Growth Challenges and Opportunities

OEMs Face in the Digital Age

Webinar
Alex Glaser
26th July 2018
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 25 years of experience in Global client base in International offices &
the field 46 countries partner network

Recognized as a Leader
by

2017 Enterprise Business 2017 Operational Intelligence

2017 Business Operating Systems
Process Analysis

Product Leadership Award

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Alex Glaser

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Growth Challenges and Opportunities
OEMs Face in the Digital Age

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 Harbor Research Background
Founded in 1984, Harbor Research helps companies Harbor Research is a strategy consulting and
develop new growth strategies for emerging technologies technology research firm focused on Smart Systems

Technology Research Strategy Consulting Smart Systems Lab

Our research, tracking, and
market intelligence services
provide an accessible learning
environment for those who
are trying to wrap their arms
and minds around emerging
disruptive opportunities.
Our strategy and business
development consulting
services deliver creative
innovation tools, practical
methods and applied
problem solving.
We are creating a real-
world laboratory where
organizations design,
prototype, and test new
models for delivering
value and differentiation.

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Harbor Interviewed and Analyzed 55+ OEMs about Digital & IoT

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digital and
smart for digital transformation to really
systems take off, radical new thinking about
information technology must begin
at the most basic levels, with new
conceptions about how machines,
information, people, systems and
organizations will interact

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 developing digital and
smart systems strategy
how should we define and frame
digital, IoT and smart systems?
Strategy
Framing and
Planning where should we start
this journey?

What process and decision

framework should we utilize?

how should we think how should we think

what success factors about organizing… about architecture ….
should we focus on? people and technology and
relationships? business/operations?
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digital and
smart
systems how should we
define and frame
digital, IoT and
smart systems?

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 What Are SMART SYSTEMS?
As networks invade the “physical” world, traditionally unique components and
interfaces between and among electronic and electro-mechanical elements are
becoming standardized…These networked devices generate information value over
their lifespan, and this information can be utilized throughout an organization .

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 Where Are We in This Journey?

Pain Points Barriers To Adoption Drivers of Adoption

unplanned equipment unclear roi & perceived uptime, efficiency and

downtime tech cost overall equipment
effectiveness
employee skill gap skill & knowledge gap
throughput & flexibility
tech integration interoperability issues &
complexities security availability of capital

complex, multi-party low understanding of company behavior

maintenance benefits
innovative partner networks

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Confusing and Diverse Set of Players Addressing the Opportunity

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 Diverse New Technologies Entering OEM Arena

DISTRIBUTED SYSTEMS
Extensible solution application

INTELLIGENT SYSTEMS SMART DEVICE

Intelligence-control-automation Empowering the edge

SUPPLY CHAIN Diverse MOBILE

Unconstrained real-time velocity Digital Enablers Next generation applications

ANALYTICS CLOUD APPLICATIONS

Machine learning applications Unlimited asynchronous services

DATA LEVERAGE
Contextualizing disparate data

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 Many Challenges and Hurdles for OEMs…..
Planning for the Future
Understanding and being flexible in technology
and solution development today to be prepared
for future technology developments
Managing Complex Data
Collecting, transforming and integrating
data from complex machines and processes
to enable new application values Technology
Data Ownership & Security
Customers are increasingly aware of the
value and importance of their data, and are
concerned about the security of their IP
Poor User Experience
Industrial suppliers typically do not consider or
emphasize user experience in the development of
smart systems and services, resulting in diminished
value and use of these systems
Starting…
Developing a strategy to spur internal
support and quickly gain customer adoption
Aligning the Business to Support Services
by generating value with smart services
Moving from decades or centuries-old product
manufacturing practices, into a service-driven
organization, both structurally and culturally
Recruiting The Right Talent
New business
Finding and hiring leaders and evangelists that can help drive the
development and diffusion of digital throughout the company
and revenue
models
Business
Developing and Finding your Place in the Ecosystem
Finding and engaging the right partners to help fill capability gaps and
New work
New modes
styles and
add value to smart solutions, while not creating tension with current
of interaction suppliers, partners or customers
processes
Sales and Go-To-Market
Selling solutions comprised of equipment, software and services
Customer requires a unique set of skills that not all sales personnel or channel
partners have naturally
Fragmented Customer Requirements
While equipment may be easy to customize or
configure to specific customer scenarios, doing the
same for software and services is difficult
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It’s Still Early in the Game…….

COMPLEX
• Smart Manufacturing Smart
Supply Chains
• Smart Cities

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digital and
smart
systems What process and
decision
framework
should we utilize?

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 Digital & Smart Systems Strategy Dev is Not Linear Process
How do we address systemic issues
with our organizations ability to
fully address the new opportunity?
Which trends, forces and
disruptions likely will shape the
Does our go-to-market future competitive environment?
system design align well with
the opportunity and market?

Which players, events and

Are our products, systems technologies should we care about?
or services correctly
spec’d and configured?

Are there new combinations of technologies,

products, services and partners that can
Which value elements should we drive sustained differentiation?
develop, which obtain by
partnering and which by sourcing?

What formal and informal What value elements will increase

relationships among allies and extend the value to the
might exist in the future? customer of our core offerings?

