Live Blogging #LlveWorx ’18, Day 2

Aiden Quilligan, Accenture Industry X.0, on AI:

  • Mindset and AI: must undo what Hollywood has done on this over years, pose it as human vs. machine.
  • We think it should be human PLUS machine.
  • he’s never seen anything move as fast as AI, especially in robotics
  • now, co-bots that work along side us
  • exoskeletons
  • what do we mean by AI?  Machine learning.  AI is range of technologies that can learn and then act. AI is the “new work colleague” we need to learn to get along with.
  • predictions: will generate #2.9 trillion in biz value and recover 6.2 billion hours of worker productivity in 2021.
  • myths:
    • 1) robots evil, coming for us: nothing inherently anti-human in them.
    • 2) will take our jobs. Element of truth in terms of repetitive, boring work that will be replaced. They will fill in for retiring workers. Some new industries created by them.  Believe there will be net creation of jobs.
    • 3) current approaches will still work.

6 steps to the Monetization of IoT, Terry Hughes:

  • Digital native companies (Uber) vs. digitally transforming companies
  • also companies such as Kodak that didn’t transform at all (vs. Fujifilm, which has transformed).
  • Forbes: 84% of companies have failed with at least one transformation program.  Each time you fail you lose 1/2 billion
  • steps:
    • 1) devices with potential
    • 2) cloud network communication
    • 3) software distribution
    • 4) partner and provider ecosystem
    • 5) create a marketplace.
    • 6) monetization of assets.
  • crazy example of software company that still ships packages rather than just download because of initial cost in new delivery system
  • 3 big software challenges for digitally transforming company
    • fragmented silos of software by product, business unit & software
    • messy and complex distribution channels
    • often no link between software and the hardware that it relates to
  • importance of an ecosystem
    • Blackberry example of one that didn’t have the ecosystem
  • 3rd parties will innovate and add value around a manufacturer’s core products
  • in IoT it’s a land grab for mindshare of 3rd-party innovators.
  • need strong developer program
  • tools for app development and integration
  • ease of building and publishing apps
  • path to discovery and revenue for developer
  • IDC: developer ecosystem allow enterprises to massively scale distribution
  • digitally native companies have totally different models (will get details later…)
  • hybrids:
    • GE Healthcare:  working with Gallus BioPharma
    • Heidelberg & Eig have digital biz model for folding carton printing. Pay per use
  • Ford is heading for mobility as a transformation

 


Bernard Marr: Why IoT, Combined With AI and Big Data, Fuels 4th Industrial Revolution

 

  • connecting everything in house to Internet
  • Spotify: their vision is they understand us better. Can correlate your activity on Apple Watch (such as spinning) & create a play list based on that)
  • FitBit: the photo will estimate your calorie content.
  • John Deere
  • ShotSpotter: the company that monitors gun shots
  • understanding customers & markets better than before:
    • Facebook: better at face recognition than we are. They can predict your IQ, your relationship status.
  • Lot of frightening, IMHO, examples of AI analyzing individuals and responding without consideration of ethics and privacy
  • 3) improving operations and efficiency:
    • self-driving boats
    • drones
    • medicine through Watson

panel on IoT:

  • Don’t be afraid of the cloud
  • Ryan Cahalane, Colfax: prepare for big, start small and move fast. They had remarkable growth with switch to IoT.  Not a digital strategy, but digital in everything they do. Have “connected welders,” for example.
  • Justin Hester, Hirotec: most importatnt strategic digital transformation decision your organization can make is the selection of a platform. The platform is the underlying digital thread that enables your team to meet  the unique and chanding needs of your organization and to scale those solutions rapidly. “Assisted reality” in ThingWorx
  • Shane O’Callahan, TSM (Ireland):  Make industrial automation equipment for manufacturing. Understanding your key value driver is where to start. Then start samll, scale fast and get a win!

