SOGETI UK BLOG

rick bouter - 18th jan

It is August the 18th of 2014 when a German government official press ‘post’ on an update called: “Zukunftsprojekt Industrie 4.0”, not knowing that this Industry number will complete transform the way we traditionally did business.[1] Where business transformation in prior times mostly affected individual entities of businesses, this transformation affects the whole business eco-system. The announcement, posted on the “Bundesministerium fur Bildung und Forschung[2]” or, in English, the:”Federal ministry of education and Research” quoted the following key message:

“The future project Industry 4.0 aims to enable the German industry in a position to be ready for the future of production. Industrial production will be characterized by strong personalization of products under the conditions of high flexibilised (high-volume) production, the extensive integration of customers and business partners in business and value creation processes and the coupling of production and quality services.”
Industry 4.0, where disruption meets the manufacturing industry

According the Cambridge Online Dictionary is revolution something that is: ‘a very important change in the way that people do things’ or ‘one completecircular movement of something’. That Industry 4.0 is a industrial revolution is an understatement. Industry 4.0 is a big disruption in the economy & the way we (will) do business in the future. Before deep dive directly into Industry 4.0 let us have a closer look to the road towards it…

Industry X.0

What are the Germans counting for? The number behind Industry is the amount of Industrial Revolutions. Let me first take you on the road towards Industry 4.0.

Industry 1.0

The first industrial revolution relates back to the end of the 18th century, back to 1784 where the first mechanical loom saw daylight. The first industrial revolution is known for mechanical production facilities powered by water and steam.

Industry 2.0

The second industrial revolution takes us back to the start of the 20th century. Don not confuse this with the fundamental principles of electricity generation who were discovered in the period between 1820 and 1830 by the British scientistMichael Faraday[3]. The second revolution was all about mass production based on the division of labour, powered by electrical energy.

Industry 3.0

The third Industrial revolution takes us back to the early 70’s where electronics, IT and heavy-duty industrial robots where taken into process for a further automization of production.

Industry 4.0

Industry 4.0 is an initiative of the German government to make the paradigm shift from the traditional way of manufacturing to the future way of manufacturing. Where analog and mechanical where key words in the traditional way of manufacturing, the future way of doing business in this market segment will all be about digital. The fourth Industrial revolution takes us back to today where we see the first steps of the so called Industry 4.0, what is based on Cyber-Physical Production Systems.

Connecting the physical with the digital

Seen the revolutions we can see a pattern, mass production through automation. The fourth revolution is changing the game. To stay in the competitive game, companies have to digitally transform totally. Digital Transformation as key enabler to stay in the game. Connecting the physical and digital dots to create a whole new era for the manufacturing industry, is what needed. The German government and businesses realizes that is no other. Their economy is on the cusp of that fourth industrial revolution:

“The economy is on the cusp of the fourth industrial revolution. Through the Internet driven, grow real and virtual world continues along to an Internet of things. The hallmark of the future form of industrial production are the strong individualization of products under the conditions of high flexibilised (high-volume) production, the extensive integration of customers and business partners in business and value creation processes and the coupling of production and quality services, referred to in such opens hybrid products. The German industry now has the opportunity to actively participate in the fourth industrial revolution. The future project Industry 4.0 we want to support this process.[4]

Plug and play

“… in other words, standardization – is only one of the many attributes of what is known as Industry 4.0. This concept, which was coined as part of the Federal Government’s High Tech Strategy, describes a form of production in which all machines and products are digitally networked together. It was presented to a broader public for the first time in 2011 at the Hannover Messe, Germany’s most important industrial fair.[5]

Think about it, a connected manufacturer is only the beginning. What is next is a whole distribution chain connected and again, this is only the beginning. Whole business eco-systems will be connected. Every action taken by employees, all concrete machine action and duration, every part of transportation, the state of your products, employees and machines, available on every moment in time. In terms of cost calculation, we never knew what cost calculation was, until the arrival of the ‘smactory’. Managers and business leaders can now steer upon real time overall insights. No impediments, uncertainties and so on. Real time, valid, data to steer on. Remember the well known quote: “You cannot manage what you do not measure?”