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 Thinking About a Digital Process Framework
Transformative IoT and Digital Vision
Strategic Assets
• Defining a digital and IoT vision and
Sales force Products & content Partnership network Customer knowledge strategy based on understanding
Sales & channels Product innovation Brand Culture new and novel requirements for
IoT and Digital Engagement

IoT and Digital Governance

manufacturing and customers
IoT and Digital Building Blocks
• Development and acceleration for
Customer Operational Business
Experience Process Model new smart systems, services and
solutions
Customer Process & Manufacturing Digitally-Modified
Understanding Digitization Business
• Supported by new internal
Customer Touch Points Worker & Process New Digital Partnered
& Experiences Enablement Models processes, skills and roles required
to adopt new tech and capabilities
Performance New Revenue and Value
New Top Line Growth
Management Realization
• Supported by building and
sustaining partner and ecosystem
Skills Infrastructure Investment Initiatives values
Iterative Transformation Roadmap
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How Should We Organize to Drive Digital Innovation and Impact…

evolving OEM
growth themes
Most OEM segments are
undergoing dramatic change
due to broader forces at work
in the marketplace but also
because of the impacts driven
by digital and Internet of
Things technologies

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digital and
smart
systems
what are the
critical success factors
we should focus on?

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 What Success Factors Should We Focus On; What Next?
Discovering and enabling new Organizing the structure of Digital team/function
1 customer and user experiences 2 to support real development - aligning your
and systems innovation skills, capabilities and structure to support new
technology adoption

Aligning “business” Rapid experimentation (small

8 architecture with 3 projects first for quick wins) and
“technology architecture” business model innovation

Creating new digital Organizing clever combinations

7 ventures to parallel the 4 of smart systems technologies
core business

Managing “creative contention” across Extending skills through relationships,

6 organization – functions, roles, 5 partnerships, ecosystems and
charters, governance, mandates “strange bedfellows”

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Digital and IoT Requires End-to-End Solutions

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How Should We Think About Relationships…..

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Solutions Not New but Creative Combinations of Existing Tech

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Rapid Experimentation to Develop and Deploy Projects Quickly

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Ecosystem Design Requires a Holistic Partnership Strategy

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 Future Data and Information Architecture is Critical

INTEROPERABLE P2P & CLIENT-SERVER DISTRIBUTED COMPUTING SEMANTIC STREAM PROCESSING

Universal compatibility Adaptable network Embeddable Process temporal, spatial & state context
architecture

LINEAR SCALABILITY BEYOND REAL-TIME ASYNCHRONOUS DATABASE INDEPENDENCE

Unrestricted volume Microsecond processing Heterogeneous signals Break the IT stack

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Diverse Growth Models and Strategies Across OEMs

“Designer” “Constructor” “Grower” “Planner” “Operator”

Designs unique Acquires to attain Has competence to Charts the Aggressively and
organizational new skills &/or grow new businesses company’s future deliberately focus on
organically; can the management of
structures, businesses (e.g. course, fostering
deliberately nurture
relationships, and software); builds opportunities that internal efficiencies
new skills without
tools to create new business losing focus or mark a big shift from and skills; digital focus
extraordinary value “platforms” to competitive edge the company’s is often on driving
with digital particularly via new efficiencies and
address growth existing businesses
partnerships and services.
opportunities. opportunities. (i.e. digital).
ecosystems.

• GE • Acuity Brands • Rockwell • ABB • GE

• Bosch • Roper Automation • Fortive • Emerson
• Diversey • Fortive-Fluke • Bobcat • GE • Danaher
• Schneider Electric • Club Car
Danaher
• Honeywell
• • 3M
• National • Eaton
Instruments
• Honeywell

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 New Growth and Innovation Modes for OEMs

MERGERS and ACQUISITIONS (M&A)

Acquisition of developed companies with existing
business, innovations or assets
M&A CORPORATE
Expansion/New

BUSINESS UNIT VENTURES VENTURES and

DEVELOPMENT COLLBAORATIVE VENTURES
COLLABORATIVE
Joint ventures, collaborative developments,
VENTURES
spin-offs, etc. that drive incremental revenues
(Joint Ventures,
Spin-Offs and
Minority Equity
Investments)
BUSINESS UNIT VENTURES
Sound business idea that surfaces in core where
culture or ops mode limits potential

INTERNAL R&D and INNOVATION

Internal core innovation and/ or product
development
Core

CORPORATE VENTURES & DEVELOPMENTS

INTERNAL R&D and INNOVATION
Support of and cooperation with start-up companies in early
stages
Lead Time To Maturity

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“architectures” must be aligned

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 How to Organize Evolving Offerings, Create Value
and Capture Value?

Need To Integrate IT, OT

and Complex Ops Systems

Strong Bias CUSTOMER Software Platform To

Towards Services NEEDS Leverage Multiple
Orchestration Partners and Values
CREATING VALUE CUSTOMER CUSTOMER
(CUSTOMER FACING) EXPERIENCE OFFERING

CAPTURING VALUE
(INTERNAL – GETTING PAID)
VALUE CONTROL
Enabling, CAPTURE POINTS
Aggregating, Integrating and
Analyzing and Managing Critical
Brokering Critical Data Systems and Processes

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 Q&A

www.harborresearch.com www.interfacing.com
Alex Glaser
Vice President sales@interfacing.com

aglaser@harborresearch.com +1 (800) 561 5005

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