Deloitte’s IoT “Information Value Loop”: critical attitudinal shift

Ever so often it’s good to step back from the day-to-day minutia of current Internet of Things projects, and get some perspective on the long-term prospects and challenges.

That’s what Deloitte did last December, when it held an “Internet of Things Grand Challenge Workshop,” with a focus on the all-important “forging the path to revenue generation.”

The attendees included two of my idols: John Seely Brown and John Hagel, of Deloitte’s “Center for the Edge” (love the pun in that title!).

The results were recently released, and bear close examination, especially the concept of how to foster what they call the “Information Value Loop”:

Deloitte IoT Information Value Loop

Deloitte IoT Information Value Loop

“The underlying asset that the IoT creates and exploits is information, yet we lack a well- developed, practical guide to understand how information creates value and how companies can effectively capture value. The ‘Information Value Loop’ describes how information creates value, how to increase that value, and how understanding the relevant technology is central to positioning an organization to capture value. The Information Value Loop is one way to begin making sense of the changes we face. The Loop consists of three interconnected elements: stages, value drivers, and technologies. Where the stages and value drivers are general principles defining if and how information creates value under any circumstances, it is the specifics of today’s technology that connect the Loop to the challenges and opportunities created by the IoT.”

This fits nicely with one of my IoT Esssential Truths,” that we need to turn linear information flows into cyclical ones to fully capitalize on the IoT.  No pussy-footin’ about this for these guys: “For information to create any value at all, it must pass through all the stages of the Loop. This is a binary outcome: should the flow of information be blocked completely at any stage, no value is created by that information.”

IMHO, this is also going to be one of the biggest challenges of the IoT for management: in the days when it was sooo difficult to gather and disseminate information, it made sense for those in the C-suite to control it, and parcel out what they felt was relevant, to whom and when they felt it was relevant. More often than not, the flow was linear and hierarchical, with one information silo in the company handing on the results to the next after they’d processed it. That didn’t allow any of the critical advantages the IoT brings, of allowing everyone who needs it to share real-time data instantly.  But saying we need to change those information management practices is one thing: actually having senior management give up their gatekeeper functions is another, and shouldn’t be understated as a challenge.

So here are some of the other key points in the conference proceedings:

  • In line with the multi-step strategy I outlined in Managing the Internet of Things Revolution, they concluded that incremental improvements to existing processes and products are important, but will only take you so far, at which point radical innovation will be crucial: “At first blush, the early IoT emphasis on sustaining innovation seems reasonable. Performance and cost improvement are seldom absent from the priorities of stakeholders; they are relatively easy to measure and their impact is likely more immediate than any investment that is truly disruptive. Put simply, the business case for an IoT application that focuses on operational efficiencies is relatively easy to make. Many decision makers are hard-wired to prefer the path of less resistance and, for many, truly innovative IoT applications seem too far-flung and abstract to risk pursuing. Still, organizations cannot innovate from the cost side forever.”
  • Melding the public and private, “Cities have inherent societal challenges in place to serve as natural incubators of IoT solutions.” Yeah!
  • As in everything else, those contrarian Millennials (who aren’t so hung up on buying stuff and often prefer to just use it)  are likely to save us when it comes to the IoT:  “From an innovation perspective … some of the new technologies are first marketed at the consumers. Thus, many believe that near-term innovation in IoT applications will come out of the consumer sector – spurred by the emergence of the tech-savvy Millennial consumers as a driving economic force.”
  • As I’ve written before, while some customers will still prefer to buy products outright, the IoT will probably bring a shift from selling products to marketing services based on those products, creating new revenue streams and long-term relationships with customers: “As IoT makes successful forays into the world of consumer and industrial products, it may radically change the producer—buyer transactional model from one based on capital expenditure to one based on operating expenditure. Specifically, in a widely adopted IoT world, buyers may be more apt to purchase product service outcomes on some kind of “per unit” basis, rather than the product itself and in so doing, render the physical product as something more of an afterthought. The manufacturer would then gradually transform into a service provider, operating on a complete awareness of each product’s need for replenishment, repair, replacement, etc.”

