The Internet of Things is both prolific and nebulous. While many manufacturers already have a strong IoT plan, some struggle to understand its impact and how or if they should take action.
In a new four-part series, Jim Heppelmann, CEO of Boston-based tech company PTC and co-author of Harvard Business Review‘s November cover How Smart Connected Products are Transforming Competition, talks to McKinsey about how the IoT and smart, connected products impact the design, manufacture, operation, and service of products.
“The term Internet of Things doesn’t actually communicate much,” begins Heppelmann. “It’s a catchy phrase and we all like it, but it’s not clear what it means.”
For Heppelmann, “smart, connected products” is a more tangible definition, and as CEO of a company that has long specialized in product development, he believes the IoT is less about the Internet and more about the products themselves.
Hepplemann identifies three major advantages to smart, connected products.
“If you step back and say, “Why would people connect things to the Internet? What’s the point?”—I think there are three killer applications. The first is that you can service things better if you can communicate with these things and have feedback loops. You can be proactive. You can be efficient. You can maintain higher degrees of uptime. Better output with lesser input.” Heppelmann says.
“The second thing you can do is operate these things better—operate them remotely for reasons of safety, efficiency, accessibility, you name it.
“And the third thing is that you can make them better. You can have feedback loops into engineering and design processes to understand if the customers use the product like you thought they would,” Heppelmann says.
“So I think that this will have a transformative effect on the way things are created, operated, and serviced. And a tremendous amount of efficiency and differentiation and value will be created as a result,” he concludes.
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