Presentation in IBM Watson IoT HQ in Munich as part of the BITKOM AK Meeting on Industry 4.0.

1. www.ksri.kit.edu
KIT – The Research University in the Helmholtz Association
KARLSRUHE SERVICE RESEARCH INSTITUTE (KSRI)
www.kit.edu
Monetization of Data
@ BITKOM - AK Industrie 4.0 Markt und Strategie
Dr. Ronny Schüritz
Sept. 19, 2017

2. Karlsruhe Service Research Institute
www.ksri.kit.edu
KSRI – An “industry-on-campus” model with focus on
interdisciplinary and application-oriented research
€€ €€€€€€ €
€€
€€€ €
€€€€€€
Discrete Optimization &
Logistics
Prof. Dr. Stefan Nickel
Knowledge
Management
Prof. Dr. Rudi Studer
Prof. Dr. York Sure-Vetter
Information &
Market Engineering
Prof. Dr. Christof Weinhardt
€
Energy Economics
Prof. Dr. Wolf Fichtner
Information Systems
& Service Design
Prof. Dr. Alexander Mädche
Value Stream
Services
Dr. Markus Bauer,
Prof. Dr. Kai Furmans
Digital Service Innovation
Prof. Dr. Gerhard Satzger
20/09/20172 Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ

3. Karlsruhe Service Research Institute
www.ksri.kit.edu
Services enable „intrusion“ into customer value creation
process and open the potential for higher margins and
differentiation
Product Application
often a multiple of
product value
10 cents 40 cents 3 € +
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/20173

4. Karlsruhe Service Research Institute
www.ksri.kit.edu
... and this holds also for industrial contexts:
Product Application
often a multiple of
product value
Source: Rolls-Royce
“Traditional”
approach
“Power by the hour” – approach
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/20174

5. Karlsruhe Service Research Institute
www.ksri.kit.edu
Servitization happens also within individual companies – even
in places where you would not expect it
5Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/20175

6. Karlsruhe Service Research Institute
www.ksri.kit.edu
Servitization has reached almost every business & continent
Source:
Dinges, V., Urmetzer, F., Martinez, V., Zaki, M., and Neely, A. 2015. “The future of servitization: Technologies that will make a difference,” (available at
http://cambridgeservicealliance.eng.cam.ac.uk/resources/Downloads/Monthly Papers/150623FutureTechnologiesinServitization.pdf).
Baines, T. S., Lightfoot, H. W., and Kay, J. 2009. “Servitized manufacture: practical challenges of delivering integrated products and services,” in Proceedings of the Institution of
Mechanical Engineers, Part B Journal of Engineering Manufacture (Vol. 223), pp. 1207–1215
A. Neely, “Exploring the financial consequences of the servitization of manufacturing” 2009
0
10
20
30
40
50
60
70
% Servitized in 2007 % Servitized in 2013
Proportion of Manufacturing Firms that
have servitized (2007 & 2013)
Servitization – “the innovation of an
organization’s capabilities and processes to
shift from selling products to selling integrated
products and services that deliver value in
use” (Baines, Lightfoot, Benedettini, et al.
2009, p. 555)
Servitization has been the leading trend in
Europe to capture additional value and for
differentiation from low-cost markets
Motivations to servitize:
competitive motivations
demand-based motivations
economic motivations
In this context, the integration of technology is
becoming a crucial element for organizations to
develop, integrate and deliver novel services,
and advancing the original limits of servitization
(Dinges et al. 2015)
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/20176