Jeffrey Miller, PTC: Digital Transformation:

  • if you start with digital strategy you’re starting in wrong place Start with business strategy. 
  • Couple with innovation vision merged with digital strategy. Add business use cases.
  • Jobs: it’s not how much you spend on R & D, but “about the people you have, you you’re dled, and how much you get it”
  • create an environment for innovation
    • do we encourage experimentation?
    • is it ok to fail
  • identify digital technologies to provide the required operating capabilities:
    • have we conducted proofs of concept?
    • experimented, tested  and validated?
    • reviewed use cases & success studies?
    • delivered small, important, scalable successes?

Matt,  PTC: Bringing Business Value to AR:

  • augmented service guidance
  • remote expert guidance
  • manufacturing: machine setup and turnover, assembly and process
  • example of Bell & Howell towers to store online sales in WalMart stores for customer pickup: very expensive to send one to a store for salesperson to use in sales — now just use AR app to give realistic demo without expense.
  • service: poor documentation organization, wants accurate, relevant, onsite info for technician. Want to remove return visits because the repair wasn’t done 1st time, or there’s a new technician. Manuals in binders, etc. Instead, with AR, requirements are quick access to current info. Finally, a demo.

Suchitra Bose, Accenture: Manufacturing IIoT, Driving the Speed of Digital Manufacturing:

  • convergence of IT and OT
  • expanding digital footprint across your entire factory
  • PTC has wide range of case studies (“use cases” in biz speak…) on aspects of IoT & manufacturing.

Great Podcast Discussion of #IoT Strategy With Old Friend Jason Daniels

Right after I submitted my final manuscript for The Future is Smart I had a chance to spend an hour with old friend Jason Daniels (we collaborated on a series of “21st Century Homeland Security Tips You Won’t Hear From Officials” videos back when I was a homeland security theorist) on his “Studio @ 50 Oliver” podcast.

We covered just about every topic I hit in the book, with a heavy emphasis on the attitude shifts (“IoT Essential Truths” needed to really capitalize on the IoT and the bleeding-edge concept I introduce at the end of the book, the “Circular Corporation,” with departments and individuals (even including your supply chain, distribution network and customers, if you choose) in a continuous, circular management style revolving around a shared real-time IoT hub.  Hope you’ll enjoy it!

IoT Design Manifesto 1.0: great starting point for your IoT strategy & products!

Late in the process of writing my forthcoming IoT strategy book, The Future Is Smart, I happened on the “IoT Design Manifesto 1.0” site. I wish I’d found it earlier so I could have featured it more prominently in the book.

The reason is that the manifesto is the product (bear in mind that the original team of participants designed it to be dynamic and iterative, so it will doubtlessly change over time) of a collaborative process involving both product designers and IoT thought leaders such as the great Rob van Kranenburg. As I’ve written ad nauseam, I think of the IoT as inherently collaborative, since sharing data rather than hoarding it can lead to synergistic benefits, and collaborative approaches such as smart cities get their strength from an evolving mishmash of individual actions that gets progressively more valuable.

From the names, I suspect most of the Manifesto’s authors are European. That’s important, since Europeans seem to be more concerned, on the whole, about IoT privacy and security than their American counterparts, witness the EU-driven “privacy by design” concept, which makes privacy a priority from the beginning of the design process.

At any rate, I was impressed that the manifesto combines both philosophical and economic priorities, and does so in a way that should maximize the benefits and minimize the problems.

