Four keys to developing a winning IoT service: Business View

office boardroom meeting

This article is the first of our series, “Four keys to developing a winning IoT service.” See more from William Dupley.

I met with a cloud provider who was not having success. They had built an excellent set of services, but no one was buying them. I reviewed with them the following approach to defining an IT Service.  This approach likens the development of a new service to constructing a building.

There are four views to this approach.

After I presented this simple analogy the cloud service provider immediately said, “I see what we did wrong. We did not develop a business view or a functional view. We focused on the technology view and thought if we build it, customers will come, but nobody came.”

This is an all too common problem in new IT initiatives. The Internet of Things (IoT) is the latest in technological advancements that have captured the heart of enterprises. It is demonstrating tremendous gains but also significant failures. In most cases, these failures can be traced back to avoiding the development of a robust business and functional view.

Over the next four weeks, I will explore each one of these views when developing a new IoT initiative.

The Business View

There are several reasons why businesses fail. Two of the most common are:

  1. Competition – Not evolving business models and as a result competitors forge ahead.
  2. Technology – Not exploiting technological advances to meet business needs.

Uber is an excellent example of a company that transformed the taxi industry by evolving the conventional business model of owning a fleet of taxis and replaced it with contract drivers and empowering customers to order a taxi using a mobile device. They also measure success based on customer metrics not on internal process metrics.

We focused on the technology view and thought if we build it, customers will come, but nobody came.

It’s critical that businesses continually evaluate new business models in light of what a new technology enables. IoT is a disruptive technology, and companies that link IoT technologies to solving their business challenges will outpace their competitors very quickly.

Both the public sector and the private sector can transform their operating models using IoT, however, understanding the unique challenges of an enterprise is the first step in developing a robust business view. Let’s look a few examples of challenges facing the private and public sector.

Manufacturing Sector Challenges

  • Industry 4.0: Every manufacturer must now have an Industry 4.0 implementation strategy.
  • Labor Shortage: As the baby boomers leave the workforce it is expected that 4.6 million jobs will open up in the manufacturing sector and unfortunately there is a shortage of resources to fill those vacancies. There is also a desire to shift labor resources to higher value work away from transactional work.
  • New Product Development: Customers are demanding that almost all products be able to be connected to the internet.

Government Challenges

  1. Economic development, creating jobs and enhancing the tax base.
  2. Improving public safety
  3. Managing budgets  
  4. Implementing new infrastructure  
  5. Improving education  
  6. Providing housing
  7. Managing energy/environment  
  8. Addressing demographics, diversity, and inclusiveness challenges
  9. Exploiting technology and data  
  10. Providing health care

Bernard Marr, the CEO and founder of the Advanced Performance Institute, included these in his list of top Commercial Challenges.

  1. Uncertainty about the future.
  2. Financial management.
  3. How to monitor the performance of their firm.
  4. Demonstrating adherence to new regulation and compliance.
  5. Maintaining a good reputation and customer service
  6. Knowing when to embrace change.

Retail Challenges

  • Brand loyalty: There are lots of choices. Conventional brands need to fight to keep their customers.
  • Multichannel buying: 96% of American customers now use online shopping. However, 65% of their shopping budget is spent in traditional brick-and-mortar.
  • Creating a personal experience: Customers want to be treated as individuals. Retailers need to create a personal experience for every customer.

The better we understand the challenges facing an enterprise the more likely we will develop an IoT service that will meet their requirements. Learning to communicate in the language of your customer and understanding their challenges is foundational for forming a robust business view.

In part two of this series, I will look at the Functional View of developing a winning IoT service.

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