Pivoting to a new business model

“Revolutionary” is often overused or unnecessarily dramatic. But as Glen Fields is witnessing, the manufacturing world is living up to that description, as physical product development transforms to become systems as a service.

Fields, Rockwell Automation Vice President, spoke with Capgemini’s Adrian Penka in the fourth episode in our six-part Leaders in Innovation podcast series, a partnership we have with Products That Count. Their conversation focused on the digital transformation underway in the manufacturing industry and the five steps to realize success.

According to Fields, the convergence of products, software, and services is driving this transformation across industries.

Fueled by the rapid development of technologies, including cloud, artificial intelligence (AI), Internet of Things (IoT), edge computing, and 5G, the convergence of the physical and virtual worlds is the next phase of transformation cutting across all facets of customer interaction, business operations, R&D, engineering, manufacturing, and supply chains.

But perhaps the biggest technological imprint on the switch to services is digital twins – virtual replicas of physical systems that can model, simulate, monitor, analyze, and constantly optimize the physical world. Capgemini research shows that organizations working on digital twins have seen a 15 percent improvement in key sales and operational metrics and an improvement upwards of 25 percent in system performance.

A new business model based on software and data services is enabling Rockwell’s OEM (original equipment manufacturers) customers, Fields says. These “smart manufacturing” customers now can sell a physical machine as well as an outcome-based services contract using a digital twin.

He’s also finding that AI is incredibly effective for data acquisition and analysis, whether machine learning or deep learning. These tools are elevating efficiencies in manufacturing.

Fields offers five steps product leaders should follow to monetize a new business model: identify the solution outcomes, liberate data, unite data, and clearly articulate your call to action. These will lead to the fifth step: to successfully monetize a new business model.

Listen to the full podcast here.

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