Digital Strategy and Products: Changing the Game in a Big Way

In my previous posts on the Five Core Components of a Great Digital Strategy, I’ve covered how information and technology have made significant changes in how your business works. Michael Porter pointed out that changes have come in three big waves. 30 years ago it was all about accounting systems (ERP) and automating internal processes; 15 years later, the introduction of the Internet, and a fundamental change in how we connect with our customers.

Now it’s time for information and technology to make huge, disruptive changes in the products and services that we offer. Of course, I am talking about Smart, Connected Products – Porter’s term for the Internet of Things. This is the newest wave of change that information and technology has brought to business – coupled with the maturing of the Internet, the growth of the mobile platform, and the accessibility of artificial intelligence, it’s the wave that has us all talking about how business can (and must) make a “digital transformation”.

Over the past 18 months, I have been involved in a lot of work regarding the Internet of Things – writing, speaking, and working a number of interesting, meaningful projects. It seems like everyone is jumping in now – but just like the early days of ERP and the Internet, there are competing standards, incomplete specifications, and oversimplified solutions. Don’t get me wrong – there’s a lot of terrific stuff happening, it’s just not as mature as other digital business practices.

Link to Digital Strategy


This is what makes Smart, Connected Products an important component of the strategic digital conversation within your business. The key is to pick out the critical bits that will have an impact on your customers and your marketplaces – things like machine learning and predictive analytics, where data and statistics are changing the nature of our products and how we deliver value to our customers.

But remember, we’re talking about five components that interact and leverage each other to become a truly unified digital strategy. So how does the Internet of Things play together with everyone else?

  • Internal Operations: As you start your first experiments with sensors, communications, and data, take the opportunity to experiment in your own manufacturing / operating processes; why not learn, fail, iterate, and improve in private? But the real value is in the data connection – your product teams will see the value in connecting serial numbers on IoT-enabled devices with the product lifecycle data coming out of your ERP – when was it manufactured, what is in the bill of materials, who was it sold to / shipped to.
  • Customer Relationships: The data coming from your smart, connected products will shine further light on the entire value chain – from manufacturer to distributor to end-user. All participants in that chain will get value from visibility – product performance and utilization will be open to all, intermediaries will better see future demand, and improved products and services will make those customer relationships “stickier”.
  • Leveraging Information: Yes, there is currently a talent shortage for data scientists – but it is clear that the concepts and tools are much more accessible thanks to advances in support of the Internet of Things. Smart companies, however, will not stop at their products – they will apply predictive techniques to the data coming out of their customer-facing and internal operational systems, to make smarter decisions and think more proactively in both of those areas.

The Disruptive Truth

The biggest impact, however, that this component will have on your Great Digital Strategy will be increased awareness in the power of disruption. We saw it happening with the advent of the Internet, when stable markets and established businesses like newspapers and bookstores were wildly disrupted, because of fundamental changes in the nature of the distribution of information to end consumers.


Now the nature of product itself is disrupting new industries in completely different ways; am I selling a capital good, like an engine? Or am I selling a service, like the ability to generate power consistently for a guaranteed 20 hours per day? It’s fun (and a little scary) to think of how many things in your business such a disruption could change; better to think about it seriously, so you can focus on the fun and minimize the scary.


When was the last time you thought seriously about disruption? When it becomes part of your Great Digital Strategy, you’ll think about it all the time (and that’s a healthy move).

Jim MacLennan is Senior Vice President and Chief Information Officer at IDEX Corporation, a Fortune 1000 manufacturer that sells highly engineered products in a variety of markets worldwide. MacLennan has responsibility for Corporate IT services for all IDEX business units, and also drives innovation through initiatives that leverage Information and Technology as growth drivers for the industrial manufacturing space. He regularly publishes his observations and insights on the intersection of business and technology - check out his work at