Value Creation in the Era of Smart, Connected Products

“Monitoring the productivity of different fields might affect the farm’s strategy for what seeds to plant, how dense to plant the seeds and how much fertilizer and irrigation to put on next spring,”
explained Heppelmann, who added that FarmSight is something of a departure for the tractor company. “Suddenly, John Deere finds itself acting more like a software company, multiple levels
removed from being a tractor company. That kind of thing is still an experiment because the farther you go with it, the more you may end up competing with people who don’t even have tractors and
are pretty potent competitors.”

Opening new lines of business will, in turn, raise a host of challenges, noted several CEOs. “For those of us who are traditionally B2B businesses, the challenge is that we’re all going to be becoming
more B2C if we’re going to move up and down the channel that way, rather than horizontally,” noted Terrence Hahn, president and CEO of Honeywell Transportation Systems. “You’ll have to identify those
unmet user needs and bring them back.”

By its very nature, data-centric technology is always a pricey and dicey investment for companies, involving a hefty capital spend and the challenge of ensuring that new capabilities are leveraged
appropriately. “A lot of people talk Big Data and they collect all of it, but they don’t know what to do with it,” noted Bob Nardelli, founder, chairman and CEO of XLR-8.

Having been down the implementation road before, many CEOs dread the prospect of reconciling new and existing systems. “We’re in the process of globally implementing SAP and I’ve got another monitoring system in place,” noted Michael Reed, The Manitowoc Company’s vice president of operations.

“The struggle we have is how to tie all this together into one system so that we’re not going back and forth trying to figure out, ‘Where is my data coming from now?’”