I’m going to take the liberty of including the entire manifesto, with my side comments:

  1. WE DON’T BELIEVE THE HYPE. We pledge to be skeptical of the cult of the new — just slapping the Internet onto a product isn’t the answer, Monetizing only through connectivity rarely guarantees sustainable commercial success.
    (Comment: this is like my “just because you can do it doesn’t mean you should” warning: if making a product “smart” doesn’t add real value, why do it?)*
  2. WE DESIGN USEFUL THINGS. Value comes from products that are purposeful. Our commitment is to design products that have a meaningful impact on people’s lives; IoT technologies are merely tools to enable that.
    (Comment: see number 1!)
  3. “WE AIM FOR THE WIN-WIN-WIN. A complex web of stakeholders is forming around IoT products: from users, to businesses, and everyone in between. We design so that there is a win for everybody in this elaborate exchange.
    (Comment:This is a big one in my mind, and relates to my IoT Essential Truth #2 — share data, don’t hoard it — when you share IoT data, even with competitors in some cases [think of IFTTT “recipes”] — you can create services that benefit customers, companies, and even the greater good, such as reducing global warming).
  4. WE KEEP EVERYONE AND EVERYTHING SECURE. With connectivity comes the potential for external security threats executed through the product itself, which comes with serious consequences. We are committed to protecting our users from these dangers, whatever they may be.
    (Comment: Amen! as I’ve written ad nauseum, protecting privacy and security must be THE highest IoT priority — see next post below!).
  5. WE BUILD AND PROMOTE A CULTURE OF PRIVACY. Equally severe threats can also come from within. Trust is violated when personal  information gathered by the product is handled carelessly. We build and promote a culture of integrity where the norm is to handle data with care.
    (Comment:See 4!).
  6. WE ARE DELIBERATE ABOUT WHAT DATA WE COLLECT. This is not the business of hoarding data; we only collect data that serves the utility of the product and service. Therefore, identifying what those data points are must be conscientious and deliberate.
    (Comment: this is a delicate issue, because you may find data that wasn’t originally valuable becomes so as new correlations and links are established. However, just collecting data willy-nilly and depositing it in an unstructured “data lake” for possible use later is asking for trouble if your security is breeched.).
  7. WE MAKE THE PARTIES ASSOCIATED WITH AN IOT PRODUCT EXPLICIT. IoT products are uniquely connected, making the flow of information among stakeholders open and fluid. This results in a complex, ambiguous, and invisible network. Our responsibility is to make the dynamics among those parties more visible and understandable to everyone.
    (Comment: see what I wrote in the last post, where I recommended companies spell out their privacy and usage policies in plain language and completely).
  8. WE EMPOWER USERS TO BE THE MASTERS OF THEIR OWN DOMAIN. Users often do not have control over their role within the network of stakeholders surrounding an IoT product. We believe that users should be empowered to set the boundaries of how their data is accessed and how they are engaged with via the product.
    (Comment: consistent with prior points, make sure that any permissions are explicit and  opt-in rather than opt-out to protect users — and yourself (rather avoid lawsuits? Thought so…)
  9. WE DESIGN THINGS FOR THEIR LIFETIME. Currently physical products and digital services tend to be built to have different lifespans. In an IoT product features are codependent, so lifespans need to be aligned. We design products and their services to be bound as a single, durable entity.
    (Comment: consistent with the emerging circular economy concept, this can be a win-win-win for you, your customer and the environment. Products that don’t become obsolete quickly but can be upgraded either by hardware or software will delight customers and build their loyalty [remember that if you continue to meet their needs and desires, there’s less incentive for customers to check out competitors and possibly be wooed away!). Products that you enhance over time and particularly those you market as services instead of sell will also stay out of landfills and reduce your pduction costs.
  10. IN THE END, WE ARE HUMAN BEINGS. Design is an impactful act. With our work, we have the power to affect relationships between people and technology, as well as among people.  We don’t use this influence to only make profits or create robot overlords; instead, it is our responsibility to use design to help people, communities, and societies  thrive.
    Comment: yea designers!!)

I’ve personally signed onto the Manifesto, and do hope to contribute in the future (would like something explicit about the environment in it, but who knows) and urge you to do the same. More important, why start from scratch to come up with your own product design guidelines, when you can capitalize on the hard work that’s gone into the Manifesto as a starting point and modify it for your own unique needs?


