Another great article from SAP, explaining how products will evolve in the new digital era. Originally by Pradeep Amladi, SAP.
A hundred and thirty years ago, on January 29, 1886, Karl Benz patented the gasoline-driven automobile. The car was born.
From the industrial economy to the Internet economy, each economic revolution has utilized technology advancements to drive major shifts in the way businesses operate and how people live and work. The intersection of recent technology trends indicates that the world is again poised for another economic revolution… The Digital Economy.
This new reality is being powered by the unique convergence of hyper-connectivity, super-computing, cloud computing, smarter world, and cybersecurity. Each of these technology trends has matured and hit scale at the same time, creating an environment ripe for business innovation.
Digital transformation has become a strategic priority. Finding new ways to connect the business with assets, customers and suppliers has already led to the development of smarter products and new business models – for example, a snack food vending machine that anticipates and makes smart purchase recommendations to customers based on their profiles and historical purchase patterns. This same machine also gathers customer demographic information, such as age and gender, and passes it back to the vendor who uses the information to make smarter inventory decisions, thereby increasing purchasing frequency and revenue.
New product and service offerings often provide much-needed differentiation in the marketplace and form the foundation for innovative business models, which is one reason behind a recent push for developing innovative, “smart” products. While sensors have been embedded in large assets for many years, digital technology now has made them smaller and more affordable. To compete in the new digital economy, companies can start by taking an existing product or device created to perform a single function, and adding sensors, allowing it to transmit and collect vast amounts of data. As a result, products are changing in several ways:
To meet the information requirements necessary to capitalise on the digital economy, companies must first digitise, connect and collect data on all of their assets, suppliers, workers and stakeholders. They also need high-speed platform technology capable of quickly analysing the data from multiple angles and combining internal content with external information. Finally, all information must be viewed in the right business context and with the customer experience in mind across all channels.
Early adopters of the digital economy are winning by growing shareholder and stakeholder value faster than their counterparts. 74% of U.S. and European retail, healthcare and manufacturing companies have already developed smart products (The Economist Insights). By proactively embracing the digital economy, these industry leaders are harnessing the power of real-time data analytics to develop the next-generation of products that connect people and businesses in ways we are just beginning to understand.
IDC predicts the worldwide market for IoT solutions will grow from $1.9 trillion in 2013 to $7.1 trillion in 2020. The digital economy will allow companies to redefine who they are and where they want to go. Yet, they must remain focused on the customer outcomes of their decisions.
Neil ran his first SAP transformation programme in his early twenties. He spent the next 16 years working both client side and for various consultancies running numerous SAP programmes. After successfully completing over 15 full lifecycles he took a senior leadership/board position and his work moved onto creating the same success for others.