    Or, a hybrid model may emerge: “What may ultimately happen in a relatively connected product world is that many may accept the notion of the smartly connected product, but in a limited way. Such people will want to own the smartly connected product outright, but will also accept the idea of sharing the usage data to the limited extent that the sellers use such data in relatively benign ways, such as providing advice on more efficient usage, etc. The outcome here will also rely upon a long term total cost of ownership (TCO) perspective. With any fundamental purchasing model changes (as is taking place in owned vs. cloud resources in the network / IT world), not all suppliers will be able to reap additional economic benefit under the service model. Buyers will eventually recognize the increase in TCO and revert back to the more economical business model if the economic rents are too high.”

  • It’s likely that those players in the IoT ecosystem who create value-added data interpretation will be the most valuable and profitable: “…are certain building blocks of the IoT network “more equal” than others?

    “Some have argued that the holy grail of the IoT value loop resides in the data and that those in the IoT ecosystem who aggregate and transform massive amounts of raw data into commercially useful intelligence capture the real value in the IoT environment. This notion holds that commercially useful data provide insights that drive action and ultimately represent the reason that the end user pursues a smart solution in the first place. Put another way, the end customer is more apt to pay for a more comprehensive treatment of raw data than for a better sensor. Indeed, some even believe that as time passes, the gap in relative value captured by those who curate and analyze the data and the rest of the IoT ecosystem will only widen and that, on a long-term basis, players within the “non-data” part of the IoT ecosystem will need to develop some data analytics capabilities simply to differentiate themselves as something more than commodity providers. Of course, some think that the emphasis on data is overblown and argue that where the real value in the IoT ecosystem is captured depends on application. Time will tell of course. But there can be little doubt that the collection and enhancement of data is highly coveted, and analytics and the ability to make use of the vast quantities of information that is captured will serve as critical elements to virtually any IoT solution.”

I urge you to download and closely analyze the entire report. It’s one of the most thoughtful and visionary pieces of IoT theory I’ve seen (no doubt because of its roundtable origins: in keeping with the above-mentioned need for cyclical information flow for the IoT [and, IMHO, creativity in general], the more insights you can bring together on a real-time basis, the richer the outcome. Bravo!

 

The Internet of Things’ Essential Truths

I’ve been writing about what I call the Internet of Things’ “Essential Truths” for three years now, and decided the time was long overview to codify them and present them in a single post to make them easy to refer to.

As I’ve said, the IoT really will bring about a total paradigm shift, because, for the the first time, it will be possible for everyone who needs it to share real-time information instantly. That really does change everything, obliterating the “Collective Blindness” that has hampered both daily operations and long-term strategy in the past. As a result, we must rethink a wide range of management shibboleths (OK, OK, that was gratuitous, but I’ve always wanted to use the word, and it seemed relevant here, LOL):

  1. First, we must share data. Tesla leads the way with its patent sharing. In the past, proprietary knowledge led to wealth: your win was my loss. Now, we must automatically ask “who else can use this information?” and, even in the case of competitors, “can we mutually profit from sharing this information?” Closed systems and proprietary standards are the biggest obstacle to the IoT.
  2. Second, we must use the Internet of Things to empower workers. With the IoT, it is technically possible for everyone who could do their job better because of access to real-time information to share it instantly, so management must begin with a new premise: information should be shared with the entire workforce. Limiting access must be justified.
  3. Third, we must close the loop. We must redesign our data management processes to capitalize on new information, creating continuous feedback loops.
  4. Fourth, we must rethink products’ roles. Rolls-Royce jet engines feed back a constant stream of real-time data on their operations. Real-time field data lets companies have a sustained dialogue with products and their customers, increasingly allowing them to market products as services, with benefits including new revenue streams.
  5. Fifth, we must develop new skills to listen to products and understand their signals. IBM scientists and medical experts jointly analyzed data from sick preemies’ bassinettes & realized they could diagnose infections a day before there was any visible sign. It’s not enough to have vast data streams: we need to understand them.
  6. Sixth, we must democratize innovation. The wildly-popular IFTTT web site allows anyone to create new “recipes” to exploit unforeseen aspects of IoT products – and doesn’t require any tech skills to use. By sharing IoT data, we empower everyone who has access to develop new ways to capitalize on that data, speading the IoT’s development.
  7. Seventh, and perhaps most important, we must take privacy and security seriously. What responsible parent would put an IoT baby monitor in their baby’s room after the highly-publicized incident when a hacker exploited the manufacturer’s disregard for privacy and spewed a string of obscenities at the baby? Unless everyone in the field takes privacy and security seriously, the public may lose faith in the IoT.

