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The Digital Imlementation Platform
The document outlines TMG's approach to creating a digital implementation platform (DIP) aimed at enabling dynamic B2B value creation through smart services. It discusses the challenges faced by German firms in the emerging smart service market and emphasizes the need for improved digital capabilities, business models, and entrepreneurship to remain competitive. TMG leverages existing engineering strengths to develop hybrid business models that integrate smart products and services, aiming to enhance efficiency and drive growth.
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The Digital Imlementation Platform
- 1. Paul.Gromball@tmg-muenchen.de1Aug 2016 Creating the learningEnterprise The TMG Approach Digital Implementation Platform to create, build and launch Smart Services Industrial Smart Service DIP
- 2. DIP Digital Implementation Platform 2 ForCompanies 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 SmartServices 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 BusinessModel 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: TheUS 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 MonetaryFund 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 theKey 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 anintegrative 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 EcosystemTheValue 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 BusinessModel 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 DigitalCapability 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 DIPis 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 FreeingResources 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 along 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 TechnologyManagement 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