*BTW: I was contemptuous of the first IoT electric toothbrush I wrote about, but since talked to a leader in the field who convinced me that it could actually revolutionize the practice of dentistry for the better by providing objective proof that  patient had brushed frequently and correctly. My bad!

A Vision for Dynamic and Lower-Cost Aging in Cities Through “SmartAging”

I’ve been giving a lot of thought recently about how my vision of I0T-based “SmartAging” through a combination of:

  • Quantified Self health apps and devices to improve seniors’ health and turn their health care into more of a partnership with their doctors
  • and smart home devices that would make it easier to manage their homes and “age in place” rather than being institutionalized

could meld with the exciting developments in smart city devices and strategy.  I believe the results could make seniors happier and healthier, reduce the burdens on city budgets of growing aging populations, and spur unprecedented creativity and innovation on these issues. Here’s my vision of how the two might come together. I’d welcome your thoughts on the concept!

 

A Vision for Dynamic and Lower-Cost Aging in Cities Through “SmartAging”

It’s clear business as usual in dealing with aging in America won’t work anymore.  10,000 baby boomers a day retire and draw Social Security. Between now and 2050, seniors will be the fastest growing segment of the population.  How can we stretch government programs and private resources so seniors won’t be sickly and live in abject poverty, yet millennials won’t be bankrupted either?

As someone in that category, this is of more than passing interest to me! 

I propose a new approach to aging in cities, marrying advanced but affordable personal technology, new ways of thinking about aging, and hybrid formal and ad hoc public-private partnerships, which can deal with at least part of the aging issue. Carving out some seniors from needing services through self-reliance and enhancing their well-being would allow focusing scarce resources on the most vulnerable remaining seniors. 

The approach is made possible not only by the plummeting cost and increasing power of personal technology but also the exciting new forms of collaboration it has made possible.

The proposal’s basis is the Internet of Things (IoT).  There is already a growing range of IoT wearable devices to track health indicators such as heart rates and promoting fitness activities, and IoT “smart home” devices controlling lighting, heat, and other systems. The framework visualized here would easily integrate these devices, but they can be expensive, so it is designed so seniors could benefit from the project without having to buy the dedicated devices.

This proposal does not attempt to be an all-encompassing solution to every issue of aging, but instead will create a robust, open platform that government agencies, companies, civic groups, and individuals can build upon to reduce burdens on individual seniors, improve their health and quality of life, and cut the cost of and need for some government services. Even better, the same platform and technologies can be used to enhance the lives of others throughout the life spectrum as well, increasing its value and versatility.

The proposal is for two complementary projects to create a basis for later, more ambitious one.

Each would be valuable in its own right and perhaps reach differing portions of the senior population. Combined, they would provide seniors and their families with a wealth of real-time information to improve health, mobility, and quality of life, while cutting their living costs and reducing social isolation.  The result would be a mutually-beneficial public-private partnerships and, one hopes, improve not only seniors’ lives, but also their feeling of connectedness to the broader community. Rather than treat seniors as passive recipients of services, it would empower them to be as self-reliant as possible given their varying circumstances. They would both be based on the Lifeline program in Massachusetts (and similar ones elsewhere) that give low-income residents basic Internet service at low cost.

Locally, Boston already has a record of achievement in internet-based services to connect seniors with others, starting with the simple and tremendously effective SnowCrew program that Joe Porcelli launched in the Jamaica Plain neighborhood. This later expanded nationwide into the NextDoor site and app, which could easily be used by participants in the program.

The first project would capitalize on the widespread popularity of the new digital “home assistants,” such as the Amazon Echo and Google Home.  One version of the Echo can be bought for as little as $49, with bulk buying also possible.  A critical advantage of these devices, rather than home monitoring devices specifically for seniors, is that they are mainstream, benefit from the “network effects” phenomenon that means each becomes more valuable as more are in use, and don’t stigmatize the users or shout I’M ELDERLY. A person who is in their 50s could buy one now, use it for routine household needs, and then add additional age-related functions (see below) as they age, amortizing the cost.