There you have ’em: my best analysis of how the Internet of Things will require a revolution not just in technology, but also management strategy and practices. What do you think?

IFTTT DO apps: neat extension of my fav #IoT crowdsourcing tool!

Have I told you lately how much I love IFTTT? Of course!  As I’ve said, I think they are a phenomenal example of my IoT “Essential Truth” question: who else can use this data?

IFTTT_DO_buttonNow, they’ve come up with 3 new apps, the “DO button,” “DO camera,” and “DO Note,” that make this great tool even more versatile!

With a DO “recipe,” you simply tap on the appropriate app, and the “recipe” runs. Presto! Change-o!

As a consultant who must bill for his time, I particularly like the one that lets you “Track Your Work hours” on Google Drive, but you’re sure to find your own favorites in categories such as play, work, home, families, and essentials. Some are just fun, and some will increase your productivity or help manage your household more easily (hmm: not sure where “post a note to your dog’s timeline” fits in (aside to my sons: feel free to “send notes to your data via email”.  If past experience is any indication, there should be many, many more helpful “Do” recipes as soon as users are familiar with how to create them.

As I’ve said before, it’s no reflection on the talented engineers at HUE, NEST, et. al., but there’s simply no way they could possibly visualize all the ways that their devices could be used and/or combined with others, and that’s why IFTTT, by adding the crowdsourcing component and democratizing data, is so important to speeding the IoT’s deployment.

IoT: What Can You Do That You Couldn’t? Heavy Construction

Not sure why, but I’m particularly fascinated by how the IoT can transform parts of the economy that have been around for more than 100 years, such as the way the Union Pacific uses it to reduce derailments — and worse.

One of those tradition-bound industries where the IoT Essential TruthWhat Can You Do Now That You Couldn’t Do Before” is starting to revolutionize both daily practices and strategy is heavy construction, both for buildings and public works.

First of all, heavy construction is inherently dangerous, so anything that can be done to manage that danger is beneficial.

Lots of very heavy machinery; many people, frequently on foot; almost impossible to coordinate all of them in the past, especially as vehicles enter and leave the site.  According to OSHA, in the US alone, 796, or 20.3% of all workers killed on the job in 2003 were killed on construction sites, primarily through falls, struck by objects, electrocution or “caught-in-between.” Of those, lack of coordination probably resulted in most of the struck by objects and “caught-in-between” deaths.

One of the most exciting developments in that regard is SAP’s demonstration program with SK Solutions, which makes anti-collision software, on a construction site in Dubai. They are capitalizing on new construction cranes and construction vehicle  that have sensors built in so their real-time location can be determined instantly. SAP and SK Solutions combine sensor-based data – such as 3-D motion control, location, load weight, equipment usage and wind speed – to avoid collisions with trucks  to enhance worker safety, improve productivity and reduce costs. The site and project managers monitor the equipment via a dashboard.

Less dramatic than collision avoidance is the way that construction companies are using real-time data from the equipment to maximize operating efficiency and reduce maintenance costs through innovations such as “predictive maintenance.”  As my Boston IoT MeetUp co-director Chris Rezendes of INEX Advisors discussed at the recent Association of Equipment Management Professionals Asset Management Symposium, “instrumentation of assets” through digital plans and models, sensors, data and embedded communication devices in buildings and bridges is becoming a key differentiator in the industry. According to Rezendes:

““Everybody in tech wants to instrument your assets, inventories, operations, people and processes… They are looking at instrumenting all manner of industrial machines, equipment and more. And they’re doing it really well…. You should feel threatened, at least a little bit, by big technology companies trying to instrument your assets for you, maybe to you… I’m going to tell it to you straight: He or she who controls the intelligence–the data about those assets, inventories and areas of operation–will control that market, the customer, the regulatory environment and the supply chain. They will control you.”

