For Companies who want to become a Smart Services Leader, TMG provides a Digital Implementation Platform which enables dynamic B2B value creation through layering the platform operating model on top of the existing linear product value chain

1. Paul.Gromball@tmg-muenchen.de1Aug 2016
Creating the
learning Enterprise
The TMG Approach
Digital Implementation Platform
to create, build and launch Smart Services
Industrial
Smart Service
DIP

2. DIP
Digital Implementation Platform
2
For Companies who want to become a Smart Services
Leader, TMG provides a Digital Implementation
Platform which enables dynamic B2B value creation
through layering the platform operating model on
top of the existing linear product value chain
DIP

3. 3
Smart Products
Industrie 4.0
Smart Services
Disruption
Customer
Initiatives
Revenue
Impact
Profit
Impact
Smart Product Initiatives Smart Service Initiatives
86 % 14 %
62 % 38 %
39 % 61 %
The Profit and growth consequences of Smart Services
The Emergence of the Smart Service Market
DIP focuses on the fast growing global Smart Service Market
Source:Kim, Chan et al: Blue Ocean Strategy, Harvard Business School, 2015
Base: 150 global companies in 30 industries
• Smart Service Lead Market
• Smart Service Lead Provider
• Many Start-ups
• Internet incumbents
Smart Service Leadership

4. The linear Business Model
Observation I: The German Approach to Smart Service
The Product World Mindset
4
Value Chain Operation
Value Chain Design
Production
Engineering
Integrated Supply
Product Strategy
Product Design
Research
IT
HR
Shared
Services
FI
Inbound
-Logistic
Production
(Digital
Twin)
Outbound
-Logistic
Supplier
Smart
Service
Product support-based Smart Services
are not very profitable at present:
Customer expect high up-time for
“Made-in-Germany” Products
Representative
Smart Service Solution
Communication and
Analytics Hardware
Temperature Sensors
Source: ABB
• Product Connection
• Remote Services
• Condition Monitoring
• Predictive Maintenance
• Pay per Use
The Product World Mindset leads to a lack of preparedness for digital Disruption
Key Driver:
• Efficiency
• Automation
Sales
Channels
Marketing

5. 5
Observation II: The US Approach to Smart Service
The Digital World Mindset
The Platform Business Model
The Value Eco-System
Compensates
Creates Connects
Consumes
VALUE-UNIT:
Smart Services
Producer Team
2
Customer Team
Supply Demand
Art of the Possible (Non)Customer Pain
Platform
Sales
Physical
World Mindset
Digital
World Mindset
Physical
Key
Digital
Key
Representative
Smart Service Solution
Key App
• Customer Experience
• Customer Connection
Think different
The Digital World Mindset focuses on Customer Connection & Experience which reshapes Industries
Key Driver:
• Network Effects
• Fast Learning

6. Source: International Monetary Fund
North America Europe Africa, Latin America, ROWAsia
2015 Nominal GDP US$ Total: 73.1 T
THE GLOBAL ECONOMY IS RELATIVELY BALANCED
v10.7 T23.5 T19.5 T 19.5 T
North America Europe Africa & Latin
America
Asia
North America has the most $1B+ platform firms, as measured by market cap. China, with a large
homogeneous market, is growing fast. Europe, with a more fragmented market, has less than ¼ the value of
North America
Private
Public
THE PLATFORM ECONOMY IS UNBALANCED
The Platform Challenge
The emerging Platform Economy based on Smart Services is unbalanced

7. DIP addresses the Key Performance Gaps of German Firms
Germany as an international player has key engineering strengths –
Pressure to move to digital Improvements continues to grow
7
Relative German Strength vs. USA & China
highlow
FutureBusinessImportance
high
low
International Digital Benchmark Result
Key Strengths
• Engineering
Capability
• Importance of
Production
• Sustainability
No focus field No focus field
Source: Industrie 4.0 Internationaler Benchmark: acatech, Heinz Nixdorf Institut; Thomas Sattelberger
?
Growing Pressure
• Business Models
• Digital Capabilities
• Entrepreneurship
German Firms have to improve in three
key action fields in order to escape the
Sandwich Position:
• Business Models
• Digital Capabilities
• Entrepreneurship
Implication
Germany is in a Sandwich Position

8. DIP enables an integrative Approach to improve
the Digital Performance with Smart Services
DIP Phases in the evolution of smart services
8
Implementation
Phases
A) Business
Strategy
PHASE I
B) Business Model
PHASE II
C) Digital Capabilities
PHASE III
D) Entrepreneurship
DIP Workshop I
• Segmentation
• Scenarios
• Evaluation
DIP Workshop II
• Initiative Scope
• Talent Pool
• Network
• Blueprint
DIP Workshop III
• Platform
Prototyping
• Plan Activation
Sessions
Design the Hybrid
Business Model
Shaping superior
Value-Ecosystems
Fostering Empowered
Execution
• Aligning Strategy with
Business System
• Smart Service
Scenario
• Design Work-Graph
• Focus on Key Goals
• Apply Digital Leadership
Framework
• Architecture of
Participation
• Set-up Digital Design
Platform
• Design Digital Network
• Governance System of
Community
• Activating Competence
Network
• Joint Consciousness
• Achieving goal by
driving Lead measures
External Smart Service
 1
 2
 3
Internal Smart Service
 1
 2
 3

