Business of Smart Connected Products/Internet of Things (IOT) - Harvard Business School MBA Program

Business of Smart Connected Products/Internet of Things (IOT)

Course Number 1944

Professor Rajiv Lal
Spring; Q3Q4; 3 credits
25 sessions

This full course replaces the following two courses previously offered: The Business of Smart Connected Products (1945) and Field Course: The Business of Smart Connected Products (6194).

Course Overview

In their Harvard Business Review articles, Michael Porter and Jim Heppelmann discussed how smart, connected products are transforming both competition and companies. Porter and Heppelmann see smart, connected products as the third wave of IT-driven competition which are likely to have a far bigger impact on our economies than anything like it up until now. McKinsey estimated that smart, connected products could create $3.7 trillion of value in our economy. In addition to smart, connected products, the course will explore new applications of augmented reality and virtual reality, the world of blockchain, autonomous cars, and intelligent assistants such as Alexa from Amazon.

This course will teach students what smart, connected products are, what technologies are needed to build smart, connected products, and how these products create value for end users. Moreover, the class with examine the ecosystems that need to be created and supported to realize the full value of this technology.

The course will start with giving students an understanding of the capabilities of smart, connected products and what technologies are needed to enable them. We are likely to seek help from companies like PTC and Sensata to give students a live demonstration of both products and the technology stack. Students will see how this technology allows for monitoring, control, optimization, and autonomy of such products. Students will gain a practical understanding of machine learning and artificial intelligence.

The most fundamental aspect of the Internet of Things (IoT) is that it enables us to collect data about interactions between humans, machines, and the environment like never before. Integrating these disparate yet complementary sources of data creates value in ways that could not be easily imagined.

The first module will explore the challenges and opportunities in building businesses made possible by information as a raw material. Cases from innovative firms like Siemens and Philips will help students discover how this enabling technology can improve efficiency in manufacturing and operations as well as create additional opportunities for developing new products and services. This module will also cover how firms are launching entirely new businesses with innovative business models to extract the full value of the information around us.

Next, we will examine two critical questions facing firms offering IoT solutions: What should be the boundary of the firm or what business are we in? Also, what changes need to be made to a firm’s internal organization to fully leverage the data from connected devices? Cases involving companies such as Deere and iRobot, makers of the Roomba, will help students investigate these issues.

A data-rich environment naturally raises the issues of privacy, ownership, security, and governance. These subjects must be addressed by organizations so that the free flow of the data in the ecosystem can create and enhance value. We will discuss issues regarding privacy protections that organizations must address to engender trust in their client base. The security challenges facing the world of IoT will be explored as well as the solutions currently available to protect firms from serious hackers. Finally, we will revisit the issue of product liability in IoT. Cases in this module will examine a cutting-edge sensor network on the streets of Chicago and biometric data generated from NBA players.

The next module will focus our attention on the technology stack in an IoT solution and examine the different ways that firms are carving out their role and crafting competitive strategies as suppliers of these technologies. In particular, we will discuss GE, IBM and PTC’s varied approaches to being a supplier of the building blocks of IoT.

Last but not least, we will analyze the transformative possibilities afforded by new technologies like augmented reality and virtual reality. Moreover, the course will delve into the new economic platforms created by the advent of autonomous cars, intelligent assistants, blockchains, and smart cities. These platforms will disrupt many existing value chains, leading to an exciting examination of their consequences. This module will feature cases on Ford, Amazon, and Google.

We will end the course with an in-class project where every student will work in a group to build a Smart Connected Product with the help of the resources in the Harvard i-lab.

Students will be graded on class participation and a term paper. The paper will be completed in groups of two and will be no more than five pages in length.