Value Creation Dynamics

The ABB Ability to bring intelligence to industrial plants

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I continue to look at the world of IIoT solution platforms that are being offered to their customers which are digitally enabled, requiring connected devices to improve efficiency, productivity and increase profitability, all being provided through digital platform offerings

I’ve looked at Bosch and its IoT suite, Siemens and its Mindsphere, GE and its Predix platform, and Schneider Electrics with its Ecostruxure to begin to explore and understand their digital platform offering. I do need to revisit GE and its Predix platform with recent changes occurring inside the company.

I then wrote a summary of the fact that Industry is lagging but catching up in its choices of platform offering, taking three of these examples and how just within a few months this seems to be accelerating into a real race of the IIoT digital platforms to seize competitive advantage as well as I term it “taking the IIoT hill” to make sure customers align with them. A digital industrial application offering has increasingly become central to growth for many of the infrastructure providers.

This post is about ABB and their ABB Ability™ to offer a common platform across the industries they serve of a digital end-to-end set of solutions.

ABB has been investing in building their ‘digital operations’ to control, interrogate and modify the operational task in response to the external signals, mostly through distributed sensors. The aim is to transform clients activities more into software-driven activity, where the operational results in identifying trends and possible failure modes and equally, how they can transform the whole maintenance regime, to reduce downtime and anticipate potential failure.

ABB has a fairly powerful business case for being a trusted partner.

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Gaining speed, perspective, inspiration and agility the Schneider Electric way

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Schneider Electric’s platform

I just wish I had reviewed these guys a lot sooner. Schneider Electric has been on my radar for reviewing their platform for some time.

Schneider is in among the leaders in the digital transformation of Energy Management and Automation of homes, buildings, data centers, infrastructure and a range of industries.

They hold a commanding position in Power Management in Medium and Low voltage, Secure power, in critical power and cooling, grid automation, industrial and building automation and controls and providing discrete automation process systems.

Schneider Electric has been constantly providing integrated efficiency solutions for many years, well before platforms became fashionable.

They are constantly seeking to combine energy, automation, and software. They have adopted a very open ecosystem approach collaborating with partners, integrators and the developer community to build an open platform to deliver real-time control and operational efficiency

Schneider Electric is not set up as a glamorous company, they provide the essentials; such as boxes, enclosures, protect relays, cabling, control, switchgear, metering, racks, breaker switches. The list goes on and on. They operate in 100 countries and set out to find the most efficient and agile ways to foster innovation.

I get the real impression they have taken innovation to the core of what they do and I often can’t say that for many companies I review – more’s the pity.

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Mapping our Innovation Future through Ecosystems and Platform Design

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Why do we need a new innovative architecture, for mapping out the future

We are witnessing a very radical change, driven by technology, increasingly disrupting and breaking down the past traditional boundaries and market positions of many incumbent organizations. Mostly these were built so as to defend positions to achieve and maintain economic scale.

There is a new economic logic to building even greater scale through technology design, it involves greater complexity, yet its value proposition is to strive toward offering greater customer experience and satisfaction.

The solutions are valued far higher, in social and economic value. We need to recognize this is a new business model design with the arrival of engagement platforms that connect all the ecosystem of partners in its design, to gain this scale and value.

A new economic logic that gets closer to the connected customer expectations and daily needs for innovative solutions to solve, in ways far better than what are being presently being offered. Connecting technology, digital and human understanding brings radically different solutions.

A different innovative design has become paramount to these new offerings, so they can be capitalized upon, releasing this increased value creation understanding of opportunities.

The market dynamics are also changing; we are seeing greater disruption and blurring of traditional boundaries of competition, yet the reality is that innovation systems, structures and processes are badly lagging, in design and approach, to react and respond to this new dynamic.

A dynamic where the startup can undermind the established incumbent, mostly large organizations that are less nimble and agile, in radically different and dramatic ways, in short time frames, from the pilot, and testing to scaling those solutions, moving them from local to global through the power of technology applications.

