What makes smart, connected products fundamentally different is not the internet, but the changing nature of the “things.” It is the expanded capabilities of smart, connected products and the data they generate that are ushering in a new era of competition. The internet, whether involving people or things, is simply a mechanism for transmitting information. Yet this phrase is not very helpful in understanding the phenomenon or its implications. The phrase “internet of things” has arisen to reflect the growing number of smart, connected products and highlight the new opportunities they can represent. Smart, connected products raise a new set of strategic choices related to how value is created and captured, how the prodigious amount of new (and sensitive) data they generate is utilized and managed, how relationships with traditional business partners such as channels are redefined, and what role companies should play as industry boundaries are expanded. In many companies, smart, connected products will force the fundamental question, “What business am I in?” They are reshaping industry boundaries and creating entirely new industries. These new types of products alter industry structure and the nature of competition, exposing companies to new competitive opportunities and threats. Visit our companion case study and video on how Joy Global’s smart, connected mining equipment transforms mine performance. For many firms, smart, connected products will force the fundamental question: “What business am I in?” This article provides a framework for developing strategy and achieving competitive advantage in a smart, connected world.
#Parts smarts how to
Smart, connected products raise a broad set of new strategic choices for companies about how value is created and captured, how to work with traditional partners and what new partnerships will be required, and how to secure competitive advantage as the new capabilities reshape industry boundaries. The changing nature of products is disrupting value chains, argue Michael Porter and PTC CEO James Heppelmann, and forcing companies to rethink nearly everything they do, from how they conceive, design, and source their products to how they manufacture, operate, and service them to how they build and secure the necessary IT infrastructure. These “smart, connected products” offer exponentially expanding opportunities for new functionality, far greater reliability, and capabilities that cut across and transcend traditional product boundaries.
#Parts smarts software
Products once composed solely of mechanical and electrical parts have become complex systems combining hardware, sensors, electronics, and software that connect through the internet in myriad ways. Information technology is revolutionizing products, from appliances to cars to mining equipment.
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