Industrial IoT: It's now all about selling outcomes, not products
By Simran Singh February 27, 2017
- As leading enterprises begin to embrace the Industrial IoT, they are uncovering opportunities
- Companies can now gain insights into the outcomes their customers are trying to achieve
DIGITAL transformations are already taking their place as primary drivers of profitability and market differentiation in every industry.
Disruptive enterprises are recognising that the vast digital landscape means that they need to choose their partners and vendors wisely in order to grow. They are stretching their boundaries by tapping into a broad array of other digital businesses, digital customers, and even digital "things" at the edge of their networks.
Leading enterprises that are eager to drive changes are leveraging on a broader digital ecosystem, one that is allowing these forward-looking companies to potentially shape entire markets and change the way we work, play, and live.
Technology elements for a holistic IoT ecosystem
These pioneer enterprises have already realised such implications of tapping into a broader digital ecosystem. With strategic collaboration, they can shape experiences and deliver outcomes in a way never seen before.
In the rapidly growing Industrial IoT age, companies are using these connections to offer new services, reshape experiences, and enter new markets by creating digital ecosystems. These pioneering businesses see great potential to make a difference by operating as ecosystems, not just as individual entities, thus creating a new economy—the “Outcome Economy.”
How are digital devices on the edge powering an Outcome Economy and enabling a new business model that shifts the focus from selling things to selling results?
One example of this case is the manufacturing company John Deere with its Production Asset Management solution MyJohnDeere, a comprehensive information platform to help agricultural producers consolidate the management of equipment information, production data and farm operations.
This centralised, online platform allows agro-producers to access, view, archive, manage and share a wide variety of business information. The platform helps agricultural producers consolidate the management of equipment information, production data, and farm operations—and ultimately improve the bottom line. It has also enabled the company to expand its role in the precision agriculture market.
Another good example illustrating successful partnerships in this new market ecosystem is the EFFIFUEL Fleet Management platform from Michelin. The platform is a comprehensive ecosystem that includes sophisticated telematics, training in eco-driving techniques and the EFFITIRES optimised tyre management system. This allows fleet managers to outsource the management of tyres and can focus on their core business, and helping customers optimise fuel savings and offer a piece of mind to fleet managers.
As leading enterprises begin to embrace the Industrial Internet of Things, they are uncovering opportunities just like John Deere and Michelin, to embed hardware and sensors in their digital solutions and architecture.
They are utilising intelligent hardware to offer customers what they really want: not more products or services, but more meaningful outcomes and hard results.
What are the trends that are driving these?
Hardware has become more approachable. More and more businesses are able to leverage on a vast ecosystem of tools to design, produce, and distribute hardware than we have ever seen before. This is also attributed to the cost of these "things" – the cost of sensors has drastically fallen and this has, in turn, pushed more machine-to-machine (M2M) investments.
Sensors are cheaper, smaller, and more energy efficient than ever before, allowing more sensors to be installed in more places and maintained for longer periods of time at the edge of networks. Network infrastructure readiness is another key driver; high-bandwidth, wired, and wireless communications are now ubiquitous in most markets.
Are there any other good examples?
Looking at further examples, Disney, the global family entertainment wanted to create a more integrated and more efficient experience which allowed guests to do more and spend more in its theme parks. Disney formed an internal task-force during the late 2000s to improve its guest experience. The task-force explored multiple options but eventually settled on the MagicBand and the MyMagicPlus platform.
MagicBands are wristband with RFID chips and radio transmitters inside, that allows the band to connect to the vast number of sensors within the park. Guest data is then linked to the MyMagicPlus platform, which streams real-time data about guests’ whereabouts, what they are doing and what they want.
In Clinical Care, Proteus Digital Health is focused on improving patient outcomes as a new way to create value in the pharmaceuticals industry. Proteus integrates a tiny sensor in the pills it produces; the sensor acts together with a wearable device and mobile app to provide full “adherence transparency” for patients, healthcare providers, and insurance payers.
Not only can the Proteus hardware-based system determine when patients take their medications, but it also can send alerts and reminders to each individual if they forget to take a pill.
So what is the conclusion?
With the IoT being underpinned by emerging technologies such as social, analytics, and cloud, companies can now gain quantifiable, end-to-end insights into the outcomes their customers are trying to achieve and use those insights to develop significantly more effective products.
But they cannot go at this alone – these new disruptors are those that can consistently collaborate with others to deliver excellent outcomes across their capability spectrum. These players will be those that will outdo their competition and stay as market thrivers for a long time to come.
Simran Singh is the consulting lead for IDC Malaysia.