What Is IoT? And How IoT Startups Can Radically Improve Business Operations
Internet of Things (IoT) is no longer a shiny technology conversation. It is becoming a strategic initiative within the business and an enabler to move organizations forward towards digital transformation. If organizations are thinking about transformation and reinventing themselves, there is a high chance that they are thinking about IoT.
IoT is no longer a transnational experimental project. Many organizations started their IoT journey by adding some sensors to their buildings and perhaps doing some exciting stuff with their lighting system.
However, this is no longer the case.
Organizations found that IoT can be much more strategic on how to do business and even perhaps finding new ways of transacting with their customers.
They can now think of different data and information that they can gather which was not even possible before. They can start using analytics and big data platforms to categorize those data and apply business intelligence tools so they can make more informed decisions.
Organizations now can make more strategic decisions on the board level, via the tools that IoT can offer them.
This is a unique positioning and a lot of startups are emerging to work exclusively on different aspects of IoT.
As a matter of fact, the IoT landscape is so wide, that no single vendor can handle a project on their own. This is the nature of IoT engagement and you will have at least three to four vendors involved in a single project. This means the complexity of the IoT project is relatively high both in terms of technical details and organizational structure.
Having said that, IoT is becoming more mature and more strategic for leaders and they are determined to use this technology as a driver for their digital transformation. There are different ways that we can achieve this. If you are having these conversations at the business level, it means you are in the right direction and on the right path to harnessing the power of IoT.
We are producing more data in the history of mankind than in any other era.
Billions of people are using smartphones and internet broadband is becoming the norm in every house. People have more than 10 devices at home that are connected to the internet and their functionality is depending on the internet.
This means we are producing more and more data that organizations are keen to capture. For them, this means new business opportunities and if they can capture these data at the edge (closer to the end consumer) they can start to see some interesting patterns on how people are behaving and how they can shift their business activities towards that path.
For example, the fact that buyers checking prices of the goods before purchasing from retailers is an important behavioral shift that retailers should know about so they can start doing something about it. Imagine if a retailer does not react to this new digital trend. The consequence will be revenue loss which will take the business out no matter how big they are.
Retailers should react to this trend in different ways.
For instance, they can use IoT to find out who is moving towards the store or their branch, and then by exploring the history of their browsers or apps they installed on their phone and the history of their previous shopping, they can start to make guesses (big data analysis and AI) that what will be the next possible steps for this potential shopper and then they design customer experience and customer journey based on this information.
This simply means more revenue and more opportunities for businesses to explore other market segments as well.
Connect the Unconnected
Organizations can now think of how they can connect the devices that are not connected to the internet and start to see the true business value of all these “things”.
Imagine that the lift companies can now connect all their lift fleet to the internet via lots of sensors and start to see how they bringing value to the organization.
They can see which product family or which model is doing better and more profitable, more stable, and needs less maintenance.
This means more profit margin for the organization because they now can use more of these profitable lifts in their projects.
In addition, by using analytics and predictive maintenance technology, organizations can be more proactive rather than reactive and fix issues before they happen!
This will put organizations in a strategic position so now they experience less drama and downtime which leads to higher productivity for their customers. This will be the starting point for organizations to improve customer satisfaction and customer experience as they become more proactive in their business.
Disrupt the Disruptor
IoT will give the leaders the chance to start thinking about how they can be disruptive to the market as well.
A great example is the weather app.
One of the weather companies that give information on the weather on smartphones found that users will check weather conditions more than 4 or 5 times per day.
But every time they check the weather, they use the app only for 3 to 4 seconds. This means the value is there, but not in the form of weather information.
So they decided to use big data analytics and AI to see if they can find patterns of behavior for their users. Surprisingly, they found that on rainy days people buy more umbrellas and apples! Now, we all can understand why people buy an umbrella on a rainy day but there was no firm answer on why people buy apples.
However, the company started to find all these interesting patterns and they started targeted advertisements on those behaviors. The result was increased revenue and publicity in the market, but not the weather market, advertising market.
Now this company is exploiting the advertisement market by using data and analytics in a different and disruptive way which was not possible before.
IoT Marketing Strategy; Digital Marketing for the Internet of Things
In a near future, connected devices will start making decisions on what to buy and how to improve their own performance. We as humans will leave “things” on autopilot and empower the Internet of Things to become a fully autonomous world. The question is: how digital marketing will change in the era of connected things?
Internet of Things is becoming a disruptive force and is changing the way we live and doing business. Every day more and more devices are connected to the internet and businesses are using more tools to monitor their behavior.
On the other hand, in this digital world, marketing is becoming more and more specialized and customized towards end-users and consumers' behavior patterns. We, as strategists and marketers are trying to predict where the consumers and customers are moving so we can stay relevant in the marketplace.
Now, the challenge in the IoT era is, how to market for “connected things”?
Smart devices are now becoming more and more mainstream for consumers and businesses. Everything is becoming smart.
Smart TVs, smart speakers, smartwatches, smart lighting, smart fridges, and so on. There will be a time that these devices are all connected to a centralized valet or credit card and they can start transacting with the market on their own with some predefined conditions. The big question is: how marketing will change in those days?
The answer is lying in “Data”.
As we all know, even now, organizations are collecting as much data as they can from all these connected devices. Businesses are now becoming a data business.
IoT organizations and startups are creating as many data points as they can so they can understand how consumers are using their products. This will give them a great platform so they can start optimizing their products and services to end-users requirements. Now, the same approach can be used so organizations move to predictive marketing.
This means that with the amount of data that companies now have, they can start predictions on how end-users will move and what will be the next thing for them. Then marketers can start making targeted focused and customized campaigns based on customers' specific needs.
