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The Risks and Rewards of Connecting Commercial KitchensE360 Webinar • December 11, 2018
This presentation is intended to highlight changing developments in the law and industry topics. The law is frequently evolving and information and publications in this presentation may not reflect the latest changes in the law or legal interpretations. The statements and information provided in this presentation should not be construed as legal advice or legal opinion regarding any specific facts or circumstances, but is intended for general informational purposes only. The views and statements expressed during this presentation are the personal opinions of the presenter and do not represent those of Emerson Climate Technologies, Inc. or its affiliated companies. You should consult an attorney about your situation and specific facts and you should not act on any of the information in this presentation as the information may not be applicable to your situation. Although all statements and information contained herein are believed to be accurate and reliable, they are presented without warranty of any kind. Information provided herein does not relieve the user from the responsibility of carrying out its own tests and experiments. Statements or suggestions concerning the use of materials and processes are made without representation or warranty that any such use is free of patent infringement and are not recommendations to infringe on any patents. This presentation may not be copied or redistributed without the express written consent of Emerson Climate Technologies, Inc.
Disclaimer
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Speaker
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Paul HepperlaVice President, Solutions Integration, FoodserviceEmerson
Paul Hepperla is responsible for working with the company’s foodservice customers to identify their pain points and then integrate various Emerson products to create solutions that solve those pain points. He most recently served as vice president, North American solutions — sales at Emerson. Paul earned a bachelor’s degree in aerospace engineering from St. Louis University.
Agenda for Today
• The importance of defining the scope and purpose of your connected project
• An examination of the far-reaching and dramatic impacts to your business
• Evaluating business models that involve service contracts, recurring revenue or monetization
• Real-world examples of successful and failed connectivity projects
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Scope and Purpose
Background
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The Hype• IoT is full of promise
• 20B connected devices by 2020
• Will “transform” business
• Manufacturers will gain “tremendous insights”
The Reality• 26% of companies are successful
with their IoT initiatives– 35% IT | 15% business
• 60% believe IoT looks good on paper but more complex than expected
The Direction• Solve a problem someone
cares about• Plan realistically• Fix outdated processes
and policies• Partner for success
Hypothesis
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Most manufacturers and end users are exploring IoT and engaging in tests of technology…
…without having a strategy, defined approach, or a comprehensive view of how it may change their business in many ways.
Smart Systems are less about communication and more about connection.
Relationships
Business
MarketUser Experience
Technology
Emerson Smart Systems
Smart Systems
Relationships
The Market – Foodservice
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• Millions of legacy devices are in the field with communication capabilities.
• Understanding how people interact and relate with equipment isn’t well understood.
• IT infrastructure, due to fragmented ownership, is not robust.
• Command and control are decentralized; often, a brand does not “control” an operator.
• Channels are complex and varying.
• The ability to scale is halted by a complex purchasing model.
• OEMs don’t have as much knowledge or visibility about their own equipment in real applications as they would prefer.
• End users have some visibility, but not as much control over the process.
Foodservice is fast to trial and slow to widescale adoption,unless a critical problem is being addressed.
Tech Will Be Less of a Focus
Tech
nolo
gyAp
plic
atio
n
Physical Level
Communication Level
Customer Level
Secu
rity
Valves Controls Communications/GatewaysSensors
Maintenanceand Service
Operational Efficiency
RevenueGrowth
Food Quality and Safety
Energy Savings
System Level
“The Cloud”
Presentation and VisualizationAnalytics Database(s)
Network/Device Management Hardware
Relationships Market
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Technology
User Experience
Business
User Experience
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Device
Interfaces
Context
User experience isn’t just about the “cloud.” It’s pervasive in every aspect of the offering and presents a great opportunity for differentiation for the manufacturer.
Context
Interfaces
Devices
Relationships and Interactions
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The relationships in our market are vastly different than five or 10 years ago.
Self-organized
Collaborative
Non-hierarchical Non-proprietaryRelationships
Business
Market
Technology
User Experience
Emerson can be the bi-directional link between the digital user and the physical world.
Far-reaching Impacts
Changes to the Business Models and Approaches Are Far-reaching
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Today, most are only focusing on technology.
Value Proposition
Target Customer
Offering
Differentiation
Profit Formula
Revenue Type
Revenue Model
Cost Structure
Margin Model
Key Processes
Product Design
Manufacturing
Service Delivery
Hiring
Marketing
Key Resources
People
Equipment
Technology
Information
A Real Example
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Manufacturers need to think about the long-term changes needed to support connected devices.
Manufacturer launches new
connected oven.
After install, the oven stops
communicating. Is the oven broken?
Who does the operator call? What do they say is the issue?
Does the manufacturer send a service provider? Do they
have this skill?
Can the provider fix the problem? What if it’s the
customer’s IT issue?
What if it’s
leased?
How do I charge?
