Industrial internet development will lead to the emergence of an outcome economy
by Sampsa Tiainen at 12:29 PM 01/04/2016
Below mentioned is an excerpt from the study "Finnish machinery industry and the industrial internet of things - the revolution will be digitized" produced by Prosia Executive Search, 2016, author Ph.D. Teea Mäkelä.
Greatest transformation will come from a move to outcome-based business models. Industrial Internet of Things leads to an emergence of an outcome economy, where companies will shift from competing through selling products and services to competing on delivering measurable, quantitative results important to the customer. A business model based on outcome-based services is one where businesses compete on their ability to deliver measurable results to customers.
The outcome economy has many implications for businesses. Companies will need more and better data to calculate costs, manage risks, and track all the factors required to deliver the promised value. This is a challenging prospect. Among other things, providers will require a deeper understanding of customer needs and contexts in which products and services will be used. Value based on output also entails quantifying results in real time. Both of these requirements have been nearly insurmountable obstacles to scale until now; it is the digital age that makes the outcome economy possible.
Delivering such outcomes will require new levels of collaboration across an ecosystem of business partners, bringing together players that combine their products and services to meet customer needs. Software platforms will emerge that will better facilitate data capture, aggregation, and exchange across the ecosystem. They will help create, distribute, and monetize new products and services at unprecedented speed and scale. The big winners will be platform owners and partners who can harness the network effect inherent in these new digital business models to create new kinds of value.
References:  World Economic Forum in collaboration with Accenture (2015) "Industrial Internet of Things: Unleashing the Potential of Connected Products and Services";  The McKinsey Global Institute (2015) "The Internet of Things: Mapping the Value Beyond the Hype";  SAP (2015) "The CEO Perspective: The Internet of Things for Industrial Machinery and Components"; IDC (2015),"Transforming Manufacturing with the Internet of Things"
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