AVP Digitalization Strategy Presentation ABMA Jan2017

Big Data & Analytics:
A. Vaccani&Partner AG
Bid Confusion, Big Threat or Big Opportunity? Zollikerstrassse 141
P.O. Box 1682
CH-8032 Zurich
Switzerland
T +41 44 392 99 00
info@avp-group.net
www.avp-group.net
Presented by Scott Affelt
January 2017
A. Vaccani & Partner AG | 2017 | Page 1
What is Big Data, Analytics and the
Internet of Things?
Source: Dataconomy

What is it?
Big Data is high-volume, high-variety and high-velocity data that needs
Analytical tools to reveal trends, patterns and correlations that can
create actionable insights into decision-making.
Internet of Things (IoT) is the inter-networking of physical devices,

embedded with electronics, software, sensors, actuators, and network
connectivity that enable these objects to collect and exchange data.

An Explosion of Interconnected Devices

Why Now?
Cost of Cost of Cost of Cost of
Sensors Computing Bandwidth RAM/Storage
45% 60X 40X 20X
Solutions can now

Sensors Analytics
that were be applied
provided to Enablers to $1M
$500M assets.
assets .
Connectivity Computing
Its All Coming Together!

Source: Goldman Sachs Investment Research. Changes over last 10 years.

IM NOT GOOGLE.
WHY DO I CARE ABOUT BIG DATA?

Challenging Industrial Markets
Capital Spending Competition Profit Margins
NA Growth Europe Growth Asia Growth
Want to Grow Your Business?

Status Quo Will Not Work!
Safe is Risky!
If you dont figure it out. Someone
Old Model New Model else will!
Sears, Macys Amazon
Yellow Taxi Uber, Lyft
Dont Let Kodak/Motorola Digital Cameras, iPhone
This Be You! Boiler OEM ??????

Where does Big Data, Analytics and
Internet of Things Fit in the
Power/Energy Industry?

Asset Performance Management
Asset Operations
Management Management
Predictive Optimization
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Assets
Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Current Industry
Assets Practices
(limited by technology & cost)
Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Potential Future
Assets
Applications
(enabled by technology & cost)
How Data Analytics Adds Value
What
should I do
When about it?
will it Prescriptive
Past happen? Analytics
Why
State did it Predictive
happen? Analytics
What Diagnostic
Value happened? Analytics
Descriptive
Analytics
Current/Future
State of Analytics
Source: Gartner
Difficulty
Key Areas of Value Creation
Benefits Value Created
Predictive Early detection of failures Reduce downtime by 35%
Improved maintenance planning Reduce unplanned outages by 70%
Maintenance Remaining useful life predictions. Reduce maintenance costs by 25%.
Advanced Pattern Reduced capital spending Increase availability
Recognition + Lengthen maintenance intervals
Diagnostics +
Prognostics
Performance Real-time performance data Improve efficiency by 2-8%

Identify specific components Maintain optimum capacity
Monitoring contributing to inefficiency
Real-time process Improved thermal efficiency
monitoring + Diagnostics
Advanced Controls Optimized process control Improve efficiency by 2-8%
Adaptive, Predictive Best operator 24/7 Maintain process quality
Optimize over transients Maintain process stability
Controls Improve operational flexibility
Sources: DOE Study on Predictive Maintenance. NETL & EPA studies on Efficiency Improvements.
Predictive Maintenance Benefits
Direct Value Created
Accenture Study
Avoided Cost of Unplanned Outages 10GW Fleet
Lower Maintenance Costs

Higher efficiency
Indirect Value Created
Better Risk Management
Real-time Decision Support
Strategic Capital Investment Decisions
Duke Energy
Increased workforce effectiveness $31.5M Cost Avoidance
Improved safety
<1 year Return on Investment

Predictive Maintenance Solutions
SmartSignal/Predix (acquired by GE)

PRiSM (acquired by Schneider Electric)
Mtell (acquired by AspenTech)
EtaPro APR (General Physics)
FAMOS (Curtiss-Wright)
SureSense by Expert Microsystems

Where does the OEM fit?
Domain Expertise
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning Computer
Science

Domain Expertise
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning Computer
Science

Domain Expertise
Process/Reliability
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
OEM Domain Knowledge
Learning is
Computer
Science
KEY to Maximize Value
Extracted from Data Analytics
New Business Models Can Capture Value

New Business Models
Product Driven Model Internet of Things Model

Run-to-failure Remote Monitoring
Warranty response Predictive Maintenance
Spares Operating Performance
Field Service Design Optimization
Retrofits/upgrades
Services
Services
Products
Products

Evolution of GE Business Model
High
Customer
Outcomes
Optimized Assets & Production
Customer Value
Data analytics provides decision support