That the German government takes the Internet of Things serious can be seen on the tremendous amount of money the Germans reserving for Industry 4.0 namely, 200 million euro’s. But, not only the German government is taking the Industry 4.0 seriously. Also industry leaders as Siemens, Bosch and other German companies are working very concrete on Industrial Internet of Things strategies.

Industrial Internet of Things strategies

When we look to two German companies which are heavily involved in the Industry 4.0, we see Siemens and Bosch.

Siemens

Siemens AG, known for their electronic devices/ machines with presence in sectors such as industry, utilities, healthcare, etc is one of the German companies who is actively developing a strategy for the Industry 4.0. Siemens sees and does the following things:

Fundamental change in manufacturing industry leads to increasing digitization and networking to leverage productivity

  • With 7,500 software engineers, the Industry Sector is trendsetter for linking product development and production through the use of IT
  • Integrated Siemens portfolio comprising hardware, software and services underpins technological leadership[6]

A great example of the first steps of a ‘smactory’. Leveraging the network and linking product development and manufacturing/ production through digital. Industry 4.0 is more than just linking machines and production lines. It is also pioneering how all this data can support product development to better determine customer/ business need and produce, what they want, and deliver, when they need it. The role of supplier will significant change with the entrance of Industry 4.0. When your supplier have full sight on your stock and the way and speed of how you produce they can take over the role of stock management. In this way you do not have to worry about your stock of raw materials and companies can focus on their reason of existence.

Creating competitive advantage through simulation software

In their report on: “Self-organizing factories” Siemens wrote:

“To be competitive, companies must reduce the time and cost associated with developing and manu- facturing ever more complex products. Customer requirements are also becoming more demanding and nuanced. Production experts believe the solution is the merger of virtual planning and physical production processes. This is the idea behind the concepts of cyber-physical systems (CPS) and Industry 4.0. Customized software is a must here — but generally not the horizontal IT systems which, like office programs and databases, can be used in many different applications. Even more important is vertical IT — i.e. solutions developed for particular industrial sectors and their special needs.[7]

Bosch

Do you still think Bosch is the companies of the green cordless drill machines, think again. With Bosch Software Innovation, Bosch is one of the Industry 4.0 accelerators of the German landscape.

How all the Internets of ‘X’s’ fit together

When talking about connecting the physical to the digital, there is a lot of rumour around different definitions. Industrial leaders trying to coin to their own definition to grab a piece from the connectivity pie. A thought sharing on the war of definition when we speak about connecting the unconnected would result in:

The overall coined term Internet of Everything (as a baseline) for connecting the unconnected/ physical to the digital. The term everything explains that we talk not only about ‘things’, but about everything. Not only things but also people, processes and data. The original term Internet of Things, coined by Kevin Ashton in his days as a product manager at Procter & Gamble is a part of IoE because her the focus is on things and not on people, processes, etc. When we talk about the Web of Things it is in my point of view focussing on the connectivity of things again. Bosch build on this thought, by talking about the Internet of Things & Services. The industrial Internet is also a part of IoE but focussing mainly on the big industries. Industry 4.0 is a part of the Industrial Internet because Industry 4.0. mainly will be focussing on the manufacturing industry. M2M, Machine 2 Machine is a very important part for the Industrial Internet. Machines which produces data and communicates to other machines or general systems to say something about what they sense where line/ production managers can steer on. Connectivity is key for ‘smactories’, that is what the Internet of ‘X’ is all about. Real time decision making on valid data.

From Factory to Smactory

Where a factory is defined[8] as a building or set of buildings where largeamounts of goods are made using machines, a Smactory is an almost self-steering industrial data leader in the digital era. A factory that has a full focus on ‘Smact’. Smact, known for technology such as Social, Mobile, Analytics, Cloud & (Internet of) Things are the key pillars for innovation in the Industry sector.

LNS research predict that there will be three main focus areas on Industry 4.0 in the early 2015’s.

  1. The Emergence of the Industrial IoT Platform

“In today’s marketplace, no Industrial IoT Platform vendor can claim a one-stop shop in the industrial space, nor is it even agreed upon what would need to be delivered by a one-stop shop.”

