product innovation in the age of digital transformation
TRANSCRIPT
Product Innovation in the Age of Digital Transformation
Jeff Hojlo
Program Director, Product Innovation Strategies
April 11, 2019
Agenda ▪ Digital Transformation and the Impact on Innovation
▪ What is Innovation Digital Transformation?
▪ TOVC Technology Priorities
▪ Essential Guidance
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 2
DX and the Impact on Innovation
© IDC 3
Organizations are Facing Several Challenges
Outdated KPIs
DX Performance Scorecard
Siloed DX Initiatives
DX Organization
Structure
Tactical Plans
Digital Roadmaps
Limited Expertise
Digital Capabilities
Silos of Innovation
Digital Platform
DIGITAL NATIVE
ENTERPRISE
© IDC4
Transformation on Multiple Fronts
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5
Emerging Markets
Enterprise Quality
Battle for Talent
Customer Centricity & Experience
Meeting Demand Flexibly
Complex Value
Chains
Security
Sustainability & Compliance
IT/OT
AI & Machine Learning
Connected Products & Processes
“Customers are choosing experience over products.”
- Brian Krzanich, CEO of Intel
” Everyone has to collaborate a lot more – OEM/Tier 1/Tier 2 –up front and through the lifecycle of the car."
- Jensun Huang, CEO, NVIDIA
“The lines between hardware, software, and services are blurring. The only way you can pull this off is when everyone is working together well . . . so focused on a great experience that they are not taking functional views of things.”
- Tim Cook, CEO of Apple
CXO Quotes
6© IDC
• Product innovation Platforms to the Evolution of NPDI
• Innovation Management & Commercialization
• Leveraging Digital Twins & Digital Thread for better experiences
• Product Lifecycle Analytics
What is Innovation Digital Transformation?
© IDC 7
Harmonize the Organization on a Product Innovation Platform
© IDC 8
Source: IDC 2016
Build a Team of Innovation Managers
Make Costing a Core Part of Innovation Management
Incorporate Manufacturing Early for Innovation
Establish a Foundation for Innovation
Achieve Innovation Balance w/ a Cross Functional Team
9
IDC PeerScape: Practices for Innovation Management
Innovation ManagementPractices for Successful Innovation Management
PRIMARY BUSINESS BENEFITPRACTICE COMPLEXITY
Appropriate talent available
Technology performs as anticipated
Creates business value
Medium complexity to implement
Simple to implement
High complexity to implement
PRIMARY BUSINESS BENEFIT COMPLEXITY
LEGEND
Source: IDC 2017
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Leverage Digital Twins Across your Value Chain
10© IDC
Source: IDC 2018
Product & Service Knowledge
Supply Chain Performance
Manufacturing Execution
Product-in-service
Service & Customer
Experience
Market & Competition
Customer Needs & Demand
© IDC 11
Product Lifecycle Analytics
Product Lifecycle Analytics
Product Lifecycle Analytics
Product Lifecycle Analytics
Product Lifecycle Analytics
Product Lifecycle Analytics
Source: IDC 2018
12© IDC
26.0%
34.7%
25.7%
13.7%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Our approach to service operations focuses on break/fix
efforts
Our approach to service operations focuses on preventative
maintenance
Our approach to service operations is more proactive, with
the focus on product monitoring
Our approach to service operations is prescriptive, whereby
products have autonomic capabilities to report
problems/issues and request repair
Proactive and Preventative SupportBreak/fix model is falling behind, but still a ways to go for prescriptive service
Q: Which of the following best characterizes your service operational approach with customers?
