In brief

In brief

  • Reinventing the product promises massive new value, but the journey cannot be accomplished without some fundamental capabilities.
  • Being flexible, agile and fluent in data analysis and ecosystem building is pivotal in making the journey towards smart products a success.
  • Key points on a roadmap to the New must be identified.


The journey to product reinvention

The successful reinvention of a product as a smart connected device is a journey in the New requiring open strategic and entrepreneurial spirit. It also needs a new mindset for operational aspects, from developing a smart product to managing it in the field.

This voyage requires some critical capabilities. Product-making companies are advised to adopt them as they embark on, or accelerate, their digitization journey.

Flexibility and agility must be combined

The term “flexagility” is critical as a core capability to master the journey. It combines flexibility, the willingness to change, with agility, the ability to reorganize internal processes quickly.

The traditional industrial sequence of “ideation, design, prototyping and manufacturing” needs to be broken up and dynamically looped to become instantly reactive to new needs and market feedback. Only this makes a product company truly customer-centric in the digital age.

"Hardware manufacturers can no longer afford to bank on inflexible processes that bring, for example, a new car model to market over a timeframe of several years. Instead, constant iterative overhaul of ideas, products and attached services is needed."

– ERIC SCHAEFFER, Senior Managing Director

Engineering must be perpetual

In the new product world users demand continuous innovation and adaptability from their devices. Agile engineering practices based on digital tools are therefore crucial. They allow perpetual improvement to be injected into devices.

Agile engineering approaches are in essence a form of micro trial and error, bouts of rapid prototyping sprints steered by continuous market feedback. This achieves the highest possible accuracy for the delivery of excellent user experience.

"Agile engineering means that teams swiftly gather feedback to test, and upgrade the architecture for products, software components and, crucially, the user experience."

– DAVID SOVIE, Senior Managing Director

Data fluency must be pervasive in product businesses

Smart connected products are data-driven and data-producing devices. Data is vital for understanding the market and the product’s usage so the user experience can be perpetually improved.

Hardware manufacturers must data-augment all their internal and external business processes via a unified data model. Transparent end-to-end data tools such as digital twins and digital threads are handy in this context. They act as data representations of products in action, showing usage and delivering insights for improvement.

And of course, data safety should be a major concern for any smart product company.

Platforms and ecosystems must support smart products

Some smart connected products will work as platforms. But in order to create and run a successful platform, product companies must command the art of building and orchestrate ecosystems that support such platforms. This entails identifying ecosystem partners that can contribute technologies, data or service elements to boost the value and experience of the smart connected product.

Service mindsets and new skills will be required

For the journey to the New, a couple more key capabilities: sales teams should be trained to spot trends throughout the product lifecycle on which new product services can be launched; and the workforce creating smart connected products needs drastically new skills, profiles and mindsets.

Managing the wise pivot and creating your own mode

The capabilities mentioned so far are crucial but a few additional markers on a roadmap to success are necessary to secure maximum benefit from tapping the new value sources of smart connected products.

Finding the wise pivot is a vital marker on your roadmap to success. This is to say, product-making companies with a product legacy must decide how and how long core business is protected while new product lines are scaled. Here, digital transformation of core businesses can drive efficiency gains that allow a surplus to be transferred into the push for the new product world.

Another marker is to create a well-suited digital innovation factory to accelerate the change – a product and experience innovation center housing all the inter-disciplinary skills required. A further related marker: every product-making company must create its own model, based on its existing position within the product evolution space and its ambition for the future – charted, as we suggest, by our new Product Reinvention Grid tool .

No one-size-fits all solution

Ultimately, there is no standard organizational model for smart connected product-making companies. However, the capabilities and markers on a roadmap to the reinvented product should allow you to adapt your specific business in the way that best suits it to succeed in the landscape of the New.

Now.

Eric Schaeffer

Senior Managing Director


David Sovie

Senior Managing Director

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