Contractual Predictive Maintenance
LTSA Extended intervals in LTSA
Share risk
Transactional Reduce Total Cost of Ownership
Break/fix Long-Term Service Agreement
Preventive Maintenance
Sell Parts/Spares
Reactive Maintenance
Low
1980 2017

Value Created & Value Captured
Product-Based Internet of Things-Based
Mindset Mindset
Value Created for Customer
Customer Reactively solve existing needs Proactively address real-time and
Needs emergent needs
Offering Stand-alone product that become Continual update of product, features &
obsolete over time value created
Role of Data Monitoring, Control and Safety Optimization, Improvement, Autonomy
Value Captured by Supplier

Path to Profit Sell the next product Enable recurring revenue streams
Customer Technology know-how, IP and brand Synergies between products & services
Control Points Customer reliance of Value Created
Capability Maximize use of core competencies & Leverage use of core competencies &
Development existing resources existing resources
Focus is on Product
Source: SmartDesign
Create new network/system value
A. Vaccani & Partner AG | 2017 | Page 23 Focus is on the System
Concepts of New Solution
Offerings and Business Models

Predictive Maintenance Solution
Key Components of Offering
On-site software monitors & detects equipment anomalies before component failure
Integrates physics-based (OEM) knowledge with data-driven models
Diagnostics capability determines likely cause of failure
Prognostic capability to predict remaining useful life (RUL) of component
Key Enablers
Physics-based performance, reliability and lifecycle models based on OEM
designs/knowledge
Diagnostic rules for common faults
Robust advanced pattern recognition analytics with diagnostic and prognostic capability
Embedded or network edge analytic solutions
Price allows access to smaller assets
Early detection of potential failures and cost avoidance of unplanned outages
Guidance for users to make repairs based on the diagnostics
Better planning for repair/manage risk of failure using RUL
Value Captured for Supplier
On-line diagnostics can better prepare for on-site work/repair
Early failure detection can facilitate spares/inventory
SaaS Recurring revenue stream
Performance Monitoring Solution
On-site software monitors & detects performance degradation against design
specifications
Quantifies impact of degradation
Utilizes OEM process knowledge/models
Diagnostics capability determines likely cause of performance shortfall
Key Enablers
Price point of solution to customer
May be integrated in other advanced pattern recognition solution (i.e. Predictive
Maintenance)
Improved thermal efficiency, reliability and availability
Identifies and quantifies specific areas for potential upgrade/repair projects

Remote Monitoring Service
Remote, real-time service monitors & detects equipment and/or performance anomalies
Integrates physics-based and process (OEM) knowledge with data-driven models
Diagnostics capability determines likely cause of failure or degradation
Key Enablers
Data connectivity
Same as Predictive Maintenance & Performance Monitoring Solutions
Subject matter experts and remote monitoring resources
Same as Predictive Maintenance & Performance Monitoring Services
Less in-house SME requirements
Less resources required to monitor assets
Less investment in APR/IT/Resources
Data used to: identify common faults across installed base; improve hardware designs
Triggers action for sales team for repairs, upgrades or asset replacement
Leverage SME and knowledge base
Advanced Controls Solutions
Predictive, adaptive process control optimizes process (safely)
Goes beyond standard P&ID control systems
Can be used in supervisory or closed-loop mode
Real-time quantification of potential value of control changes
Key Enablers
In depth knowledge of process, control and automation
Advanced control technology (either build, buy or license)
Price point allows access to smaller assets
Optimized process control simulates the Best operator 24/7
Optimize process over transient conditions (various loads, fuels)
Improve operational flexibility
Improve efficiency
Reduce emissions
Expand automation/controls solutions to offer higher value
Leverage process knowledge
SaaS or shared savings Recurring revenue stream
Equipment as a Service (EaaS)
Sell hardware as a service or outcome (i.e. $X/Y lb/hr steam, power by the hour)
Aligns customer and supplier risk and rewards
Key Enablers
Connectivity to data
Same as Remote Monitoring Service
Access to capital to fund initial outlay
Lower capital outlay for equipment
Transfer risks to those best suited to manage it
Allows focus on core business
Creates long term and aligned relationship with customer
Creates steady recurring revenue stream
Feeds aftermarket business
Leverages Predictive Maintenance, Performance Monitoring and Remote M&D
platforms

How will the IoT Opportunity Evolve?
We are Moving to Here NOW.

