Facing Innovation Challenges – How digital technologies ... · 3 Capgemini Consulting, MIT “The...

Facing Innovation Challenges – How digital technologies can improve your innovation and lifecycle performanceFebruary 2014

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1. Key Challenges of InnovatIon and lIfeCyCle ManageMent 04

2. turnIng IlM Challenges Into dIgItal opportunItIes 06

3. how to realIze the potentIal of dIgItIzatIon In IlM 08

3.1. Innovative Methods and tools 08

3.2. digitizing Innovation and lifecycle Management 09

3.2.1. digitally leveraging and enhancing Customer experience 09

3.2.2. digitizing operational processes 11

3.2.3. new digital Business Model 13

4. ManagIng the Change towards dIgItal MaturIty In IlM 16

5. how to start the journey of BeCoMIng a dIgItal leader In IlM 17

Contents

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Figure 1: ILM Key Business Drivers

1. Key Challenges of Innovation and Lifecycle Management

Innovation and

Lifecycle costs

Inno

vativ

enes

s

Time-to

-mark

etCustomer

orientation

Glo

bal

Foo

tprint

• Need to reduce costs for innovation and across lifecycle• Need for lean and efficient processes

• Need for differentiation from competitors• Need for fulfilling high customer expectations for each new product generation

• Need to address shrinking product lifecycles• Need to address overall increase in market demand

• Need of meeting individual customer expectations• Need for greater customer participation in product innovation

• Need for effectively and efficiently managing complex and global R&D networks

© Capgemini Consulting 2014

ILM Key Business

Drivers

Innovation and Lifecycle Management (ILM) is a crucial success driver for most organizations. Experience shows that organizations that do not adapt their product and services and the way of producing and delivering them to changing circumstances do not survive in the long term. For example photographic pioneer Kodak was a technology leader in the development and manufacturing of photo films over decades, but missing the digital revolution of photography they ended

up bankrupt in 2012. In today’s highly competitive environment we have identified key business drivers pushing companies’ Innovation and Lifecycle Management:

The quest of picking up on new possibilities, carrying them through to successful completion and managing them profitably throughout their lifecycles is getting more and more difficult. Reasons for that can be found across various elements of the companies’ ecosystems.

Challenges resulting from rising competition

Rising competition has put serious pressure, on innovation speed, on lifecycle costs as well as on the degree of innovativeness that is expected. It is not enough anymore just to modify or enhance existing products to differen‑ tiate form the competitors. Drastic changes for each new product generation are necessary to stay ahead in the race for competitive advantage.


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Market-driven challenges

Ever‑rising and rapidly changing customer requirements in combination with the demand for individuality and diversity of variants have led to complex products and services. Consequently companies are struggling to minimize innovation and development time as well as related costs. In addition to that, markets are increasingly global, fragmented and virtual due to online sales channels and global distribution networks. Social networking sites – which have populations larger than most countries – and their members play an increasingly powerful role in delivering input for innovations and shaping developments.1

The organizational challenge of managing complex networks

In times of globalized and fragmented knowledge creation, corporate innovation does not only take place within the sphere of a company’s R&D department. New products and services emerge from widely distributed R&D activities that take place across borders, time zones and even organizations. Such networks may exist within or across firm boundaries by means of

partnerships with external engineering organizations, research institutions and or even competitors on certain topics. The concept of opening the innovation process of organizations to increase the innovation potential is also known as Open Innovation. Whether it’s through offshoring, meaning locating own R&D activities in other countries, or through nearshore relationships with customers, suppliers, governments or research organizations, managing today’s corporate R&D means being able to control a wide network of innovation activities.

We strongly believe that digital inno‑ vations in the form of technologies, methods and tools open up radically new possibilities to encounter the challenges companies are facing in Innovation and Lifecycle Management. In the following we will therefore analyze how digital innovations pave the way for companies to radically improve their ILM and overall performance.

