Is your business ready for the Internet of Services?

Last week, we looked at how the Internet of Things has evolved over time. This week, we'll explore how that evolution is moving towards services rather than things.

Transforming the customer experience 

According to a report from the Harvard Business Review, the Internet of Things stands to have the biggest impact in two key areas: operational efficiencies, which we’ve seen, and customer engagement, for example, using predictive analysis to anticipate customers’ needs.

Deakin University in Australia has been experimenting with building a “smart campus” via its mobile app for students. It can anticipate student needs on a very personal level, for example, a student who is running late might get a prompt asking if she wants her usual coffee order so it’s ready and paid for when she swings through the campus center on her way to class. The app can also help students find a quiet study space or connect with classmates, among other things.

According, to the Industrial Analytics Report 2016/17, it’s these predictive and prescriptive analytics that will be the most important when it comes to the maintenance of machines over the next several years. And, it’s not only the factory owners that will benefit from predictive analytics, but also product owners.

Smart devices will transform how consumer products are serviced by field engineers. For example, what if your washing machine was serviced before it broke, saving you the time and aggravation of having to get it fixed or replaced? Empowered with data and insights, the IoT devices of the future will afford just that. When field engineers do have to operate in a repair as opposed to prevention role, they with have access to work history and information from previous site visits, and might be equipped with wearables, such as smart glasses, that will make them more effective in maintenance and prevention of further issues.

This sort of direct product-manufacturer interaction brings us to yet another way that IoT has the potential to transform customer relationships. Connected products offer a new way for manufacturers to stay in contact not only with the device, but the owner of the device, creating a new basis for direct and ongoing two-way dialogue that could include product feedback, customer support, or product servicing.  

Internet of Services

So, how can your business stay competitive and harness the power of IoT technology? Now you don’t have to create a bespoke platform or even hire an in-house data scientist. Companies, like cloud services provider Prodea Systems, are developing powerful big data-processing applications that will take data from IoT sensors and transform it into insights for enterprise and consumer applications.

Salesforce offers a similar service that will leverage its existing CRM business by syncing it will IoT processing power. Described as paving “the road from proactive to predictive,” their new Salesforce IOT Cloud platform promises to “turn the data generated by every one of your customers, partners, devices, and sensors into meaningful action.”

There are more, including from all the usual suspects: Google has developed a cloud-based IoT platform called Android Things, for Android connected devices;Amazon web services, has several IoT integration options; and IBM now offers Watson IoT.

The proliferation of these services could be heralding a shift in the IoT business model from provision of products to provision of services.  

Risks and rewards

Big data and IoT present a number of data security challenges as well as regulatory compliance risks. In the EU, data protection obligations have been introduced with regard to allocation of responsibilities between the different parties involved so it’s important to make sure you’re aware and compliant. And, since IoT sensors collect an enormous amount of personal data, as well as confidential business information and trade secrets, legal issues around data protection, intellectual property, cyber security, and product liability could arise. Additionally, there are, of course, inherent risks in storing vast amounts of data digitally and with, IoT, there are new entry points for hackers.

Despite these risks, we think the rewards will outweigh them. With the Internet of Services, perhaps the IoT platforms will shoulder more of the risks, freeing companies to reap the benefits without the burden of potential legal issues.

According to a 2017 report by Cambridge Consultants for Ofcom, the key growth sectors for IoT over the next eight or so years are: automotive, consumer electronics and goods, and utilities, followed by a wide margin by smart cities, and the rest, including supply chain, manufacturing, and healthcare.

How will your business be impacted?