The Real Benefits of IoT are in End User Experience and Marketing

IoT has entered the world of television commercials and branding. Who would have thought? Yesterday #IoT still seemed a relatively obscure extension of systems- and control engineering. To understand the rapid rise of IoT, consider the early days of the “dot com” period. Many of the initial pioneers focused on technologies like HTML and meta-tagging. Web pages were made by enthusiastic amateurs that knew some of the new tricks, and what they created was a form of advertising. But some saw the real potential of the internet early and created disruptive businesses that replaced entire industries. Few people believed Amazon in the nineties when they proclaimed that they would become the largest retailer in the world. Now we have Booking, Uber, and Netflix.

IoT is following this path and is pivoting. Whereas much of the talk is still about which LPWAN is better and how you optimize the energy consumption of a connected device, the disruptive new business models are being established already by visionaries who can see the real potential created by connecting things to the internet. What are those new business models? 4 themes are emerging that may foreshadow what we will see in the future.

Personalization of experiences

In the UK, Costa created a coffee vending machine for “coffee on the go” at, for example, convenience stores, airport lounges, gas stations, company restaurants, and shopping malls. A user can scan the QR code on the machine with a mobile phone. The personal preferences of the user are sent to the appliance and a “barista-style” drink appears. With an added benefit during COVID: the user does not have to touch the machine. At the same time, back-office processes start, from automatic payment, tracking supplies, monitoring individual machine performance, understanding the most popular choices to learning about the user. With this connected coffee vending machine, Costa can not only deliver an incredible user experience today but can grow and improve this even further in its next-generation machines through the knowledge and insights it gains. All of this is enabled by IoT.

Bypassing the middle man and data mining the physical world

In many instances, producers and end-users are not directly connected. Intermediates like distributors or stores are in control of the information flow. The quality of the collected information depends on the nature of the business and the relationships. And it could leave the producer in the dark. This happens in B2B2C but is also very common in B2B, with channels, resellers, white labeling, import agencies, and other forms of distribution.

One of our customers recently told us that they make all their profit from the products they sell in restaurants, and hardly any from their other channels. As the products in the restaurants move through wholesalers and distributors, they have no visibility about what is going on. They can solve this with IoT and receive real-time data from sensors and equipment, with pinpoint location information.

With this data, they can improve their negotiation position with their distributors, test the effect of their #marketing campaigns, add “as a service” offerings, and adjust the product mix in specific outlets. Another related benefit is that this data can be mined. Similar to using information about a user’s online behavior (like search terms and sites visited) for personalized advertising, it is possible to use data from the interaction of a person with physical things to learn about interests and preferences. This is happening already, with smart home systems learning about the behaviors of the persons living in the home and automatically adjusting ventilation, temperature control, and light settings based on those patterns.

Data from connected devices can be used for new business models and personalized experiences

Back office processes: Automatic replenishment and “As A Service” models

Almost all companies provide support with their products in some form: to solve problems, handle claims, send replacement parts, sell consumables, deliver added services, or for other reasons. For many companies, there are significant opportunities in this part of their business: for cost savings, quality improvements, or cross-selling. Companies that have connected their products have been able to optimize their back-end processes. Lowering costs at better service levels increases their competitive advantage. Tech support is the most obvious, as the helpdesk can resolve problems faster with access to up-to-date information about the state of the product. Automatic replenishment is another big differentiator.

An example from our own experience is from a producer of paint used to create the lines on football fields. This company found that their dispensers were sometimes filled with lower-grade alternatives by their customers. After adding IoT, they were able to track the dispensers and the volume of paint. With an automatic refill program, they reduced the hassle of reordering and increase sales significantly. And at the same time pushing some competitors out of business.

Predicting and maintaining

IoT is about data collection and remote control. With significant advancements in Machine Learning, this data can be used to detect a problem even before it occurs. Through the IoT infrastructure, it is possible to push updates and prevent the problem also in other units with the same potential exposure. The result is lower warranty costs and n new business propositions with guaranteed performance. We have all become accustomed to receiving updates on our computer or mobile device. IoT enables the same for things, and this is happening on a large scale already.

Detecting problems before they occur can support industrial operations as well as professional or household appliances

Typical improvements that can result from IoT in the operations and maintenance of equipment include:

• Reduction in call center time
• Reduction in unnecessary service call-outs
• Reduction of the fleet of support vehicles
• Reduction in fuel cost and carbon footprint
• Increase in visit efficiency
• Improvement in first time fix rate
• Improvement in scheduling and route planning optimization

 Where is the catch?

With all this potential, why has IoT not progressed further? If you look around, there are still very few things that take full advantage of IoT. There are several reasons, of which two are specifically important:

• Implementing IoT is more complicated than it seems. Many projects are initiated without sufficient understanding of all the true complexities. Two of those areas are hardware and connectivity. In addition, IoT projects typically require changes in the organization; some work disappears, other skills are needed. That is often underestimated as well. About 50% of our customers at Evalan had a previous experience with an IoT implementation that failed. Creating secure, scalable, future-proof IoT implementations that are easy to maintain and operate is not the same as connecting devices to the internet.       
• The benefits of IoT were kept obscure. Most of the communication about IoT has been by engineers to engineers about technical topics. Business decision-makers are not interested in those. They need to know what it can do for their business.

Moore’s Law

Several of the underlying technologies of IoT follow Moore’s law. Effectively this means that for the same costs and footprint the capabilities of IoT grow exponentially. As more use cases can benefit from IoT, the disruptive potential of IoT becomes more significant very quickly. We recently heard a 6-year-old ask with surprise and disappointment why the box that stores her braces was not connected to the internet, so she could find it easily like her mother can track down her phone through an App on her tablet. The generation that expects everything to be connected to the internet is coming. Why does this coffee machine does not know my preferences?

BACE IoT

Are you interested in exploring what IoT can do for your product or business? At Evalan, we created BACE, a ready-to-deploy IoT connector. With BACE or other options in our portfolio, we can typically develop an end-to-end feasibility version of a connected product in about 6 weeks, including a dashboard. This prototype enables you to test a use case and get experience. We can then support you in the entire process, from design thinking to product launch and operation.

For more information and a demonstration, see www.bace-iot.com . You can contact us via +31207790344 and [email protected] .

BACE IoT – a ready to deploy IoT solution that connects an asset to the cloud and delivers its data via a RESTful API  

Evalan

Evalan is an experienced IoT solutions provider based in Amsterdam, and serves clients in industry, real-estate, agriculture, healthcare and departments of the Ministry of Defence.

#innovation #IIoT #digitaltransformation