Servitization With IoT: Weird Biz-Speak, But Sound Strategy

I love it when manufacturers stop selling things — and their revenues soar!

That’s one of the things I’ll cover on May 2nd  in”Define Your Breakout IoT” strategy, (sign-up) a webinar I’m doing with Mendix. I’ll outline an incremental approach to the IoT in which you can make some early, tentative steps (such as implementing Augury’s hand-held vibration sensor as a way to start predictive maintenance) and then, as you gain experience and increase savings and efficiency, plow the savings back into more dramatic transformation.

One example of the latter that I’ll detail in the webinar is one of my four “Essential Truths” of the IoT: rethink products. By that I meant not only reinventing products to be smart (especially by building in sensors so they can report their real-time status 24/7), but, having done that, exploring new ways to market them.  Or, as one graphic I’ll use in the presentation puts it, in mangled biz-speak, “servitization.”

              Hortilux bulbs

Most of the examples I’ve written about in that regard have been from major businesses, such as GE and Rolls-Royce jet turbines, that are now leased as services (with the price determined by thrust generated), but Mendix has a smaller, niche client that also successfully made the conversion: Hortilux, a manufacturer of grow lights for greenhouses.

The Hortilux decided to differentiate itself in an increasingly competitive grow light market by evolving from simply selling bulbs to instead providing a comprehensive continuing service that helps its customers optimize availability and lifetime of grow light systems, while cut energy cost.     

Using Mendix tools, they created Hortisensehttp://www.hortidaily.com/article/31774/Hortilux-launches-Hortisense-software-suite, a digital platform that monitors and safeguards various grow light processes in the greenhouse using sensors and PLCs. Software applications interpret the data and present valuable information to the grower anytime, anywhere, and on any device.

With Mendix, Hortilux created an application to collect sensor data on light, temperature, soil, weather and more. Now users can optimize plants’ photosynthesis, energy consumption, and greenhouse maintenance. Most ambitiously, it provides comprehensive “crop yield management:” 

  • Digital cultivation schedule
  • Light strategies based on plant physiology and life cycle
  • Automatic light adjustment based on predictive analytics (e.g. weather forecast, energy prices, produce prices)

The app even allows predictive maintenance, predicting bulbs’ life expectancy and notifying maintenance to replace them in time to avoid disruptions in operations.

In the days when we suffered from what I call “Collective Blindness,” when we lacked the tools to “see” inside products to m0nitor and perhaps fix them based on real-time operating data, it made sense to sell products and provide hit-or-miss maintenance when they broke down.

Now that we can monitor them 24/7 and get early enough warning to instead provide predictive maintenance, it makes equal sense to switching to marketing them as services, with mutual benefits including:

  • increased customer satisfaction because of less down-time
  • new revenues from selling customers services based on availability of the real-time data, which in turn allows them more operating precision
  • increased customer loyalty, because the customer is less likely to actually go on the open market and buy a competing product
  • the opportunity to improve operations through software upgrades to the product.

Servitization: ugly word, but smart strategy. Hope you’ll join us on the 2nd!

IoT Saving Lives

Posted on 15th April 2017 in health, Internet of Things, m-health

What can you do now that you couldn’t do before?

That’s a question from my friend and patron Eric Bonabeau that I’ve raised before with regard to the IoT, and it’s a worthwhile counter-weight to focusing on the steady increases in operating efficiency that incremental IoT strategies can bring about (a not-t0o-subtle plug for the webinar that I’ll do on that subject May 2nd with low-code hotshots Mendix.  Register now!). Sure, concentrate your efforts on squeezing every bit of precision you can, but don’t forget that the IoT can also really change everything.

I’m reminded of that by this piece by Kevin Ashton, who coined the “Internet of Things” name when he was working on early RFID projects at MIT.  He writes about a brilliant insight by Prof. Shwetak Patel, a MacArthur Fellow at the University Washington.  He’s a polymath whose IoT creations include  Zensi a residential energy monitoring device a low-power wireless sensor platform company called SNUPI Technologies, and WallyHome, a consumer home sensing product.

Patel was studying COPD (once called emphysema) which causes shortness of breath and coughing. 5% of the world population suffers from it, and 3 million die from COPD yearly. In the US alone it causes 3/4 million hospitalizations and is the 3rd largest cause of death.

To diagnose it, doctors use spirometers, which cost thousands of dollars, to measure air flow in and out of lungs. Most COPD sufferers don’t have access to them. Hmm. What could substitute for the spirometers? Patel realized there were actually billions of devices that could do the job: the microphones in everyone’s phones! His research group created an algorithm that calculates lung health by analyzing the sound of a person blowing into the mic.  The patient just calls a toll-free number and blows into the phone. Computers analyze the data and tell the patient the results within seconds by voice or a text message. The algorithm’s now so sophisticated that it has 95% accuracy on cellphones and landlines alike.

How cool is that?

The same Ashton piece also talks about a more prosaic medical issue that’s still crucial to patients: how to navigate hospitals. A study he cited at Emory Hospital in Atlanta documented that the problem cost them $400,000 a year, or $800 per bed, not to mention the distraction resulting when  busy staff members are interrupted t0 help patients find their way to a lab or doc’s office.

      My Way App

Specifically, the innovation Ashton cited was at my favorite hospital, Boston Children’s, where my youngest spent a lot of time as a baby & I’ve donated blood for 40 years.  Let me tell you, because Children’s is a pastiche of buildings built since 1871, it kinda resembles a rabbit warren, and, as we like to say in these parts, “you can’t get there from here.”  So the hospital now has a “My Way” app that makes it simple to navigate the maze.

The Ashton piece nicely encapsulated the IoT’s potential: from small changes that make current reality easier to literally and figuratively navigate to new innovations that can literally change your life. Sweet!

 

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