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The Emerging World of Connected Industrial Ecosystems

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Whenever I seem to read about Platforms and Ecosystems, it mostly seems to relate to technology-led organizations and how they continue to connect us all up in our private lives.

As leading examples of the disruption that occurs and the connected value, we get offered the likes of Uber, Facebook, Apple, etc., all bringing new value to transform our world.

Yet, for me, the area that is shifting dramatically is where Industrial organizations are providing platform solutions to solve industrial problems. Good examples are Bosch, Siemens, GE and Schneider Electrics.

They transform their solutions and clients businesses by offering digital on top of the existing products in some awe-inspiring ways. They focus on connecting up their solutions into their client network on platforms to build the industrial internet.

The building of these platforms has prioritised specific industries to master and progressively transform their business into a digitally connected one. This seems to me to be so much harder than those like Facebook, Google or Uber.

Industrial solutions have had to deal with legacy “big time,” overcome entrenched positions or views and begin to collaborate in highly sophisticated ways, with often very demanding and sometimes sceptical clients.

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There is a growing force in Siemens MindSphere as it scales up in 2018.

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The move towards open-cloud based IoT operating systems has been significant in the past few years or so. Most major industrial companies have set about building and offering to their clients their platforms, for more open design and engineering, automation and operational work, as well as increased emphasis on maintenance and utilization.

To power this, digitalization has changed everything. The smart factory, plant, and buildings, work alongside smart products and solutions and smart business services are all in the sights of those industrial digital platform providers. The platforms-as-a-service has become essential to many industrial organizations to exploit.

I have been following a number of these in recent years and recently began to have a more specific focus on three; GE & their Predix, Bosch through their BSI and more recently Siemens and their Mindsphere. Others beginning to appear on my radar of industrial platform providers are Dassault Systèmes, Honeywell Connected Plant, Rockwell Automation and Schneider Electrics

Getting to understand Siemens MindSphere.

I had the opportunity a couple of weeks ago to be invited to the Siemens Innovation Day. I really appreciated it  The day before the main event I was included in the Industry Analysts visit to the Siemens Technology Center. We were provided a variety of insights in different presentations and demonstrations of the technology they are working upon. Mindsphere was consistent in its presence but was not as specifically focused on as I would have liked.

I put some of my thoughts down on a post “Creating the Industrial Ecosystem” about my take aways from this Siemens invite recently. I have been attempting to unravel my thinking between that that greatly impressed and the parts that still seemed to have innovation gaps to fill. MindSphere had a particular focus for me.

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We Are in the Middle of a Platform Revolution

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I was  not aware until recently that there are well over 450 providers of Platforms, all offering solutions, presently giving a very fragmenting market. Collaborators be aware!

There some substantial “biggies” that are covering the consumer market (social media ones such as Facebook) and business ones, where the growth in platforms will grow. If you break down the platform market into manufacturing, smart cities, energy, mobility, health, supply chain, retail, public services and many others, the use of IoT platforms are catching up with the consumer side.

One real growth area is the platform startup where funding seems to be strong. Cisco investments are backing a number as well as many others, seeing growing potential.

Amazon through its AWS is a clear standout for providing the platform-as-a-service. Everywhere you look today,everything is moving into a platform.

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Industry is lagging but catching up in its choices of platform offerings

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The platform has become essential for much of our social and direct engagements. The likes of Facebook, Amazon, Airbnb and many others are transforming much of our digital engagement for our social and private needs.

The lag has been connecting industry up, to the transforming value of ecosystems, to collaborate and build new value on co-developed platforms. There are some leading voices on this, determined to be the orchestrators- exploiting first mover advantage- who are heavily investing in the software and analytics to demonstrate value for not just themselves but drawing in lead customers to offer real, added ‘connected’ value.

I am watching three specifically in the digital industrial space of GE, Bosch and more recently Siemens as they build their ecosystems and offer their platforms as solutions into Industry.

These are among the growing voices on different aspects of innovation, connecting machines, data and new human understanding, of adding the new value or focusing on even more on the preventative aspects where industrial assets need to be constantly performing, as essential. For instance in aviation, power, energy, transport, and healthcare. They are at the forefront of reshaping entire industry dynamics.