The most important thing to remember about these devices regarding aging is the fact that they are voice-activated, so they would be especially attractive to seniors who are tech-averse or simply unable to navigate complex devices. The user simply speaks a command to activate the device.

The Echo (one presumes a variation on the same theme will soon be the case with the “Home,” Apple’s forthcoming “Home Pod” and other devices that might enter the space in the future) gets its power from “skills,” or apps, that are developed by third-party developers. They give it the power, via voice, to deliver a wide range of content on every topic under the sun.  Several already released “skills” give an idea of how this might work:

  • Ask My Buddy helps users in an emergency. In an emergency, it can send phone calls or text messages to up to five contacts. A user would say, “Alexa, ask my buddy Bob to send help” and Bob would get an alert to check in on his friend.
  • Linked thermostats can raise or lower the temperature a precise amount, and lights can also be turned on or off or adjusted for specific needs.
  • Marvee can keep seniors in touch w/ their families and lessen social isolation.
  • The Fitbit skill allows the user who also has a Fitbit to trace their physical activity, encouraging fitness.

Again looking to Boston for precedent, related apps include the Children’s Hospital and Kids’ MD ones from Children’s Hospital. Imagine how helpful it could be if the gerontology departments of hospitals provided similar “skills” for seniors!

Most important to making this service work would be to capitalize on the growing number of city-based open-data programs that release a variety of important real-time data bases which independent developers mash up to create “skills”  such as real-time transit apps.  The author was a consultant to the District of Columbia in 2008 when it began this data-based “smart city” approach with the Apps for Democracy contest, which has spawned similar projects worldwide since then.  When real-time city data is released, the result is almost magic: individuals and groups see different value in the same data, and develop new services that use it in a variety of ways at no expense to taxpayers.

The key to this half of the pilot programs would be creating a working relationship with local Meetups such as those already created in various cities for Alexa programmers, which would facilitate the relationship) to stage one or more high-visibility hackathons. Programmers from major public and social service institutions serving seniors, colleges and universities, and others with an interest in the subject could come together to create “skills” based on the local public data feeds, to serve seniors’ needs, such as:

  • health
  • nutrition
  • mobility
  • city services
  • overcoming social isolation (one might ask how a technological program could help with this need. The City of Barcelona, generally acknowledged as the world’s “smartest” city, is circulating an RFP right now with that goal and already has a “smart” program for seniors who need immediate help to call for it) .

“Skills” are proliferating at a dizzying rate, and ones developed for one city can be easily adapted for localized use elsewhere.

Such a project would have no direct costs, but the city and/or a non-profit might negotiate lower bulk-buying rates for the devices, especially the l0wer price ($59 list) Amazon Dot, similar to the contract between the Japan Post Group, IBM, and Apple to buy 5 million iPads and equip them with senior-friendly apps from IBM which the Post Group would then furnish to Japanese seniors. Conceivably, the Dots bought this way might come preloaded with the localized and senior-friendly “skills.” 

The second component of a prototype SmartAging city program would make the wide range of local real-time location-based data available by various cities usable by cities joininh the 100+ cities worldwide who have joined the “Things Network” that create free citywide data networks specifically for Internet of Things use.

The concept uses technology called LoRaWAN: low-cost (the 10 units used in Amsterdam, each with a signal range of about 6 miles, only cost $12,000 total — much cheaper ones will be released soon), and were deployed and operative in less than a month!  The cost and difficulty of linking an entire city has plummeted as more cities join, and the global project is inherently collaborative.