1 E.g. Social Product Development with Quirks, Thingiverse and other sites.

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2 See also in The Economist: “The Third Industrial Revolution”, www.economist.com/node/215529013 Capgemini Consulting, MIT “The Digital Advantage: How digital leaders outperform their peers in every industry”.4 Basket of indicators for top line growth are revenue/employee, fixed assets turnover (revenues / property, plant & equipment). For financial performance EBIT margin,

net profit margin are considered.

Digital technologies have started impacting companies’ ILM performance across industries. Organizations are now realizing the disruptive and productive impacts of digital on their operations. After two industrial revolutions – first the invention of the steam engine and second the introduction of electricity – we are now facing a third revolution of “Digitization” driven by the shift to an economy based on information and fuelled by advances in computer miniaturisation, mobile and Internet.2

2. Turning Innovation Challenges into Digital Opportunities

Figure 2: Digital ILM Transformation Framework


Customer Experience

Unified data & processes

Analytical capabilities

Business- & IT integration Solution delivery

Digital Capabilities & Governance

DT drivers Mobility Cloud Big data / Analytics Social media

Operational Processes Business Model

Digitally-modified Digitally enriched products Digitally enhanced services Augmentation of products and services

Digital Globalization Global innovation network coordination & control Cross-company R&D / Engineering collaboration

Customer understanding Socially-informed knowledge as innovation input “Glocalized” development Product analytics based insights

Customer touch points Coherence across digital information channels Remote service Mobile self-service

Process digitization Open innovation processes Social collaboration Virtualization & simulation Rapid prototyping

Performance management R&D performance transparency Data-driven R&D decision making Product analytics and remote diagnostics

New Digital Decentralized decision making through Internet of Things & Services (IoTS) Leveraging of machine- to-machine communication

Top line growth Co-innovation and development with customers Mass customization via digital platforms

Worker enablement Remote R&D decision making Social communication in innovation and development teams

Based on our research in cooperation with the MIT3, including more than 450 interviews with IT and Business Executives of more than 390 Companies – many of them billion‑dollar enterprises – we found that digitally‑mature companies achieve better top line growth and outperform their competitors in terms of financial performance4. When properly exploited, digital technologies support the transformation towards a highly innovative, fast growing and agile company. We also found that those

successful companies, called the “Digirati”, follow a structured and co‑ ordinated approach in performing their digital initiatives. Based on these findings we developed a Digital Transformation Framework, representing a specific set of digital transformation elements implemented by those organizations, to show what those companies are actually doing. The framework reveals a set of building blocks, structured along the three dimensions of customer experience, operational processes and


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business model, where digitization can be implemented to improve companies’ ILM performance.

This framework provides a guide to show what kind of digital technologies and tools successful companies are using. Capgemini Consulting studied the newest trends to complete this picture and examined how digital innovations can enable underlying business benefits.

Technology Drivers of Digital Transformation (DT)

Starting from the point where companies were implementing standard techno‑ logies like ERP, PLM or CAD systems to support their business, the situation has been changed by the variety of new, digital tools. These tools are heavily driven by digital enablers such as mobility, cloud computing, big data and analytics as well as social media. Digital tools connect employees, customers and machines, digital technologies are no longer just supporting, but driving companies’ business and creating new business opportunities and business models.

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We have identified numerous digital innovations along the building blocks of the Digital Transformation Framework. They enable companies to overcome challenges and achieve their business objectives. A key outcome of our

3. How to Realize the Potential of Digitization in ILM

findings is what we term an “Innovation Radar” of digital innovations for ILM. It clusters the enabling methods and tools according to their potential impact on companies’ performance in internal and external opportunities.

