Imagine having the technology to put sensors into your manufactured item such as a vacuum, TV, Stereo or lawnmower and be able to tell when there is a problem with a component. The company is alerted and is proactive in calling the customer with either a new part or a solution to fix it right there on the spot.
The Internet of things or IoT makes that possible. John Rossman spent 4 years launching and running Amazon’s marketplace business. If anyone knows anything about IOT its Amazon.com.
He initially set out to write a book on IoT, it turned into an obsession. This led to setting the groundwork in industry for doing IoT. It’s not something you just implement in a step or two, it’s an ongoing process.
To get to the point where your using connected devices to solve your customer problems is the goal here. Makes them happy and puts more money to your top line by selling more products and services.
10 Principles for IoT Strategy
IoT Principle 1 – Be passionately obsessive about your customer experiences.
Connected devices and sensors are a vehicle to improve the customer experience. Sometimes you must put profit on the back burner to enhance the experience with technology.
IoT Principle 2 – Create a seamless experience across all platforms and channels.
Mastering information continuity is the key to great omnichannel experiences. As an example, if a customer has a faulty connected vacuum cleaner and calls one of your customer-service agents, that agent should already be able to see where the vacuum cleaner is and what's wrong with it — better yet, that agent could contact the customer proactively with a solution.
IoT Principle 3 – Always look for ways to improve.
Connected devices and IoT put you in touch with your processes unlike anything you’ve ever seen before. It provides the tools you will need to drive change and improvement on a continuing basis with much better data and analytics. It creates high visibility and process improvement within an organization. IoT can give you real-time insight into the flow, status, and state of key items in your process.
IoT Principle 4 – Just having data isn’t enough.
IoT will allow an organization to collect data at an alarming rate, however the data isn’t enough. That data needs to be leveraged with models, analytics, and algorithms to extract insight from it. This will help you dig deep into your processes and consistently be improving them.
IoT Principle 5 – Think Big, take small bites.
If you’re going to create fundamental transformation, think big. Bite sized, discreet projects together bring most big visions. These allow you fail and iterate experience gained IoT is a journey and you should have an idea of just how long it is going to be. To be successful you need to move forward in small steps, learning from mistakes.
IoT Principle 6 – Become a Platform company with IoT.
By creating a platform business model, you allow other businesses to leverage your capabilities to grow their own businesses and thus creates a long, sustainable competitive advantage for your business. Think of ways to allow other businesses to leverage your connected devices.
IoT Principle 7 – Outcome based business models are where it’s at.
It’s fine and dandy to sell products, however, IOT connected devices allow you to go a step further and sell outcomes. In this model, the customer pays for the results that a product or service provides rather than for the product or service itself.
This is not a fit for every business, however, if implemented, they can they can increase your profits, improve your relationships with customers and increase customer loyalty.
IoT principle 8 – The next generation is finding a way between monetizing your data and protecting privacy.
It has not hit the market full-fledged, however, some companies will monetize the data they collect from sensors. Financial trading companies are buying cargo ship transit and port arrival information. Utility companies are buying building and appliance energy-consumption data. Smart home companies are selling data to advertisers and insurance companies.
IoT Principle 9 – Disrupt the value chain by exploring HOT products and services.
Innovation is key. It creates opportunities for growth up and down the value-chain. Learn the industry and look for areas in which there are customer issues or stranded excess margin. Then look for strategy that will disrupt the industry value-chain.
A value chain is the end-to-end set of processes and activities for an industry. Rossman says. Imagine, for instance, an HVAC system provider. Its customers are commercial building manufacturers. It could install sensors that would allow it to take responsibility for maintenance of the HVAC system in an as-a-service model, creating a new revenue stream while reducing the building manager's maintenance burden.
IoT Principle 10 – Create a Flywheel for your IoT Strategy.
A lot of effort should be put into identifying factors that will generate and keep the most momentum in creating upward growth patterns. If you have a good handle on systems dynamics, you can then use IoT to identify and execute on opportunities and risks in your business. Understanding the moving pieces will give a company greater momentum to carry a company to improved things.