Is this part of the
warranty?
Do I need technical support?
Connections Allow for New Innovation Models for Manufacturers
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Are you prepared to consider other innovation models? Are your competitors?
Where we tend to live Where the connection may take us
Trad
ition
al s
cope
The Impacts Are Wide and Deep
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Manufacturers and their customers will both experience radical changes.
Improvements to components
New components for existing systems
“Smart” components
On machine diagnostics
Connected machines “Smart” systems
Component Level
System Level
Incremental Radical“New to the Customer”
Business Models
Revenue Models Are Varied by Provider and Market
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Operators are pushing back against recurring revenue models.
Traditional OEM Model
Contractor Model
Dealer/Distributor Model
Connected Device Model
The Choice of Revenue Type Has Many Downstream Impacts
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Integrating Smart Systems requires restructuring long-held assumptions about how products and services are brought to market.
• Revenue Type– Physical product– Software– Data– Service
• Delivery– Cloud– Colocation– Hosted– Bundled/hybrid– On premise
• Licenses– Open source– Proprietary – shareware– Proprietary – commercial
• Revenue Model– Subscription– Pay-per– One-time– Indirect
• Market Delivery– Channel
• System integrators• VARs• Distributors/wholesalers• Professional/tech services• OEM/ODM• Direct
– Direct Services• System selection/integration• Training• Maintenance/service monitoring• Aftermarket support and logistics
Questions to Be Asked of Our Customers Are Different
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Discover Model/Prototype Insights Redesign
• Who are your customers?
• What personas, applications, devices and systems does the product touch?
• How can we best use technology to create an advantage?
• What elements can be combined to create value?
• Are the elements available in existing products/offerings, or is this new to the world?
• Is the timing right?
• Who is participating?
• Who are our natural allies to create the best opportunities?
• What are the critical information interfaces and interactions?
• Key system elements?
• Can we quickly iterate?
• User roles?
• How are we best testing our design?
• How are users responding?
• What are we learning that is new/different?
• Unexpected outcomes?
• Are the value assumptions correct?
• What changes can we make quickly to change the response?
• Do we have the right elements/data/ information?
• Can we incorporate our learnings in the new model?
• Do we phase in insights?
• Prioritized value?
• Is the user experience correct?
• What are adjacent connections we must know/design?
• How will integrations be handled?
• What is the wider ecosystem to consider?
Commercialize/Build
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• How will our role evolve?
• What is the business system that will best enable the customer experience?
• How do we position this in the marketplace?
• How do we align investments/resources to align with the strategy?
• Buy/build/make/partner?
• Launch plan?
• Technology allies?
• Organization levers? Expansion opportunities?
• Timelines/deliverables/costs/risks?
• Ongoing support elements? Service network? Channel knowledge?
• How do we continue to iterate?
These key questions are often left unanswered until the project is far underway. This reduces the likelihood of adoption.
Failures and Successes
The Internet of Broken Things
• Project scope• Security• Usability• Business case
“If you think error messages and applications crashes are a problem now, just wait until the web is embedded in everything from your car to your sneakers.” — Klint Finley, Wired
Mirai Botnet Attack – October 2016 St. Jude Cardiac Devices – 2015 Owlet Wi-Fi Baby Monitor – 2015 TRENDnet Webcam Hacks – April 2010 The Jeep Hack – July 2015 Devil’s Ivy – remote takeover of security cameras
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Complete and Discrete Answers for the Food Cold Chain
Fresh prepared foods in friendly stores attract new
customers and profits.
Convenience Store – Foodservice Focus
Complete and Discrete Answers for the Food Cold Chain
Push Fast Menu Changes Across the Enterprise
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Complete and Discrete Answers for the Food Cold Chain
Moving Beyond Field Trials – Major Equipment Manufacturer
Next Steps• Sales leadership partnering on commercial
strategy and sales training• Product management and marketing finalizing
product offering and alignment• Testing with prominent customers
– Product customization– Service/warranty– Leasing
Customer• Growth-oriented manufacturer• Leveraging connectivity for 8+ months primarily
in field trials for 90+ units worldwide• Goal: Deliver 25,000+ units annually
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Monitor: Data gathered and published every five minutes + critical alertsInsight: Correlation to equipment performanceRedesign: More than 10 firmware changes impacting performanceCommercialize: Next steps
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Questions?
DISCLAIMERAlthough all statements and information contained herein are believed to be accurate and reliable, they are presented without guarantee or warranty of any kind, expressed or implied. Information provided herein does not relieve the user from the responsibility of carrying out its own tests and experiments, and the user assumes all risks and liability for use of the information and results obtained. Statements or suggestions concerning the use of materials and processes are made without representation or warranty that any such use is free of patent infringement and are not recommendations to infringe on any patents. The user should not assume that all toxicity data and safety measures are indicated herein or that other measures may not be required.
Thank You!
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