When worlds collide, innovations are born

Jarkko Vesa, Founder & CEO of management consulting company Not Innovated Here, has had the opportunity to get thoroughly acquainted with the possibilities that the industrial internet brings in different industries. As the technology enabling the required connectivity and data gathering has become more common, the question on everyone’s minds is how to find new business models from these new opportunities. Vesa thinks that the solution for finding new innovations lies in bringing in experts from very different backgrounds to the planning table.

According to Vesa, one of the most prominent opportunities for finding new ways of utilizing the technological advancements comes from the cooperation of start-ups, hackers and industrial companies, coming together and trying out new things.

“I’ve attended various industrial hackathon events and found that we have a lot of analytics tools and start-ups that offer great visualizations. This world can be swiftly utilized when the Application Programming Interfaces (API’s) are opened in a controlled manner. This way the traditional industries are able utilize the know-how of start-ups, and this is where the real potential lies.”

Vesa points out that the main idea is to bring applications of the consumer world and the industrial environments closer to each other.

“Opening the interfaces in the industrial internet enables this culture. That’s how we get into the same kind of buzz that’s been happening in consumer services, enabled by Google, Apple and other operators alike. What we’ve witnessed in industrial hackathons is that these two worlds can be quickly combined together.”

One of the developments in the industrial internet is that it improves user experiences in industrial environments and new solutions are introduced at a rapid pace.

“There is a lot of utilization of motion detection features nowadays, where a crane can follow its operator or a welding machine can follow the movement of the welders arm. A lot of the solutions involve intuitive interfaces, such as smart glasses, speech recognition or other convenient ways of communicating with machines.”

The world can’t be built in a day

Vesa sees that one of the keys to unlocking new business benefits lies in utilizing a start-up mentality in finding new solutions. He argues that in the start-up world, large questions are not solved all at once, but rather with quick and dirty and good enough type of solutions.

“This sort of lean thinking enables solutions to be developed through new versions and it also provides the ability to make changes faster“.

In Vesa’s opinion, there are certain similarities in the current state of the industrial internet to where the telecoms industry was in the late nineties.

“I wrote my thesis on the development of mobile technology back in the turn of the millennium. Back then the tele operator business resembled the traditional industries a lot. Everything had to be 100 per cent tested and confirmed. And suddenly these internet geeks started showing up and doing things with a good enough attitude. This was the focal thinking of the new generation – it doesn’t hurt if everything is not tested thoroughly. The ethos was that the users will give feedback and the product will be developed based on it. This sort of thinking horrified the traditional telecoms industry. They said that they can’t build critical systems with that sort of mentality”.

Vesa points out that security, safety and quality issues need to be managed, but adding a certain open mindset and courage to research and development will lead to innovations.

“Of course there needs to be the right places where to experiment. But in suitable places and instances, where risks are managed, the development teams should be given more freedom to try things out. I think the industrial hackathons are a perfect place for that – a sandbox to experiment in, within safe boundaries”.

Industrial internet or industrial intranet?

A lot of the new innovations around industrial internet have, however, focused on improving productivity on a machine level, ranging from predicative maintenance to wearables in an industrial environment.

In Vesa’s opinion, there will be a lot of innovations on a machinery level in the near future, but getting the solutions to the next stage in the evolution will require more time.

“The development stages are in order: machinery, factory, supply chain and ecosystem. In the large scale of things, I believe that in the beginning the first big success stories will be the interfaces, which are relatively simple and fast to build”.

This leads to the question, whether we’re really in the age of an industrial internet or an industrial intranet?

“If we look at existing business cases, we are managing, monitoring and operating on a machine level, but we’re only just moving towards conducting these on a factory level. Managing a whole supply chain or an ecosystem is still far away. There are certain challenges of systemic innovation, where the whole chain needs to reach a certain level for it to spread”, Vesa says.

What would need to happen in order to reach the level where the machinery of different operators or even industries could communicate seamlessly with each other?

“Recognizing things is one of the challenges here. The machines, equipment and products need to be equipped with RFID’s or some other tags. When bar codes came along, it was a huge step forward at the time. In order for them to spread it required a few big operators in retail who decided to start using them and demanded the supplying industries to start using them as well. That was back then, but which operators these days would be powerful enough to start driving this kind of change? Of course many industrial companies are in a position where they have their supply chains well managed and can use their power to implement new solutions”.

First step: Just do it!

When all the right components are in place, Vesa gives three key things to consider when innovating new business models or solutions based on the industrial internet.

“The first one – Just do it. Here in Europe, we have a tradition of planning for a long time before moving to execution, where as in the United States it’s quite the opposite. This affects everything we do, from legislation to standardization. I think the most important thing is just to get going”, Vesa starts out.

“The second point is about agility and speed. There has been an increase in the Lean and Minimum Viable Product (MVP) thinking, where one does not aim for perfection right away, but for a good enough version, which can be developed further based on the user feedback. The important thing is not to get stuck on the planning for too long, but to bring the product out and test it with the clients”.

“The third point regards cyber safety. It is pretty common that this takes first place and then security issues become a top priority. When everything is done very cautiously and thoroughly, there is a risk that the information security starts to drive the business itself. I claim that an information system cannot be developed information security first. You have to create it business first and then make sure all of the security issues are in order”, Vesa states.

“This is an area where it is very easy to start seeing threats everywhere, raising concerns and portraying scenarios where cranes are being high-jacked in ports or something similar. In reality, everything is planned thoroughly and the risks are managed, for example, using data diodes, which transmit information only to one direction”.

“The industrial internet is too important a matter to be left solely in the hands of the cyber security experts. It has to stay on the business agenda”, Vesa concludes.

Jarkko Vesa is the Founder & CEO at Not Innovated Here – Laboratory of Creative Destruction

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