From traditional to reinvented products: ten traits. By Eric Schaeffer and David Sovie
Let’s consider how traditional products stack up against new smartened-up ones. We have put together a list describing the ten defining features of both categories. It becomes clear what a departure from the old world the ever-higher content of digital technology and software in devices means in terms of a value-rich ‘living’ product existence. This will help you get a sense of the latter’s new business opportunities.
‘Always on’ with superspeed highway access
First there is connectivity and the advances made by this vital ingredient for the smart connected product world. Traditionally there has been either no or limited connectivity between makers and users of a hardware product. It was the software industry that eventually pioneered the concept of ‘always-on’ relationships – between creators and users – via contact through a cloud server. With the arrival of 5G, there will be an infrastructure to connect any physical product permanently, allowing for quick design iterations, remote servicing, personalisation, and bilateral communication between devices.
Sensorised for awareness
Another key trait of the smart connected product is sensor and awareness technology. Products used to have almost no sensors. The odd data feeler might have been used – temperature or pressure sensors for instance – but there was no range of high-tech, low-cost, miniature sensors available to enable mass data collection. This has changed dramatically. The car cockpit maker Faurecia is developing a sensorised car seat that adapts automatically to personal driver preferences and monitors health data to deliver maximum comfort for the user, for example.
Smarter than smart
Then there is the new cognitive character of products. Today’s smartphones boast at least as much processing capacity as a supercomputer of 20 years ago. From the thoroughly unintelligent, unresponsive lumps of metal, plastic and electronic components they once were, products are emancipating themselves, carrying their own processing, storage and analytics power around with them, turning into ‘thinking’, autonomously analysing, decentralised, decision-making brains.
Software eats hardware and digital eats software
With the advent of smart connected products, the balance of value will tilt in a transformative way towards software and digital technologies, a shift most dramatically felt by hardware producers. Digital technologies include various types of artificial intelligence such as machine learning, natural language processing and voice assistants as well as the advanced big data and analytics capabilities to harness and utilise all the data being captured by a sensorised, intelligent device. Non-intelligent products are rendered smart and connected; their value profile changes. The pure engineering features lose their market clout to software that makes products adaptable and collaborative.
Evergreen via upgrade
The capacity to frequently upgrade via software is a characteristic of moving up the EQ axis from a transactional product to an outcome oriented as-a-service or platform model. Software is fluid: simple code lines can drastically change product characteristics. This gives them an adaptive life, able to offer true experiences rather than mere product features, and to be constantly made new again, literally renewed. Think of your smartphone’s operating system, updated regularly to improve usability or data safety.
Digital age user interface
The user interface of a product is the core component of the experience; to transform the experience most product companies will need to transition to new digital interfaces. In the past, stationary physical dashboards with a limited number of switches and gauges were the norm. However, product interfaces have now turned into digitally enabled, voice-, swipe- or gesture-activated, artificial intelligence-driven, user-personalised, ergonomically highly adaptable mobile technology modules that allow for seamless communication and collaboration between a user and a smart connected product.
Once a product has digital user interfaces and enough intelligence, it is possible to consider a degree of personalisation that was not possible a few years ago. These new user interfaces are flexible enough to deliver the right user experience at the right time in the right context. But their software-enabled flexibility is also an important precondition for tailored experience personalisation in individual user contexts. Having the flexibility and capacity to morph into a very personal product offering for many users is one of the crucial drivers of customer value in the age of smart connected products. Rendered autonomously intelligent by artificial intelligence a product such as a car can even learn and take its own decisions on how best to personalise its user experience.
A platform for multiple parties
Another development is the transformation from a product in isolation to a connected product platform, allowing for the deep and versatile involvement of third parties. Think of your smartphone, which comes to life for your day-to-day use and experience only by means of the numerous apps provided by third parties. Or consider Faurecia again, with its digital car cockpit primarily operated by users via the voice assistant Alexa, provided by Amazon. While many smart connected devices will not become platforms as no new value will thereby be tapped, some surely will.
Embedded in ecosystems
The emergence of the product as a flexible and living platform goes hand-in-hand with the emergence of the ecosystem that builds organically around it. Ecosystems mostly emerge because third-party applications are being developed to run the platform, because third parties are approached to service the product, or because they leverage product hardware and/or data to create their own complementary service designs for the product user. Ecosystem developers orbiting a platform today might number anywhere from a few dozen to millions, as in the case of Apple’s iOS and AppStore.
Digital thread as an eternal umbilical cord
To provide an outcome-based and compelling experience, it is essential to be able to track and trace the product over its entire lifecycle. This requires smart connected products to run on a data leash controlled by its makers long after sale, in a way that almost no hardware maker does today. These goals will be achieved via two related concepts, the digital twin, which is a complete digital representation of a physical product, and the digital thread, which extends this concept over the entire product lifecycle to track changes to the product’s configuration over time and trace its data flows.
Virtually every product will need to be reinvented and transformed in the near future. In fact, the race is already on, and business leaders who dither for too long about creating new generations of smart connected products run a significant risk of their organisations being disrupted and even pushed from the market. Indeed, the massive disruption represented by the product reinvention is enabling new entrants, often from completely different sectors.
Eric Schaeffer and David Sovie
Eric Schaeffer and David Sovie are Senior Managing Directors at Accenture and co-authors of new book, Reinventing the Product: How to transform your business and create value in the digital age, published by Kogan Page.
Accenture is a leading professional services company that works with businesses across the globe to help them embrace innovation and drive new value for their organisations.