Who wouldn’t want to capture some of the estimated $6 trillion in play with the Internet of Things (IoT)? Companies embrace IoT solutions for a number of reasons, such as lowering operating costs, increasing productivity, expanding into new markets, and developing new products/services. A study from Unisys showed that 72% of top executives see digital business models as vital to corporate success. Many of these businesses are obtaining value from cloud-based services and apps. However, while large companies are seeing a boost in areas such as security, user experience, and infrastructure performance, they are not sure how to expand on these early victories. For example, how can companies now capitalize on their technology to create new products or services and realize new streams of revenue? One possible solution is to incorporate an IoT-driven product or service initiative into your company’s offerings.
Big Business, Big Challenges
The rapid pace of technology has been a boon to companies large and small, and it is altering other aspects of the market landscape. The Internet of Things (IoT) is on the very cutting-edge of advanced technologies, and has resulted in significant disruption across verticals. For example, in one article from the National Realtors Association, many buyers in high-end markets are coming to think of Smart Home systems as essential to a home purchase, so sellers are rushing to have systems installed. Wearables are taking the market by storm, and these IoT-enabled devices go beyond fitness trackers. The popular Pokemon Go game has its own dedicated wrist device so users can “catch’em all”. IoT solutions may be able to solve businesses’ most thorny problems, too. For example, sensors and a strong approach to energy conservation can pave the way for companies and governments to slash carbon emissions and lower energy costs.
Small companies and startups have been quick to capitalize on the benefits of IoT; their agility and size are advantages in a tech-driven market. While large companies have rushed to invest in technology, many of these investments have been about improving efficiency in the workplace or enhancing safety and security—not about capturing more value on the open market. Part of this problem is that a fear of risk, operational efficiency blowbacks, and communication issues may be holding them back from realizing additional value from their tech investments. Another issue is a gap between understanding how these technologies can be efficiently used at a company and how they can be expanded to customers. This gap is understandable: technology is changing so quickly that it is difficult to keep up with all its uses. However, it is possible to overcome these issues and construct an approach that captures value from existing products, services, and systems.
Expanding Your Reach
The first step in building on the existing value pent up in your current technology solutions is to understand what assets are at your disposal. This means taking a hard look at how your current digital solutions are being implemented and expanding on their possible use for customers. It also means examining what your portfolio looks like. Finding the connections between your current products, services, and technology capabilities allows your company to develop a strategic approach to expansion.
Some companies will already have products or services that adapt well to technological expansion. For example, the Unisys study noted that a majority of companies had access to cloud services, an absolute must for the successful implementation of an IoT solution. How can you modify your existing solutions to expand their reach? For example, banks offered certain hours when customers could walk into the bank and engage in a transaction. Banks upped their games by augmenting these basic services with ATMs that allowed customers to see balances, deposit cash, and obtain money from their accounts 24 hours a day. Eventually, banks began to offer online banking for customers, not only through their main secured website, but also through their mobile apps. By taking an existing product or service, banks were able to expand their customer base and improve customer satisfaction and loyalty.
However, not every company will be able to link current products or services with their new capabilities. For those with no existing solutions, there is a need to identify new ones. This identification process begins with a breakdown of the current assets and an identification of the raw components of a possible initiative. What are your company’s core competencies? How can these be related to other types of products or services similar to what you would like to offer?
Realizing IoT Solutions
Progressing with IoT initiative can take several forms. It is, of course, possible to utilize the same processes used to develop products or services at your business, but technology-driven solutions require a slightly different methodology. IoT solutions are more suitably developed with an agile approach, which may involve multiple quickly-developed prototypes and numerous rapid testing phases. The “business-as-usual” mindset cannot result in a successful IoT solution; the traditional way of thinking for established companies involves a stronger focus on efficiency and steady returns rather than a focus on creativity and agility.
Another possible way to drive an IoT initiative would be to create an innovation lab. For example, Max Wessell highlighted Clayton Christensen’s (author of The Innovator’s Dilemma) idea concerning the creation of autonomous business units within the larger corporate family. These units can operate as smaller, more nimble operators that drive product innovation. Since these autonomous units enjoy the support and resources of the parent company, they can tap into a significant asset base not available to the average startup. However, these innovation labs still need to deliver results in order to remain viable.
Another possible solution would be to identify smaller companies or startups that are in on the ground floor of the solution you would like and buy them out. Facebook’s acquisition of Oculus (to the tune of $2 billion) allowed the internet powerhouse to expand its reach. Cisco’s takeover of Jasper (which develops a cloud-based Internet of Things (IoT) service platform) highlights the company’s commitment to enterprise IoT solutions. Japanese Softbank’s strategic acquisition of UK chip designer ARM underscored the company’s understanding of market trends (ARM’s microprocessors are in almost all of the world’s smartphones).
Innovating with a Leader
Unfortunately, it may not be possible to create an innovation lab that is successfully generating winning products— innovation is, in fact, an inherently risky venture that requires a significant background in technology and market knowledge. Buying up startups can be risky, because it’s not always possible to understand where the trends in technology are going. However, that does not mean that your company will miss out on the opportunities offered by IoT or other advanced technologies. If setting up another small unit and incubating ideas until their release is not feasible, there is another, more efficient way to capture the value of innovative technologies that can open up new streams of revenue and new markets. Work with an experienced team of experts who have successfully helped companies realize their technology visions and business objectives, assisting with the entire lifecycle of IoT product development. They can assist with every stage of your IoT initiative—helping you tease out which technology enabled ideas are best suited to your company’s core competencies, providing the necessary augmentation of your R&D team, assisting with product development, providing insights into the market landscape, and mentoring with our technical know-how. Expanding on your existing technology capabilities is about more than simply understanding how the technology creates efficiencies for your business—it is about exercising leadership and judgement that is informed by seasoned expertise.
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