Here at Blue Hill, more and more of our time is spent exploring implications associated with the Internet of Things. Naturally, there has been a great deal of buzz around IoT analytics.
We’ve had the chance to speak with a number of companies who are doing some truly fantastic things with IoT. This includes everything from farms more efficiently watering their crops to cities optimizing traffic patterns – all of which speak to the potential value that analytics can bring on top of a world of connected ‘things’.
In the IoT gold rush, business leaders should not just ask themselves if there are opportunities to build top-line growth from bolstering existing revenue streams; they should also be asking how they can grow top-line performance from net-new revenue streams.
One organization I spoke with, an industrial truck manufacturer, shared insights that the rest of us should learn from. As part of their IoT initiatives, they first began collecting data on their trucks to identify common areas of complications. This eventually evolved into the ability to provide predictive maintenance on their trucks. As part of their warranty support, they now identify imminent problems and schedule service appointments before a breakdown ever happens. This represents a series of meaningful incremental improvements that not only save time and money, but improve the quality of their trucks over time.
However, the manufacturer took a step forward in realizing this service would be highly valuable to their customers as well. They now offer the ability to preemptively identify issues and schedule service appointments as a subscription service to their customers. In short, truck buyers can purchase this value-added service on an ongoing annual basis. The result is a better-serviced customer and an entirely new (and recurring) revenue stream.
Any producer of highly valuable capital equipment has a direct lesson to learn from this quick example. The right blend of analytics and IoT enables a new business model – “predictive maintenance as a service.” This is not just an internal business model to improve operational efficiency and maintenance, but an external and client-facing business model that can translate Big Data into Big Money.
More broadly, the lesson is around the usefulness of the vast amount of data that organizations can collect cheaply thanks to the plummeting costs of sensors and data processing power. If the data is valuable in one context, there is at least a chance that it is valuable in another as well.
Business leaders must continue to recognize the transformational shift as every company, whether in manufacturing, retail, or construction, is becoming data centric. As our abilities to collect and process data about every aspect of our business increases exponentially, we should always be looking for opportunities to repackage the data to drive new and innovative revenue streams.
What new business models do you see from the intersection of IoT and analytics? Join the conversation on Twitter (@James_Haight) or feel free to email me directly (firstname.lastname@example.org) with your thoughts.