7. Karlsruhe Service Research Institute
www.ksri.kit.edu
Big Data and Advanced Analytics holds great potential for
existing businesses.
§ From 2013 to 2020, the digital universe will
grow by a factor of 10
§ Most of the digital universe is transient (e.g.
unsaved Netflix or Hulu movie streams)
§ Current driver of this development is the
availability of:
§ Big Data (senosrs, social media, etc.)
§ Support enablement (methods and tools)
§ Capabilities (“Data science” educations)
§ Complementary technologies (cloud, mobile,etc.)
DatavolumeinExabytes
Source: Turner et al. (2016) Source: Turner et al. (2014)
Estimate of worldwide data by 2020 Data Facts
Impact on the business model
§ There is potential for new data-driven business models such as, Data-as-a-service (DaaS) and
Analytics-as-a-Service (AaaS)
§ What does that mean for the business model of existing companies?
Turner, V., Gantz, J., Reinsel, D., and Minton, S. 2014. The digital universe of opportunities: Rich data and the increasing value of the internet of things., IDC (available at
http://www.emc.com/collateral/analyst-reports/idc-digital-universe-2014.pdf)
C. L. Philip Chen and C. Y. Zhang, “Data-intensive applications, challenges, techniques and technologies: A survey on Big Data,” Inf. Sci. (Ny)., vol. 275, pp. 314–347, 2014.
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/20177

8. Karlsruhe Service Research Institute
www.ksri.kit.edu
Data monetization represents three distinct ways to make
money
Improve
Optimized
Processes
Data
Monetization
Source:
Wixom, B. and Schüritz, R. “Data Wrapping” MIT CISR Research Briefing November 2017 (forthcoming)
Wixom, B., and Ross, J. "How to Monetize Your Data." MIT Sloan Management Review 58.3 (2017).
Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming Organizations.”
Thirty Eighth International Conference on Information Systems (2017)
Examples:
The use of data analytics to create
operational efficiencies in processes and
decision-making quality
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/20178

9. Karlsruhe Service Research Institute
www.ksri.kit.edu
Data monetization represents three distinct ways to make
money
Wrap
Differentiated Products,
Customer Experiences
Data
Monetization
Source:
Wixom, B. and Schüritz, R. “Data Wrapping” MIT CISR Research Briefing November 2017 (forthcoming)
Wixom, B., and Ross, J. "How to Monetize Your Data." MIT Sloan Management Review 58.3 (2017).
Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming Organizations.”
Thirty Eighth International Conference on Information Systems (2017)
Offering
Value
proposition
Offering Market Price
Wrapping
Value
proposition
Increased customer
willingness to pay
Improve
Optimized
Processes
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/20179

10. Karlsruhe Service Research Institute
www.ksri.kit.edu
Data monetization represents three distinct ways to make
money
Wrap
Differentiated Products,
Customer Experiences
Data
Monetization
Source:
Wixom, B. and Schüritz, R. “Data Wrapping” MIT CISR Research Briefing November 2017 (forthcoming)
Wixom, B., and Ross, J. "How to Monetize Your Data." MIT Sloan Management Review 58.3 (2017).
Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming Organizations.”
Thirty Eighth International Conference on Information Systems (2017)
Examples:
The use of data analytics to increase the
the value of an offering
Improve
Optimized
Processes
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/201710

11. Karlsruhe Service Research Institute
www.ksri.kit.edu
Data monetization represents three distinct ways to make
money
Wrap
Differentiated Products,
Customer Experiences
Data
Monetization
Source:
Wixom, B. and Schüritz, R. “Data Wrapping” MIT CISR Research Briefing November 2017 (forthcoming)
Wixom, B., and Ross, J. "How to Monetize Your Data." MIT Sloan Management Review 58.3 (2017).
Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming Organizations.”
Thirty Eighth International Conference on Information Systems (2017)
Deliver Product/Service Solve Problems
PerformInform
Wrapping Framework
Improve
Optimized
Processes
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/201711