Figure 3: Digital Innovation Radar for ILM

Mobile after sales support

Remote-service

Self-service

Onlineproduct blog

KnowledgeLibrary

Social mediaOnline

expert blog

Crowdsourcing

Product Analytics

Integratedsystems

RapidPrototyping

Virtualization &Simulation

Digitalmock up

Mobile servicefield workforce

solutionPartner

Collaborationplatform

InternalCollaboration

platform

Machine toMachine

communication

AugmentedReality

Masscustomisation

Online design and testing forums

Co-innovation/development

platforms

Customertouch points

CustomerUnderstanding

CostManagement

ProductivityImprovement

NewProducts /Services

NewPlatformsCustomer

Operational

Product

Exte

rnal

Opp

ortu

nitie

s

Internal Opportunities External O

pportunities

Idea Generation / Mgt

Application of method / tool in ILM process

Design / Development

Prototyping / Testing

Engineering Mgt

Service / Support


3.1. Innovative Methods and Tools


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We found that digital tools can signifi‑ cantly impact all three dimensions of our Digital ILM Transformation Frame‑ work, meaning customer experience, operational processes and business model across all building blocks.

3.2. Digitizing Innovation and Lifecycle Management

The usage of digital technologies addresses all ILM key business drivers and therefore allows companies to improve innovation productivity, reduce innovation and lifecycle costs, raise degree of innovations, achieve faster

time‑to‑market and increase customer orientation by aiming at different building blocks of the Digital Transformation Framework.

Figure 4: Digital Customer Experience adresses key business drivers

Customer understanding Socially-informed knowledge as innovation input “Glocalized” development Product analytics based insights

Top line growth Co-innovation and development with customers Mass customization via digital platforms

Customer touch points Coherence across digital information channels Remote service Mobile self-service

Global footprint

Innovativeness

Time-to-market

Customer orientation

Innovativeness

Time-to-market


Innovation and Lifecycle costs


ILM Business Drivers Addressed

DigitalCustomer Experience

© Capgemini Consulting 2014© Capgemini Consulting 2014

3.2.1. Digitally Leveraging and Enhancing Customer Experience

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Customer understanding through knowledge integration

Companies can significantly improve their customer orientation as well as time‑ to‑market of new products by integrating customer knowledge and experiences into the innovation process. Listening to the voice of the customer by leveraging information from sources such as social media or direct usage feedback can provide valuable insights about customer requirements and needs. The access to social customer knowledge on a global level is especially important when it comes to “glocalizing” products and services, meaning to adapt products and services to culture‑ or location‑specific conditions. Listening to the voice of experts, for example from expert blogs, delivers additional input to innovate and keep up with the latest trends. Since this kind of information is usually dispersed across different data sources, in different data formats and often not articulated in a structured manner, data analytics can help to gather, structure, analyze and evaluate

the information in order to be able to draw conclusions for new products and services.

Top line growth through “self-inventions”

The connected nature of digital techno‑logies also paves the way for concepts such as co‑innovation, co‑design or co‑development. Innovation or develop‑ ment platforms actively integrate the customer, who can bring own ideas and specific requirements. Customers can therewith provide feedback on existing products. Through the active involvement in developing new products the customer gets the feeling

of “self‑inventing” which results in an improved customer experience and relationship.

Customer touch points digitally optimized

Coherent activities for gathering information, customer feedback and ideas across several information channels are a key success factor when optimizing customer touch points. Questions are which channels have to be harnessed to gather what kind of information from which customer group, feeding innovations for which type of products. Finding the right answers to those questions are key challenges to be mastered.

Digital tools not only enhance the front‑end of the product lifecycle, they also improve service and maintenance business. Digital innovations such as mobile, self‑ or remote service reduce lifecycle costs and improve customer orientation.

5 Crowd Sourcing, “GE’S ECOMAGINATION CHALLENGE BREAKS OPEN INNOVATION RECORDS”, 2012.6 Lego, Case Study, 2009.7 Capgemini client.

