One of the latest and most prominent technological achievements is the Internet of Things (IoT). Introduction of IoT to existing traditional businesses has potential for new business opportunities. Devices are centrally managed by an IoT platform. Very often these platforms are provided by a third party, since development of own platforms is often more expensive as to select an existing one. These platforms have many features and business functionalities.
The traditional business is on the verge of reinventing itself. The success and smoothness of this change is depending on the existing transformation capabilities of every business leader. Consequently, for every business leader, questions arise about how to adapt their own business to IoT.
Key Questions for Starting IoT Business
The key questions for business leaders are: How can an IoT platform be integrated into my business? What advantages can I expect from using IoT platforms in my business?
This post focuses on supporting business leaders who think about doing business with an IoT platform. It includes a self-assessment questionnaire (downloadable at the end of this post) to support decision-makers in the IoT business design. It helps to identify use cases and requirements relevant to own business. With the result of this self-assessment, the further selection of the appropriate IoT platform for your business will be easier.
Higher Interaction and Connection
An IoT platform allow the use of technology for higher and better interaction between connected people and devices. The connection occurs through the devices, equipped with different kind of sensors. Sensors provide environmental information to the platform and users can then interpret these data. Thus, the user is more aware of its environment and can better manage this information. Accordingly, information transparency increases to all involved stakeholders. More information are available. On this base, economic decision making and the economic exchange can be changed as more factors can be considered than before.
Also, the IoT platform allows to develop further business opportunities such as: personalized customer experience, personalized digital marketing, personalized value-added services, maintenance, participation on several business ecosystems and many more. With IoT platforms, the business model of an organization can be totally reconstructed.
Things-to-Things-Design – New Business Ways
With IoT platforms the established business relationships can be influenced totally by things-to-things-design (T2TD). T2TD stands for the design of devices, sensors, platform and humans (see picture 1). The interaction of different devices and people is nothing new. What`s new is that the existing business relationships can be changed, and additional business value can be generated in a new manner.
Processes like standardization and empowerment can occur simultaneously without any limitations. More available information allow to use the increased transparency for better adjustment of prices, products and services. For example, an insurance company can decrease insurance rates because more information is available and the appropriate assumption of risk is to grasp. So, the general problem of asymmetric information becomes obsolete.
To summarize our findings: as a cornerstone to your IoT solution, the quality of the IoT platform infrastructure will influence the new opportunities for your own business design and is highly eminent to achieve proficiency in digital IoT business.
Methodology for the IoT Business Check List
The self-assessment check list facilitates the identification of the specific requirements which should suit to the business strategy and activities. It triggers the creation and design of new business tactics.
Digital Master and Capabilities – A holistic change approach
The Implementation of new business opportunities should occur in a systematic and reflected way. The future market position of the digital transformed organization should response adequately to all new challenges in a competitive market environment.
Our approach is to reach the market position called “Digital Master” by G. Westerman. In his book “Digital Leading” Westerman reveals that the “Digital Master” is the most digital advantageous position in the market for a company using digital technology. Thus, a company with status of Digital Master has both strong leadership capabilities and digital capabilities. These capabilities enable the company to incorporate the right technology (digital capabilities) and the right measures for a sustainable change in the organization (leadership capabilities). These two capabilities are essential for running a successful digital business.
Westerman divided the digital capabilities in three main categories (picture 2): business model, operations and customer experience. The leadership capabilities contents the categories: vision, engagement, governance and technology leadership.
We deviated indicators for the check list from the above capabilities (see picture 2 and picture 3).
The transformation to the digital business model with all benefits and opportunities should also occur in a sustainable and comprehensible way. With this holistic approach, digital business design allows to identify innovative economic interaction. In addition, a diligent user can also add further dimensions to digital and leadership capabilities.
Download the IoT self-assessment check list
Download of the self-assessment check list to check the maturity of your business for IoT by filling the form below.
How to use the Check List?
We identified 19 key indicators, enriched with questions. The questions aim to identify use cases and requirements for the digital business model. You can answer with “yes”, “no”, or “unknown”. All question answered “yes” will stand for needed requirements in your future digital IoT business model. In contrast, ones with “no” will stand for requirement not needed. Please answer “unknown” in case of you need more information about this specific requirement.
If you have any questions, please do not hesitate to contact us or leave a comment below!
1 – Westerman, G. Leading Digital, Boston 2014
2 – In this post, we provide only our approach and not the whole explanation of capabilities.
Latest posts by Beatrice Malova (see all)
- How to start an IoT platform business – Download our maturity checklist - February 15, 2018