12. Karlsruhe Service Research Institute
www.ksri.kit.edu
Data monetization represents three distinct ways to make
money
Wrap
Differentiated Products,
Customer Experiences
Data
Monetization
Source:
Wixom, B. and Schüritz, R. “Data Wrapping” MIT CISR Research Briefing November 2017 (forthcoming)
Wixom, B., and Ross, J. "How to Monetize Your Data." MIT Sloan Management Review 58.3 (2017).
Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming Organizations.”
Thirty Eighth International Conference on Information Systems (2017)
Improve
Optimized
Processes
Deliver Product/Service Solve Problems
PerformInform
On-line
Statement
Spend
Categorizer
Spend
Recommender
Savings
Recommender
Automatic
Retirement Fund
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/201712

13. Karlsruhe Service Research Institute
www.ksri.kit.edu
Data monetization represents three distinct ways to make
money
Wrap
Differentiated Products,
Customer Experiences
Data
Monetization
Source:
Wixom, B. and Schüritz, R. “Data Wrapping” MIT CISR Research Briefing November 2017 (forthcoming)
Wixom, B., and Ross, J. "How to Monetize Your Data." MIT Sloan Management Review 58.3 (2017).
Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming Organizations.”
Thirty Eighth International Conference on Information Systems (2017)
t1
t2
t3
Improve
Optimized
Processes
Deliver Product/Service Solve Problems
PerformInform
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/201713

14. Karlsruhe Service Research Institute
www.ksri.kit.edu
Data monetization represents three distinct ways to make
money
Sell
New
Offerings
Wrap
Differentiated Products,
Customer Experiences
Data
Monetization
Source:
Wixom, B. and Schüritz, R. “Data Wrapping” MIT CISR Research Briefing November 2017 (forthcoming)
Wixom, B., and Ross, J. "How to Monetize Your Data." MIT Sloan Management Review 58.3 (2017).
Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming Organizations.”
Thirty Eighth International Conference on Information Systems (2017)
Examples:
The use of data to sell information offerings
to new and existing markets
Improve
Optimized
Processes
Dr. Ronny Schüritz Data Monetization – Bitkom AK Meeting on Industry 4.0 @
IBM Watson IoT HQ
20/09/201714

15. Karlsruhe Service Research Institute
www.ksri.kit.edu
Source: Schüritz, R., Seebacher, S., Satzger, G. and Schwarz, L. “Datatization as the Next Frontier of Servitization – Understanding the Challenges for Transforming
Organizations.” Thirty Eighth International Conference on Information Systems (2017)
Product-focused
organization
Servitized
organization
Datatized
organizations
Product-focused
organization
Integrated product-
service-strategy
Additional data strategyStrategy
Supplier-network Partner-network Partner-information-ecosystemNetwork
Customer
Relationship
Short-term transaction
based
Long-term with new
customer facing roles
Deep relationships and
new interfaces
Development
practice
Product - oriented Service - oriented
Analytics and software
oriented
Skills &
Capabilities
Manufacturing
capabilities
Customer facing skills
Data science, IT infrastructure
capabilities and software
development skills
Datatization an advanced step of servitization
Revenue
stream
One revenue stream
Additional stream or
replacing existing one
Additional stream and indirect
pay-off through product/service
uplift
Dr. Ronny Schüritz
Data Monetization – Bitkom AK Meeting on Industry 4.0 @ IBM Watson IoT HQ
20/09/201715

16. Karlsruhe Service Research Institute
www.ksri.kit.edu
Thank you – Please get connected!
Karlsruhe Service Research Institute –
Karlsruhe Institute of Technology (KIT)
@ http://www.ksri.kit.edu/
https://de.linkedin.com/compa
ny/karlsruhe-service-
research-institute-ksri-
https://twitter.com/ksri_kit
Dr. Ronny Schüritz
Phone: +49 (0) 721 608 – 45625
Email: ronny.schueritz@kit.edu
https://de.linkedin.com/in/ronnyschueritz
Center for Information System Research –
MIT Sloan School for Management @ https://cisr.mit.edu/
Dr. Ronny Schüritz
Data Monetization – Bitkom AK Meeting on Industry 4.0 @ IBM Watson IoT HQ
20/09/201716