  1. Smart Connected Assets
  2. Smart Connected Operations

As a conclusion I would like to quote a part of Siegfried Dais, deputy chairman of the board of management at Robert Bosch GmbH, his findings in an interview he had with McKinsey & Company:

“With all this new information available—about interdependencies, the flow of materials, the cycle time, and so on—manufacturers can lower their inventory costs and reduce the amount of capital required. But don’t forget: this involves huge amounts of data, and the fundamental prerequisite for such a system is that it is stable and reproducible. Common sense won’t help here; this involves rigorous mathematics. And what’s interesting is that the algorithms for this already exist. Mathematics has already solved numerous problems that we won’t encounter in the real world for another 50 years. But analytical talent is becoming increasingly rare in the labor market, so there will be fierce competition for mathematicians and analysts. The opportunities presented by the Internet of Things are clear—but so are the challenges.” [9]

Do you want to know more about the Internet of Things? Join the LinkedIn group about: “Industry 4.0 & the Industrial Internet” now!

Sources

Bundesministerium fur Bildung und Forschung, “Zukunftsprojekt Industrie 4.0 ” 18th of August 2014

Deutschland.de, “Industry 4.0 at Hannover Messe” the 7th of April, 2014

Wikipedia “Elektric Energy

Wahlster, Wolfgang, “Industry 4.0: From the Internet of Things to Smart Factories”, Digile, 31rd of May, 2012

Siemens, “Siemens prepares the way for Industry 4.0”, Siemens Press release, 8th of April, 2013

Nikolaus, Katrin, “Building the Nuts and Bolts of Self-Organizing Factories” Siemens, spring”, 2013

Image credits:

Industry 4.0 – Impetum

Logo Bundesministerium fur Bildung und Forschung – Bundesministerium fur Bildung und Forschung

From Industry 1.0 to Industry 4.0 – The Engineer

[1] http://www.bmbf.de/de/9072.php

[2] http://www.bmbf.de/

[3] http://www.michaelfaraday.net/

[4] http://www.bmbf.de/de/9072.php

[5] https://www.deutschland.de/en/topic/business/globalization-world-trade/industry-40-at-hannover-messe

[6] http://www.siemens.com/press/en/pressrelease/?press=/en/pressrelease/2013/industry/i20130457.htm

[7] http://www.siemens.com/innovation/apps/pof_microsite/_pof-spring-2013/_pdf/en/Self-organizing_factories_EN.pdf

[8] http://dictionary.cambridge.org/dictionary/british/factory

[9]http://www.mckinsey.com/insights/business_technology/the_internet_of_things_and_the_future_of_manufacturing

 

Rick Bouter AUTHOR:
Rick Bouter is a Project Management Officer (PMO) since October 2013. Before this role he, graduated at the Sogeti trendlab VINT. In his final thesis Rick wrote a report on the trend the ‘Internet of Things’ and its impact on healthcare.

Posted in: Automation Testing, Big data, Business Intelligence, communication, Digital strategy, High Tech, Infrastructure, Innovation, Internet of Things, IT strategy, Open Innovation, Quality Assurance, Social Aspects, Software Development, Technical Testing, Test Driven Development, Test Tools, Testing and innovation, Transformation      
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Digital TransformationIt does not matter how big or small you are. Concepts of innovation are overwhelming your feeds on different social platforms. Over-hyped technology buzz-words and start-up (or whatever) approaches are knocking on our doors… but do they make sense?

An important thing to remember is to start with your company goals and apply technology to achieve these goals. Not the other way around. A lot of companies are adopting different types of technologies, but have no clue about what they should do with it.

Let us start from the beginning. We are living in a Digital world. Technology is everywhere around us. With Digital going mainstream, we will talk about Digital Transformation.

In a nutshell:

“Digital Transformation is the collective noun of the movement, which intertwine the physical and digital world to better determine client, customer and target audience needs to deliver excellent products & services with an excellent digital experience by the use of new technology.”

If you ask me, Digital Transformation is the process that companies follow when applying new technology to reach company goals. It’s about having a strategic mindset of what you want to achieve and then applying the fitting technology to get a step (or a few) closer.

