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Servitization and Intelligent Platforms: Insights from an Engaging Discussion in Munich

Ness put on an elegant evening for our clients and other progressive organizations at the beautiful (and sun dappled) Mace restaurant (http://mace-restaurant.de/) in Munich on Wednesday 18 October. I was lucky enough to moderate an incredibly insightful panel discussion on the opportunities and challenges arising out of the rapid, ubiquitous advance of the intelligent platforms and cyber-physical systems which underpin the so called ‘Fourth Industrial Revolution’.

The Ness Point of View which triggered the discussion was that the winners will be those companies who move fast to experiment, innovate and mobilize a global talent pool and challenge accepted norms in terms of business models, training for staff and customers and deployment of technology solutions. The shift towards Industry 4.0 is happening in a world of increasing complexity where the uses and dimensions of available data are mind-bending.

Two expressions we have adopted and shared with enthusiasm are the concept of “learning to live with VUCA” (Volatility, Uncertainty, Complexity and Ambiguity), which is a US military concept of yore, and the word Servitization, championed by Andy Neely, which speaks to the increasing number of layers of service provided by those previously known as “product” companies. Nowadays customers are happy to outsource what they see as time consuming “work” back to the maker in the form of a service – and pay for it. Instrumenting equipment to deliver that service and solve ever more complex customer problems speaks clearly to the trends we are seeing in the market.

With their gracious agreement, I wanted to summarize some of the views that came across from our panel. These are the views that have got me thinking:

Stinson McElhinney is the Global Technology Manager for Connected Product and Solar Digital for Solar Turbines – part of Caterpillar Inc. He talked about the cultural shift required in a manufacturing company whose DNA is not software. To be able to grow their company, which manufactures power turbines, by adding digital services to their core product is actually more of a mindset challenge than a talent one. They have come to realise that a lot of the software they have built themselves to digitally turbocharge customer success with Solar equipment may well have much greater value when used with (or even by) companies in the emerging end-to-end energy and asset optimisation ecosystem. Using some of their bespoke applications to analyse and then optimise energy consumption has become a new business line for Solar Turbines, and they now offer personalised, detailed recommendations (including when to power the turbines up, or down) to plants and factories around the world.

Manfred Schulze is Head of Corporate Innovation Management for Diehl Metering who are experts in water and energy metering. Manfred offered insight into the challenges emerging in relation to ownership of the data being aggregated from smart homes and office blocks.  – and whether these discussions were keeping pace with the demand from consumers for new services and the ability of technology to deliver them. It was fascinating to hear him talk about the fusing of meter data with social event data, which could allow Diehl to make recommendations on resource allocation ahead of demand spikes for water or electricity (during a big festival or sports tournament for example) which should benefit consumers, utilities and the environment.

Frederik Brantner is founder and CEO of Magazino which now has the largest team in Europe for perception-driven robotics which improve the flow of information and material goods in distribution centers. His passion for his subject and knowledge of the complexity of automated picking of items in a warehouse or factory was infectious (warehouses have never been associated with such a sense of wonder before!)  In fact, increasing complexity was his main challenge as co-ordinating the advancement of hardware, capability and perception in this fast-evolving field seems to be a never-ending cycle. Frederik was also a proud advocate of digital openness in his approach to both recruitment and training talent and to the open-source software (http://www.ros.org/) community on which his company is founded.

Dr Oliver Gaussman is Senior Director at S&P Global and Managing Director of Minerals Value Service, a Munich-based data analytics company acquired by S&P in 2015. S&P markets its ambitions in providing Essential Intelligence and is a real heavyweight in the field, managing the complexity of “billions of data points” every day. He talked about the need for a radical shift in traditional thinking to embrace the latent opportunity of integrating adjacent datasets with those that S&P has historically worked with. Remote sensing data and satellite image capabilities are now being used by S&P to improve geo-spatial intelligence, speed of data ingestion and feeding a push to increase the immediacy of insight that S&P can deliver.

His comments on a new appetite for an end-to-end approach to the curation and monetization of raw material data for better decision making resonated with our belief that user demand for extremely personalized, relevant insights in near real-time is the dominant driver of change in the industry at the moment – and where commercial gain awaits those who do it best.

With such a stellar line-up of talent, it was inevitable that everyone involved learned something new through the discussions that followed over dinner. I look forward to continuing the dialogue and developing this network of data strategists as we plan our next sessions on this theme.

Herzlichen Dank, Munchen. Ich werde bald wiederkommen.