Don Scheibenreif, is expecting to see a significant shift from human to ‘things’.
“People, rightly or wrongly, will often make purchasing decisions based on emotion. And their timing and behavior may be unpredictable,” he says.
So what happens when ‘things’ become customers? “The evidence is there that more and more things, backed up by intelligent systems, are taking up the behaviors of us as customers. The question then becomes: How do you market to a thing?” Scheibenreif asks.
Whereas humans might rely on emotion, things will rely on logic. This is one of the most profound implications for marketing, according to Scheibenreif.
“Appealing to somebody’s sense of style won’t work if you’re marketing to the smart home. What will work is if your organization has enough insight about what’s important to the homeowner and making sure your messages are targeted to address the parameters the house has been programmed with for purchasing decisions,” he continues.
My own personal prediction will be “things” will make decisions based on pure logic.
However, their logic still will be affected by human emotions. Since, we as humans and consumers will have our own emotions that running our lives shape our behavior, then based on those behaviors the connected devices will make decisions on how to optimize their moves. So, things will not go out of hand, at least immediately.
Human users are still in control with another layer of complexity added to our lives.
Digital marketers need to understand how to optimize their approach to the new wave of technology and connected things. They need to come up with a problem-solving approach that will be very different from today’s theme which is educational based marketing.
Today’s marketing is heavily relying on the educational target market so they can shift their prospect behavior and purchasing decisions when the time comes.
With connected devices and the Internet of Things, the approach will be totally different. Since you do not need to train or educate devices, as they already are connected, marketers should think of a problem-solving approach.
Means that they have to think about what problems their prospects or customers will have, and how they can provide end to end solution in place with one click.
Let’s face it. The way that connected devices and IoT solutions communicate with each other and with organizations is through “one-click”. So, everything will be one click away from these connected things.
We have already seen how Amazon is transforming the retail market with the “one-click” purchase option. The future of the businesses will need to go in that direction. This may be challenging with B2B businesses, but for B2C organizations, this will be a must.
This means, companies must think of the “one-click” option from now and start to think about potential business impact and indeed, how marketing will be affected.
The other trend that will be the result of data-driven marketing for the Internet of Things will be “data sharing”.
As a result of businesses becoming data platforms, organizations and startups will be in a position that can exchange or share their data with each other so they can bring even more value to their collective customers. Joint marketing will be transformed to a whole another level and now marketers can use each other's data to do more accurate predictions.
This approach initially seems scary from a data privacy perspective. The idea of your data to be shared with different organizations. However, the regulations will hopefully become stronger and will keep up with the technology.
An example will be GDPR that is now protecting customers' data privacy and companies need to get user’s permission to share and use their data. I personally believe that regulations will evolve to cater to these use cases.
Now, IoT Startups and Business Operations
Because making business processes easy, IoT startups can expect a streamlined work environment producing efficient, fast, and money-saving results.
And what’s the worst-case scenario of not having a simplified business process for IoT startups?
Well, tragedies like the Chernobyl Disaster, NASA’s mistake causing $193 million, and Microsoft Azure’s loss of 4.46 billion hours are enough to emphasize the importance of the business process, don’t you think?
How to make the business process easy?
A business process is the number of steps any company takes to attain its goals. But as companies grow, their business operations become more complex with time. More employees are involved in operations and customer demands change.
So we have compiled 5 simple steps for making business processes easy so that the operations improve leading to business growth.
Know your Existence Process
Before moving on to any plans, it is necessary to look at your past. Gather your existing process in a place and monitor it. Try to find its strengths as well as weak pointers.
Remember, any good process can rust with time & strategies can become outdated. You can use business operations software to analyze the data in your process and find out what worked for you and what didn’t.
Goals & KPI Setting
Forget about your process being smooth unless you have a clear goal and KPI setting. If you don’t determine what goals you want to achieve by the end of the year then you can always expect trouble in your operations.
Write down your goals clearly and set the necessary KPIs for achieving them. Once you have these outlined, you will have to align your processes with your KPIs. This will help you and the employees improve operations subconsciously.
Reframe the Process
Once you have your goals and KPIs outlined, you will have to match them with your existing process. Find the weak spots where you need improvement and assign people to optimize those areas.
Start reframing the process from here. Slowly and carefully optimize the existing steps by educating the persons responsible as well as making communication between the team members smooth.
Execute the Upgraded Process
Now that you have accumulated enough data for optimization, it is time for the real deal. Remember that communication is the key to success in implementing any new process.
Gather all the people involved in the optimization and convey your reasons and plan to implement the new process. Extract their opinions about your decision and find a common ground.
Once all the members involved are on the same page, the actual implementation will be a piece of cake.
Vigilantly Monitor & Continuously Optimize
Maintenance is always harder and more important than the beginning of any new process. Make a chart of the goals and KPIs you had decided and aligned them with your new process.
After a couple of months, analyze the progress of the implementation. Try to find the weak spots as early as possible and discuss the possible solutions with the people involved.
Try using business operations software as these tools are often time and cost-efficient.
However, as an IoT startup
We all know how this market is fragmented and also each IoT project consists of so many pieces. This means for each IoT project, startups must deal with a lot of vendors and suppliers as the nature of the project is very complex and fragmented.
This means IoT startups must have a strong and solid business operations plan in place to be able to keep their customers happy.
First of all, they need to think about having a unified solution to manage day to day business operations of the company. Also, this software needs to be able to have a 360 view of the business. What has been purchased, what projects are in the pipeline, what jobs are active now, and what customers are actively we are engaging with.
This is pretty important when it comes to IoT startups as they are leading the innovation curve in the digital world.
IoT startups need to have full visibility over all projects, customers, and technology space of their business. Otherwise, they lose track of the projects and essentially losing customers.