The age of smart: What smarter products and service is all about
Smarter. Flatter. Intelligent. Interconnected. Instrumented. We all agree that the world is changing. More likely than not you're building products or services that are driving this evolution. But are you prepared to lead? How can you prepare and win in the age of Smarter Products and Services?
Delivering innovative products and services that transform the way we live, work, and play
You hear about IBM's 100-year anniversary and the evolution of the technology from the Industrial Revolution through to the age of railways (watch this video on smarter railways), electricity, telecom and now to the age of smart. You see Watson on Jeopardy and IBM talking about how we're helping to use decades of information in new and innovative ways.
Sam Palmisano said it best when he talked about entering the decade of smart. To quote, "by a Smarter Planet, we mean that intelligence is being infused into the systems and processes that enable services to be delivered, physical to be developed, manufactured, bought and sold --everything from people and money to petroleum, water and electrons to move and billions of people to work and live."
Now, we all know that will not be an easy transition, and that's where IBM is helping to make this planet smarter. A key part in this transition is developing, building and managing intelligent instrumented and interconnected products and service in what we like to call product and service innovation.
Here, we'll explain these strategic initiatives and why it's so important in today's Smarter Planet, and some solutions to address these needs by helping companies speed the delivery of innovation in their organization.
The acceleration of product innovationProducts and service innovation really is something very, very important for the world as we know it today. If you look at what used to be a dumb device in your pockets, whether it's your phone or your calculator or your camera, today we are seeing a major shift in all the products around us. This is probably most visible in the devices that you have either on your desk or in your pocket right now. It's a phone. It's a messaging device. It's a camera. It's a radio. It's a music player. It's a video recorder. It's a GPS device. If you just think back 10 years ago, all of those were separate devices you had to buy. And just go 10 years earlier than that, most of them...I mean, some of them didn't even really exist.
So there's an acceleration of product innovation that's really changing the world. And those consumer devices are the most visible, but we are seeing the shift across all industries. We're seeing it in the automotive industry where cars are becoming smarter and either more environmentally friendly or safer. We're seeing it in the aerospace industry. We're seeing it in banking, in retail. Really in every single industry, I look around, there's a major shift in how the fundamental building blocks, the products, are becoming smarter. All of that smarts is from software.
You might have seen IBM Watson playing Jeopardy earlier this year. Of course, there's a lots of software that is making that innovation possible. But then, of course, the software is in a product. So there's building and the key question is how do we build these smarter products? Also, the products are more and more interconnected among each other in an ecosystem of what we call systems of systems (see the video below). And those multiple levels really make for fantastic opportunities but also challenges, as we'll see today.
What service innovation is really aboutWe mentioned
product innovation really being about this new software
that's being embedded in products and what that makes
possible. Now, we have all kinds of new
information available to us on the client experience, on
what's going on in your business, capturing new types of
data that allow us to transform the way we operate through
new levels of intelligence.
With that in mind, we have service innovation that's being about not just manufacturers being able to deliver new services around those products that they're creating, but also around enterprises that are consuming smart products -- and whether that's telecoms with new smart phones or energy and utility companies now that are implementing smart meters. What they're really able to do is look at things like the client experience, look at what's happening inside their business, and connect those devices to traditional information technology within the business, process that information now to make better decisions.
So service innovation is really about leveraging a combination of those smart products and the information technology to gain new insights and to make better decisions and ultimately to deliver better client experience and new value to clients and to drive growth for your business.
Are businesses really ready for this major shift?
It's reasonable to say that organizations are not only willing, but capable to varying degrees to embrace and capitalize on opportunities for product and service innovation. And IBM is working with many companies to help them down that path, whether it's focusing on strategic innovation projects, things like smart grid implementations or brand-new types of services that haven't been done by industries before or by helping them put the foundational components in place to allow that transformation to happen over time.
So as organizations address their current challenges, they must be able to add new capabilities and ultimately bring them to a point where they're agile enough [is your business agile enough?] where they have the internal ability to respond to new opportunities, to take their ideas, their innovative ideas, and to actually turn those into innovative products and services much more quickly.
We are seeing this front and center in with nearly all of our customers. That need for innovation is fundamental when it comes to being competitive.
Today, there's so much focus on bringing out the next iPad killer on the next iPhone killer or...we definitely can see that that innovation is what's helping us capture new market shares and really make sure that we still remain relevant.
A lot of these markets are changing so quickly with these new game-changing innovations that it's hard for anyone to guarantee that their company will still be around in five or 10 years' time -- and when you think about it -- that's crazy!
Another very important point is new streams of revenue. In my existing company, with my product, by adding additional services, there are also ways that I can start building out new streams of revenue, new things I can sell my customer or new ways I can connect with my customer to understand what their needs are, where the market's going, what their satisfaction is and really make sure I'm transforming the client-to-company relationship works. This really is a key thing when it comes to the challenges that are top of mind for our top customers.