Lego has achieved a turnaround through rethinking the role of users. They provided CAD soft‑ ware named LEGO Factory, where customers can design their own creations, upload them and receive the creations within 48 hours physically sent to their homes. Users can see other customers’ creations, rate and modify them. Lego also opened up to their customers after realizing that a lot of them were hacking the Mindstorms NXT – a sophisticated technology‑based kit with a pro‑ grammable brick, various sensors and actuators and a simple user programming language. Rather than trying to control or restrict this activity, Lego adopted an open innovation approach, recognizing that „not all the smart guys work for [them]“. By identifying key developers and then engaging their interest Lego was able to gain considerable leverage on the original design. A growing user community began setting up websites, over 40 “recipe” books were produced and all sorts of hardware and software add‑ons were developed.6

At a global automotive company Capgemini supported the client at implementing an application based, mobile service solution. Users can download an applica‑ tion for their cars that allows them to scan the interior and engine compartment by using the camera of their own mobile devices. The application auto‑ matically detects relevant vehicle controls, for example control lamps, displays or oil level indication. For the recognized elements corresponding overlays on the camera view will appear. When the user clicks on one of these overlays, the corresponding chapter of the operating instruc‑ tions is either displayed or a video starts explaining the controls.7

As a part of its innovation initiative, General Electric wanted to involve all stakeholders including customers, current and prospec‑ tive, and internal engineers in developing a sustainable solution for an efficient power grid. GE launched a $200m collaborative project and ‘crowd sourced’ ideas to invest in the most popular and efficient ideas. More than 3,000 ideas were submitted on grid modernization and effective utilization of energy resources on the online platform where site visitors could read and vote for the idea. The top 5 ideas were further evaluated by internal engineers in terms of their feasibility and incorporated into the product innovation program.5

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3.2.2. Digitizing Operational Processes

Figure 5: Impact of Digital Transforming Operation Process Building Blocks on ILM Business Drivers

Process digitization Open innovation processes Social collaboration Virtualization & simulation Rapid prototyping

Worker enablement Remote R&D decision making Social communication in innovation and development teams

Performance management R&D performance transparency Data based R&D decision making Product analytics and remote diagnostics

Global footprint

Innovativeness


Global footprint

Innovativeness

Time-to-market

Global footprint



Digital Operational Processes


Time-to-market


Process digitization enables collaboration, acceleration and innovativeness

Digital tools can ease collaboration, increase creativity and offer innovation friendly communication structures.

Making use of them speeds up inno‑ vation and development processes and increases resource efficiency of even widely distributed teams without compromising the quality of results.

Crowd platforms can be used to structure idea generation and support selection as well as status assessment by bringing relevant internal and external stakeholders and experts virtually together. Especially when dealing with locally dispersed development parties and teams, crowd platforms foster cost and time efficient knowledge generation and aggregation throughout the value network. By applying analytics in complex KPI systems, ideas can be

assessed more efficiently and with a higher success rate regarding later commercialization. The leveraging of out of the box thinking by external and cross‑discipline idea sources allows larger innovation leaps, which strengthens the competitive advantage.

8 Capgemini Consulting client.

A Capgemini Consulting client in the high‑tech industry wanted to stimulate its innovative idea generation. A platform was needed to offer employees the right framework to do so. The right incentives were set through means of funds to facilitate and direct these innovations within the company. We implemented the Capgemini Open Innovation approach by establishing a digital technology collaboration backbone. The standardized and automated assessment and development process for new innovative ideas led to a company‑wide interest and involvement in innovation as well as proactive nurturing of bottom‑ up innovative ideas. Professional networks across the company were leveraged, further developed and continuously improvement through collaborating via the digital network.8


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Based on digital mock‑ups new ways of rapid prototyping are possible, such as 3D‑printing, an additive process, where successive layers of material are laid down in different shapes until the intended form has been reached.

Virtual prototyping and digital mock‑ups in combination with simulation tools can reduce time and costs for validating and testing. Other virtual validation tools are finite element methods, flow analysis and variance analysis to simulate physical behaviors of digital prototypes without taking the risk and challenges associated with real prototypes.

Worker enablement raises flexibility and efficient use of capacity

Mobile tools in combination with cloud‑based applications enable working anywhere anytime. This provides a lot of freedom to R&D engineers to find solutions and directly document and share them with their teams, no matter where they are. By providing the right sharing platforms, an efficient usage of internal knowledge and an enhanced transparency and communication within the organization is ensured. Such plat‑ forms can be internal social networks, wikis or micro‑blogs. Decentralized, quick and efficient R&D decision making is also fostered through new digital cloud or mobile solutions.

