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Driving Unconventional
Growth from the Industrial
Internet of Things
April 23rd, 2015
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Norway among top five countries right set to grow an
economy based on the Industrial Internet of Things
The NAC Index
The United States, Switzerland and three
Nordic countries are the furthest ahead
in terms of their NACs, but they also
exhibit room for improvement within each
of the four pillars.
100
90
80
70
60
50
40
30
20
10
0
Russia
India
Italy
Brazil
Spain
France
China
Canada
South Korea
Australia
Germany
Japan
United Kingdom
Denmark
Netherlands
Norway
Sweden
Finland
Switzerland
United States
Source: Accenture and Frontier Economics
Copyright © 2014 Accenture. All rights reserved.
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Driving Growth from the Industrial Internet
The Industrial Internet has been heralded primarily as a way to improve
operational efficiency. But in today’s environment, companies can also benefit
greatly by seeing it as a tool for finding growth in unexpected opportunities.
The Industrial Internet as the universe of
intelligent industrial products, processes and
services that communicate with each other
and with people over a global network
Operational Efficiency
Top-Line Growth
Automation, more flexible production
techniques and predictive maintenance
New digital products and services
generate entirely new sources of revenue
Copyright © 2014 Accenture. All rights reserved.
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Industrial Equipment companies are putting more
emphasis on service business. How far do you need to
go?
Relative importance of
products
Relative importance of
services
”Only products”
”Mostly
products”
Product focus
Copyright © 2014 Accenture. All rights reserved.
”More than
products”
Process focus
“Also
products”
“Something else
than products”
Business focus
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Software “intelligence” has penetrated products and
equipment, yet we are still just beginning the journey
Today, products and equipments are
loaded with firmware, embedded
software and in-product software:
In the near future, intelligent
products will not only communicate
with other equipment, but:
– Software inside of consumer products e.g.
Smart Thermostats.
– Initiate tasks and communicate with other
equipment.
– Software inside of cars e.g. auto-cruise control.
– Tailor their user interfaces, recommendations
and movements to meet customer
preferences.
– Programmable Logic Controllers of robotic arms
and plant machinery.
– Strengthen their features—and thus the
benefits they provide customers—through
software improvements.
– Learn how to lower their operating costs.
– Optimize their yield and productivity.
– Prevent accidents and failures during
operation.
– Take action in uncertain or adverse
conditions.
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Four strategies to exploit revenue-generating
opportunities
1. Innovate through
Product-Service
Hybrids
2. Be the most valuable
information provider
3. Treat services
as R&D
4. Create the Industrial
Internet workforce
Intelligent technologies
will fuel innovation
Analytics from
devices
Digital
Workforce
Management
Data from Wearable
devices
Connected Vehicles
Intelligent
Plants and
Factories
Inputs
Outputs
IIOT Platform
Copyright © 2014 Accenture. All rights reserved.
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1. Innovate through product-service hybrids
While the idea of industrial companies supplementing product revenues with services
isn’t a new one, companies are creating an entirely new business model. Productservice hybrids combine product sales and leasing with recurring income streams
from digital services, expanding opportunities to tap into new sources of revenue.
Product Makers
Asset Owners / Operators
Product as a Platform
Operations and Predictive
Maintenance
NextGen Products/Services
Commercial Optimization
Most Valuable Information
Provider
New Customer Experiences and
Machine Applications
New business and Operating
Models
Boost Productivity
Improve Equipment Performance
Increase Customer trust & loyalty
Copyright © 2014 Accenture. All rights reserved.
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A tire manufacturer is helping truck fleet managers
reduce fuel consumption and costs, and allowing them
to pay for tires on a kilometers-driven basis
Fuel consumption
reduction service
Information
Services
Product
or service
Equipment
services
Products
Tires as a service
Tires
Tires with sensors
Pre-digital product
line
Digital product line
New market
segment
Go to market approach
Copyright © 2014 Accenture. All rights reserved.
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2. Be the VIP – Most Valuable Information Provider
Sell products, and your customers interact with you only when they have a problem.
Sell services, and you gain multiple opportunities to create customer touch points, build
trust and become the preferred provider for new services.
Make the consumer aware of their connect world and then work with the
ecosystem partners to drive next generation customer experiences.
Connected
Vehicles
Products and
Equipment
Increase ability to have context rich
interactions within value chains
•
Enable analytics on large
real-time data for diagnostics and
recommendations
•
Share data with partners for valueadded services across the eco-system
•
Take advantage of digitally contestable
markets e.g. transportation, payments,
manufacturing
Plants and Factories
Consumer
Connected Home
Networked
Enterprise
•
Cross selling & new
value-add services
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Caterpillar is banking on information services for it’s
installed base to retain and attract customers
Centrally managed installed base & diagnostic solution keeps maintenance and
idle time at a minimum through Telematics, Machine Data, Analytics
CAT Telematics Landing Page
Equipment List with Complex Assets
Hours, Location, Fuel Consumption
Machine Detail with Geo and Time-Fence
Machine Alerts, Fault Codes
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3. Treat Services as R&D
To innovate more quickly, industrial equipment makers will take a page from
technology companies: they will treat services as a speedy laboratory for discovering
the features that their customers want.
When a company treats services as R&D:
Products start to sound off. A piece of equipment and it’s moving parts
once installed at a site will be a reliable feedback mechanism to the vendor
from maintenance status to request for feature enhancements.
Hardware is not that hard anymore. R&D intensity is high in industrial
sectors where scientists and technologies design electro-mechanical devices.
However, embedded and in-product software that can be upgraded in the field
with new functionality allows a “super-cycle” of innovation.
Compelling customer experiences emerge. Energy management, safety,
sensing and measurement capabilities drive capital-intensive R&D projects.
Now, more than ever, it is the customer experience that matters. Digital
services will be a vital vehicle to marshal collaborators of compelling solutions.
Real-world experimentation is possible. Manufacturers and service
companies can try out new digital services on product users. They can see
which services are embraced and which rejected. And they can try out
different variants in the field, even doing A/B testing.
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Ford is enabling new product development by
supporting crowdsourcing as a means of high speed,
low cost concept development
Ford once said “make the best quality goods possible at the lowest cost possible,
paying the highest wages possible.” That was a good rule in the early 20th
century, but it’s insufficient for the 21st.
OpenXC™ is a data-focused API for your car and by installing a
small hardware module, the vehicle data becomes accessible to
Android or other desktop applications using the OpenXC library.
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4. Integrate Digital and Human Labor
While the adoption of the Industrial Internet will accelerate and expand the use of
digital labor (in the form of automation using intelligent software and robots), greater
returns and productivity gains will come from augmentation, which seamlessly blends
digital and human labor in task-specific environments
Examples
Self-driving cars create an entirely different kind of
commute and driving experience
Adaptive robots working side-by-side with people on
the factory floor
Remote operation of mining equipment from the
Command Center
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It’s Time for Flying Robots:
Reduce Time to Location and Risk Exposure at Location
Assets such as Oil & Gas pipelines can be remotely monitored, using sensors on UAVs to
detect intruders, pipeline leaks and right of way violations
UAV’s in Action
Solutions exist to manage a fleet
of UAV’s for asset monitoring:
•
Select type of UAV, number of
UAVs and identify vendor
•
Determine the right set of
sensors to meet the mission
objectives
•
Design and execute flight
missions (e.g. routes,
waypoints) to satisfy business
needs
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1. Innovate through
Product-Service
Hybrids
2. Be the most valuable
information provider
Copyright © 2014 Accenture. All rights reserved.
3. Treat services
as R&D
4. Create the Industrial
Internet workforce
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