The Connected, Real-time Company. Jeroen Tas (CIO Philips) #exsum13

If you’re a 123-year-old business, the only way to live another 123 years is to keep transforming. Currently, Philips is in three different markets: light, medical systems and consumer electronics. But, as Tas argues, these different markets are increasingly interwoven. Smart light bulbs know your preferences and behavior. A smart toothbrush can tie into a health-system that alerts dentists, gives you a dashboard and generally keeps your teeth healthy – it can even make brushing fun by offering games and rewards. Medical devices are no longer about the ‘box’ but about the process, the outcomes. Digital interfaces determine the value, through touch-screen tablets, interactive glasses and whatever interfaces may come up next. Inside Philips, this new, integrated view is a true culture change, where different divisions need to work together. Some people still want to just ‘sell the products’, while others focus on ‘healthy eating’ of ‘pure air in your home’ and start rethinking the business model: can we earn money through apps? Services? Data storage? Sell Community Access? Automatically ship consumables? The ‘new’ Philips is moving from product via ‘product+’ to a complete proposition. For example, there is the product ‘lifeline’ which alerts when elderly people fall. Connected to a service, it offers peace of mind. Hardware + software + service. The digital proposition would be a complete offering that allows a senior to stay living at home. The ultimate goal of such a device in context could be to help prevent people from falling: detect what pattern of vital signs can you see before people fall, and then give an alert when it’s about to happen. Other products that would feature in these propositions are the connected medicine dispenser, which can alert family or friends when people don’t take their medicine, or an application of Google Glass giving surgeons direct visibility into a patient’s vital signs. ‘A digital proposition is always hardware + software + services, interconnected by data and digital content, offering a meaningful smart solution to a community of customers’. More data will lead to better insights and, ultimately, better outcomes. For Philips, this also means to rethink IT and how to invest. Start at the ‘added value’ on the outside and work from there. Co-create with customers and partner and above all: accelerate! Turning Philips into a real-time, connected company starts at the basics (creating e.g. shared data-models), but stretches far across the entire value chain into the ecosystem of partners. First find the real customer need, then create a compelling proposition and only then find a way to make money on it. Along the way, you leverage your assets and capabilities (E.g. your brand, global supply chain, R&D capabilities, etc.) but in the end, it does come down to the eternal truth of innovation: no risk, no glory!