This edition of the Innovation Flash comes just after the Philips Innovation Experience 2011. (Click here http://www.youtube.com/watch?v=FR2j67i6Xuc&feature=related for an impression and here http://www.innovation.philips.com for more background). In the event innovation was highlighted as driver for profitable growth, an area we work with many of our clients on.
Herewith some of the lessons we would like to share with you from recent work we have been doing:
- Most companies know the power of platform and architecture thinking. However making choices in this remains difficult especially when the extent and nature of the demand is uncertain. In this article Paul Hissel and his co-authors provide a real options approach to addressing these uncertainties and choices. Learn more…
- In the second article, Mike Schavemaker shows how innovation really works in the area of energy and Smart Grids. When technology offers many opportunities the complexity of innovation is in understanding the users’ unarticulated needs and crafting a network of actors that collaborate to deliver against these needs. Learn more…
- Next to reading our thoughts in these articles you can also meet us at Metering, Billing/CRM Europe 2011 conference, to have an exchange of thoughts on your innovation challenges and opportunities in the field of energy. Learn more…
- Furthermore you can interact with us on our upcoming webinar on Lean Innovation. As a follow up to the successful webinar of last year, this November Wil van Mil will share new experiences we have in applying lean in innovation, using the lean innovation maturity model as a base. Learn more…
- Finally, I would like to introduce two of our consultants that have joined us at the start of this year and are contributing to building innovation capabilities at our clients: Cindy Copier and Rob Jaartsveld. Learn more…
Please mail us your reactions and thoughts on innovation.
Let's innovate!
Iason Onassis
Managing Consultant
Industry Consulting, Philips Innovation Services
Assessing the product architecture decision about product features – a real options approach
Product architecture decisions impact how a firm can introduce new products to the market and are therefore strategically important. However, the extent and nature of future demand is typically uncertain, making the evaluation of product architecture decisions complex. Furthermore, due to an ever decreasing product development lead time, firms usually have limited time to make product architecture decisions, and because product development teams are often multidisciplinary, frameworks supporting these decisions should be transparent and facilitate the sharing of knowledge.
Wouldn’t you like to be able to predict the financial consequences of your product architecture decisions?
We invite you to read more on a method which has been jointly developed by university researchers and consultants of Philips Innovation Services (former Philips Applied Technologies). A method for the assessment of product architecture decisions, which is practically usable by nonfinancial professionals, about the strategies for the inclusion of product features anticipation future opportunities (keeping options open). The method provides financial insights, enables balanced trade-off’s and stimulates cross-functional cooperation.
To continue reading, click here to see the options for accessing the total article.
Click here for more information on product architecture
A perspective on Smart Grids
“This article briefly addresses the different values and value drivers around the evolution of Smart Grids. It is written for the Smart Grid professional who desires to have a snapshot feed of the complex and widely interpreted development of Smart Grids. In that sense, reading through the article will not lead you to the holy grail of understanding, or a “Rosetta’s Stone” of Smart Grids, rather a better sense of the languages and perspectives used in this Tower of Babel, called the Smart Grid.”
Value is in eye of the beholder
Smart Energy and in particular Smart Grids are subject to a great number of different perspectives. So far we have seen an abundance of definitions of Smart Grids that all have one thing in common: they are all true, and they are all applicable from the perspective of the beholder:
The Utility: “using state-of-the-art technologies and developments, smart grids provide extended opportunities to actively and flexibly adapt generation, grid control, storage and consumption to the constantly changing requirements of the energy markets”.
The ICT-System Integrator: “a paradigm shift in our energy system -- changing the way people and businesses interact with energy -- and how value is created in the utility market”.
The trend watcher: “a future electricity delivery infrastructure that makes use of advances in information, communications and energy technologies to improve system use and resilience, empower consumers, and address energy sustainability concerns”.