Digital Transformation is a new way of developing / working / delivering for you and your company; but it improves those items on various aspects. Think about the possibilities for items like: Visibility, efficiency, effectiveness, value creation, speed, scalability, customer experience, product development, innovation and so on.

An important thing to remember is: Step out of all the rumors and think about your vision. What do you want to achieve? Then apply the right technology, which supports that vision.

Another important thing to note is: Be where your target audience is. Let your company be inspired by the way your customers use Digital solutions and facilitate them in using it. Make their lives easier by adding value to the reason of your existence, your products and services.

Of course, Digital Transformation is going to change the way you develop / work and deliver. Of course, your business model will change. But it will change your business model in a way to get closer to the people you serve. Is it a bad thing? No way. It has always been like this and will always be. The only thing that changes is the trend or technology we are talking about. In a few years, you will only remember the following:

“Digital Transformation: The paradigm shift towards business as usual”

To read the original post and add comments, please visit the SogetiLabs blog: Digital Transformation: Making sense of the mess we made with it

Related Posts:

  1. Quality-driven Digital Transformation
  2. How is an Architect’s role changing in the Digital Transformation era?
  3. There is No Room for Traditional Testing & QA in your Digital Transformation Journey
  4. Key themes for QA & Testing organizations to focus on during Digital Transformation


Rick Bouter AUTHOR:
Rick Bouter is a Project Management Officer (PMO) since October 2013. Before this role he, graduated at the Sogeti trendlab VINT. In his final thesis Rick wrote a report on the trend the ‘Internet of Things’ and its impact on healthcare.

Posted in: Business Intelligence, Digital, Digital strategy, Innovation, Technology Outlook, Transformation      
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brain

Could my loss of focus be a result of all the time I have spent online? In search of an answer to that question, I began to dig into the many psychological, behavioural, and neurological studies that examine how the tools we use to think with (our information technologies) shape our habits of mind.
– Nicolas Carr, ‘How the Internet is making us stupid’.

Clash of people as ‘things’

It’s well known that different generations think and approach the world differently, but is it really only a culture clash between young and old, or is there more going on?
The article “The internet of things is setting up the ultimate culture clash”, written by Stacey Higginbotham, points us to debate about how the internet is not only making us ‘stupid’, but also putting people in the position of products:

As the internet of things becomes more mainstream in the consumer home, this culture clash may play out where most people aren’t aware of it, but I think it’s a debate we should be having. Many people regret that the internet has become a place where you are the product, but it’s a scenario that is set to happen again as we put more and more of our old-line goods online. We should talk about that.”

Shaping our habits of mind

Not only are we giving our privacy away to the big industrial leaders and start-ups, but we are also selling out the part of being human to the highest bidder. You are no longer a consumer, no, you are a product. You are selling the only things that separate us from technology – our emotion and our creativity – and replacing them with algorithms. If this is the case, then what is the value of life? (Isn’t that soemthing we’d all like to know?)

Blind to the damage to lives and culture

And what is the danger of this shift in culture and sharp increase in the use of technology within every part of our daily lives?

Nicholas Carr ends his article with the following thoughts:

There’s nothing wrong with absorbing information quickly and in bits and pieces. We’ve always skimmed newspapers more than we’ve read them, and we routinely run our eyes over books and magazines to get the gist of a piece of writing and decide whether it warrants more thorough reading.
The ability to scan and browse is as important as the ability to read deeply and think attentively. What’s disturbing is that skimming is becoming our dominant mode of thought. Once a means to an end, a way to identify information for further study, it’s becoming an end in itself — our preferred method of both learning and analysis. Dazzled by the net’s treasures, we have been blind to the damage we may be doing to our intellectual lives and even our culture.

Brains for sale

Next time you embrace internet related products, remember that you are not only the product on the internet, but that you are also partly selling your brain out. If the scenario of your grandparents being the last smart generation doesn’t freak you out, what does?

 

To read the original post and add comments, please visit the SogetiLabs blog:
Internet of Things: Culture clash or end of cultures?

 

Rick Bouter AUTHOR:
Rick Bouter is a Project Management Officer (PMO) since October 2013. Before this role he, graduated at the Sogeti trendlab VINT. In his final thesis Rick wrote a report on the trend the ‘Internet of Things’ and its impact on healthcare.

