Three Ways The IoT Can Drive Business Value
You can’t escape the IoT momentum these days. The Internet of Things is being used for everything from saving the rhino from poaching to leveraging stray dogs to fight crime.
But even as vendors spend billions to try and grab IoT market share, it’s not always clear exactly how their business customers are supposed to actually benefit from IoT. According to a thoughtful new report from Forrester, the answer lies in three fundamental business scenarios:
- Design: Transform new or existing products or environments
- Operate: Enhance physical processes with better information and digital automation
- Consume: Improve services, operations or products with third-party IoT customer and context data
The report, called Untangle Your IoT Strategies: The Three IoT Scenarios and How They Drive Business Value claims every company can apply IoT to at least one those scenarios. That may be optimistic, but the framework can help companies get a clearer picture of how they can leverage IoT.
Complexity is the enemy in IoT projects
The dizzying complexity of possible business use cases, the incredible variety of IoT devices and the myriad possible benefits and stakeholders are what make the business benefits and challenges of IoT hard to sort out, the report suggests. The three scenarios are intended to cut through that confusion to let technical and business leaders focus on exactly what kind of IoT applications make sense for a given organization. Let’s take a look at each one:
Scenario 1: Design products and experiences
This scenario covers what are often called “connected products” or “smart products.”
They range from “durable goods, with IoT in the product or the dispenser for the product” (John Deere’s FarmSight, Field Connect, and HarvestLab), to “packaging with embedded sensors to monitor consumable products”, Vitality GlowCap for pill bottles, to experiential spaces in locations such as retail stores and sports stadiums, MLB Advanced Media’s MLB.com Ballpark app, all enhanced with IoT sensors and data.
Scenario 2: Operate business processes
“IoT sensors can lower costs by preventing expensive downtime and improving asset utilisation,” the report claims. And “IoT can also help offer customers more product customisation, faster delivery and better experiences.”
Examples include wearables for employees or consumers; customer experience enhancements for retail, hospitality, travel, entertainment and sports venues; and industrial and business environmental improvements. Other examples: tracking the operations of equipment and machinery; as well as buildings and large-scale built infrastructure, including whole cities.
Scenario 3: Consume insights
This third scenario includes “any business that can gain insight from real-world data that helps improve its offerings,” even when that data comes from third-party IoT sources, not from operating your own IoT networks.
Examples here include monitoring the safety, wellness, and medical condition of people in a variety of contexts, as well as tracking the activity and status of property ranging from vehicles to industrial equipment and machinery. Tracking environmental information, from weather to water quality, can also be valuable.
Big benefits for IoT success
The benefits of IoT are big, the report promises.
“Firms that do implement IoT scenarios don’t see simple one-shot benefits. Because IoT can span a wide variety of products, environments, operations, and data analytics processes, there’s a rich, escalating spectrum of business value.”
The report even offers a handful of strategies to help companies get there:
- Develop IoT design strategies in addition to operations strategies.
- Plan beyond the initial optimization benefits of using IoT in operations.
- Start with customer experience, then work back into internal operations.
- Find “consume” IoT opportunities by learning where user journeys interact with IoT-enabled assets or environments.
This structure makes sense, and anything that helps organise the unstructured chaos of the amazing range of stuff that gets dubbed IoT is a welcome tool.
Still, the big step comes when you need to go beyond figuring out how to think about what’s happening in IoT and decide what your company can actually do about it.
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