Areas to Compete in Big Data
Distinctive Technology
Analytical tools
Connectivity
Data storage, management
Distinctive Data/Knowledge
Unique process knowledge/algorithms
Domain
Physics-based life assessments
Knowledge
Unique to OEM
Platform Providers
GE Predix, Siemens
MicroSoft, IBM
End-to-end Solution Providers
Asset Performance Management Suites
Enterprise Asset Management Suites
If not you, who?
Traditional Non-Traditional
GE IBM
Siemens Google
Schneider
Oracle
Emerson
ABB Microsoft
Honeywell SAP
AspenTech
Yokogowa
Rockwell
Where does the AVP Group fit?
Domain Expertise
Knowledge of:
Domain,
Data Analytics,
Traditional
Software Processing Market,
AVP
DATA
Value Proposition,
Players/partners
Math &
Group
ANALYTICS
Statistics Machine
Learning Computer
Science

Digital Strategy Development -
Functional Process Elements
Phase 1 Phase 2 Phase 3
Implementation
Digital Strategy
Initialization
Digital
Business Strategy Preparation of
Analysis Formation Implementation
External
Internal

Project Phases Details
Project Initiation Digital Business Analysis Strategy Development Implementation
Goals, deliverables, Deep understanding of: Digital Vision and roadmap Final alignment of the digital
key issues Current strategic vision Digital strategy including strategy with top
Finalizing project What data and value of data in the Target focus areas to provide management
organization, kick-off business model customer vale Organizational
teams Digital SWOT Digital Value Chain and gaps requirements
Define needs for Customer expectations Monetizing strategy Development budget
internal and external Competitive landscape Make or buy Roadmap and Millstones for
analysis Mapping of key players Partnering strategy and interfaces implementation
Capability assessment
Activity postponed into Phase 2

Mistakes to Avoid
Believing this Big Data movement will pass
Adding functionality customers dont want
Underestimating data security risks
Failing to anticipate new competitive threats
Waiting too long to get started
Overestimating internal capabilities

Conclusions
The future is already here its just not very equally
distributed
William Gibson
The only strategy that is guaranteed to fail, is not taking any

risks and not changing anything because the world is moving
too fast
Mark Zuckerberg

Thank You.
AVP Group
S.Affelt@AVP-Group.com
+1 303-883-0399

Internet of Things?
Source: Dataconomy

What is it?



Why Now?
45% 60X 40X 20X
Solutions can now

Sensors Analytics
$500M assets.
assets .


IM NOT GOOGLE.


Safe is Risky!
Sears, Macys Amazon


Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Assets
Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Current Industry
Assets Practices
Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Potential Future
Assets
Applications
What
should I do
When about it?
Why
happen? Analytics
What Diagnostic
Descriptive
Analytics
Current/Future
State of Analytics
Source: Gartner
Difficulty
Diagnostics +
Prognostics

Accenture Study

Higher efficiency
Duke Energy
Improved safety



Domain Expertise
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning Computer
Science

Domain Expertise
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning Computer
Science

Domain Expertise
Process/Reliability
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning is
Computer
Science

New Business Models

Retrofits/upgrades
Services
Services
Products
Products

High
Customer
Outcomes
Customer Value

Share risk
Sell Parts/Spares
Low
1980 2017

Mindset Mindset

Focus is on Product
Source: SmartDesign

Key Enablers
designs/knowledge
specifications
Key Enablers
Maintenance)

Key Enablers
Data connectivity
Key Enablers
Improve efficiency
Reduce emissions
Key Enablers
platforms


Analytical tools
Connectivity
Domain
Knowledge
Unique to OEM
Platform Providers
GE Predix, Siemens
MicroSoft, IBM
If not you, who?
GE IBM
Siemens Google
Schneider
Oracle
Emerson
ABB Microsoft
Honeywell SAP
AspenTech
Yokogowa
Rockwell
Domain Expertise
Knowledge of:
Domain,
Data Analytics,
Traditional
AVP
DATA
Value Proposition,
Players/partners
Math &
Group
ANALYTICS
Statistics Machine
Learning Computer
Science

Implementation
Digital Strategy
Initialization
Digital
External
Internal


Mistakes to Avoid

Conclusions
distributed
William Gibson

too fast
Mark Zuckerberg

Thank You.
AVP Group
+1 303-883-0399

Internet of Things?
Source: Dataconomy

What is it?



Why Now?
45% 60X 40X 20X
Solutions can now

Sensors Analytics
$500M assets.
assets .


IM NOT GOOGLE.


