Business Strategy and Innovation Framework
As the overall project progresses, those involved will gain a deeper understanding of the initial idea, which will necessarily undergo a process of refinement. The objective of this refinement phase may be to hit specific budget targets in light of clearer operational constraints, ensure compliance with statutory regulations or accommodate partners’ technical limitations.
The key to impact analysis is to discern the degree of elasticity in a technical specification, and the extent of compromise needed to meet budgetary constraints, particularly in the face of change. For instance, it may transpire that data sovereignty regulations limit the scope of potential solutions in ways that were not envisaged when the initial business case was developed, or that certain planned Quality of Service( QoS) levels may not be achievable( due to limited connectivity, for example). It’ s difficult to conceive of all the potential problems that can crop up and blow an IIoT project off its budgetary course— and that’ s precisely the point: IIoT business cases need to be structured in a way that allows analyses of the best way to achieve compromise between technical constraints and available budgets. Business planners need sufficient detail within the overall context. This allows them to discuss descoping possibilities with downstream project managers.
A related issue is security: the level of security deployed as part of an IIoT solution should be subjected to a specific risk- and scenario-based analysis. The transformation of business systems that will take place under a new IIoT regime will bring new types of risk that have not been previously considered in the context of more traditional IT projects.
Lastly, there is significant potential for new or different business models to materialize once a foundational IIoT infrastructure has been put in place. For instance, a manufacturing company that has set up a fully connected, automated production line might consider a new business model that brings the customer into the production process as a decision-maker, with the ability to adjust their preferences at the time of production. These post-investment opportunities for business models should be analyzed using standard evaluation tools, for instance by extending net present value calculation to include real-option approaches. Scenario planning can elaborate on future possibilities and develop a business model roadmap.
Scenario planning can also serve as a helpful tool for reducing risk. Based on the assumptions underlying the business model( such as the target group, timeframe), determine various future scenarios and the most effective business model response. It is particularly important to explore those elements of the business model that have impact and value, both in the context of a specific scenario and the overall strategy. Engaging in this level of rigorous strategy planning and scenario analysis enables enterprises to develop a future-proof business model.
IIC: PUB: B01: V1.0: PB: 20161115- 32-