The pace that Digital initiatives and IoT is forcing on the market makes it difficult to know when to act. ‘Fast follower’, the normal preferred stance for many Enterprises has huge risks in IoT as first movers have literally taken over and closed off market sectors to following competitors. A significant feature of IoT moves is the impact runs from small-scale innovative moves, such as Uber, to big market ecosystem disruptions by global giants such General Electric.
Research report now available: The Foundational Elements for the Internet of Things (IoT)
Even moves to improve existing operating capabilities such as Harley Davison IoT deployment transforming their custom bike manufacturing can make impacts and create direct business value greater than many current planned Digital, or IT, investments.
How to plan your enterprise approach to IoT starts by considering which of four main business strategic approaches listed below offers the best alignment to your Enterprise business strategy and business model. The definitions provided below are outlines to help initial thinking;
1) Improve – adding IoT data inputs to an existing process improve the accuracy and quality of its current performance
The internal use of simple sensors for factory floor Operational Technology systems is a mature technology, but has developed as a separate environment to IT with specialized protocols and GUIs. Enriching the type and quality of sensed data, or adding new more intelligent IoT sensors to feed data faster, with integration into Enterprise Manufacturing or Logistics IT application can improve dynamic efficiency by a considerable factor. Some Enterprise Application IT vendors, and some leading automation OT vendors, offer direct connecting IoT sensor solutions for this purpose.
External remote, off site business activities that requiring scheduled manual inspection, such as management of Merchandising machines can gain a reduction in visits and costs by sensor signaled refill requirements. Improve IoT projects do not involve any significant change in business activities, instead offering simple straightforward improvements.
2) Innovate – introducing a new higher value Smart Service based on reacting to events using IoT sensors
Changing a current business service such as maintenance of equipment on a set schedule, or in response to a breakdown call, into an event reactive, or even proactive Smart Service. Proactive maintenance of critical systems, e.g. air conditioning units, to forestall breakdowns by monitoring the change in crucial parameters, has a higher value to a customer as well as cutting unproductive routine service visit costs.
Innovative IoT deployments introduce the need for intelligence and insightful outputs through a Smart Service, and as such are prime candidates for business activities where time to read and respond changes has a value to the customer. Other examples include critical event responses to emergencies, optimization of capacity, or energy use. Many Enterprise claim to be seeking ‘innovative’ new market offerings around ‘services’ and this is where their own specialized market, or sector, knowledge can be applied aligned to the new capabilities of IoT Smart Services.
3) Market Partners – making use of a market leader providing a Smart Services Platform and a customer base
The most obvious examples relate to IoT based Smart Services Apps delivered for Apple and Google Smart Phones and Tablets, but there are other Platforms in industrial markets as well. Consumer markets are rich in opportunities from the developing interest in Smart Homes and Cars as well as Smart Service Apps such as Uber. Market partnerships lower technology risks and challenges, but increase the pressure to compete by finding unique smart value as differentiating Intellectual Property. It requires careful consideration as to whether the Market Partners Platform provides enough IoT data inputs to be able to makes use of the complex event processing insight that makes your Smart Service unique.
Market Partners are not only to be found in the consumer market as in an increasing number of Markets face a dominant player introducing a disruptive IoT Platform that supports and empowers the introduction of Smart Services from other market players. See market disrupter example in next section.
4) Market Disrupter – a market dominant player moves to take advantage of their existing position and product span to introduce new competitive rules
The example of John Deere in the agricultural market is a good example of a market leader using IoT to create a market disruption. Introducing Smart IoT sensing on a variety of John Deere implements with interaction allows measurement of a wide range of conditions. The resulting insightful inputs not only enable the John Deere machinery to function optimally, e.g. using less fuel, but additionally provides data inputs on soil conditions, fertility, local micro climate conditions, etc. This data is made available to John Deere Market Partners who gain an effective route to market, and are able to ensure their products, seeds, sprays, fertilizers etc. are used in the optimally manner for the best results.
Market Disrupter Ecosystems offer very high value to the end customer, in this case the farmer, such that the primary proposition and form of market competition is fatally disrupted. In this case the previous factors of choice in buying agricultural machinery are of less importance than the value the integrated Smart Services Ecosystem provides. A classic example of a shift to a ‘Services’ economy.
These four major headings are by no means an exhaustive list of the possibilities that IoT brings to an Enterprise, but offer a quick summary of four major business recognizable types of initiatives.
Resource
The Foundational Elements for the Internet of Things (IoT)
Footnotes
A list of IoT case studies based on using ThingsWorx http://www.ptc.com/internet-of-things/customer-success
A Cisco published IoT case study of Stanley Black & Decker http://www.cisco.com/web/strategy/manufacturing/stanley-black-decker.html
An SAP published list of IoT case studies http://www.sap.com/pc/tech/internet-of-things/case-studies.html
Explanation by MyJohnDeere.com as to features and benefits https://www.deere.co.uk/en_GB/products/equipment/agricultural_management_solutions/myjohndeere/myjohndeere.page
General Electric explains their IoT solutions ecosystems http://www.ge.com/digital/predix