Safe is Risky!
Sears, Macys Amazon


Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Assets
Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Current Industry
Assets Practices
Asset Operations
Maintenance
Value Created
Production
Advanced
Preventive
Control
Reactive Control
Potential Future
Assets
Applications
What
should I do
When about it?
Why
happen? Analytics
What Diagnostic
Descriptive
Analytics
Current/Future
State of Analytics
Source: Gartner
Difficulty
Diagnostics +
Prognostics

Accenture Study

Higher efficiency
Duke Energy
Improved safety



Domain Expertise
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning Computer
Science

Domain Expertise
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning Computer
Science

Domain Expertise
Process/Reliability
Traditional Data
Controls Processing
DATA
ANALYTICS
Math &
Statistics Machine
Learning is
Computer
Science

New Business Models

Retrofits/upgrades
Services
Services
Products
Products

High
Customer
Outcomes
Customer Value

Share risk
Sell Parts/Spares
Low
1980 2017

Mindset Mindset

Focus is on Product
Source: SmartDesign

Key Enablers
designs/knowledge
specifications
Key Enablers
Maintenance)

Key Enablers
Data connectivity
Key Enablers
Improve efficiency
Reduce emissions
Key Enablers
platforms


Analytical tools
Connectivity
Domain
Knowledge
Unique to OEM
Platform Providers
GE Predix, Siemens
MicroSoft, IBM
If not you, who?
GE IBM
Siemens Google
Schneider
Oracle
Emerson
ABB Microsoft
Honeywell SAP
AspenTech
Yokogowa
Rockwell
Domain Expertise
Knowledge of:
Domain,
Data Analytics,
Traditional
AVP
DATA
Value Proposition,
Players/partners
Math &
Group
ANALYTICS
Statistics Machine
Learning Computer
Science

Implementation
Digital Strategy
Initialization
Digital
External
Internal


Mistakes to Avoid

Conclusions
distributed
William Gibson

too fast
Mark Zuckerberg

Thank You.
AVP Group
+1 303-883-0399

AVP Digitalization Strategy Presentation ABMA Jan2017

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Big Data & Analytics:

A. Vaccani & Partner AG | 2017 | Page 2

Internet of Things (IoT) is the inter-networking of physical devices,

A. Vaccani & Partner AG | 2017 | Page 3

A. Vaccani & Partner AG | 2017 | Page 4

45% 60X 40X 20X

Solutions can now

Its All Coming Together!

A. Vaccani & Partner AG | 2017 | Page 5

WHY DO I CARE ABOUT BIG DATA?

A. Vaccani & Partner AG | 2017 | Page 6

NA Growth Europe Growth Asia Growth

Want to Grow Your Business?

A. Vaccani & Partner AG | 2017 | Page 8

A. Vaccani & Partner AG | 2017 | Page 9

Performance Real-time performance data Improve efficiency by 2-8%

Lower Maintenance Costs

<1 year Return on Investment

A. Vaccani & Partner AG | 2017 | Page 15

SmartSignal/Predix (acquired by GE)

A. Vaccani & Partner AG | 2017 | Page 16

A. Vaccani & Partner AG | 2017 | Page 17

A. Vaccani & Partner AG | 2017 | Page 18

A. Vaccani & Partner AG | 2017 | Page 20

Product Driven Model Internet of Things Model

A. Vaccani & Partner AG | 2017 | Page 21

Data analytics provides decision support

A. Vaccani & Partner AG | 2017 | Page 22

Value Captured by Supplier

A. Vaccani & Partner AG | 2017 | Page 24

A. Vaccani & Partner AG | 2017 | Page 26

A. Vaccani & Partner AG | 2017 | Page 29

We are Moving to Here NOW.

A. Vaccani & Partner AG | 2017 | Page 33

Phase 1 Phase 2 Phase 3

A. Vaccani & Partner AG | 2017 | Page 34

Project Initiation Digital Business Analysis Strategy Development Implementation

Activity postponed into Phase 2

A. Vaccani & Partner AG | 2017 | Page 35

A. Vaccani & Partner AG | 2017 | Page 36

The only strategy that is guaranteed to fail, is not taking any

A. Vaccani & Partner AG | 2017 | Page 37

A. Vaccani & Partner AG | 2017 | Page 38

A. Vaccani & Partner AG | 2017 | Page 2

Internet of Things (IoT) is the inter-networking of physical devices,

A. Vaccani & Partner AG | 2017 | Page 3

A. Vaccani & Partner AG | 2017 | Page 4

45% 60X 40X 20X

Solutions can now

Its All Coming Together!

A. Vaccani & Partner AG | 2017 | Page 5

WHY DO I CARE ABOUT BIG DATA?

A. Vaccani & Partner AG | 2017 | Page 6

NA Growth Europe Growth Asia Growth

Want to Grow Your Business?

A. Vaccani & Partner AG | 2017 | Page 8

A. Vaccani & Partner AG | 2017 | Page 9

Performance Real-time performance data Improve efficiency by 2-8%

Lower Maintenance Costs

<1 year Return on Investment

A. Vaccani & Partner AG | 2017 | Page 15

SmartSignal/Predix (acquired by GE)

A. Vaccani & Partner AG | 2017 | Page 16

A. Vaccani & Partner AG | 2017 | Page 17