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, physicalto 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 theirorganization.
The acceleration of product innovationProducts and service innovation really issomething very, very important for the world as we know ittoday.If you look at what used to be a dumb device in yourpockets, whether it's your phone or your calculator or yourcamera, today we are seeing a major shift in all theproducts around us. This is probably most visible inthe devices that you haveeither on your desk or in your pocket right now. It's aphone. It's a messaging device. It's a camera. It's aradio. It's a music player. It's a video recorder. It's aGPS device. If you just think back 10 years ago, all of those wereseparate devices you had to buy. And just go 10 yearsearlier than that, most of them...I mean, some of themdidn't even really exist.
So there's an acceleration of product innovation that'sreally changing the world. And those consumer devices arethe most visible, but we are seeing the shift acrossall industries. We're seeing it in the automotive industry where cars are becoming smarter and either more environmentally friendly orsafer. We're seeing it in the aerospace industry. We'reseeing it in banking, in retail. Really in every singleindustry, I look around, there's a major shift in how thefundamental building blocks, the products, are becomingsmarter. 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 innovationpossible. But then, of course, the software is in aproduct. So there's building and the key question is how do we build these smarterproducts? Also, the products are more and more interconnectedamong 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 seetoday.
What service innovation is really aboutWe mentionedproduct innovation really being about this new softwarethat's being embedded in products and what that makespossible. Now, we have all kinds of newinformation available to us on the client experience, onwhat's going on in your business, capturing new types ofdata that allow us to transform the way we operate throughnew levels of intelligence.
With that in mind, we have service innovation that's being about not justmanufacturers being able to deliver new services aroundthose products that they're creating, but also aroundenterprises that are consuming smart products -- and whetherthat's telecoms with new smart phones or energy and utilitycompanies now that are implementing smart meters.What they're really able to do is look at things like theclient experience, look at what's happening inside theirbusiness, and connect those devices to trad
So service innovation is really about leveraging acombination of those smart products and the info
Are businesses really ready for thismajor shift?
It's reasonable tosay that organizations are not only willing, but capable tovarying degrees to embrace and capitalize on opportunitiesfor product and service innovation. And IBM is working with many companies to help them down that path, whether it'sfocusing on strategic innovation projects, things like smartgrid implementations or brand-new types of services thathaven't been done by industries before or by helping themput the foundational components in place to allow thattransformation to happen over time.
So as organizations address their current challenges, they must be able toadd new capabilities and ultimately bring them to a pointwhere they're agile enough [is your business agile enough?] where they have the internalability to respond to new opportunities, to take theirideas, their innovative ideas, and to actually turn thoseinto innovative products and services much more quickly.
We areseeing this front and center in with nearly all of ourcustomers. That need for innovation is fundamental when itcomes to being competitive.
Today, there's so much focus on bringing out the next iPadkiller on the next iPhone killer or...we definitely can seethat that innovation is what's helping us capture new marketshares and really make sure that we still remainrelevant.
A lot of these markets are changing so quickly with thesenew game-changing innovations that it's hard for anyone toguarantee that their company will still be around in five or10 years' time -- and when you think about it -- that'scrazy!
Another very important point is new streams ofrevenue. In my existing company, with my product, by addingadditional services, there are also ways that I can startbuilding out new streams of revenue, new things I can sellmy customer or new ways I can connect with my customer tounderstand what their needs are, where the market's going,what their satisfaction is and really make sure I'mtransforming the client-to-company relationship works. This really is a key thingwhen it comes to the challenges that are top of mind for ourtop customers.
The need to innovate: an end-to-end approachInside IBM, we're very, very lucky tohave a number of very bright people. We have a fantastic research and development team,fantastic services team, and lots of best of breedmarket-leading products. That has given us the opportunity to bring all of thatexpertise and all of that tooling together to provide whatwe call integrated product management as an end-to-endapproach to help build these smarter products and to driveproduct innovation.
So the way that works is realizing that there really are anumber of key things that a company needs to do. The first step is of course, what is this major shift in the marketsand how is it impacting the way I do business? How does mybusiness need to transform? We have top of class services that can come in and reallyhelp with that transformation and guide you through thechange and identify, what are the top parts of yourportfolio you should be focusing on and how does thisfacilitate innovation?
And then on the designing and developing of these newproducts, we have fantastic solutions for the embeddedsoftware development, for systems engineering, for systemarchitecting, for connecting the software development withmechanical and electrical development, connecting ALM andPLM. There's a number of fantastically valuable areas thatwe can provide help with, and a lot of customers areactually benefiting from that.
Then there's also becoming smarter in manufacturing,which of course once you have designed this product, how doyou build it smarter? How do you become more agile on themanufacturing floor? And of course, you've got the after sales of this. There'sno point in inventing new products if it absolutely killsyou 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 succ
That really is in a nutshell integrated product management.It's an integrated end-to-end approach for building smarterproducts, smarter planes, smarter cars, smarter phones,smarter power plants, smarter telecom systems. Allthat really is facilitated by having this end-to-endapproach. And we also actually have asimilar approach for services.
Similarly to integrated product management, you must have a complementary means ofaddressing 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 designand delivery teams that actually have to then create it, theIT operations teams that manage the information technologythat gets deployed.
Increasingly, enterprise operations teams are goingout and deploying these new smart devices, whether it'ssmart meters or turning on smart phones for clients. And soall of those people are part of the process, but there'salso all that technology. There's all the management systems thateach of those people or roles actually need do theirday-to-day management of the overall process of delivering aservice.
Bottom line is that it's really about collaboration. It's about agility.It's about sharing ideas across those different teams andacross the lifecycle to continuously improve the way thatservices are delivered and the value to the client.And so integrated service management really takes thatholistic approach to designing, delivering and managing aservice across the lifecycle and makes it a more efficientprocess and ultimately helps drive down things like cost andhelps 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 GogoInflight Internet. And the goal of that service is to deliver broadband speed and performance to passengers, whichmeans that ultimately, now, one the few places that wecouldn't communicate with the world was when we're in aflight.
What Gogo allows you to do is really connect usingbroadband on the flight itself so that clients, the peoplethat are using it can e-mail, they can instant message, theycan tweet, they can surf the Web all at 30,000 feet. Aircell realized is that innovationwithout the ability to really ensure the quality for theclient wasn't enough. They needed to have a more holisticview of how they're designing, delivering and managing aservice, and so they wanted to manage that entire lifecycle.
So Aircell now leverages integrated service managementsoftware from IBM in a solution designed by an IBM partner,Generation E, to literally see the status of theconnectivity for individual planes while they're in flight.So what they're able to do now is actually see the servicethat they're providing directly from the planes, where thoseplanes are and what the connectivity is for the users andthe quality of the experience for the users. So that's justone example of service innovation. I imagine, Dominic, youhave 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 fordesigning, delivering and managing smart products. One company that is doing that with the help of IBM Rational is GeneralMotors with the Chevy Volt. I know a lot of people haveseen 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 marketand to relaunch their competitive positioning. And ofcourse, that means two things: it means that, on one hand,you want to produce innovative cars -- and the Chevy Volt isa typical example of fantastic innovation -- but at the sametime, you want to reduce the risk, you want to improve yourtime to market, and you want to keep costs low. We worked very, very closely with GM on modernizing theirdesign and development platform, but also with busi
The car has got some fantastic features and reallyhas been heralded as a lifesaver.
That's one reallygreat example, a very visible example in the automotiveindustry. But we could have picked examples in a number ofother 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.