With Things Network, entire cities would be converted into Internet of Things laboratories, empowering anyone (city agencies, companies, educational institutions, non-profits, individuals) to experiment with offering new services that would use the no-cost data sharing network.  In cities that already host Things Networks,  availability of the networks has spawned a wide range of novel local services.  For example, in Dunblane, Scotland, the team is developing a ThingsNetwork- based alarming system for people with dementia.  Even better, as the rapid spread of citywide open data programs and resulting open source apps to capitalize on them has illustrated, a neat app or service created in one city could easily be copied and enhanced elsewhere — virtuous imitation!

The critical component of the prototype programs would be to hold one or more hackathons once the network was in place.  The same range of participants would be invited, and since the Things Network could also serve a wide range of other public/private uses for all age groups and demographics, more developers and subject matter experts might participate in the hackathon, increasing the chances of more robust and multi-purpose applications resulting.

These citywide networks could eventually become the heart of ambitious two-way services for seniors based on real-time data, similar to those in Bolsano, Italy

The Internet of Things and smart cities will become widespread soon simply because of lowering costs and greater versatility, whether this prototype project for seniors happens or not. The suggestions above would make sure that the IoT serves the public interest by harnessing IoT data to improve seniors’ health, reduce their social isolation, and make them more self-sufficient. It will reduce the burden on traditional government services to seniors while unlocking creative new services we can’t even visualize today to enhance the aging process.

Hippo: IoT-based paradigm shift from passive to active insurance companies

I’m a big advocate of incremental IoT strategies (check out my recent webinar with Mendix on this approach), for existing companies that want to test the waters first. However, I’m enough of a rabble-rouser to also applaud those who jump right in with paradigm-busting IoT (and big data) startups.

Enter, stage left, a nimble (LOL) new home insurance company: Hippo!

IMHO, Hippo’s important both in its own right and also as a harbinger of other startups that will exploit the IoT and big data to break with years of tradition in the insurance industry as a whole, no longer sitting passively to pay out claims when something bad happens, but seizing the initiative to reduce risk, which is what insurance started out to do.

After all, when a Mr. B. Franklin (I’ll tell you: plunk that guy down in 2017 and he’d create a start-up addressing an unmet need within a week!) and his fellow firefighters launched the Philadelphia Contributionship in 1752, one of the first things they did was to send out appraisers to determine the risk of a house burning and suggest ways to make it safer.

Left to right: Eyal Navon, CTO and cofounder; Assaf Wand, CEO cofounder of Hippo

In fact, there’s actually a term for this kind of web-based insurance, coined by McKinsey: insuretec” (practicing what he preached, one of Hippo’s founders had been at McKinsey, and what intrigued the founders about insurance as a target was that it’s a huge industry, hasn’t really innovate for years, and didn’t focus on the customer experience.).

I talked recently to two key staffers, Head of Product Aviad Pinkovezky and Head of Marketing, Growth and Product Innovation Jason White.  They outlined a radically new strategy “with focused attention on loss reduction”:

  • sell directly to consumers instead of using agents
  • cut out legacy coverage leftovers, such as fur coats, silverware & stock certificates in a home safe) and instead cover laptops, water leaks, etc.
  • Leverage data to inform customers about appliances they own that might be more likely to cause problems, and communicate with them on a continuous basis about steps such as cleaning gutters that could reduce problems.

According to Pinkovezky, the current companies “are reactive, responding to something that takes place. Consumer-to-company interaction is non-continuous, with almost nothing between paying premiums and filing a claim.  Hippo wants to build must more of a continuous relationship, providing value added,” such as an IoT-based water-leak detection device that new customers receive.

At the same time, White said that the company is still somewhat limited in what if can do to reduce risk because so much of it isn’t really from factors such as theft (data speaks: he said thefts actually constitute little of claims) but from one, measured by frequency and amount of damage (according to their analysis) that’s beyond their control: weather. As I pointed out, that’s probably going to constitute more of a risk in the foreseeable future due to global warming.