The consumer (definition taken from BEUC): “an electricity network that can cost efficiently integrate the behavior and actions of all users connected to it – generators, consumers and those that do both – in order to ensure economically efficient, sustainable power system with low losses and high levels of quality and security of supply and safety”.
Browsing through these various definitions, it is clear that the beauty and the promise of the Smart Grid bring a world of opportunities, whilst simultaneously challenges all actors in the field with universal question marks. These question marks refer to the value that each individual or group of actors aspire to bring, or get in the sphere of the Smart Grid.
Additionally, actors within the domain of Smart Grids are liable to different local conditions (e.g. regulations, grid tariff systems, legacy assets and freedom-to-operate of US-actors are different from those in Germany) just to name one factor. It is difficult to compare one best-practice to the other within the realm of Smart Grids; let alone to draw universal conclusions on Smart Grid pilots.
E=ICT²
These aforementioned boundary conditions and constraints face yet another layer of complexity: the layer of Information and Communication Technology. Whereas the 20th Century, was the century of the famous equation E=MC², the 21st century will partly evolve around another equation, namely E=ICT². Energy will be measured, be controlled, be organized, be localized, create value, allow entertainment, unleash mobility, ensure well-being, saving the planet, drive new markets, enabled by a plethora of (distributed) ICT-solutions.
Mind you, that information technology already is introduced in the Energy domain for decades. So, the question arises: how can we make sense of the complexity within Smart Grids; where I make a clear cut-off point of Electricity networks, not including Water, Gas and others. Therefore this article introduces a simple overview model. The model is derived from the EEGI SmartGrids Model.
To understand the dynamics of the model displayed above, you first have to realize that the core business of the Energy industry revolves around reliability and availability of energy supply and demand. The traditional Energy industry does not accept the traditional IT-availability standards of the five 9’s (99.999 availability). No. It dictates an even more strict system availability. This becomes even more vital in the top of the model, where the nodes are supercritical. Here, clearly the function focuses on pure energy supply and demand and underlying assets and workforce optimization is paramount. It is here, at the transmission level, were actors particularly need to execute on operations management and quality control.
In the middle section of the model – the distribution level - the control and monitoring aspects get more versatile. Remote operations and balancing of the (energy) subsystems get critical. In this context, the Smart Grid allows for self-healing properties of the system, coupling supply and demand to the grid. But don’t be mistaken, these DSO-structures therefore get more and more intertwined and connected with each other. Distributed, intelligent Smart Grid technologies typically focus on this ground to cover, as the investments and subsequent business cases are more articulated: by and large, it’s replacing existing meters and substations with more feature rich versions that allow for more accurate measuring and (demand) control. In this middle part of the model, cost modeling for utilities and control centers is on the agenda, including sustainable technology roadmaps for utilities and vendors – often combined into one ‘eco-system’ business roadmap to cover a particular geography, or horizontal (e.g. Electronic Vehicling) to support their long term roll-out plans.
Finally, on the bottom of the model the Home Area Networking level is introduced. This is the most dense part of the Energy network; as form and function of the Smart Grid least defined. For the argument’s sake, this level of the model includes physically e.g. buildings (private homeowners and ESCO’s), mobile assets (ships, automobiles, cycles and cell-phones) basically each former “bus’ed” proprietary network with storage capability.
Here, not only the question arises what services and added-value can be brought to the end-user/customer, but also: to what extend can this part of the Smart Grid be ‘cracked-open’. Typically, this territory of the Smart Grid is highly fragmented and divided to proprietary protocols and respective vendor, and system integrator evangelists. A true end-to-end Smart Grid would allow open (non-proprietary) forms of the control plain and application domain. Whereas large actors in this space focus on safeguarding their stake of the pie by focusing on enterprise level security on the control plain, smaller more nimble actors focus onto rapidly developing apps and end user solutions.
Know thy customer to know thyself
Therefore, for actors it’s hard to hear the message through the cacophony of promises. In the end, the value is sought by the (end-)customer. Therefore, we believe that the end customer is the focal point of understanding. Once you have created your right-to-play as actor, you can decide which partnerships, go-to-market and control points you need to execute on.