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Rethinking the Value of Business Ecosystems

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Business is far from usual, it is transforming in front of our eyes. A business has to simply accept this is a changing world and business ecosystems are coming of age, perhaps adding more complexity but also to help bridge this transformation. The traditional silo mentality, the belief that your industry boundaries are immune to change and new challenges, is a grave mistake.

There is, or should be, a recognition that all businesses should find opportunities to coalesce into networked ecosystems. They need to open up to a far greater potential than is presently on offer to each individual entity, unless you have deep pockets (Apple), as well as so many app developers lining up to be part of their ecosystem, or patient shareholders (Amazon) continuing seeing growth but limited profit return, or inflows of revenue (Google), where you can invest in new, potentially huge but speculative, technology-related business concepts.

Ecosystems can offer so much connecting value out there to ‘form’ around.

We are witnessing a very radical change, driven by technology, increasingly disrupting and breaking down past traditional boundaries, partly built to defend positions so as to achieve economic scale. There is a new economic logic to build even greater scale, it involves greater complexity, yet its value proposition is to strive towards offer greater customer experience and satisfaction, where the solutions are valued highly in social and economic value. Ones that get closer to their connected expectations and daily needs for solutions to solve, in far better ways, than that are presently offered. Innovative design has become paramount to these new offerings.

The market dynamics are also changing. Those businesses with a different mindset of global trade and value proposition building will benefit. Risk is taking on different forms to capitalize on these changes. Today we can all be liberated through the exploitation of technology and new radical innovation design. In some ways, it has become a new ‘land grab’ panning for digital gold. We are at the point of building a new frontier that is calling for business change.

As we think through the impacts of the changes we need to reflect on some of its parts. Some of these are outlined here:

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We are failing to deliver radical innovation. Why?

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I see the growing importance of ecosystems and platforms for those that want a thriving future, these are the ones that simply “get this” need to connect into a wider ecosystem to build better value and solutions that customers want. The business imperative of today and near-term future is designing around ecosystems that seek out collaborative platform solutions.

Regretfully for those that don’t, the ones that hang on to the belief that their island of knowledge and their product offering are still good enough to meet the customer needs will face a very uncertain and bumpy future.

This is a delusion, utterly deluding, to continue as you have previously, as customers are today looking at “connected experiences” and these come out of far more complex back-ends of delivery, orchestrated on platforms, where the leverage of partners, technology, and common cause come together in highly collaborative ways. Also working on solutions that are recognizing that the front delivery end provides simplicity, ease of access and completion of the service or experience customers are looking for, far more as providing a more complete comprehensive, connected solution to their needs.

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Returning to the Interconnected Parts of the Ecosystem

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Credit Katri Valkokari

I wrote a post “the Interconnected Parts of the Ecosystem” earlier this year, after a paper written by Katri Valkokari, a Research Manager at VTT Technical Research Centre of Finland caught my eye. I wanted to come back to this really powerful visual, recognizing the three interrelated ecosystems we require to form around. I mentioned in my post, these three parts actually do fuse into one, making up an integrated ecosystem of their distinct parts.

It gave me a level of recognition that we do have this need for this three-stage evolution, especially in a business context. Each establishes a boundary of scope and feeds into each other constantly. It is the fact they combine ideas, skills, learning, fresh insights, leading to promising outcomes and creations. It is how they interact and add new value that gives this ‘combination effect’ such potential for us to consider.

The combining of tangible and intangible assets gives us ‘fresh capital’. I have written about Capital and consciously focused upon this, up to know, more under Innovation Capital, as this draws in knowledge through insights and then pushes these out from Knowledge into Organizations as concepts to be explored and exploited, to grow and improve.

Our innovation capital has mostly been internally built to date, yet there is a time and need to take this out with new forms of collaboration, leveraging all the combined assets into a new “collective capital”. This needs reflecting upon, of how you would ‘break this down’, perhaps within this awareness of all these three ecosystems that we do need to consider.

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