based on User Centered Experience Organizing The Rapidly Growing Amounts of Data From Open Systems For Wider Use, Awareness and Collaboration Utilizing New Modes of Collaboration & Integration Tools To Leverage The Wealth of Experience Across Venues and Markets Leveraging Human Capital and Skills In This Connected World Will Create Entirely New Solution Values Potential To Engage & Leverage Extended Communities of Users, Companies, OEMs, Suppliers With Real- Time Interactions and Information Value Emerging Technologies, If Properly Nurtured and Applied, Can Foster Many Opportunities To Disrupt Current Competitive Structure TechnologySkills Relationships Experience Content Behaviors SMART SYSTEMS FRAMEWORK A New Frame Of Reference Is Required .............. How Do We Connect The Dots?
  4. 4. smart systems and business design Page 3 To Conceive and Design Smart Systems & Services, Organizations Need An Integrated Approach..... Many organizations today do not even recognize the many smart connected product and services oppprtunities that surround them. DESIGN We believe design needs to transcend discrete product or service innovation. Assuming that the role of design is only about making existing products or services more attractive no longer works. Business designers need to creatively imagine fully developed systems and whole marketplaces. Companies need to envision the design role as one that can address product, service and business systems. RELATIONSHIPS Problem solving for new Smart Systems opportunities must address tough questions: how can an organization turns its workers, partners, and customers into believers and contributors? How can we make changes that can impact multiple functions and organizations and ultimately solve really 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 versa. Behaviors of users, customers, teams, functions, leadership, all need to considered. Understanding empathy, participation, motivations - putting human sensibilities and behaviors at the center of the solution is key. SKILLS Companies need to move beyond a conventional orientation to technology 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 and relationships, and manufacturing and distribution capacities. DISCOVER How to use customer experience and technology uncertainty to reveal new opportunities DEFINE Specific development opportunities including formal and informal relationships DESIGN System and services delivery modes including go-to-market design DEVELOP Align investments with strategy and model Understand likely evolution of competitive environment Business model design and validation User experience and understanding
  5. 5. smart systems and business design Page 4 Processes To Design and Develop Smart Systems Must Leverage All Value Participants... Determining Value Creation Role Model What characteristics should we use to segment our markets & articulate the benefits of our proposed offering? Which actual or anticipated segments are most attractive? What role/s can we play in the proposed system? What eco-system configuration best supports our strategy; open; closed; hierarchical; select members? Which value elements should we own; which should we obtain by partnering? What are the business model alternatives; which business model best aligns with the opportunity? Innovate What technology innovation is available to enhance or extend our system’s value? What is the architectural“blueprint” behind the customer experience? What technology alllies will be required for product/service realization? Validate How can we best test our design? What is the best means to prove our system’s value in the field? How attractive are the economics of the business case; what will it cost to bring the system to market? Will it result in cost savings; new values; new experience? Building The Platform Discovering Emerging Smart Systems Opportunities Connect Who are our natural allies (players; devices; peers? Who is best poised to help develop our opportunity; what participants and companies will play in the new system? What formal and informal relationships might exist in the future? Participate How can we best test our hypothesis? Who can we invite to collaborate? What manner of interactions can we use to drive empathy? involvement? innovation? Interact Is there an explicit (or implicit) community of participants? If so, which participants interact with which value elements? What are the critical information interfaces? Interactions? How will information flow between and among constituents? Prototype How should we prototype the customer experience? What are the key system elements & design factors? How can we quickly iterate our assumptions to learn more; which potential participants can help us best understand the potential user system experience? Explore Who are our customers? What are their experiences? What personas, applications, devices & systems does our product or service touch? What is the nature of the interactions? How can we best use technological and market uncertainty to our advantage? Experience What primary customer activities can we observe; be involved with? Which activities represent opportunities for us? Do these activities benefit from smart devices and/or services? What adjacent activities can we observe; be involved with? Will these activities benefit from smart devices and/or services? Map What elements will combine to create value for the customer? What benefits can be added over time & what advantages will they bring? Are there special challenges in making the value salient to the customer? Do these elements extend existing product or service offerings or are they completely new? Based on desired peer interaction & technology maturity, is the timing right? Anticipating Interactions, Relationships & Collaboration Architect What are the key eco-system design factors? How will our role or the role of others evolve? What is the business system that will best enable the customer experience How should the new system be positioned in the marketplace? Invest How can we align investments and resources with our chosen strategy? How should we approach critical make, buy, partner decisions? Build What technology allies will be required for product / service / system realization? What organization levers will best drive this business? What leadership priorities will drive the most effective market role? How should the new business relate to the parent? What are the critical path elements that need to addressed: activities; timing; responsibilities; costs; uncertainties? Support What key on-going support elements need to be in place to continue to enhance our objectives? What will be the mode of iteration for improving and expanding the business? Discover Define Design Develop Discovering Emerging Smart System Opportunities Anticipating Experiences, Interactions and Relationships Determining Value Creation Role Building The Platform