Smart Connected Products

As a result of dynamic markets, industrial companies often reach their limits to remain competitive. Smart connected solutions (SCS) comprise data-based and service-oriented offerings to stay successful. This paper provides practice-oriented insights into SCS maturity, challenges in building SCS business models and recommendations for action for industrial companies.

The expanded capabilities of smart connected products will not only deeply affect market strategies and industrial structures. A study by Prof. Michael E. Porter (Harvard Business School) and Jim Heppelmann, President and CEO, PTC, reveals that most all core manufacturing functions e.g. product development, production process, sales or service, will be redefined. In addition, completely new functions and jobs will emerge. These changes will not be easy and come with many uncertainties. But companies that successfully make the transformation will reap strong rewards down the road.

The vision is of the “Smart Connected World”, in which every “thing” in the Internet of Things has a name, can go online and can be communicated with individually via Internet. The vision can be quickly formulated, but the journey there is a rather painstaking evolution as opposed to a disruptive one. That is the result of an international study by market research experts of Oxford Economics who along with PTC researched the status of the development and the market presence of smart connected products (SCP) in the manufacturing industry. Integration and data security were named as significant challenges to be overcome on the journey into an IoT world.