Posted in: Internet of Things, Opinion      
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IoTinthefutureTwo years ago, Forrester Consulting commissioned a study for Zebra Technologies on the topic: “2012 Enterprise Internet of Things Adoption Outlook.” One of the key takeaways of this study was that over 50% of the organizations had plans to deploy Internet of Things related solutions in the coming two years.

Source: Building Value from Visibility – 2012 Enterprise Internet of Things Adoption Outlook

Industry drivers

Now, two years later, we can see some results: Big companies and industries as drivers of this digital revolution ; smart cities are being created and companies are connecting internal and external sources to each other, to visualize business processes to create insights they can steer on. On the other hand, we see an explosion on the amount of offerings in the wearable technology market. $14 billion in 2014 to over $70 billion in 2024, and everyone trying to get a piece of the PIE. (Pervasive Interaction Engine)

Digital Transformation

For that reason CXO’s are trying to establish new business models. Flexible business models that are able to impact big and unwieldy companies. Flexible business models that can easily transform and adapt in times of technology disruption. A so called real, ‘digital transformation’ needs to happen for a lot of companies which is why business models have turned from an industrial perspective into a digital perspective. In fact Capgemini has already developed a framework for this digital framework with MIT center for digital business.

IoTCC

Source: “Capgemini Consulting – Digital Transformation

The real meaning of Digital Transformation

One of the meanings of digital transformation is to get/be ready for technology adoption. But the real meaning if you ask me is that not only the organization itself benefits from this interconnected world, but its customers and end users. The real reason for digital transformation should be the ambition to serve your customers and end users in a better way. To not only give them what they want, but serve them what they need.

Sensing as a Service

With the Internet of Things entering the stage, companies are able to create more insights into their customers: insights that really reveal the needs of their customers. Sensing as a Service ‘the’ business model in this ‘everything’ connected World? Dr. Mazlan Abbas titled his presentation right if you ask me. “Sensing as a Service, is the new Internet of Things business model.”

“Things are not specifically key, it is the ability to sense customer needs!”

Let me put this straight. Your company’s Internet of Things strategy will not be a success on its own, like a lot of people thought the case with social media was. No, it is the organization that is in a position to use all kinds of technologies to define, on the next level, their target audience group and their needs. For that reason they need to define a strategy on, let me call it, sensing, that truly makes sense. Adopting technology that connects objects to each other offers up a lot food for thought. Have you ever questioned yourself how many touch points/ channels your target audience will be facing when the Internet of Things really explodes?

Every object a DCX

Every connected object will be a touch point to improve your digital customer experience. Next time when you think of digital transformation, the Internet of Things and digital customer experience, think also about how you are going to grab a piece of that PIE.

Rick Bouter AUTHOR:
Rick Bouter is a Project Management Officer (PMO) since October 2013. Before this role he, graduated at the Sogeti trendlab VINT. In his final thesis Rick wrote a report on the trend the ‘Internet of Things’ and its impact on healthcare.

Posted in: Digital, Digital strategy, Internet of Things, IT strategy, Omnichannel, SogetiLabs, Technology Outlook, Transformation, User Experience, Wearable technology      
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Marketing3Where in prior times marketing  was another way to say your business was doing advertisement, marketing has a way different meaning these days. Where marketing was very impersonal we can see a strong shift to the personalisation of marketing. Companies and brands are getting really engaged with people and try to find a spot in all kinds of rapid developing niche markets. Why?  Simple, because the personalisation of marketing works. Customers are busy people these days. This is one of the reasons why they love to have a tailor made solution on all kinds of  problems, no, their problems, their needs.

Marketing1Image credits 

Before we deep dive into the ‘need’ for you as a company to personalize the way you do marketing, let’s focus on what marketing actually is? According to the American Marketing Association (AMA) is marketing:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

Marketing in  1950 was a set of tasks to bring very impersonal products on a very impersonal way to people you could often call customers or end users. That changed totally. Through a way of marketing concepts, targeting, global marketing, e-business, brand equity and many, many other definitions, marketing quickly evolved from benchwarmer into captain of the B2C market.