9. 9
Google
UBER
AirBnB
The Value EcosystemThe Value Chain
The „Red Ocean“ Business The „Blue Ocean“ Business
The Linear Business Model The Platform Business Model
Kuka
Putzmeister
EEW
Intense Competition:
• Monoculture and Hierarchy
• Focus on internal Efficiency/costs
• Supply Economies of scale
• Zero-Sum Game
Avoiding Competition:
• User creates value for user
• Focus on Disruption
• Demand Economies of Scale
• High Risk/High Rewards
The Digital Business Areas
Basis: Dr. Bleise,
The Value EcosystemThe Value Chain
The „Green Field“ Business
The Hybrid Business Model
German Engineering
Automotive
Pharmaceuticals
Apple
Nike
Cooperation:
• Linked Value Creation Processes
• Focus on Effectiveness/Integration
• Adaptability & Innovation
• Win-Win : Collective Intelligence
A. The Business Strategy
DIP leverages existing strengths to create the Hybrid Business Model
The Key Strength
The Machine House The Digital House
Future
Today
DIP
Smart Products Smart Service

10. 10
B. The Business Model
DIP is layering Smart Services on top of the product value chain
The Value Ecosystem
Smart Service
Sales
More
Demand
More innovative
Platform Content
More
Innovative
Applications
Lower problem
solving time
The Value Chain
Smart Products
Mutually reinforcing value creation of Smart Products and Smart Services
German Engineering Example
Customer
Dynamics
Lower Costs,
higher Speed
More interested
Customer Engineers
Efficiency
• Resource control
• Internal optimization
• Focus on customer value
Adaptability
• Resource orchestration
• External interaction
• Focus on ecosystem value
Value Creation by
Material & Energy
Value Creation by
Information &
Knowledge

11. C. The Digital Capability
DIP builds the Dual Organization for creating Smart Products and
Smart Services in concert
11
The Operating Model of the dual Organization
Basis: Haufe Quadrant
GovernanceSystemSelf-Organized
Doer:
Duplication
Creator:
Innovation
Knowledge Work
MarketDynamics
1
2
Controlled
Smart Services
Leadership-driven network
Role of the employee
Smart Products
Management-
driven hierarchy
Diversity of
Digital Capability
Rules
Competences

12. 12
D. The Entrepreneurship
DIP is a distributed Leadership Tool for scaling agile Networks
Digital Implementation Platform Architecture
PERIPHERY
Competence Teams
MARKET
• Customers
• Stakeholder
Customer Teams
Supply Demand
VALUE-UNIT:
Smart Services
CENTER
Digital Implementation Platform
Design, build and launch Smart Services
Level 3:
Infrastructure
Distributed Leadership Tool
Level 2:
Participants
Competences
Level 1:
Organization
Rules & Principles
Principles
1. Focus on the Key Goal
2. Act on Lead Measures
3. Keep a compelling Scoreboard
4. Create a Rhythm of Social
Accountability
Key GoalRole 1 Role 2
Enabling Self-Organization
• Transparency
• Cooperation
• Feedback
• Learning
• Coordination
Competence Building
• Coaching
• On the job Training
Endproduct

13. 13
Digitally
Engage Customers
Value Creation: Periphery Value Creation: CustomerValue Creation: Center
Enabling the
Periphery Teams
Phase I: Connect Employees Phase II: Connect Customers
B2B Smart Service Platform
Enabling the
Center Team
2
Customer TeamCompany TeamCompany Team
VALUE-UNIT:
Smart Services
VALUE-UNIT:
Smart Services
The DIP Outcome: Collective-Intelligence@Scale
The B2B Smart Services Platform

14. 14
The Collective-Intelligence@Scale Advantage
Freeing Resources for value-creating Activities and Growth
Resources
(costs,emailtime..)
Cooperation
Linear Business Model
Platform Business Model
The Effect on Business Performance
Digital
Transformation
Time-Reduction
30 -50%
Speed
Fast Responses
Reduction of
non-value added expenses
25 -30%
Efficiency
Work Productivity
Additional Value-Creation
by Cooperation between Teams
30 -35%
Growth
Collective Creativity
Limits of Growth: Knowledge Resources
Growth Effect
Source: Morieux, Yves: Six Simple Rules

15. 15
TMG has a long history of
creating, building and launching successful B2B Platforms
The TMG B2B Platform Journey
Supply
Demand
VALUE-UNIT
Pharmacy
Platform
Airfreight
Platform
Euro-Logistics
Platform
E-Sourcing
Platform
Smart Service
Platform
Online
Ordering
Wholesaler
Pharma-Company
Pharmacists
Airfreight
Track & Trace
Airlines
Freight Forwarder
Shipper
Multi-Modal
Track & Trace
Carrier
Logistics Services
Receiver
Shipper
RFQ/Offer
Seller
Buyer
Smart Service
Producer
• Center
• Periphery
1984 1989 1994 2000 2007
Customer
Richness
Reach
Low
Germany
Low
Global
Low
Europe
Medium
Global
High
Global
Trigger IBM Dominance Integrators
Mobil Phone
Competition
New Economy Digital Disruption
USA
German Engineering
Automotive
Pharmaceuticals

16. 16
Automotive Engineering
Other Industries
Technology Management Group Profile
Competences
- Internet Driven Strategic Changes
- Business Development
- Accelerating Innovation Process
- Mobilizing People in Networks
Facts
Office: München
founded 1987
TMG helps companies create, build and launch new digital initiatives from within their organization