TV-report: The Internet of Things – The secret to what PLM and ERP can do in the smart revolution

Thought leaders share their vision on how the IoT will impact product development.

Have you heard enough of the word “smart” when it comes to product design? It’s thrown around a lot: smart machines, homes, and cities, where smart cars solve transportation problems. Even the tires are smart, as is shown in this TV-report.

Well, you’re going to hear more about IoT and smart products, especially if you support a PLM or ERP environment for product development.   “It’s the way of the future and it’s the Internet of Things (IoT) that is the catalyst for this smart revolution,” asserts Ericsson’s IoT “guru”, Jan Höller.

So what is the role of ERP and PLM in this context? And how will the transition to smart connected devices impact the product realization, distribution and service processes?’s PLM TV-team interviewed a number of the leading technology developers in the IoT area.   In this report you’ll hear more from Ericsson’s Höller, Dassault’s Bernard Charles and PTC’s Jim Heppelmann, as well as SAP’s Shekhar Iyer and IFS’ Alastair Sorbie and the academic servitization authority, professor Tim Baines at British Aston University Business School.  


It has been said that the IoT – The Internet of Things – will revolutionize product realization, distribution and services. But is that forecast true? The short answer is: It already has!

The idea of providing increasingly software-controlled products with sensors and connecting them via the internet has already reached breakthrough levels of acceptance in 2014.

“I would say that in the past 18 months, IoT went from something that according to Gartner was a trend in an “early adopters investigate mode’ to practical solutions used by big players across industry segments and in different parts of the value chain”, Jan Höller claims, adding that these companies have invested heavily in the IoT opportunity.


Connecting products in use back to the PLM system – Professor Tim Baines
The IoT is a high priority for the ERP and PLM players. “Absolutely, we’re very familiar with both the ERP and PLM systems, but as we move into these new advanced form of services we have to have systems that first tells us about the product in use. Where is it used? How? What’s the condition? We need to be able to feed back that information to the developing organization and help them to make decisions about what to do with the product”, says professor Tim Baines at Aston Business School and author of the book, “Made to Serve”. He adds “that PLM and actually an SLM system (Service Lifecycle Management) plays a crucial role in this”.


IoT is an important focus area for PTC
PLM developer PTC is one of the companies that has made ​​the most progress in terms of SLM and the Internet of Things. Half a year ago they bought ThingWorx and previously Servigistics, an advanced player on the SLM field.

“The Internet of Things creates this whole new product experience and this in turn finally brings us to servitization which is a complete transformation in the way we think of products, with services or even as services. These smart connected products can be serviced in a whole new way and that leads more and more companies to the ‘power by the hour’ type of business model”, says PTC’s CEO, Jim Heppelmann.

He describes a mindset where companies will, “think of their product not just as a product but as a vehicle to deliver services in a continuous ongoing relationship with their customer”.


“A whole new world is emerging”, claims Dassault’s Bernard Charles
This statement marks one of the rare occasions where the PTC CEO fully agrees with Dassault’s CEO, Bernard Charles.  “It is a whole new world emerging”, says Charles, “and it will change a lot when it comes to product development, engineering, and manufacturing, not to mention the big transition of business models that follows in the path of new consumption patterns and the automation of the interaction between machines (M2M)”.


The need for standardization on the IoT
But there’s still a lot to do before the IoT can reach its full potential, claims Ericssons Höller and standardization may be the most important issue. “Indeed, if we look at a number of industry sectors they have been building their solutions for years.  They have their own standards and proprietary protocols etc. As more and more “things” become connected these pieces have to be phased out and be replaced by standards”.


IoT and M2M’s expected growth
In 2020 Gartner forecasts that 30 billion devices (“things”) will be connected to the IoT. M2M services are estimated to grow to nearly $ 200 billion by 2017. And according to a report by the McKinsey Global Institute (“Disruptive Technologies: Advances that will transform life, business, and the global economy” – released in May 2013), the Internet of Things has the potential to create economic effects in the range of 2.7 trillion (2 700 billion) to 6.2 trillion dollars by 2025. McKinsey further believe that 80 – 100 percent of all manufacturing will somehow be linked to the use of the Internet of Things.

So, if you haven’t already included the Internet of Things in your PLM and ERP plans – a “smart” idea would be to rethink…

But first: Watch this TV-report!