The Race for the Industrial Internet: Developing digital services is the new challenge

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1 The Race for the Industrial Internet: Developing digital services is the new challenge Prof. Dr. Walter Brenner St. Leon-Rot, October 23 rd 2015

2 In this speech I will use the race of Le Mans 24 Hours as structure.

3 For 30 years I have been working in the IT industry as a researcher,consultant and entrepreneur..

4 Let s start with the formation lap: Whom would you ask to predict the future: a profesor, a consultant, a magican, a soothsayer or whom? Let s start with the formation lap: Working in IT and on Digitalization is working on the future. Whom would you ask to predict the future: a professor, a consultant, a vendor, a magician, a soothsayer, whom?

5 Interpol und Deutsche Bank, FBI und Scotland Yard Interpol und Deutsche Bank, FBI und Scotland Yard Flensburg und das BKA, Haben unsere Daten da Flensburg und das BKA, Haben unsere Daten da Nummern, Zahlen, Handel, Leute Nummern, Who Zahlen, Handel, wrote Leute and Computerwelt Computerwelt Denn Zeit performed ist Geld this Denn Zeit ist Geld Interpol und Deutsche Bank, FBI und Scotland Yard song? Interpol und Deutsche Bank, FBI und Scotland Yard Finanzamt und das BKA, Haben unsere Daten da Finanzamt und das When? BKA, Haben unsere Daten da Automat und Telespiel Leiten heute die Zukunft ein Computer für den Kleinbetrieb Computer für das eigene Heim Reisen, Zeit, Medizin, Unterhaltung Reisen, Zeit, Medizin, Unterhaltung

6 Of course it s Kraftwerk. Can they predict the future? Should SAP invite them?

7

8 In round one you will learn what the industrial internet is?

9 The industrial internet refers to the integration of complex physical machinery with networked sensors and software. The industrial internet draws together fields such as machine learning big data, internet of things, machine-tomachine communication and data analytics (often in real-time). Source: Wikipedia

10 Digital Layer 5 Digital Service Service to regulate and C and RH for cost effective heating Layer 4 Analytics Sensor data is combined with e.g. weather or other data to recognize patterns / get insights Layer 3 Connectivity Temperature and humidity data is sent into cloud service Physical Layer 2 Layer 1 Sensor / Actor Physical Thing Measures temperature and humidity and turns off/on Thermostat regulates heating (on/off) Adapted and extended from Fleisch, Weinberger & Wortmann, 2014

11 In round two you will learn what smart products, the outcome of industrial internet, are.

12 Smart Products are physical products which are enriched or combined with digital services.

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14

15

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17 Which were the leading TV manufacturers in the 70ies and 80ies? Which are the leading manufacturers today? What a change!

18 Reputation Sales Smart Products are physical products which are enriched or combined with digital servcices.

19

20 In round two you will learn why there is a race for the industrial internet.

21 The race for the video recorder standard is one of the classical MBA cases.

22

23 And some of you may still remember the competition between SAP and ADV/Orga in the german market.

24 In round three you will learn who are the teams in the race for the industrial internet.

25 The race for the industry internet is like Le Mans. Cars in different categories compete at the same time on the same racetrack.

26 Traditional manufacturing companies: User Hybrid hi-tech companies: User and/or creator Software companies: User and/or creator Internet Giants: User and/or creator Specialized data analytics companies: User Start-ups User and/or creator

27

28

29 A stupid question: What has Groupon to do with the industrial internet? Who knows the answer??

30 an important new player

31 And of course don t forget the internet giants. Google is developing a operating system of the internet of things. What will amazon do? And of course don t forget the internet giants. Google is developing an operating system of the internet of things. What will amazon do?

32 In round 4 you will learn some of the rules in the race for the industrial internet.

33 Don t accept and don t be afraid of existing (big) players Store all data that you can get forever ( data lake ) Customer in the centre. Set-up of adequate infrastructures and employee skills Nothing is (seems to be) impossible The probability If you don t do it someone is high else that these rules will be will do it ( cannibalize yourself ) the rules for the industrial internet, too. Be naive and don t ask questions like: Is this possible? What will government say? What will the press say? Be agressive Question everything that exists Speed is everything (Controlled) openness (like Prof. Apple, Dr. Walter Google/Android) Brenner Just do it, show activity on market

34 And believe me: It s hard for a traditional company to learn and to use the new rules. But that s digital transformation.

35 In round 6 you will learn something about consequences for general management and IT management.

36 The strategic question is how do i keep or build up new competiivie advantage All companies have the at least the theoretical the optieon: Vendor/Creater or Unser of thei îndstruislv Bild von SWOT Analyse Companies have two strategic options: - Creating the industrial internet - Using the industrial internet

37 Develop a digital and innovative corporate culture (Openness as key sucess factor) Develop a digital business strategy (just one strategy) Foster Innovation, Introduce new tools and methods (Open the horizon) Increase diverstiy (Culture, Gender, Age.) Make lighthouse projects (start small and grow, try and error) Build digital capabilites (give the organization a chance to learn) Build aliances (with organizations and people who you never thought of) Think in Platforms/Ecosystems

38 Bild mit Karten und die offene Plattform und ein Zitat von Rupert Stadler aus der Pressekonferenz bei der IAA The «cooperation» of Audi, BMW and Mercedes is a good example for management in a digitized world.

39 Developing digital services is key in the race for industrial internet

40 Wir arbeiten seit Jahren für viele grosse Unternehmen und Institutionen an Projekten im Rahmen der Digitalisierung: Audi Unite

41

42 We used Design Thinking to develop this digital service.

43

44

45 To design digital services considering customers needs needs new and a lot of space!

46 Who will win and who will make it up to the podium in the race for the industrial internet? What is your guess? What is your bet?

47 Only those who work hard, train often and are lucky have a chance to win the race.

48 The races finishes with a victory lap: Who wants to hear one more song from Kraftwerk?

49 Kraftwerk wrote Die Roboter in 1978.

50 Contact details Prof. Dr. Walter Brenner Director Institute of Information Management University of St.Gallen Unterer Graben 21 CH 9000 St.Gallen Switzerland Tel Mobile Mail Web

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