When considering the product service on the other hand, service personnel can obtain important information such as availability of spare parts in real time as well as feeding back necessary information about the incident to the base. Complex challenges can be solved quicker, resulting in higher customer satisfaction.

Performance management – Digitally improving R&D portfolio and service transparency

Driven by the constantly rising complexity of engineering portfolios, companies are facing the challenge of lacking trans‑ parency about the portfolio status in terms of costs, resource availability, scope and time. Reasons for that are missing consistency concerning time recording as well as inappropriate scheduling tools. Digitally harmonizing processes and systems on a global level, integrating scheduling and capacity planning as well as implementing cross‑departmental KPI‑reporting lead to a high level of portfolio transparency and inhibits project overruns.

R&D decision making, based on big amounts of data of diverse sources and structures, can have a big impact on the quality and lifecycle costs of later products and services. This is not only about Go‑ or NoGo‑decisions for R&D projects in later development phases,

9 Carbon Design Systems Case Study on Samsung.10 Swarf, also known as turnings, chips, or filings, are shavings and chippings of metal — the debris or waste resulting from metalworking operations including milling and grinding.11 GE, “Transforming manufacturing, one layer at a time”, 2013.12 Capgemini Consulting client.

the focus should be more on the phase where amount and consequences of decisions made are the biggest and that is during early stages of idea selection, concept and product design.

By having a closer look at companies’ service activities, applying Product Analytics – e.g. through embedded sensors and offering predictive maintenance schemes – incidents can be predicted before they even occur. Unplanned machine downtimes and boosting lifecycle costs can be evaded. Higher levels of customer satisfaction are the direct result. Based on the gathered data, service and maintenance activities can be planned for the entire customer base and deliver valuable input for driving new product innovations.

A similar challenge could be identified at a leading manufacturing company. Continuous growth on a global scale has led to complexity and intransparency of engineering planning and controlling processes. Hence, improved transparency on engineering performance and the seamless integration into the logistics chain on a global basis was needed. A state‑of‑the art process landscape and technology platform for engineering project management and controlling was implemented by using standardized tools for planning and scheduling as well as for monitoring and controlling project execution across the full portfolio lifecycle. Accompanied by a set‑up of newly designed standard reports and a KPI dashboard, the manufacturing company realized real‑time and fully integrated project information for over 3,500 engineers, project and resource managers. Global tracking and controlling of engineering skills and capacity as well as improved portfolio transparency provided by fully integrated standard reporting and KPIs were the key benefits.12

A new rapid prototyping approach can be found at General Electric Aviation. The aviation industry commonly relies on milling to manu‑ facture complex aviation parts. But milling produces large amounts of waste in the form of swarf.10 Prototyping is therefore often sumptuous due to time consump‑ tion at retooling and the waste associated. By using 3D printing for prototyping, instead of machining parts from solid billets of metal, only the material that is needed to shape the part is now used. GE further plans to introduce a jet engine which is largely manufactured using 3D printing; more than 4.000 engines are already ordered.11

Samsung utilized a virtual proto‑ typing platform to build a new hybrid hard drive system which resulted in improving design performance by more than 50%.9

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3.2.3. New Digital Business Model

13 ABB Process Automation Service (USA), Case Study.

The impact of digital innovations not only affects customer‑oriented or operational process related topics, it goes much further by having significant impact on companies’ business models and the way they will create value for the customer and generate revenues in the future.