The need to innovate: an end-to-end approachInside IBM, we're very, very lucky to
have a number of very bright people. We have a fantastic research and development team,
fantastic services team, and lots of best of breed
market-leading products. That has given us the opportunity to bring all of that
expertise and all of that tooling together to provide what
we call integrated product management as an end-to-end
approach to help build these smarter products and to drive
So the way that works is realizing that there really are a number of key things that a company needs to do. The first step is of course, what is this major shift in the markets and how is it impacting the way I do business? How does my business need to transform? We have top of class services that can come in and really help with that transformation and guide you through the change and identify, what are the top parts of your portfolio you should be focusing on and how does this facilitate innovation?
And then on the designing and developing of these new products, we have fantastic solutions for the embedded software development, for systems engineering, for system architecting, for connecting the software development with mechanical and electrical development, connecting ALM and PLM. There's a number of fantastically valuable areas that we can provide help with, and a lot of customers are actually benefiting from that.
Then there's also becoming smarter in manufacturing, which of course once you have designed this product, how do you build it smarter? How do you become more agile on the manufacturing floor? And of course, you've got the after sales of this. There's no point in inventing new products if it absolutely kills you when it comes to the customer relationship or the cost of maintenance. So bringing together development and operations is going to really be key for successful innovative products.
That really is in a nutshell integrated product management. It's an integrated end-to-end approach for building smarter products, smarter planes, smarter cars, smarter phones, smarter power plants, smarter telecom systems. All that really is facilitated by having this end-to-end approach. And we also actually have a similar approach for services.
Similarly to integrated product management, you must have a complementary means of addressing the service lifecycle. When you consider what it takes to deliver a service, whether it's an innovative service or an existing service, there's a lot of moving parts to that. There's the people, the lines of business that come up with the idea, the design and delivery teams that actually have to then create it, the IT operations teams that manage the information technology that gets deployed.
Increasingly, enterprise operations teams are going out and deploying these new smart devices, whether it's smart meters or turning on smart phones for clients. And so all of those people are part of the process, but there's also all that technology. There's all the management systems that each of those people or roles actually need do their day-to-day management of the overall process of delivering a service.
Bottom line is that it's really about collaboration. It's about agility. It's about sharing ideas across those different teams and across the lifecycle to continuously improve the way that services are delivered and the value to the client. And so integrated service management really takes that holistic approach to designing, delivering and managing a service across the lifecycle and makes it a more efficient process and ultimately helps drive down things like cost and helps speed delivery of innovative new services to market. That's what integrated service management is all about.
Some examples of smarter products and services
Here's a great example of service innovation: There's a company called Aircell. It's a provider of in-flight wireless broadband. In that sense, it's a flying WiFi hotspot called Gogo Inflight Internet. And the goal of that service is to deliver broadband speed and performance to passengers, which means that ultimately, now, one the few places that we couldn't communicate with the world was when we're in a flight.
What Gogo allows you to do is really connect using broadband on the flight itself so that clients, the people that are using it can e-mail, they can instant message, they can tweet, they can surf the Web all at 30,000 feet. Aircell realized is that innovation without the ability to really ensure the quality for the client wasn't enough. They needed to have a more holistic view of how they're designing, delivering and managing a service, and so they wanted to manage that entire lifecycle.
So Aircell now leverages integrated service management software from IBM in a solution designed by an IBM partner, Generation E, to literally see the status of the connectivity for individual planes while they're in flight. So what they're able to do now is actually see the service that they're providing directly from the planes, where those planes are and what the connectivity is for the users and the quality of the experience for the users. So that's just one example of service innovation. I imagine, Dominic, you have some good ones for product innovation.
Here's a great example of product innovation: A lot of companies have been focusing on modernizing their platform for designing, delivering and managing smart products. One company that is doing that with the help of IBM Rational is General Motors with the Chevy Volt. I know a lot of people have seen it; it was actually named car of the year in a number of magazines.
We've been closely collaborating with GM on this initiative, because their objective really was to transform the market and to relaunch their competitive positioning. And of course, that means two things: it means that, on one hand, you want to produce innovative cars -- and the Chevy Volt is a typical example of fantastic innovation -- but at the same time, you want to reduce the risk, you want to improve your time to market, and you want to keep costs low. We worked very, very closely with GM on modernizing their design and development platform, but also with business transformation services that IBM provides, and helped them reduce the development time of a new car -- that used to be about 10 years. The Chevy Volt was produced in less than 5 years!
The car has got some fantastic features and really has been heralded as a lifesaver.
That's one really great example, a very visible example in the automotive industry. But we could have picked examples in a number of other industries as well.
We hope you enjoyed this discussion from IBM's Dominic Tavassoli (director of Rational systems and industry marketing) and Pierre Coyne (market manager for integrated service management solutions) talking about product and service innovation, delivering innovative products and services that transform the way we live, work and play. Don't forget to leave a comment below with your thoughts on this discussion and one smarter products and services.