James Heppelmann, president and chief executive officer of PTC, discusses how the Internet of Things phenomenon is transforming companies’ organizational structures.

In the classic structure, a business is divided into functional units, such as R&D, manufacturing, logistics, sales, marketing, after-sale service, finance, and IT. These functional units enjoy substantial autonomy. Though integration across them is essential, much of it tends to be relatively episodic and tactical.

With the emergence of smart, connected products, however, this classic model breaks down. On June 9, 2016 James Heppelmann, president and CEO of PTC and co-author of the Harvard Business Review article “How Smart, Connected Products Are Transforming Companies,” discussed the new need for companies to coordinate across product design, cloud operation, service improvement, and customer engagement.