N = 300Source: IDC Manufacturing Insights, 2017 PLM/SLM Survey
TOVC Technology Priorities
© IDC 13
QB48R. In order to capitalize on digital transformation, to what extent are you are currently making
changes, if any, in each of the following areas?TOVC
22.0%
25.1%
29.3%
32.3%
32.3%
31.3%
34.7%
16.2%
31.4%
34.1%
21.9%
37.9%
37.2%
38.0%
21.8%
22.9%
26.8%
25.8%
21.8%
28.9%
25.7%
35.5%
37.0%
29.3%
40.6%
35.0%
21.7%
28.2%
14.3%
15.2%
9.7%
9.4%
14.5%
9.8%
14.9%
23.9%
8.1%
13.2%
15.8%
8.5%
24.8%
21.5%
Organizational structure/design
Location of key operations or…
Corporate governance and…
Approach to managing risk
M&A, joint ventures or strategic…
R&D and innovation capacity
Channels to market
Customer growth and retention…
Investment in production capacity
New distribution platforms
Use / mngnt of data + data analytics
Technology investments
Talent strategies
Supply chain
Considering or planning change Change is underway Change is complete
n=72
Manufacturing Insights Survey 2017Source: IDC’s 2017 Industry IT & Communications Survey, IDC Customer Insights and Analysis
Manufacturing Insights Survey 2017
QB2R. Thinking about your organization's top priorities in the coming year, please rank
the following initiatives in order of importance (1 = most important)Mean Summary Table
n=708, AOVC=263, BOVC=237, EOVC=93, TOVC=115
TOVCOverall Survey
1. Traditional IT
2. Mobility (devices, platforms, apps, services)
3. Analytics
4. Cloud computing
5. Big data
6. Internet of things
1. Cloud computing
2. Analytics
3. Traditional IT
4. Mobility (devices, platforms, apps, services)
5. Big data
6. Internet of things
Source: IDC’s 2017 Industry IT & Communications Survey, IDC Customer Insights and Analysis
Manufacturing Insights Survey 2017
34.8%
24.3%
43.8%
32.8%
22.6%
18.2%
24.5%
27.8%
20.6%
17.9%
29.4%
24.6%
34.5%
22.1%
43.9%
31.7%
21.5%
27.2%
29.7%
35.5%
40.6%
27.0%
18.6%
33.3%
18.9%
21.6%
28.7%
25.2%
13.7%
25.1% 25.1%
30.5%
27.2%
22.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Big Data Mobility: Mobiledevices, platforms,apps and services
Analytics Internet of Things 3D Printing Augmented/VirtualReality
CognitiveComputing
Blockchain Robotics Wearable devices Collaborationsoftware for
employees toshare documents
and calendars
Businessanalytics/Business
intelligencesoftware (BI) for
data analysis
Customerrelationship
managementsoftware (CRM)
Social mediaanalytics and
marketing trackingtools for
campaigns
Enterpriseresource planning
software (ERP)
Ecommerce/onlineorder taking and
billing
HR/Talentmanagement
software
Currently Future
TOVC
Technologies for digital transformation
QB47RC. Which technologies are currently driving and do you expect will drive digital transformation the most within your organization?
n = 79Source: IDC’s 2017 Industry IT & Communications Survey, IDC Customer Insights and Analysis
• Currently: Big data, analytics, collaboration software, CRM, ERP
• Future: IoT, 3DPrinting, Cognitive, Wearables, Social media analytics
Attribute MFG
Networking and connectivity 39.0%
Cloud-based application software (for operational processes, such as DMS, MES and SCM) 38.7%
Analytics – advanced analytics (simulation, optimization, artificial intelligence, machine learning etc.) 36.8%
Cloud-based operational data management and analytics 35.0%
Integration of OT systems with other OT or IT systems or sensors 31.0%
Mobile applications and devices 18.7%
Analytics – business intelligence (KPI dashboards, graphic display) 18.1%
Internet of Things – deploying sensors that can wirelessly connect to a network 18.1%
Refresh/upgrade of OT systems 16.9%
Security 15.3%
© IDC 7
Top Priorities for IT/OT Investment
Source: IDC IT/OT Convergence Survey, June 2018 (2016 N=794, 2018 N=905)
53
.3%
55
.8%
50
.4%
51
.0% 55
.8%
45
.2%
41
.3%
41
.8%
40
.7%
41
.0%
40
.0%
42
.2%
11
.3%
7.3
%
16
.3%
7.7
%
6.7
%
8.9
%
0%
10%
20%
30%
40%
50%
60%
Overall PLM decision maker/on team SLM decision maker/on team
Product ideation and design
Better service planning and execution
Products in-service that self-heal or suggest preventative maintenance
Products in-service that suggest design improvements
We don’t use AI in our products or processes, but plan to in the next 12-18 months
We don’t use AI in our products or processes and have no plans to do so
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Q18. Does your organization plan to apply Artificial Intelligence (AI) and machine learning for the following?
Overall n=300, PLM decision maker/on team n= 165, SLM decision maker/on team n= 135
Level of responsibility
Essential Guidance
© IDC 19
© IDC 20
Five Takeaways
Data & knowledge decision support are paramount with connected products, quality, ongoing service: invest in analytics
Connect open platforms across innovation, operations, & revenue for ecosystem collaboration
Simulation, visualization, & digital twins are the drivers of information on a product innovation platform across ideation, development, operations
Cloud PLM adoption is advancing rapidly, for key innovation processes now, full implementations in the near future – key for data sharing & collaboration
Quality is still king, and is the top reason why manufacturers buy PLM software and increasingly invest in 3rd platform technology
Thank You
Learn more about us at our websites or our community website:
▪ http://www.idc-mi.com
▪ https://idc-community.com/manufacturing/manufacturing-value-chain
@jeffhojlo