The Internet of Things is a confusing market
It is increasingly evident there is the confusion in the Internet of Things market, both with customers and with providers themselves. If suppliers (the experts?) can’t communicate what it is about, or more importantly what tangible value it brings, then what hope do customers have? Often, customers have started to make their own inroads, however their ideas are not Enterprise-grade and are far from production ready. IoT is an immature market and is an area of great interest where the opportunity for value-based first movers is high.
The business or enterprise impact is all important, gong far beyond the purely technical level. The days when customers would throw money blindly into an ICT project and ‘hope’ are long gone. These days it’s all about ‘agile’, ‘fail fast’, ‘prove a business case as soon as possible’ to save throwing good money after bad, and increasingly, ‘outcome based pricing’ where suppliers are challenged to go beyond telling customers about the value, and to show the value – if I succeed, you succeed.
V is for Visibility
At its base, the Internet of Things is all about visibility – what is going on in your operation that you don’t know about and hence have no control over? This needs a business event view, which events are important, which are not. When adopting the digital mantra of ‘think big, but start small’ where should the initial priority lie? This is where you will find your business case, ultimately.
Keep It Simple, Stupid and build from there
Complexity grows as you consider the ‘network’ of how your organisation interacts with its customers and suppliers. In Retail, this could be knowing your stock levels in real-time. Selling an item is a business event, running low on stock is a business event. Whilst retailers have staff to manage this, their efforts often are not very effective. Some obvious questions crop up:
- What level of visibility does a store manager have to manage inventory – too much inventory equals wasted money, too little results in shortages and lost sales?
- What ability does the manager have to identify stock that isn’t in the right place, if a customer picks it up and puts it back somewhere else?
- What ability is there to identify ‘zombie’ stock – items that have been in store for an excessive period of time and still unsold, despite being moved between the store and storeroom multiple times?
- What about the ability to identify perishable goods that have not been keep within expected environmental parameters e.g. left in the sun too long and no longer fit for human consumption?
As part of their role, staff will ‘keep an eye’ on stock, but they provide better value serving customers and making sales.
Where the problems persist, there is an opportunity
Most retailers rely on manual, ‘out of hours’ inventory management. At best, this will complete a whole store inventory over a number of days, often weeks, by which time it’s out of date again! As a result, they do not have accurate inventory control and cannot manage their customer facing inventory effectively nor the corresponding replenishment supply chain. The real result is lost sales, poor customer experience and extra manpower cost of manual effort, in a very competitive market where margins are thin.
Retailers who have introduced handheld RFID inventory management have seen 3-10% uplift in sales – after all you can’t take something home if it’s not in stock and many retailers have a poor ability to find merchandise which is, in theory ‘in stock’. Recent advances can enable a store-wide, real-time view of merchandise, without human intervention, at very high levels of accuracy. The business case is tilting more positively.
In Construction and Facilities Management, health and safety is a key business driver, as is first time fix rate. This could mean knowing that your operatives have calibrated tools and the correct education, knowledge and certifications to use them:
- Do operatives have their health and safety equipment?
- Are they wearing it?
- Has any of it expired and is now potentially dangerous?
- Have you scheduled an engineer with the right parts for the job?
- How can you keep an eye on lone workers?
What may seem like basic assets such as ladders have ‘expiry dates’ after which they should not be used for risk of failure, potentially with fatal consequences.
Even ‘virtual’ assets can spark a benefits case
In Financial Services companies, Internet of Things discussions can run quite quickly into the sand given high levels of process automation and predominantly ‘virtual’ assets. However, there are still examples emerging relating the connection between insurance premiums and recording ‘real’ risk by understanding how we actually live our lives, rather than a theoretical, albeit cleverly calculated ‘risk assessment’. When are we really at home, how often has our smoke alarm gone off in the last six months, how safely do we drive? Some of the more innovative insurers now offer products with reduced premiums for careful drivers through driver monitoring systems.
These are just a few examples of Internet of Things projects in a couple of vertical sectors, and is by no means exhaustive – there are hundreds of use cases across all industries. I hope this has sparked some thought.
This article was originally published on IOT Advisory Consulting and is reproduced with the kind permission of the author.
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