Pilot and small-scale IoT deployments are becoming commonplace, but are these incremental improvements to current Business and IT systems all that IoT has to offer? The IoT Visionaries Panel at Constellation Connected Enterprise, CCE, 2016 had plenty to say about current deployments, lessons learnt and what real large scale IoT is bringing in a step change of Business Transformation. But discussion on IoT wasn’t limited to this panel alone, no matter what the Panel topic IoT soon appeared in the discussion as a key change factor.
The BIG message is that traditional IT approaches of small-scale IoT pilots linked to incremental cost reduction business cases work, but obscure the real competitive Business challenge that is underway. Attendees heard a clear message that the ubiquitous connectivity of IoT, integrated with Clouds, and AI, creates a wholly new generation Business Models based on Smart Services.
Most importantly these are no longer concepts as first movers are already transforming various industry sectors creating new revenue streams and reducing demand for existing business products.
The Constellation IoT Visionaries panel at the 2016 Constellation Connected Enterprise event featured top players in IoT solutions; Dick Ayres of GE, Stu Johnson of Plex Manufacturing, Mark Fodor of Capgemini, Charlie Isaacs of Salesforce, Tom Davis of Microsoft, and Brian Katz of VMware. Collectively these guys have worked on tens of deployments across multiple business sectors accumulating a mass of real ‘hands on’ experience.
The panel set out to answer three basic questions on IoT; what have you achieve, what have you learnt and where does this influence what happens next? Within this framework some pretty interesting ‘insights’, (to use an IoT term), emerged. Other panels on new Business Models, or on the Value of Data, Delighting Connected Customers, all echoed remarkably aligned and similar ‘insights’.
Insight number one; IoT is non-differentiating!
Companies across every industry sector are redesigning and shipping their products with inbuilt Internet connectivity, whilst others are adding sensors to instrument existing products. Public authorities are creating Smart Cities, and individuals are using apps to create Smart Homes. The result is that IoT is an environment, or infrastructure, reality that every Enterprise is part of and has access to.
Its not a case of adding IoT to your business, it’s a case of figuring out how to use the connectivity and most importantly resulting data to compete in new ways.
Insight number two; IoT doesn’t work… on its own!
IoT a key element in a technology combination of Clouds, and AI, with new ways of using Data, that integrated together enable the ‘Digital Services Economy’. The new competitive model is built around competing on ‘Services’ that may, or may not, be directly attached to a physical product. The connected ‘real time’ data flows generated by IoT transform traditional online Web Services into intelligent Smart Service interactions that match circumstances and opportunities into optimum commercial engagements.
Smart Services are the competitive capability arising from IoT that transforms industry sectors and enterprises must master for their ongoing success.
Insight number three; Understand the business destination
Pilots are a long-standing approach to new technology adoption, but almost by definition a pilot can only take place within the confines of the current business model, and that means justification solely on cost reduction. IoT is as much, or even more, about external connectivity and new market revenue creating models. CxO executives should grasp this and identify their business strategy ‘outcome’ rather than being driven by the technology products.
IoT is a defining term for a transformation of market places and industry sectors so an Enterprise adoption path should be based on competing externally, not on a handful of internal cost issues alone.
Insight number four; IoT drives new Connected Business Models
Just as the Web removed the traditional competitive advantage of geographic location, so does IoT potentially remove the advantage of data ownership. Enterprises have to examine their current business model to find their ‘golden thread’; something of value to other ecosystem players that encourages their support to your Business Platform. Business Platforms with valuable golden threads can harness innovative service players to continually renew and extend their competitive position at minimum cost.
IoT interconnected Industry markets are a mix of primary players in competition with each other whose ability to compete is considerably enhanced by their ability to add the Services of secondary players.
Insight number five; IoT redefines the capabilities available to the COO
The COO of today attempts to maximize operational efficiency of their Enterprise on the basis of historical data, whereas in a fully transformed IoT Enterprise the role of the office of COO changes to ‘real time’ optimization of opportunities. Front Office connectivity to the external market opportunities become aligned and matched to the flow of data on the Enterprise Back Office status and capacity.
Much has been said about ‘agility’, but it’s through IoT real time data flows, AI decision making and orchestration of Services from Clouds, that it becomes reality.
Summary
This is the sixth Constellation ‘Connected Enterprise’ event and year by year the event theme of ‘connected’ has proven to be the driver of Business change. No matter what the topic, or sector, or even the speaker, the common theme is the manner in which the ubiquitous connectivity and interactivity of IoT is changing the specific activity.
However, equally clearly, the message is that IoT may be creating a new business environment, but IoT itself does not provide competitive business advantage. The capabilities of Cloud powered Data Flow ‘read’, with AI driven ‘react’ to deliver optimization of Business Operations against market opportunities will be necessary to support the ‘Digital Services’ economy
The Digital Services economy requires Enterprises to work to recognize and develop their core strategic differentiated capabilities into a so-called ‘Golden Thread’ that integrates and adds value to other players in the market place. In new Business models an Enterprises unique differentiated ‘Golden Thread’ is their basis for becoming a dominate Enterprise Business Platform ‘tying’ other less dominate players into selling through them. Skillfully applied this business model ensures that the innovative and value adding capabilities of others are reinforcing their industry dominate position.
Appendix;
Blog;
IoT drives Market Disruption by Market Leaders strategic focus on Business Platforms
Blog;
Corporate products are being disaggregated by IoT Smart Services and re aggregated as smart services
