SmartCity, SmartHome, SmartEnergy, SmartWearable, SmartEnterprise… SmartX. But just how smart are these IoT solutions, really?
Many early IoT deployments simply connect an asset to the internet but have no strategic plan for how to leverage the data to deliver smart services that will enable a smarter future. As such, they paint themselves into a corner because they can't find a path to scale their hardware and software solutions to generate revenue.
Some companies apply their IoT systems to a specific vertical application, for instance, fleet management for optimizing vehicle maintenance. Unfortunately, these companies have difficulty adapting the investment to, say, street light maintenance opportunity. The IoT system may have been either too narrow or rigid to support new use cases.
Other companies are just paralyzed, standing on the sidelines waiting to see which strategies prove successful. According to A.T. Kearney, 60% of the almost $5.9 trillion in IoT’s economic impact by 2020 will come from redistribution of revenue due to disruption. So sitting on the sidelines may be more dangerous than jumping into the game.
As one executive at Cisco said, “IoT will impact everyone. But it’s important that companies have a strategy for entering and scaling. This concept raises the discussion from those trying to build IoT products to the C-level to strategize the roadmap.”
Cisco, Pitney Bowes, IKEA and GE are all thinking along these lines.
So what’s your IoT IQ?
Aricent has come up with a basic IoT 'roadmap to revenue' that is captured in the diagram below.
The IoT Value Curve
The first step is to identify potential services that improve your customer’s experience, and the data and analytics required to enable those services. Then, working backwards, companies can create a roadmap that steers their IoT framework and architectural decisions to open new avenues to revenue.
For example, collecting telematics data from a car may let you know when things are broken, but applying data analytics to crowd-sourced data from millions of cars can lead to revenue-generating, usage-based insurance plans, preventative maintenance forecasting services, and even insight to help design better cars. That’s genius level in IoT!
The IoT triple threat
But what revenue streams and models are possible with IoT? Monetization often requires rethinking business models to mine the value hidden in the data and create new services.
In his book, The Amazon Way on IoT, John Rossman discusses what he calls the IoT “triple threat.” These are:
- Reinventing the customer experience: Integrating and enabling customer experiences across products and boundaries
- Improving operational effectiveness: Seeking operational improvements that will reach into the supply chain and vendor base
- Developing new business models: Creating platforms, services, data, and business models much more reliant on partners, vendors, and other actors
“As you build your IoT strategy,” writes Rossman, “you can set yourself up for success by leveraging two or more of the IoT ‘triple threats’ - essentially the three key opportunities created by IoT.”
He goes further to advise, “connected devices provide the opportunity to extend an enterprise in manners and at a scale that will force a new understanding of the broader industry.”
To gain persistent competitive advantage, your company must have an IoT roadmap to revenue and an agile execution process that can deliver and adapt. For example, you may start by focusing on operational efficiency but you must include a plan for moving to new business models after building some early successes.
How Aricent helps raise IoT IQs
Aricent is a global design and engineering services company that works with clients to solve their most complex challenges, from Customer to ChipTM. We will work with you to understand your business objectives and unique IoT journey.
Our roadmap-to-revenue methodology allows you to pinpoint where to start and how to get there from design & strategy, hardware and software development and product support services.
For example, we can work with you to leverage AWS IoT, and best practices in micros services and embedded software to construct a truly smart, revenue generating solution.
So how will you elevate your IoT IQ?