The internet of things has evolved drastically over the past five years and there is no sign of it slowing down. While excitement over connected devices is more measured than it was around 2013, the technology is maturing and firms are getting significant results from IoT investments. Gartner predicts there will be more than 20 billion connected devices by 2020 and more than 65% of enterprises will adopt IoT products. Others say it can be as many as 1 trillion devices by 2035 and $5 trillion in market value.
To start thinking about using IoT in your company, from a product perspective, it’s important to consider the types of new data that could provide the most value, as well as how to securely store, manage and analyze that data to gain a competitive edge.
The unique value of IoT data is that it reveals important consumer insights in the context of real-time situations. It largely takes the consumer out of the equation, using artificial intelligence and automation to either fix problems people don’t know they have or avoid problems in the first place. And that’s an amazing customer experience. But that also doesn’t mean every product should be IoT.
Here are five things to consider before turning your product into an IoT device:
- Have you put proper device management protocols in place? Adding intelligence to your product by turning it into an IoT device brings with it the complexity of both the creation and the ongoing operation maintenance of the device. How will you send bug fixes, security patches and software updates to the device? Are you managing that IoT device or sending the necessary patch/update?
- Connectivity. Have you thought about how you are going to connect and communicate with the device? Wi-Fi is the most common connectivity option. However, there are several other options, like Bluetooth and long-range connectivity technologies. All options have advantages and disadvantages, so it is important to factor in the best way to connect to the internet at the planning stage of your IoT device. In particular, make sure to consider how your device will keep retaining data and being useful when it temporarily loses connectivity to the internet.
- Increase of data complexity and scale. Integrating IoT scale can make things complex from an IT perspective. As an example, let’s consider a washing machine. If you are collecting data from multiple sensors every minute while each washing machine is on, you will quickly amass an extraordinary amount of data — especially considering the variety of models you sell multiplied by the different sizes and variety of data that your systems will collect. Make sure that you’ve considered exactly the type, size and frequency of data collection you need. Also, make sure that you have a single integrated data collection and storage system that will allow you to take advantage of all this data in one place — for example, with a data lake.
- Is the information you are collecting being used and integrated to your business processes? IoT device data provides an immense opportunity to improve your customer’s overall experience. Let’s go back to the washing machine example — those signals can be analyzed and communicated to the proper department to automatically schedule a water pump replacement before it becomes a problem. This enhancement in customer support can go a long way to improving the lifetime value of your products to your customers. Additionally, data can be used to improve your sales and marketing efforts and possibly open opportunities for new lines of business. Today, more than ever, marketing integrates with product, customer success and acquisition retention efforts. If marketing communication is not part of your IoT strategy, it will not be successful.
- Does the IoT element add value to the end user? This may be the most important but often overlooked consideration. You want to make sure the device’s connectivity isn’t just for your benefit, but provides significant new value to the end user. Otherwise, customers aren’t going to be responsive to it and you’ll have a failed product on your hands. A great example of a successful IoT initiative is when Brita launched its self-reordering water filter program that automatically orders a new filter for the customer just before the last one stops working.
P.S. A great tool to successfully manage your IoT products is with Daniel Elizalde’s IoT Product Landscape — a framework to make sure you consider all the different possible areas for IoT product development and management.
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