The power of the Internet of Things (IoT) to connect us to everyday objects and allow them to send and receive data has the potential to change the way we buy, sell, manage and service goods and commodities.
However, for this to have a real impact on the way you do business, you need to go back to the drawing board and incorporate IoT innovation in your business model from the start. Sebastian Isaac, business development manager at Rectron, discusses the point
Moving from a hardware first to a software first mindset
There has been a legacy of businesses focusing on hardware first, and of bigger businesses outsourcing various aspects of their products and services. The result is a functioning product that does what it’s meant to, but without the business functionality to monitor usage or have any further input in the customer’s experience.
The same businesses are beginning to see the benefits of including an IoT component into their products. For example, imagine operating an office automation business and being able to monitor toner usage in your customers’ devices so that you can deliver new cartridges before the customer even knows they need to be replaced.
Or you may own a lighting company and thanks to real-time data monitoring, you may be able to find a problem and redevelop a lightbulb that many of your customers have been having trouble with. It changes the nature of your business from being purely a manufacturer or distributor, to being able to take responsibility for the full customer experience.
However, a lot of existing companies are trying to retrofit IoT technology into their products to take advantage of these benefits and, quite simply, because they need to in order to stay relevant. The problem with this is that if you have been in business for several years, your business model has probably been devised around the way you sell and service your products. Simply plugging IoT into your existing model is going to be difficult.
That’s where newer or more innovative companies have an advantage. Many of them are starting with a blank canvas and designing products with software and service at their core focus.
Tesla Motors embodies this way of thinking. The company designed its whole business around its car, in a ground-up approach. Tesla is in control of its entire ecosystem, from manufacturing through to aftersales service because IoT technology was part of its business model from the beginning. It’s a prime example of using IoT to take control of customer experience at every touchpoint, and making these customers’ lives as simple as possible by choosing to use this product.
Improved customer service and deeper insights
This highlights one of the two main advantages of incorporating IoT into your business: the positive impact it has on customer service. It’s a relatively easy way of looking after your customers by monitoring their usage of your product and then stepping in with assistance before they have to reach out to you. The knock-on effect of this is creating customer loyalty to your brand. This creates a proactive approach as opposed to our current reactive nature in business.
Beyond customer service, IoT can also be a useful tool for you to monitor and manage customer data and gain insights from this data. Alarm companies have been monitoring our homes using a form of IoT technology for years, and they have the potential to take this further by incorporating data collection, storage and analysis to develop a picture of how many houses are being broken into in each suburb. Although they are currently doing it, the incorporation of an IOT platform, allows them much more insight into the data they are able to collect. They then have the opportunity to work on their product offering and security strategies, to address this.
Companies involved in water management and electricity management are also ideally placed to take advantage of IoT. In South Africa, the City of Johannesburg has already rolled out approximately 92 000 smart meters and plans to deploy another 250 000 by the end of 2016. This can give the municipality important information about energy consumption in the area and per household – and the more broadly this is rolled out, the more information there is for the government to make decisions about energy regulations within the country.
Apart from that, it’s also a useful tool for consumers to monitor their own energy consumption and manage it more effectively to cut costs. It’s already fairly common to have an app on your phone linking to your circuit board to turn off circuits that aren’t being used. And there is the potential to develop a similar system to manage water consumption too.
Addressing real, relevant problems
This shows that IoT innovation is not only a nice to have for improving customer service and consumer experience, but actually addresses real and relevant problems within the South African landscape. The good news is that we have a lot of young, innovative talent in the country ready to help us ride the IoT wave by developing new technology and looking at how to transform existing business models to incorporate it.
The technology on the backend is ready to roll. All you need to do now is start thinking beyond your existing business model and put IoT software and services at the centre of your business model. We’re not far away from making this connected world a reality – so the time is now to start innovating to make sure you’re riding the wave rather than being washed away.