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ICT-Enabled Business Model Innovation by B2B Manufacturers

—Pursuing the Creation of Process Value—

Sep. 01, 2015

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Summary

 Business-to-business (B2B) manufacturers that develop products and sell them to other businesses now face the need for going beyond merely selling their products and creating "process value" for customer companies. Process value can be classified into three types of value. They are "work process value," "business process value" and "knowledge process value." By creating these types of value, B2B manufacturers should aim to offer higher levels of added value than those that can be offered by simply producing and selling products.
 Information and communications technology (ICT) plays a significant role in offering process value. For example, business process value can be offered by employing machine-to-machine (M2M) technology, which is expected to make major contributions mainly in the area of operation and maintenance (O&M). It becomes possible to offer knowledge process value by making the best use of data that have not yet been fully utilized such as machine data and social network data in combination with external data. Amassing and analyzing these data enables the development of new businesses and new products. In such a way, ICT is the key to creating higher levels of process value.
 The groundbreaking cases of ICT-enabled process value creation include KOMTRAX (Komatsu Machine Tracking System), a remote monitoring system developed by Komatsu. Another example is one in which Company A, a machinery manufacturer, integrated its ICT capabilities that had been developed for each product separately within the company by gathering its ICT engineers together in one department.
 The important measures for ICT-empowered process value creation include: (1) systematizing the knowledge of a company's engineers and using such systematized data through an ICT system, (2) building a mechanism to visualize and utilize the knowledge and skills of control engineers and ICT engineers who are apt to simply support product development, (3) developing a structure to identify customer problems, define requirements and develop ICT-enabled solutions and (4) establishing an organization that drives business model innovation.

Contents

  1. Approaching an Era where Manufacturers Must Offer Process Value
  2. Importance of ICT Use in Offering Process Value
  3. Cases of Japanese B2B Manufacturers Using ICT to Offer Process Value
  4. Four Measures for Creating Process Value through ICT Use

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ICT-Enabled Business Model Innovation by B2B Manufacturers
—Pursuing the Creation of Process Value—

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Author's Profile

Minoru AOSHIMA

Partner
NRI’s Consulting Division
Specialties: Planning M&A strategy, PMI strategy and support of its implementation, head-office reform and sales reform

Ken-ichi KOJIMA

Consultant
NRI’s ICT & Media Industry Consulting Department
Specialties: Planning business strategy and reforming sales operations in the precision machinery industry

Shinsuke USUDA

Consultant
NRI’s ICT & Media Industry Consulting Department
Specialties: Planning business strategy and reforming sales operations in the precision machinery industry

Tai-ichiro NAKAYAMA

Consultant
NRI’s ICT & Media Industry Consulting Department
Specialties: Market research, head-office function reform and planning business strategy, primarily in the precision machinery industry

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