Figure 6: Impact of Digital Transforming Business Model Building Blocks on ILM Business Drivers


Innovativeness



Innovativeness



Time-to-market

Innovativeness

Global footprint



Digital Business Model


Digitally-modified Digitally enriched products Digitally enhanced services Augmentation of products and services

New Digital Decentralized decision making through Internet of Things & Services (IoTS) Leveraging machine-to-machine communication

Digital Globalization Global innovation network coordination & control Cross-company R&D / Engineering collaboration

ABB Process Automation Service (USA) had approximately 300 field service engineers (FEs) managed by regional coordinators. They used different spreadsheets to manage FEs and aggregate data to streamline and improve processes. That led to inefficient resource utilization. Therefore, a new cloud‑based technology platform was implemented to run the service application. A service dispatch board provides a consolidated view of all regional service requests. The software allows the company to assign FEs based on skill set, availability, and geographic proximity. Depending on urgency, customers can choose FEs from a more distant region by paying an additional fee. As a consequence services have become more responsive and have delivered improved uptime. Prior to deploying the cloud application, the time of ABB‘s field engineers was applied between 70% and 80%; after the deployment, field engineers’ time was applied 120%. These changes have resulted in an improvement of customer satisfaction ratings from 79% to 84%.13


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Digitally-modified products and services

Digitally enhancing products or services can generate additional revenue streams and differentiation from competitors. Furthermore, it creates a positive awareness as an innovator. Digitally improving service and maintenance activities can have great potential for exploiting service resources more efficiently as well as for raising customer satisfaction.

Breaking the frontiers between the physical and digital world by using digital methods such as augmented reality can have major effects on customers’ experience as well as on improving internal processes. Augmented reality is therefore shaping the future of innovative service models while ensuring global quality standards. Enabled by mobile devices customers can for example request additional product information or service instruc‑ tions by simply using the camera of their own device.

14 Miele, “RemoteVision™ WiFi Technology takes the service call into the 21st century”, 2009.15 BMW research projects, “Workshop applications at BMW”. 16 Capgemini Consulting client.

and connections between consumers and producers in terms of the products being sold.

M2M communication for example, is one factor that makes smart grids smart. Power grids are complicated networks, involving millions of connected components such as power plants, transmission lines, transformers,

New Digital Businesses – Digitally connect products, platforms and services

Offering innovative business concepts by leveraging digital technologies should be a future focus research field for companies by developing new concepts for digital products or digital platforms that have the potential to reshape the organizational boundaries.

These products and platforms are ideally connected to other products, platforms or services to fully leverage the potentials of digitization. Such connections can be realized by imple‑ menting machine to machine (M2M) technologies that allow both wireless and wired systems to connect and communicate with other devices. State‑of‑the‑art M2M communication goes beyond one‑to‑one connections and expanded into a system of net‑ works that transmits data to personal appliances, also called Internet of Things & Services (IoTS). The expansion of telecommunication networks across the globe significantly enables the M2M communication and has reduced the effort and time necessary for informa‑ tion to be communicated between machines. These networks also allow a range of new business opportunities

BMW uses augmented reality via data googles. These glasses enrich the environment with useful information. Service mechanics receive additional three‑dimensional information on the faulty engine. Necessary components are virtually animated and tools which the mechanic is supposed to use are shown. Audio instructions on single process steps are played through headphones integrated into the goggles. BMW can offer enhanced service and warranty contracts while ensuring the same service quality level globally.15

A leading manufacturing company targeted to establish a standardized creation of technical documentation for complex products and plants by establishing common structures, content, processes and digital tools. The customers’ starting point was a diverse usage of tools and practices for technical documen‑ tation creation with inconsistent information about products, structure, layout and classification of existing documents, leading to missing transparency on commonalities. The Capgemini Consulting concurrent transfor‑ mation approach enabled the client to define harmonized style sheets (templates), derive requirements for a new Content Management System (CMS) and perform a tool‑selection process to identify the out‑of‑ the‑box solution with the best fit. The whole program resulted in increased operational efficiency by implementing a state‑of‑the‑art Enterprise Content Management System (ECMS). The way was also paved for generating cost advantages through offshoring or outsourcing possibilities of technical documentation depart‑ ments. Furthermore, the creation of new revenue streams through being able to offer new, digital output products and services, e.g. Technical Documentation access via 3d‑models or mobile devices, was enabled.16

Miele was looking for additional revenue opportunities and better customer relationship management. Deeper insights into product and technology seemed to be necessary. They strived to enhance the quality of products by creating a virtual link between an enabled appliance and Miele’s monitoring center. Based on the new digital solution, an optional 5‑year service plan for new products could be offered. A wireless module integrated in the appliance connects to the household’s WiFi and transmits product data to Miele’s service center. In case of issues, a fault code will either trigger an automated email offering a corrective strategy or an analysis by a technician.14

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distribution lines and millions of energy consuming assets, from large plant equipment down to refrigerators and electric toothbrushes. Balancing supply and demand to avoid instability and blackouts is a major challenge in times of scarce resources and missing cost‑effective storage technologies.