What a seismic shift from the old days of heavy construction, which was largely a matter of brute force and difficult demands on operators to remain always vigilant in the midst of loud noises.  Add in the sensors that these construction crews are now embedding in bridges’ structure and in buildings to monitor a wide range of stresses and environmental conditions, and the conclusion is inescapable: every industry can and will be fundamentally altered in the coming decade as equipment and processes begin switch the requirements from brawn to brains.

Thermostats: yet another example why open standards win with #IoT

Despite my passion for all things Apple and the incredible functionality that comes from Tim Cook’s passion for integrating all parts of the ecosystem seamlessly (and, as I’ve noted in prior disclaimers, my part-time work at the Apple Store ..), I don’t think there’s any doubt when it comes to the Internet of Things that open standards win out.

That’s because they meet the test of my favorite Essential Truth, “who else can use this data?”

It goes back to my Data Dynamite book and my work with Vivek Kundra when he was opening up data in the District of Columbia before becoming the US CIO: when you share data, you empower end users and can go beyond your own developers’ talents and interests, to harvest others’ interests and developments.

opower_sHere’s a great example. Opower’s OpenStat API enables the electric  industry’s only open thermostat management platform. It allows any smart thermostat provider to participate in existing Opower-managed utility thermostat programs. It combines energy usage, billing, parcel and weather data to engage customers, drive measurable energy efficiency, and deliver reliable demand response.  It already has 95 partner utilities, 50 million (really? that sounds high to me…) homes in 35 states sharing data.

By contrast, Nest (which of course was created by Apple alums) had to create a specific API to allow sharing its data. 

This API is Nest’s answer to the Learning Thermostat’s lack of Z-Wave or ZigBee wireless communication. Nest came under fire from the CEDIA crowd when the Learning Thermostat launched since it wouldn’t work within even $100k home automation systems. The thermostat wasn’t friendly with others. It wouldn’t talk to other home automation products using the legacy home automation protocols. This API could change everything.

The jury’s still out — and it will really be interesting to see how many other companies decide to integrate with Apple’s new Health and Home apps. On one hand, a proliferation of standards just retards more creative API mashups, a la IFTTT (my heros!!). On the other, seamless integration and ease-of-use, the Apple hallmarks, could go a long way to ingraining the IoT into consumers’ daily lives.

What do you think?

 

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Saving Lives With the Internet of Things: school lockdowns

Continuing with the meme of this morning’s post, that the real test of the IoT will be if it allows us to do something that we couldn’t do before, how about saving children’s lives as a good example of a new paradigm courtesy of the IoT?

I don’t believe in the NRA’s bizarre position that the way to avoid more school tragedies is to arm teachers (come to think of it, I don’t believe in anything the NRA proposes — if you do, sue me, I guess…) so it’s great to see that the Internet of Things (even better, a Massachusetts firm!) has stepped in with a non-violent solution allowing teachers to act immediately, without waiting for police, to protect their children.

This kind of solution is a particular passion of mine, since long-time readers of this blog know that I pioneered (as in October, 2001) using mobile devices for personal preparation for, and response to, terrorism and disaster situation.

According to Fast Company, Elerts has created Lock It Down™ and ELERTS Campus™, which allow teachers to trigger a lockdown from a smart phone or iPad app.

Among other features, Lock It Down™ includes great features for these high-pressure, instant-reaction situations:

  • Sharing: Transmits bi-directional information in seconds
  • Action: Can initiate a Lockdown with the press of a button
  • Options: Also offers Shelter in Place and Evacuate commands
  • Reporting: Text message, photos, and GPS map add context
  • Speed: Police see reports on their devices and can respond faster
  • Status: App includes “SkyWriter” for personal safety updates

Sweet!