The point being behind the E= ICT² analogy, is that the definition of Smart Grid and the inherent value that it brings to all actors in the field, value chains, business models and use-cases (and in that particular order) depends largely on the goals of these actors. These goals are ultimately pulled by your customer, or your partner in the value-chain. In Geoffrey Moore’s terminology: we have entered the Bowling Alley; the time to cooperate together to create a new (and larger) pie has come. The time to make concrete choices of cooptation and customer propositions.
No time to waste: time to make your own definition of Smart Grid, translate your end-customer’s and partner’s perspective and create your part of the market. Be the mayor of this tower of Babel, stop searching for Rosetta Stone.
Therefore clients hire us to make sense of their particular right to play and how they can realize their business goals on a sustainable manner.
Demystifying this phenomenon is like uncovering the mechanics of a paradigm-shift of a conventional industry. Therefore it starts small, and undefined.
Metering, Billing/CRM Europe 2011 conference
The Metering, Billing/CRM Europe 2011 conference and exhibition is the industry leading meeting place for smart utility professionals and a platform to discuss the latest developments, solutions and benchmarks in the utility industry.
Come and visit us at Stand G86 in Hall 1 to discuss your innovation challenges and opportunities in a personal conversation and see how our comprehensive range of services can support your innovation and operations needs. We offer a wide variety of services for the energy sector, such as:
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Creating end-user driven energy management concepts
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Road mapping and architectures
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Lean development and program management
More information on the event: http://www.metering-europe.com
When and where
Tue, 2011-10-04 08:30- Thu, 2011-10-06 14:00
Amsterdam, The Netherlands
How lean is your innovation?
Philips Innovation Services presents a webinar on Lean Innovation.
Date: Thursday 24 November 2011, 16.00 – 17.00 hrs (CET)
Presenter is Wil van Mil, Senior Innovation Consultant, Philips Electronics
Lean manufacturing is becoming common practice these days. Applying Lean in product development is starting in various places around the globe. Good examples exist. A next step is expanding Lean to the whole innovation process including for instance product marketing. Within Philips Electronics we have started to apply Lean principles in product development as well as in innovation.
Last year we presented a webinar on Lean Innovation focusing on applying the lean principles we learned in manufacturing extending them by principles typical for development. This webinar we will share new experiences we have in applying lean in innovation. As a base we will use the lean innovation maturity model. All supported by cases from within and outside of Philips Electronics.
Click here to register. We will send you the necessary information prior to the webinar.
New employees
Cindy Copier
Cindy joins us as Innovation Management Consultant. She is an expert in the areas of smart metering processes and end user driven innovation, and has a broad range of knowledge in the energy sector.
Cindy joins us from Zest Utilities a consultancy in the energy sector. Over the last 5 years she has worked for Dutch Utilities in various functional areas. One of the areas she has accumulated experience on is Smart Metering, having been involved in many projects dealing with various phases of development and implementation within the client organizations. Prior to consulting in the energy industry Cindy was innovation consultant with Syntens, where she consulted to small and medium sized enterprises on the topics of strategy, product development, technology driven innovation and process improvements.
She studied Industrial Design Engineering at the Delft University of Technology specializing in product design and innovation management.
Rob Jaartsveld
Rob joins us as Innovation Management Consultant and Product Architect. He is an expert in the areas of software development and rapidly changing markets, he has a broad range of knowledge in road mapping and business development of software applications.
Rob joins us from NXP Software and NXP, where he spent the last ten years in various roles such as Roadmap & Technology manager, Software department manager, Product Marketing and Product management in areas such as Android Smartphone products, Video Enhancement Software and Mobile TV. Before that he worked for 8 years in Philips Consumer Electronics as technical product managerand standard design manager in the Netherlands, Austria and Japan. Prior to CE he spent 6 years with Technical Application Software Services.