17 Siemens, Turning Many into One, 2011.

Digital Globalization enables the management of complex R&D networksFollowing a global approach to inno‑ vation can create strong advantages in the speed up of time‑to‑market, uniqueness of new products and services as well as potential for concepts such as “glocalizaton” and “reverse innovation”. Differentiated ideas, sourced from a global basis can deliver a real competitive advantage. However, there is a trade‑off between the level of idea diversity gained from global dispersion and the cost of managing network complexity. In order to get value from increasingly dispersed innovation sites, digital capabilities to manage the entire innovation process across geographies, cultures and often organizations are necessary. Only very few companies seem to be developing these necessary capabilities. Successful enterprises have created processes and systems that are harmonized across locations. Leaving the path of ad hoc processes and changing to clearly defined open innovation practices, systems and roles, is critical. Flexible IT tools to track, select and manage new ideas through development and commercialization are a key success factor. By linking globally spread research and innovation networks as well as enabling the co‑ ordination with local specialists, local customer requirements can be better met and development time can be reduced by working with specialized partners. Furthermore, companies can use enterprisewide resource planning to optimize internal and external R&D resources in their innovation and development network. Depending on the maturity of the innovation and the need for local adaption, R&D activities can be globally balanced and allocated. Optimizing the workload of critical resources and creating transparency over available resources can reduce time‑to‑market and raise innovation productivity.

Siemens has developed neural networks for gas and steam turbines. The operation of gas or steam turbines for power generation is complicated, since they have to keep a constant alternating current frequency through continuous rotation. If loads are switched on and off, or if wind farms provide less power on calm days, gas turbines must ramp up their output otherwise the current frequency will fluctuate. Sensors monitor factors such as air pressure, exhaust gas temper‑ atures, emissions, and network behaviour. Siemens has developed neural networks that use these parameters to generate turbine emission forecasts within seconds. Software controls the fuel supply and ensures that the turbines are always running at ideal operational levels. The neural networks are constantly learning from resulting data and automatically optimizing turbine operations over time. In a few years the software is expected to be mature enough for normal operation. At the world’s largest gas turbine in Irsching, Bavaria, 1000 neural networks monitor the system’s components with data from approximately 5000 measuring points. This will lead to a measurable reduction in emissions, also considering the load changes caused by solar parks and wind farms. In the future such learning processes will also be used to achieve a more uniform combustion process and there‑ with extending the service life of turbine parts.17

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In the previous sections of the article we have considered what digital initiatives in the form of technologies and tools companies are using to improve their ILM performance. In the following we will describe „how“ companies can manage the transformation to become a digital company. In reference to our Digital Transformation Framework, the prior passages have dealt with the „what“ of digitally transforming the company and the subsequent part will provide an overview of „how“ executives can drive the digital change throughout the organization. This includes creating and communicating vision, establishing governance and measurement mecha‑ nisms and building a digital‑ready culture. Having the „what“ without the „how“ is at best a temporary solution.

Digital Leaders show common patterns which we call the Digital DNA. It is more than simply a combination of sound management and digital capability. There is something inherently different about Digiratis’ DNA that separates them from the rest.

Defining a strong and comprehensible target picture in form of digital vision for the companies’ Innovation and Life‑ cycle Management should be the first step on the way of each transformation. In order to show the path forward, a transformation roadmap with the main milestones of the digital transformation has to be developed. The roadmap reveals focus areas and rough time frames for investments in digital tools and technologies in order to improve the company’s digital capabilities.

