IoT: Strolling in the world of elation, I was lost in a small alley

The internet of things (IoT) gives businesses the potential to rewrite the laws of their sector. The potential rewards are enormous. But the picture isn't entirely rosy.

Lack of communication between IT and OT teams, a bewildering choice of technologies, a lack of connectivity with current business applications, and, most critically, a lack of alignment with overall business goals are all reasons that negatively influence IoT initiatives. In a few projects I've worked on, I've seen that the outcome of an IoT deployment did not always match the expectations of key decision-makers.

According to John Rossman, author of The Amazon Way on IoT: 10 Principles for Every Leader from the World's Leading Internet of Things Strategies, developing and implementing an IoT strategy for a firm is no easy job. "I think of IoT in layers," explains Rossman. "In one sense, it's the technological component, the sensors linked to cloud computing and analytics, which can make optimizations that are then sent back out to devices in the field." On a higher level, the use-case can be activated. A set of developing use cases come up, whether it is the consumer or more industrial and business-to-business scenarios. The third level is actually about the business models that can be formed, evolved, and changed due to these insights and the capacity to be always on."

Here are the ten principles that Rossman feels businesses should consider while designing an IoT strategy. "They aren't all applicable to every organization," he argues, "but they do need to be considered."

1. Obsess over user experience:

Rossman advises that businesses should first pursue IoT initiatives if they are preoccupied with the customers, their experiences, and how the companies can leverage connected devices to solve their problems.

"Connected gadgets and sensors provide yet another vehicle for improving the user experience," he explains. "If it improves the consumer experience, that's probably enough business justification for moving forward." After that, figure out how to commercialize it." Leaders, according to Rossman, begin with the consumer and go backward, and they strive diligently to gain and maintain customer trust.

"Obsession" at Amazon is a willingness to do complicated things only to simplify consumers' lives, even if those things don't result in short-term profit. It also entails reevaluating the consumer experience regularly and never settling for "good enough."

2. Make experiences that are consistent across platforms and channels:

The customers will interact with the services/products across various media and devices in an IoT-enabled environment. "When you connect across channels and experiences, you need to focus on the omnichannel experience," Rossman explains. "Providing a seamless customer experience is a critical component in improving the customer experience."

According to Rossman, mastering information continuity is the key to producing unique omnichannel experiences. For example, suppose a customer calls one of the customer service representatives about a faulty connected vacuum cleaner. In that case, that representative should be able to see where the vacuum cleaner is and what's wrong with it. Better yet, that representative should be able to contact the customer proactively with a solution.

3. Continuously strive for betterment:

Connected devices and IoT allow companies to scrutinize the processes like never before, giving them the tools one needs to drive continuous change and development. "You have access to far better data and signals," explains Rossman.

?"This empowers you to usher in a new era of visibility and process improvement within your firm." He claims that connected gadgets can provide real-time insight into the flow, status, and state of essential elements in your business.

4. Drawing insights from data:

According to Rossman, IoT will let businesses collect data about their operations on a scale and magnitude beyond anything one has seen before, but the data isn't enough. One must use that data by using models, analytics, and algorithms to gain insight from it.

"Your operations can provide you with far better data to tell you what's going on within your organization," says Rossman. "With that, you may attempt to develop a formulaic understanding of your processes, which will provide you with greater insight and definition to tighten up and reinvent those processes."

According to Rossman, teams at Amazon spend as much time defining and deciding on how to measure a new feature, service, or product as they do building the feature itself. They consider an operation's inputs and outputs, as well as the data required to conduct that operation, in order to comprehend its inner workings.

5. Consider the larger picture, but start small:

According to Rossman, vision is required for successful IoT innovation. If one wants to effect fundamental change, she must think big. However, big goals are realized through tiny, discrete tasks that allow one to fail and iterate based on the experience acquired from those mistakes.

"IoT is about a journey, and you should know how long the journey is," explains Rossman. "However, you must proceed in small, nimble, low-risk bets while trying to figure out what works and what doesn't." Understand the little bets you're making in terms of IoT and other technologies, de-scale the risk of those bets, and they're no longer a bet."

6. Make use of IoT to establish yourself as a platform company:

According to Rossman, a platform business model that allows other firms to harness one's talents to start and expand their businesses generates a significant, lasting competitive edge for your company.

Look for ways to let other firms use your linked gadgets. "A platform business is a firm that empowers others," adds Rossman. "IoT allows certain businesses to consider how their products and services could serve as a platform for other businesses to offer insights and services to their customers."

7. Foster outcome-based business models (The Peter Drucker Perspective):

Selling items is one thing, but with IoT-connected devices, one can go a step further and sell outcomes. Customers pay for the outcomes provided by a product or service rather than the product or service itself in an outcome-based business model.

According to Rossman, this transfers ownership, efficacy, and maintenance obligations from the consumer to the provider while aligning customer and provider objectives. "This is about giving firms real-time knowledge about how their goods are performing with customers," Rossman explains. "You go from being a product that needs maintenance to offer the output that your customers want."

These models range from self-monitoring services that automatically replenish to subscription services with a fixed charge to 'as-a-service' firms that provide services suited to individual needs. Rossman admits that outcome-based business models aren't suited for every company, but if they are, he says they can boost profitability, strengthen customer connections, and boost consumer loyalty.

8. Find a balance between data monetization and privacy protection:

Data could be the next "black gold." While it is difficult to locate examples of IoT-based enterprises that have successfully packaged and marketed their IoT data, Rossman believes the moment is coming. Sensors, cloud computing, third-party data sources, and APIs will all contribute to the market for IoT data brokerages.

"The data is the business model," adds Rossman. "If data is the new black gold, IoT generates many data." Some businesses will be able to produce value and commercialize the data generated by sensors. It's a business model that you'll see more of in the future." Some of that market is starting to emerge, he claims. Financial trading firms purchase cargo ship transit and port arrival information. Utility firms are buying data on building and appliance energy consumption. Smart home firms are selling data to advertisers and insurance companies.

9. By experimenting with new products and services, you can disrupt the industry's value chain:

The name of the game is innovation. According to Rossman, IoT presents chances for expansion up and down the value chain. "Start your business at one point in the value chain," he advises. "Perhaps then we should collaborate actively to find an overall answer." Learn about the industry by studying both upstream and downstream. Look for signs of a poor client experience or surplus margin that has become trapped. Then hunt for IoT-enabled tactics to disrupt that industry's value chain."

According to Rossman, a value chain is the end-to-end set of operations and activities for the industry. Consider a company that sells HVAC systems. Commercial building manufacturers are its clients. It could install sensors that would allow it to take over HVAC system maintenance in an as-a-service model, establishing a new revenue stream while decreasing the building manager's maintenance burden.

10. A flywheel for IoT strategy:

According to Rossman, if you have a good grasp of your business's systems dynamics — the flywheel (ref: Good to Great) — one can utilize IoT to detect and execute opportunities and threats. " Per IoT strategy, one needs to aim to acquire insight into who the right partners might be and where the risks might be," he advises.