ELERTS Campus™ is designed for colleges and larger campuses, and offers:

  • Reporting: Drop-down menu makes Report Type selection easy
  • Crowd-Sourcing: Message, photo, GPS map inform Security Dispatchers
  • Broadcast: Warnings can be broadcast to all students who use the app
  • Administration: The ELERTS EPICenter web console manages Reports
  • Alerts: ELERTS EPICenter allows 2-way chat with sender of original report
  • Virtual Monitoring: Users can activate “Escort Me” by pressing a button

These are just the kinds of tools that I dreamed of creating ten years ago, when all we had were the early Palm Pilots. What a great use of smart phones and the IoT!

The two programs are meant to be used in conjunction with the ALICE Training, as in Alert, Lock-down, Inform, Counter, and Evacuate.

Download the apps:

ELERTS Campus™ for iOS
ELERTS Campus™ for Android

 

 

 

Launching New Service Speaking About the Internet of Things

I’ve given speeches to business and academic audiences around the world for nearly 30 years, but haven’t tried my hand at paid public speaking until now!

However, I feel so strongly about the transformational potential of the Internet of Things that I want to evangelize on the Big Stage now, reaching corporate management, associations, and — very important — college and university students, with the message about how the IoT will change everything, and the challenges and opportunities it will bring.

So, I’ve added a new page to this site, promoting myself as a paid speaker and seminar leader.

While I’m glad to custom-craft a speech to your audience’s interests, I have several main ones tailored to various needs:

“It’s Not Just About Things, It’s About People… and Their Dreams”. Sometimes the emphasis on Internet of Things technology obscures the deeper truth: the IoT is really all about people – and improving their lives. This speech introduces laypeople and business leaders to the Internet of Things’ potential to transform every aspect of life for the better! From slippers that save the elderly from falls to hyper-efficient assembly lines that bring manufacturing jobs back to America, I give an uplifting, rapid-fire overview of the many ways the IoT is already changing our lives – and preview the even greater changes to come! I also talk about the important steps, such as new mind sets that value sharing information over hoarding it, that are necessary to fully realize the IoT’s potential.

Josh Siegel is 24. He is Reinventing the Auto Industry (this lecture is specifically aimed at college students). Josh Siegel is a 24-year old Detroiter, MIT grad student and entrepreneur. He uses the IoT to reinvent cars – whether or not Detroit is ready. Alexandra Deschamps-Sonsino is 32, and created an IoT sensation, the Good Night Lamp. Dulcey Madden is 32 (her partners are both 24), and her Peeko “onsie” is saving the lives of infants who might otherwise die from Sudden Infant Death Syndrome.

In this lecture you’ll hear about these and other young visionaries and inventors who are discovering new entrepreneurial opportunities in the Internet of Things. I challenge young listeners: what’s your passion? How will you find satisfying – and enriching – work in this exciting new field? What problem can you solve by inventing an IoT device?

P.S: Ask me to stay around the day after my speech to meet with your senior staff to advise them on how the IoT will affect your college or university, and how you can use it to increase efficiency and cut operating costs!

“I … see all … the devices in your home and … control them”. That’s how a Forbes reporter woke up an unsuspecting homeowner who’d bought an advanced home automation system – and got non-existent security in the bargain!

The Internet of Things might come to a grinding halt if the public and companies feel that their privacy and security are being violated. That’s a very real possibility – former CIA director David Petraeus waxed poetic about its potential as a spycraft tool, and a number of sensationalistic mainstream media reports have detailed the possible dangers of lax IoT privacy and security measures.

In this speech, I may scare you, but I’ll definitely get your attention! I lay out all the risks, issue a challenge to everyone involved in the IoT to make security and privacy a priority, and detail the current state of collaborative efforts to improve security and privacy.

I’m enthusiastic, well-informed, witty, (add positive adjective of your choice here …… , LOL) and convincing! If you’re interested in booking me, just fill out the contact form and download my “speaker one sheet.”

