2023 Frog Report Making Connectivity Matter
2023 Frog Report Making Connectivity Matter
Making
Connectivity
Matter
Future-proofing intelligent products and services
Published by frog,
frog part of Capgemini Invent
INTRODUCTION
03 The Promise of a
Connected World
4 PILLARS
07 Interlocking Strategies
08 Focus: Find the right path
13 Design: Aim for iconic
17 Innovate: Make it possible
22 Impact: Deliver at scale
CONCLUSION
Key Takeaways
Find opportunity in our Fuel intelligent insights with Push boundaries with
sustainable future. Gain access to new data. Use a value convergent collaboration.
competitive advantage by exchange with customers to Achieve bold impact by fusing
investing in sustainable product gather quality first-party data desirability, viability, feasibility
strategy, approach and expertise. and feed AI. and sustainability.
It’s been nearly a quarter of a century since the in valuable insights that illuminate user behavior and
term “the Internet of Things” (IoT) was coined. Since inform future strategy, unlocking new business models
then, we’ve seen a proliferation of products that and revenue streams. From a planetary perspective,
can connect and exchange data via communications connected products and services promise to be a
networks. Smart devices, powered by artificial crucial part of a sustainable future thanks to their ability
intelligence (AI) and machine learning, are starting to offer more efficient ways of operating.
to become table stakes. Connected products open Our planet is inherently connected. Vast
the way for organizations to offer intelligent services. underground mycorrhizal networks enable trees, fungi
Within the next five years, 88% of organizations and more to thrive in forests around the world.
will offer intelligent services. From mobility to Migratory birds in flight use thermal air currents to help
medicine and from personal care to production lines, them travel efficiently across continents. And the
more innovators are creating ecosystems containing Amazon rainforest plays a major role in both local and
products and services with intelligent capabilities. global climates due to the water it releases into the
Could we be moving towards a future where everything air and seas. As the climate crisis comes into clearer
will have connectivity embedded? focus, so too does the delicate balance of interwoven
From a consumer and end-user perspective, a natural systems. It’s equally apparent that our
Connected World means that intelligent devices and human creations need to become smarter and better
tools will increasingly help enhance our day-to-day lives. connected to ensure efficient, effective and more
From a business perspective, connected devices result informed routes forward.
88% of
products that have a more direct and shorter path
to payback with a significant return on investment
(ROI) despite this increased complexity. One recent
“New products can benefit the “It goes back to transforming the
environment and the planet.” whole organization to react.”
Jeff Hebert Phil Vann
Global Head of Intelligent Products and Services Vice President, Intelligent Products and Services,
in Intelligent Industry, Capgemini Invent Capgemini Invent
s Focus Focus Fo
Design Design D
ovate Innovate In
act Impact Impa
1
Focus
Find the right path trends and an ability to anticipate the technologies
of tomorrow. This process encompasses getting
ready for growth in new areas, identifying the best
There’s a lot of complexity to take on when creating use of time and resources and finally achieving the
new products and services. It can be hard to know necessary alignment to initiate action. And at the
where to begin—let alone identify the opportunity to core, instilling a deep commitment to sustainability
focus on. In a 2022 study by Capgemini only 7% of by design from day one.
organizations surveyed had scaled use cases for
intelligent products and services. This means that
many organizations have yet to prepare for what’s Get ready to demystify the initial
next in the Connected World. It also means that
those who are already active in the space have a strong
stage in order to take the first
head start. systematic and deterministic steps
Doing the work of defining a winning vision,
business case and realization strategy in the face
that inspire confidence to take big,
of complexity takes an awareness of the ongoing bold steps.
There are many signals that it’s a good time to begin The Connected World promises many benefits.
the journey into connected products and services. Take the example of the smart thermostat: figures
Here are the four most common triggers. show that, on average, the Nest smart thermostat
saves U.S. customers about 10-12% on their heating
1. Lack of data: The company does not have direct bills and about 15% on their cooling bills while
access to customer data and/or lacks broader automatically keeping their homes comfortable.
services and revenue streams from such data, In addition to offering improved efficiency and
including with third-party partners. effectiveness, adding connectivity to products and
2. Declining relevance: The organization, business services can lead to greater levels of insight to
or product has begun to lose relevance and is in help direct future business strategies, more intimate
need of an uplift, seeing a reduction in purchasing customer relationships and new ways to connect
volume, use and engagement. with customers, consumers, patients and operators.