The new digital initiatives have to be aligned and combined with existing digital capabilities to exploit synergies. Looking at the Digirati, the choices where to invest are on a strategic level and they typically excel in one or more areas of the Digital Transformation Framework, but manly focussing on digital transforming the business model. Accompanied by strong governance based on a set of standardized KPIs, it becomes clear that digital initiatives are generating measurable benefits.

4. Managing the Change towards Digital Maturity in ILM

Figure 7: The “HOW” of the Digital ILM Transformation Framework


CustomerExperience

Operational Processes

Business Model

DIGITAL VISION

DIGITAL INVESTMENT

ITERATIVE TRANSFORMATION ROADMAP

Customer understanding

Process digitization

Digitally-modified

Top line growthWorker

enablement New Digital

Customer touch points

Performance management

Digital Capabilities

Digital Globalization

DIG

ITA

L E

NG

AG

EM

EN

T

DIG

ITA

L GO

VE

RN

AN

CE

THE“WHAT”

THE“HOW”

KPI


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After having described the „what“ and the „how“ of digital transforming companies‘ Innovation and Lifecycle Management, the question arises how companies can accomplish a quick and smooth start for their digital initiatives.

The „Capgemini Consulting Innovation & Lifecycle Management Maturity Assessment“ (ILM Assessment) allows companies to quickly identify the im‑ provement needs and „pain points“ to restore their competitiveness. The results of proven, structured Focus Interviews based on 90 questions with experts and managers of the organiza‑ tion are analyzed and evaluated with our Industry Benchmark to derive the value potential and highlight the improvement areas.

The comparison to the industry stan‑ dard is complemented with solution approaches and recommendations. This is the foundation for the mobilization of stakeholders and discussions on actions, for the set up of new improve‑ ment projects or for controlling the success of existing projects.

To get an even quicker initial snapshot of the digital maturity of the organization‘s ILM, Capgemini offers the „Digital ILM Quick Scan“ as a first step, preceding the ILM Assessment. The ILM Quick Scan investigates the initiatives the company is currently performing to enhance areas such as customer experience, operational processes and business model by applying digital technologies such as mobile, social media, data analytics or smart devices.

5. How to start the journey of becoming a digital leader in ILM

Figure 8: ILM Assessment

Few days Few hours

Client & Capgemini Capgemini

DebriefingAssessment Analysis

Scoping Focus Interviews Benchmark Results Validation Next Steps

1 2


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Figure 9: Digital ILM Quick Scan


Quick Scan

Your result Digital immature companies Conventional digital maturity Digital mature companies

Digital ILM Quick – Results

Customer

OperationsBusiness Models

Customer

Operations

Business Models

Total

60%

43%

24%

42%

Your Result

about Capgemini ConsultingCapgemini Consulting is the global strategy and transformation consulting organization of the Capgemini Group, specializing in advising and supporting enterprises in significant transformation, from innovative strategy to execution and with an unstinting focus on results. With the new digital economy creating significant disruptions and opportunities, our global team of over 3,600 talented individuals work with leading companies and governments to master Digital Transformation, drawing on our understanding of the digital economy and our leadership in business transformation and organizational change.

Find out more at:

www.de.capgemini-consulting.com

about CapgeminiWith more than 130,000 people in 44 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2012 global revenues of EUR 10.3 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.

Find out more at:

www.de.capgemini.com

The information contained in this document is proprietary. ©2014 Capgemini.All rights reserved. Rightshore® is a trademark belonging to Capgemini.

Contacts

Dennis Fache Innovation and Product Lifecycle

Management +49 30 88703362

[email protected]

Udo Lange Innovation and Product Lifecycle

Management +49 40 254491864

[email protected]

Verena Gertz Innovation and Product Lifecycle

Management +49 151 4025 1468

[email protected]

Facing Innovation Challenges – How digital technologies ... · 3 Capgemini Consulting, MIT “The...

Documents

Transcript of Facing Innovation Challenges – How digital technologies ... · 3 Capgemini Consulting, MIT “The...