Could IoT Allow Do-over for Privacy, Security — & Trust?

Posted on 13th September 2013 in communication, management, privacy, security

Expect to be reading a lot here about privacy and security between now and my panel on those issues at the IoT Summit in DC, Oct. 1 & 2, as I prep to ask the panel questions!

Here’s another, from Stacy Higginbotham (BTW, she does a great podcast on IoT issues!), based on a conversation with ARM CTO Mike Muller. It’s reassuring to see that this IoT-leading firm is taking privacy and security seriously. Even more refreshingly, theirs is a nuanced and thoughtful view.

Muller told Higginbotham that IoT vendors should learn from some of the missteps on privacy on the Web so far, and make amends:

“’We should think about trust as who has access to your data and what they can do with it. For example, I’ll know where you bought something, when you bought it, how often and who did you tweet about it.

“When you put the long tail of lots of bits of information and big data analytics associated with today’s applications we can discern a lot. And people are not thinking it through. … I think it’s the responsibility of the industry that, as people connect, to make them socially aware of what’s happening with their data and the methods that are in place to make connections between disparate sets of data (my emphasis). In the web that didn’t happen, and the sense of lost privacy proliferated and it’s all out there. People are trying to claw that back and implement privacy after the fact.”

Higginbotham adds that “… what troubles Muller is that today, there’s nothing that supports trust and privacy in the infrastructure associated with the internet of things.”

What struck me, as someone who used to earn his living doing corporate crisis management, is that one of the critical issues in trust (or lack thereof) is guilt by association may not be logically valid, but is emotionally powerful: if people’s preconception of IoT privacy and security standards is that they’re simply an extension of Internet ones, there’s likely to be trouble.

She goes on to differentiate between security, privacy — and trust.

“Trust is the easiest to define and the hardest to implement. It relies on both transparency and making an effort to behave consistently ….  When it comes to connected devices and apps, trust is probably most easily gained by explaining what you do with people’s data: what you share and with whom. It might also extend to promises about interoperability and supporting different platforms. Implicitly trust with connected devices also means you will respect people’s privacy and follow the best security practices….

“Privacy is more a construct of place as opposed to something associated with a specific device. So a connected camera on a public street is different from a connected camera inside your home. It’s easy to say that people shouldn’t be able to just grab a feed from inside your home — either from a malicious hack or the government (or a business) doing a random data scrape. But when it comes to newer connected devices like wearables it gets even more murky: Consider that something like a smart meter can share information about the user to someone who knows what to look for.

“So when thinking about the internet of things and privacy, it’s probably useful to start with thinking about the data the device generates….

(As for security:) “To protect privacy when everything is connected will require laws that punish violations of people’s privacy and draw lines that companies and governments can’t step over; but it will also require vigilance by users. To get this right, users should be reading the agreements they click through when they connect a device, but companies should also create those agreements, especially around data sharing transparent, in a way that inspires trust.

Governments and companies need to think about updating laws for a connected age and set criteria about how different types of data are transported and shared. Health data might still need the HIPAA-levels of regulations, but maybe looser standards can prevail for connected thermostats.”

Sounds to me as if there’s a role in these complex issues for all of us: vendors, government, and users.

But the one take-away that I have from Muller’s remarks is that IoT vendors must realize they have to earn users trust, and that’s going to require a combination of technical measures and unambiguous, plain-English communication with users about who owns their data and how it will be used. To me, that means not hiding behind the lawyers and agate-type legal disclaimers, but clear, easy-to-understand declarations about users’ rights to their data and companies’ need to directly ask them for access, displayed prominently, with the default being that the user completely denies access, and must opt in for it to be shared. 

What do you think?

Higginbotham concludes that “we need to stop freaking out about the dangers of connected devices and start having productive discussions about implementing trust and security before the internet of things goes the way of the web. Wonderful, free and a total wild west when it comes to privacy.” Hopefully, that’s what will happen during our October 1st panel.

http://www.stephensonstrategies.com/">Stephenson blogs on Internet of Things Internet of Things strategy, breakthroughs and management