Five or six years ago, the hype wasn’t IoT, it was Cloud, but the messages about its impact as an industry game change were similar. Again, as with IoT, few people could really claim to understand the true nature of the changes that the Cloud would bring. The usual trait when we encounter something we don’t really understand is to position it aligned to something we do understand, so Cloud came to be seen as a cost reduction alternative to the data center. Few realized the significance of browser driven Services in transforming business capabilities. In 2016 it seems IoT is at the same stage;
IoT, as previously happened with the impact of Cloud, Mobility, and Social Tools, is a technology function not a Business benefit; It’s business value does not lie in IT technology improvement, but in Business led innovation to make use of ‘real time’ connected business opportunities.
There is too much talking about IoT Technology, and not enough focus on deployed business value and competitive impacts being led by Business management.
That’s a bold remark; when asked why the Farmers moved so quickly to adopt connected sensing technology on agricultural equipment, now called Precision Farming, an Agri-Business executive had a possible answer. ‘I guess they didn’t have an IT department’, out of context this is an unfair statement as it really was meant to indicate that Farmers were not tied to extensive in-house IT investments that needed to be considered. Farmers were able to see the link to transforming their profitability and moved quickly and easily to adopt ‘Services’.
Take the time to read an excellent business article on using sensing technology to control costs of inputs to maximize operational outputs, that should make any business manager think again about connected real-time operational business benefits. Okay its in Farming Equipment Canada in respect of Precision Farming, but the terminology is readily referenced to any business being financial and operational.
Quoting directly from the article; “Precision Farming means … optimizing returns on inputs. What does that mean? I see the path for optimizing your returns most effectively by applying the correct inputs, in the correct place and in the correct amount. Precision farming is your way to accurately plant, populate, apply inputs and then provide data, of what was completed on your farm.
The quote makes clear that it isn’t about the technology of IoT sensing applied to Farm Equipment working the land, but that there is a business impact in real-time operational management on direct profitability. Though the article might be about the business of farming, the point is directly applicable to many business sectors. Today the impact has moved beyond individual farms moving to become an Agri-Business sector transformation. See the previous blog A Strategy for Market Leaders based on IoT Platform collaboration for more background information on how John Deere has adapted to ensure ongoing leadership in this transformation.
Whilst it may be a truism that by not having huge IT investments Farmers where able to move quickly to adopt new practices there are several factors under lying the rapid adoption of Precision Farming. Four major reasons are;
- The ‘Consumer’ technology revolution around Smart Phones and ‘App Shops’ has removed many former barriers to using Technology, and speeded adoption rates.
- Charging by use removes the need to justify Capital investment by defining clear cost based returns, encouraging just ‘try it’ adoption to establish new ideas and develop new best practices.
- Social Tools with focused communities ensure that new practices that work are rapidly communicated, with the additional befit of peer-to-peer support from early adopter fellow users.
- Market leading suppliers, such as John Deere and Monsanto, involvement in Social Tools allowed them to spot the trend and rapidly move to support Precision Farming making their products more competitively valuable.
Putting these factors together illustrates the real point behind the ‘I guess they didn’t have an IT department’ statement. The rapid adoption of Precision Farming was made possible by using Apps and Services on a pay by use basis, rather than substantial investment in traditional IT Applications with the need to amortize the investment before making further changes.
The opening paragraph pointed out the lack of appreciation of Cloud Technology for its business transformation impact, six years latter the Business impact is becoming increasingly clear. The pay on demand use of Apps and Services, (running on Clouds), that can be deployed with minimal difficulty has revolutionized many Business capabilities.
IoT is a generic term covering too many possible functions to be a meaningful term, as even the word idIoT contains IoT! Cloud had, and still has, the same challenge when considered as a Technology, but focusing on Business use quickly defines the value of Cloud.
Today Cloud Technology is taken as underlying the whole Internet; as more and more devices are connected the Internet of Things becomes a similar fact of life. The Business value lies in the manner that these two radical shifts in capability are intertwined!
Cloud based Business Services support ‘back end’ processing by pushing their data towards Devices. IoT adds new business value by collecting and sending new data streams from the ‘front end’ devices. The ability to ‘Read’ events as they are happening by sending new data streams to Cloud based Services creates a new generation of optimized ‘Reactions’.
Much of this will occur in near ‘real-time’ that makes outcomes genuinely able to positively influence the events as they develop. Using IoT supplied data makes existing Cloud based Services interactive, or ‘smart’, in their capabilities. The linkage between the elements can be expressed simply in the following manner.
IoT Data Read + Optimized React = Smart Service
Real Time Cloud
We have stopped discussing the ‘technology’ of the Internet, and the Web, in abstraction from the business valuable capabilities this provides. The first generation of Cloud based technology is now accepted for its infrastructure replacement value, with attention being focused on using capabilities to support Business valuable competitive Services.
IoT should be part of the same Business discussion as Cloud based Apps and Services as the critical input capability supporting fully interactive high value Smart Services.
