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SICS – Introducing Internet of Things in Product Business
Christer Norström, CEO SICS
In collaboration with Lars Cederblad at Level21 AB
www.sics.se
A NOT CONNECTED PRODUCT TO ACONNECTED PRODUCT
• IOT – introduction
• Examples
• What do you have to consider when introducing IOTin your business?
• A “method” for defining a new business model andsetting up corresponding sale channels and dealerstructure
www.sics.se
WHAT IS HAPPENING?
• “Uber, the world’s largest taxi company, owns no vehicles.
• Facebook, the world’s most popular media owner, creates no content.
• Alibaba, the most valuable retailer, has no inventory.
• And Airbnb, the world’s largest accommodation provider, owns no realestate.
Something interesting is happening.”
Tom Goodwin
www.sics.se
CONNECTING EVERYTHING• Internet of Things – allt är
uppkopplat
• Ett internet som inte bara ärberoende av människor förinsamling av information
• Kunskap om things, inte baraidéer
www.sics.se
www.sics.se
VOLVO - SENSUS• The connected car
• On board services• Maintenance• Alerts• …
www.sics.se
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EXAMPLES: VERISURE• Starting point a Classic home alarm system
• Transfer into Smart home business
• Action takenOpen up for other brands productsbased on beeing a trustworthy brand.Examples of products integrated fromother brands:
Locks from AssaHumidity, temperature, etc from AnticimexHeat pumps from Panasonic
• Comment: Uses its brand value to integratecomplementary products/services. Does not integratecompetitor products.
www.sics.se
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LEAN HAULAGE• Sells a tool for efficient
driving of trucks toTransport providers
• Technical solution – simple device that reads the truck statusfrom the same port as bilbesiktning uses . The devicecommunicate with a smartphone which communicate with thecloud, and and provides the interface to the driver.
• LeanHaulage® core values puts driver, environment, safety andprofitability in focus.
• Comment: This simple technical solution shortcuts the truckbrands. It also builds a strong relation to the market!
www.sics.se
GOOGLE CARSACTIVITY SUMMARY (ALL METRICS ARE AS OF JULY 31, 2015)
• Vehicles• 23 Lexus RX450h SUVs – currently self-driving on
public streets in Mountain View, CA, and Austin, TX• 25 prototypes – 5 are currently self-driving on public
streets, mainly Mountain View, CA
• Miles driven since start of project in 2009• Autonomous mode: 1,101,171 miles• Manual mode: 842,101 miles• We’re currently averaging ~10,000 autonomous miles
per week on public streets
Make you a better Skier
Tests– what and how do you do a particularmovement
Advice and recommended exercises how youreach your goal
Specific knowledge about skiing
What about the business model?
AnalyseramySKILAB beräknar KPIer (nyckeltal)som beskriver längdskidåkningensrörelser. KPIer stakning:- Träff (Hit) 1-10- Tryck (Force) 1-10- Balans (Consistency) 1-10- Frekvens Tag/minKPI(Nyckeltal) Index har utvecklatsmed data från Svenska landslaget,Lager157 samt vasalopps-mo onärer. För klassisk skidåkning.
Öva med feedback ireal d.mySKILAB innehåller en mängdövningar och tester som designatsför a stödja din utveckling.
E exempel är real dsfeedback påträffen i stakningen.
TräningsloggSe din teknikutveckling på dinaträningssessioner. U orskanyckeltalen med highlightsfunk onalitet. Förstå hurstakningen utvecklas under e passeller om pulsen går i taket idiagonalåkningen.
mySKILAB är en tjänst för längdskidåkare somhjälper åkaren med teknikanalys och mo verandeteknikträning. Med mySKILAB träningsbibliotek fårdu real dsfeedback direkt i staktaget. Det enda dubehöver är e WEMEMOVE´s smarta pulsbälte ochmySKILAB appen. mySKILAB ger dig ävenjämförelser med proffsåkare samt träningsloggning.
På bilden: WEMEMOVE Smart pulsband + mySKILAB App (Kan kopplas ll en Smart Watch)
www.sics.se
CONTEXT
”Smartphone”
”Smartphone”
”Smartphone”
In the field
Big Data
Dataanalysis
Services
Processing
Storage
Services
Sharing
In the lab
www.sics.se
www.sics.se
INTRODUCING IOT• Three major steps
1. Efficiency in an existing business – introduce aninfrastructure and understanding of the opportunities
2. Increase the value in an existing business
3. New business model – enabling new revenuechannel• combining product and new services in the most
efficient way• Sales channels and segmenting• Dealer structure
www.sics.se
EXAMPLE
PROFESSIONAL POWER TOOLS (PPT AB)
PPT AB is today mainly a product business.To grow the business and differentiate from competitors PPT ABaims at transforming into a combination of product and servicebusiness. The business is b2b.
www.sics.se
QUESTIONS TO BE ANSWEREDThis transformation relies on a number of answers to critical issues such as:
• Overall business model for products and services, short and long term• Value Proposition (product, service)• Customer Relationship• Customer Segments (from PPT AB only to customers with only
competitor products)• Sales Channels (existing dealers, new dealers, portal etc.)• Revenue Streams (high level pricing/payment models and a
general kick-back models)• Openess to other brands in the service offer• Sustainability of the business model• Implementation road-map including communication to internal
stakeholders
www.sics.se
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WORKING METHODIdentification
andqualification of
scenarios
Ranking ofscenarios
Implementationplan and
communication
1. Find scenarios2. For each scenario:
• Value prop.,Channels,Customersegm…
• Identify externalbenchmark
1. Evaluate scenariosagainst each other
2. Use four dimensions:• Competitors• Customers• Substitutes• New entrants
3. Eliminate the leastgood scenarios
1. For the remaining scenariosestimate revenues and costs
2. Perform sensitivity and riskevaluation
3. Describe possible transitionsbetween scenarios
4. Develop communicationmaterial
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Scenario space: what dimensions are defining the scenarios?Business Model Assessment
PPT AB installedbase
Mixed installed baseCustomer have bothPPT AB products andcompetitor products
No installed base
Customers segments:
Sales channels:
Existingdealers
Existing + newdealers
Existingdealers + portal
Existing + newdealers + portal
Value propositions:
Product only Product + PPTAB services
Product + Openservices
Services only
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A combination of the front end of Business model canvas with more details andproduct/market matrix
The generic scenario description
Value Proposition CustomerRelationship
CustomerSegments
Channels
Revenue Streams
Bundledsales
Servicesales
Productsales
PPT AB installedbase
Mixed installedbase
No installed base
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The scenario space is 3x4x4 = 48 minus some scenarios describing todaysbusiness only
Scenarios to be analyzed
Productonly
Product+ PPTABservice
Product+ Openservice
Serviceonly
Existingdealers
Existing + newdealers
Existingdealers + portal
Existing + newdealers + portal
No similar productsat all
Productonly
Product+ PPTABservice
Product+ Openservice
Serviceonly
Existingdealers
Existing + newdealers
Existingdealers + portal
Existing + newdealers + portal
Productonly
Product+ PPTABservice
Product+ Openservice
Serviceonly
Existingdealers
Existing + newdealers
Existingdealers + portal
Existing + newdealers + portal
PPT AB pluscompetitor products
Only PPT ABproducts
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Focusing on the four front-end forcesPorter 5 forces
Rivalry AmongExisting
Competitors
Bargaining Powerof Customers
Threat ofSubstitutes
Bargaining Powerof Suppliers
Threat of NewEntry
www.sics.se
SUMMARY
Introducing IOT rises questions regarding thebusiness model – it is not only a matter oftechnology