Working together on smart connected products with internal and external partners

We can no longer imagine life without connected products. Lots of companies manufacturing physical products, are wondering - and quite rightly so - whether smart connected products are also their future and if and when they should make a move. Why is cooperation essential? And what about product management and risk control? 

Sirris identified ten challenges that product builders have to address when making the move to smart connected products. These were joined in a guide that will help these companies to make their first moves toward smart connected products. In the previous three blogs we already discussed six major challenges; in this last blog we will discuss the last four relevant challenges in more detail. 

Challenge 7: getting different departments and profiles in the company to work together

A smart connected product not only adds value in the form of new functionalities, data and services, it also plays a role in delivering this value to the user and converting the delivered value into revenue for the company. Where engineering, service and sales teams used to work next to each other most of the time, according to their own insights, in traditional product sales, the teams now need to start working more closely together throughout the process, from the early development phase up to the customer support phase.

The processes to develop physical products and software are quite different, go at different speeds and involve different people. It is quite a challenge to reconcile these two different cultures.

Challenge 8: setting up appropriate product management for smart connected products

From the early stages of coming up with the idea, you need to bring together business and technology skills to create valuable solutions. That's why you need a team of complementary profiles in the company that can not only provide different insights, but can also build them. You cannot outsource the product management of your smart connected product: you keep control over the idea and the product strategy to be followed. Your company will therefore have to build up internal knowledge about ‘new’ business models, ‘new’ digital technology and a ‘new’ development approach. This internal knowledge build-up starts from day 1 and takes time. A step towards smart connected products is not just something you do in between your usual tasks.

You will have to invest in setting up a sound product management:

  • Put together a complementary team and define an initial project, making sure the exploration is meaningful.
  • Retain ownership of product management within the company.   

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Challenge 9: managing risks by building proofs of concept

When working out the product strategy and exploring the various options, you should consider the opportunities, as well as the risks. Does my solution provide sufficient added value according to my (intended) customers? Is this smart functionality technologically feasible? Can I collect the correct usage data of my product to improve my services? To control these risks, you will have to validate your ideas with proofs-of-concept. A proof-of-concept is a realisation of one or more aspects of the intended solution that you want to see validated, before investing in further development. These aspects can be technological, but they can also be business-oriented.

So control your risks by building proofs of concept:

  • What are the main risks in terms of feasibility on which I should focus when working out the solution?
  • Which proof(s) of concept will I have to build and what do I want to prove with it? Can I build the proof(s) of concept myself or do I need to involve external partners?

Challenge 10: specific collaboration with the right partners

Depending on your strategic choices, you will need to enter into new collaborations with different types of partners to achieve a sustainable smart connected solution.

On the one hand, if your solution is part of a larger total solution or an ecosystem of products, you will need to make arrangements with the parties involved about how these systems work together and how all parties can benefit from this. On the other hand, you may also need to involve industrialisation partners who can supply and support customised components (e.g. a web application, a hardware module, etc.) of your solution. Together with the great potential of smart solutions, new dependencies will arise between the systems and partners who will realise these solutions together. Finally, for business-to-business solutions, you may want to work more closely with the very first customers to explore the business benefits on both sides.

So seek specific collaboration with the right partners:

  • What can I do myself and what is the best way to work with partners? Do I have a good overview of the required expertise?
  • How will I build a partner network? Do I have a good view on potential partners and their expertise?

By building proofs of concept, involving the right partners and setting up the appropriate internal organisation, you control and share the risks of your development. Sirris supports companies as innovation partners, with independent advice, setting up proofs of concept, guidance and a network of partners.

In the Wat Slim project Sirris has helped more than 50 companies to explore the potential of smart connected products for their business. The insights built up in this project were joined in a guide. It provides an overview of the 10 most important challenges for product builders who want to make the move to smart connected products.
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This blog has been written with the support of VLAIO.