About Intelligent connected products

12 April 2017

Lately there is a lot of buzz about the intelligent connected products. So let’s unravel the “intelligent connected product” and see what is all the buzz about.


According to the Merriam Webster Dictionary there are various definitions of “intelligence”:


Also, according to Merriam Webster Dictionary, “connected”  means the following:


According to a Business Dictionary there are several definitions of a “product”:

Intelligent connected products

If we combine these definitions we come to a following definition of an Intelligent Connected Product:

“Intelligent Connected Product is a good, object or service, created as a result of a process, which serves a need or satisfies a want of a customer. This product has the ability to learn or understand or to deal with new situations; it has the ability to apply new knowledge in order to change itself and/or its environment. All these abilities are a result of its ability to perform computer functions by having its parts or elements logically linked together, connected, disregarding of its physical location or the way of connecting.”

Why are Intelligent Connected Products so important?

Intelligent connected products allow companies to get a broader view on the identification, location and state of assets, properties, transactions and people. This results in more effective and faster decision-making and an improvement in customer experience and customer loyalty. Once again information technology is revolutionizing the way products are made and marketed.

This development is impacting on industrial structures and changing the nature of competition, exposing companies to new opportunities and threats. It’s reshaping industry boundaries and creating entirely new industries. In addition smart, connected products raise a new set of strategic choices related to how value is created and captured; how the amount of data connected products generate is utilized and managed; how relationships with customers and business partners are redefined; and what role companies should play to ensure continuity and profits as industry boundaries are expanding. Therefore there is compelling need to take stock, reassess your core competence, develop an IoT strategy and leverage it in a way that will enable your company to compete and succeed.

However, let’s step back for a moment and recall how we got here.  Products used to be mechanical / partially electrical and production processes relied on the exchange of information between people, much of it being delivered on paper.  When IT was employed in the 1960s / 70s various activities were automated, e.g. order processing and resource planning.  This resulted in significant increases in productivity. In the 1980s / 90s the Internet arrived and this enabled coordination and integration with individual activities. It opened up manufacturing processes to authorized third parties, eliminated distance and enabled global marketing. But the products did not change any significant way.


The evolution of enterprise technology

Picture 2. The evolution of enterprise technology ( source: http://cloudtweaks.com)

Today’s Intelligent connected products haven’t merely changed; they have been transformed into the core component of the IoT value chain.  The earlier application of advanced technology allowed companies to either save money or add new value to the products.  Now the adding of the value does not need to stop when products have been purchased, instead it is transferred to the cloud where data is stored and analyzed. Manufacturers therefore become part of an augmented product value chain and are often able to benefit through on-going revenue streams.


Intelligent connected products are important because they have the ability to  disrupt established business processes and are forcing companies to rethink nearly everything they do, from how they conceive, design, and source products, to how they manufacture, operate, and service them.  In other words, they are forcing companies to develop a strategy that will propel them forward into the new environment and the rules of a new economic order.  In many companies, as stated by Michael E. Porter and James E. Heppelmann in “How Smart, Connected Products Are Transforming Competition” intelligent connected products will force the fundamental question, “What business am I in?”

Author: Boban Vukicevic



IoT strategie IoT verbonden producten
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