The manufacturing industry is ripe for innovation, as it continues to embrace the IoT (Internet of Things) and AI (artificial intelligence). In fact, McKinsey suggests 50% of organizations’ revenue will come from new business models and products by 2026. And the way some manufacturing companies are talking this just might happen.
What’s more, this is exactly the conversation I was having recently with Melissa Durbin, sales director, digital and application innovation, Microsoft, as we discussed digital platforms for manufacturers. She explains in just the last six months the company has been having more conversations with chief innovation and chief digital officers who are engaged and who are looking to make that move.
“The time is now,” she says. “It is the digital imperative that if they do not digitize these products they will be left behind.” Does this sound familiar? We have been talking about this for more than a decade. But the good news here is manufacturers in all industries are starting to realize they need to innovate to be competitive and that is precisely why Microsoft is stepping up its efforts to assist customers and even within its own corporation.
Microsoft is focused on helping its customers in manufacturing identify ways to digitize their products, connect products, and then determine how to turn those connected products into service.
“If organizations aren’t taking their products to the cloud and having a cloud-market approach, then they may be losing out on their existing marketshare,” Durbin says. “It is really our job to help educate our customers on how we can help create that journey of digitization of their products seamlessly here at Microsoft and create that partnership.”
She points to an example of this inside Microsoft. The company started setting up analytics on Office products to see the signals and feedback. “We quickly realized that workplace analytics was a value platform that we could monetize, and we turned that into Viva platform,” she says.
While this is simply one case, there are so many opportunities in process and chemical, HVAC (heating, ventilation, and air conditioning), electrical, paints and coatings, and even in the government space. Durbin suggests thinking of a service capability for golf carts or aircrafts where you are creating a platform that other vendors could then plug their niche solutions into those platforms to help create a safer experience or a more appealing experience depending on who that is.
All in all, there is an opportunity here to leverage AI, but as Durbin explains, “We don’t always know what the end service or monetization of that is going to be until we start collecting data from customers.”
The opportunities are endless, as I always like to say, and it seems Microsoft recognizes that as well. The technology company is working closely with its customers to test a hypothesis and measure innovation that will ultimately lead to better products and services.
As new opportunities continue to present themselves in manufacturing, manufacturers must be prepared. They need to move to a more modern approach to create new revenue streams. There is certainly no better time than the present to make this happen. Are you ready? How will your company move forward in a new era of innovation?
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