Skip to Content

Intelligent products and services offer the promise of significant new value creation

Lisa Mitnick
18 Oct 2022

Cybersecurity, data analytics, and staffing challenges are holding organizations back from scaling intelligent products and services

Intelligent products and services offer the promise of significant new value creation for your customers and your company. But making the pivot from traditional products to intelligent products and services is complex. It demands customer centricity, new business models, organizational change, new ecosystem partnerships, and digital proficiency. Moving from ideas and early proofs of concept (PoC) to scale is challenging, with many new connected products failing to launch or gain market adoption. 

A new Capgemini Research Institute report surveyed 1,000 traditional maker organizations across  sectors including auto, consumer products, med tech, industrial, high tech, and energy with annual revenues ranging from $1 billion to $50 billion, and found that adopting intelligent products and services is a strategic growth priority:

  • Among the 1,000 companies surveyed, 59 percent indicated they already have well-defined visions and strategies for intelligent products and services, and the remaining 41 percent are developing them.
  • Nearly nine in 10 companies indicated they plan to offer intelligent services in the next three to five years.  
  • 43 percent expect more than 20 percent of their revenue to come from intelligent services.
  • 46 percent expect to gain up to 20 percent of their revenue from intelligent services.

While most of these organizations are enthusiastic about new revenue and market-share gains, they are also at early stages of maturity with intelligent products and services. We found that just 7 percent of organizations implement use cases for intelligent products and services at scale, with 31 percent achieving partial scaling of use cases. Roughly half (48 percent) are stuck in the pilot and PoC stages for one or two products, with the remaining 13 percent in the use-case identification stage.

A little more than one-third (36 percent) report feeling prepared for the shift from products to services, despite the imperative to make this transition. Respondents identified five areas they found particularly challenging to scaling intelligent products and services. 

  • Organizational structure: Including siloed organizational functions, absence of intelligent products and services departments, and an absence of an agile culture
  • Talent and skills gaps: Recruiting and retaining skilled employees in areas including data governance, data science, and product innovation
  • Mastery of the data lifecycle: Understandingdata infrastructure, data monetization, and data collection
  • Migration from legacy systems: Lacking simulation and analytics tools as well as having limited understanding of customer preferences
  • Cybersecurity: Experiencing common challenges like lack of security modules to protect IP and secured systems to protect data flow and regulatory compliance

Where is your organization in its intelligent products and services maturity? What is holding you back from scaling? Find out how your organization compares to your peers and learn best practices from industry leaders who have made the leap to successful scaling.

Learn more: https://bit.ly/3RnE5QW

Meet the author

Lisa Mitnick

Executive Vice President, Capgemini Invent
A hands-on digital leader and entrepreneur, Lisa Mitnick has more than 20 years’ experience delivering business success with deep knowledge in strategy, product management, cutting-edge technology services and business development. With industry expertise in communications, media, technology, health and government/public sector, she has harnessed the power of technology to transform services and improve client and customer experiences.