Marketing2Image credit: ForbesIndia 

And when we look at Philip Kotler’s ‘evolution of marketing’ we can tell that the next era offers one option and one option only. A data driven way of doing business with your customers, a data driven future is the only option companies have. Companies need to look and step into technologies called Social, Mobile, Analytics, Mobile and Things aka SMACT, a completely different way of doing business. Using new technology to determine all kinds of customer needs. The Internet of Things, sensing in homes, cars, offices to gain data every day on peoples inner state of people or external environment can give you a huge competitive advantage to compete with your current competitors. Both marketing and new technology are getting personal.

The shift of the four Ps

Where back in the days marketing was recognized by PPPP –  Product, Price, Promotion and Place – I want to introduce the same four ‘Ps’ I found in an article called “The New Marketing Mix: 4 Different Ps” written by Bernadette Jiwa . The same “Ps”, yet with a different meaning:

1. Purpose: “Not what you do, but why you do it. What’s the reason your company exists? Bringing a product to market isn’t enough.

2. People: Who you serve not what you sell. Crafting your intention around the difference your product or service will make in the lives and stories of your customers.

3. Personal: Becoming more relevant and significant to those people. How you make them feel about themselves in the presence of your brand is what matters, more than how they feel about your product.

4. Perception: Being believed and believed in, not just noticed. What your customers believe about you far outweighs anything you tell them to think. Don’t just seek to find holes in the market or to gain mind share, set out to fill a void in people’s lives.”

And when we look for an example to the 3rd P, Personal, we see that becoming more relevant and significant to people is essential in this process. Bring to people what they need. Not what you think they need.

Determining your customers needs

That bring us to the next topic. From my point of view determining the needs of your customers is the basis of doing business. Business does not start at production. Business does not start at the design table. No. Business starts at the point where you are willing and ready to determine your end-user’s need. What value do you add to their life that they want to pay for?

Receiving  the rights answers starts by listening. Listening starts by asking the right questions.

“Listening is not only about waiting, but it’s also learning how better to ask questions.”

Jacqueline Novogratz

Remember, remember…

Remember, or realize that we are living in a time where we can use data to answer one of the most difficult business questions in life: “What does my customer really need?” Of course, I realize that this is not as easy as turning on your TV, it is a mindset shift. And for that reason I want to encourage you to look how new technology can provide you the answer on these difficult questions. The future of marketing will be about putting the customer more and more in the middle of the process.

The evolution of marketing

Where we called ‘shooting at groups of people’ marketing in previous decades, companies need to make a strategic shift. A shift to another type of segmentation. That type of segmentation is using marketing as it should be used, customer centric not technology centric. When companies furnish their process like that they will come to the core of marketing: ‘ A true understanding of what drives each individual human being and presenting the value that is most desired’. From group segmentation to psychology of the individual, and to do this, we use data.

Creating competitive advantage starts with questions

Creating a competitive advantage with new technology in the data driven era is not a question asked and answered in one day. Digital competitive advantage is strategy, nothing more, nothing less. For that reason, your company should integrate questions regarding this topic in your current and future strategy. According to an article McKinsey wrote on: “Strategic principles for competing in the digital age” companies need to make six decisions. These decisions are necessary  to gain your spot in the digital market.

1. Buy or sell businesses in your portfolio?
2. Lead your customers or follow them?
3. Cooperate or compete with new attackers?
4. Diversify or double down on digital initiatives?
5. Keep digital businesses separate or integrate them with current nondigital ones?6. Delegate or own the digital agenda?

In a time where the rules of marketing and customer experience are rewritten, in a disruptive time of enhancing digital technology what would you answer? No answer is also an answer…

 

Rick Bouter AUTHOR:
Rick Bouter is a Project Management Officer (PMO) since October 2013. Before this role he, graduated at the Sogeti trendlab VINT. In his final thesis Rick wrote a report on the trend the ‘Internet of Things’ and its impact on healthcare.

Posted in: Big data, Cloud, Digital, Digital strategy, Internet of Things, Marketing, mobile applications, Mobility, SMAC, SogetiLabs, Technology Outlook, User Experience, wearable technoloy      
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