3. Competitive disruption: There’s a need In companies with more traditional products,
to create a competitive advantage against such as sporting goods, clothing or pet food, there’s
disruptive new entrants. potential to add services, such as performance or
4. Demand for efficiency: Leaders are seeking the wellbeing, around them. These services can leverage
realization of a credible, effective sustainability expertise that is typically held inside the business
strategy and want to enable more efficiency and for R&D—and use it to deliver much more valuable
intelligence in business operations. services and experiences directly to customers.
from traditional products and to enable these areas while outsourcing and triaging
the rest.
services can struggle with the new It’s important to get comfortable with messy.
paradigms associated with service During the transition it won’t all be perfectly clear and
tied up with a bow. However, taking the steps of
delivery and revenue. Only 7% ensuring there is a clear business goal, plan and an
of organizations surveyed had understanding of what's involved is key. So, get ready
to demystify the initial stage in order to take the first
scaled use cases for intelligent systematic and deterministic steps that inspire to the
Watch video
Human-centered to planet-centered
13%
40–60%
REVENUE
Companies
Reporting 12%
20–40%
Revenue REVENUE
(2022)
9% 10–20% 23%
REVENUE
5%
4%
7%
<10% 23%
REVENUE
10%
6%
5%
Companies
0% REVENUE Projecting
58% Revenue
(2025)
stuck at the pilot or proof of focusing on the biggest risks and aggressively
reducing those risks early and iterating.
concept stage. An easy trap to fall into is innovating for
innovation’s sake. For many, intellectual property,
—Capgemini Research Institute (2022) and exploring what’s hot and new, is exciting.
But building new connected products and services,
even from existing technologies, is already a
Innovate only where it matters complex undertaking on its own. To avoid excessive
complexity, it’s critical to identify where innovation
Innovation engineering is essentially the building really matters—for the experience, business
of something that’s never been built before. In model or competitive advantage—and triage the
many cases there’s no way to be sure upfront that rest. One clear place innovation may be needed
something can be done. Riskier than repeating is custom sensor development to capture data that
known engineering since the steps involved are is otherwise inaccessible. Another may be in the
Cutsforth
"WE HAVE “WE'LL START “WE'LL START “WE'VE STARTED “WE'VE DONE
NO PLANS" AFTER 2 YEARS” IN THE NEXT IN THE PAST THIS FOR
2 YEARS” 2 YEARS” 2+ YEARS”
Deliver at scale to keep the product relevant for longer, this also
supports the monetization of product and service
ecosystems extending far into the future.
When surveyed, 77% of fast movers in the connected
products and services space said they experienced On platforms and partnerships
improvements to their product performance
and/or usage. Charting the path to impact involves There’s a lot of hype currently around the power of
navigating multiple aspects concurrently. It’s a case platforms and partnerships, and it’s not without just
of ensuring foundations are scalable, operationalizing cause. That’s because connected products and
change and therefore mastering complexity and services can provide even more utility when extended
unlocking ecosystem value. all the way through to enabling and operating as
To realize positive impact and ROI, connected a platform—combining sources of data from across
products and services must be built and deployed a company’s products and services as well as those
securely, reliably and sustainably. All work must of partners, and delivering synthesized insights and
be underpinned by a commitment to structures that actions. There’s a lot of value in doing so, because
can be scaled globally, rapidly, with ease—for today, consumers want the seamless user experiences that
tomorrow and beyond. This means creating with the come from integrated systems. For example, a
potential for evolution built in. In addition to helping fridge that knows it’s almost out of milk is useful,
All work must be underpinned between the aggregators and the ecosystems that
exist already, and those that innovative, forward-
by a commitment to structures thinking device manufacturers themselves want
Volvo
results in a rapidly changing, bold companies can clear the rising bar, crafting
breakthrough connected products and services
highly competitive landscape. that bring huge value for customers.
ENABLED BY TECHNOLOGY
Innovate to reach new levels of performance and stand
apart from the competition
FUELED BY DATA
Capture and utilize new categories of data that can
supercharge your business
DIFFERENTIATED BY DESIGN
Envision, craft and manifest products and services
that people fall in love with
TODD TAYLOR LUIS ESPINOSA CARLOS FONT LEÓN ROMAIN DAVID PIGANEAU
Executive Marketing Product Manager, frog Art Director, frog Associate Marketing
Director, frog Director, frog
Senior Director, Brand PAULINA ZEPADA ARNON KARNKAENG
Portfolio, Capgemini Invent Implementation Specialist, frog Marketing Designer, frog LORENZO LASAGNA
Social Media Manager, frog
ELIZABETH WOOD, ADRIANA GARCIA REGINA VARGAS ACOSTA
Editorial Director, frog Implementation Specialist, frog Marketing Designer, frog This report was informed
ESTEFANÍA LATOFSKI by insights and data from
CAMILLA BROWN Production Capgemini Research
Senior Copyeditor, frog Visual Designer, frog
Institute’s report ‘Intelligent
LAVERNE HEDGEPETH VICTOR TAKESHI JULIANA ESCOBAR Products and Services,’ 2022.
North America Editorial Design Technologist II, frog Marketing Program
Manager, frog Manager, frog
MARIANA GALLARDO
Senior Knowledge
Manager, frog
frog.co
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