Hippo also plans a high-tech, high-touch strategy, that would couple technnology with a human aspect that’s needed in a stressful situation such as a house fire or flood. According to Forbes:

The company acknowledges that its customers rely on Hippo to protect their largest assets, and that insurance claims often derive from stressful experiences. In light of this, Hippo offers comprehensive, compassionate concierge services to help home owners find hotels when a home becomes unlivable, and to supervise repair contractors when damage occurs.”

While offering new services, the company has firm roots in the non-insuretech world, because its policies are owned and covered by Topa, which was founded more than 30 years ago.

Bottom line: if you’re casting about for an IoT-based startup opportunity, you’d do well to use the lens McKinsey applied to insurance: look for an industry that’s tradition-bound, and tends to react to change rather than initiate it (REMEMBER: a key element of the IoT paradigm shift is that, for the first time, we can piece “universal blindness” and really see inside things to gauge how they are working [or not] — the challenge is to capitalize on that new-found data). 

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 Intangibles: Increased Customer Loyalty

There are so many direct, quantifiable benefits of the IoT, such as increased quality (that 99.9988% quality rate at Siemens’s Amberg plant!) and precision, that we may forget there are also potential intangible benefits.

Most important of those is customer loyalty, brought about by dramatic shifts both in product designs and how they are marketed.

Much of this results from the IoT lifting the veil of Collective Blindness to which I’ve referred before: in particular, our prior inability to document how products were actually used once they left the loading dock. As I’ve speculated, that probably meant that manufacturers got deceptive information about how customers actually used products and their degree of satisfaction. The difficulty of getting feedback logically meant that those who most liked and most hated a product were over-represented: those who kinda liked it weren’t sufficiently motivated to take the extra steps to be heard.

Now, by contrast, product designers, marketers, and maintenance staffs can share (that critical verb from my Circular Company vision!) real-time data about how a product is actually operating in the field, often from a “digital twin” they can access right at their desks.

Why’s that important?

It can give them easy insights (especially if those different departments do access and discuss the data at the same time, each offering its own unique perspectives, on issues that will build customer loyalty:

  • what new features can we add that will keep them happy?
  • can we offer upgrades such as new operating software (such as the Tesla software that was automatically installed in every single car and avoided a recall) that will provide better customer experiences and keep the product fresh?
  • what possible maintenance problems can we spot in their earliest stages, so we can put “predictive maintenance” services into play at minimal cost and bother to the customer?

I got interested in this issue of product design and customer loyalty while consulting for IBM in the 9o’s, when it introduced the IBM PS 2E (for Energy & Environmental), a CES best-of-show winner in part because of its snap-together modular design. While today’s thin-profile-at-all-costs PC and laptop designs have made user-friendly upgrades a distant memory, one of the things that appealed to me about this design was the realization that if you could keep users satisfied that they were on top of  new developments by incremental substitution of new modules, they’d be more loyal and less likely to explore other providers.

In the same vein, as GE has found, the rapid feedback can dramatically speed upgrades and new features. That’s important for loyalty: if you maintain a continuing interaction with the customer and anticipate their demands for new features, they’ll have less reason to go on the open market and evaluate all of your competitors’ products when they do want to move up.

 

Equally important for customer loyalty is the new marketing options that the continuous flow of real-time operating data offer you. For a growing number of companies, that means they’re no longer selling products, but leasing them, with the price based on actual customer usage: if it ain’t bein’ used, it ain’t costing them anything and it ain’t bringing you any revenue!

Examples include:

  • jet turbines which, because of the real-time data flow, can be marketed on the basis of thrust generated: if it’s sitting on the ground, the leasee doesn’t pay.  The same real-time data flow allows the manufacturer to schedule predictive maintenance at the earliest sign of a problem, reducing both its cost and the impact on the customer.
  • Siemens’s Mobility Services, which add in features such as 3-D manufactured spare parts that speed maintenance and reduced costs, keeping the trains running.
  • Philips’s lighting services, which are billed on the basis of use, not sold.
  • SAP’s prototype smart vending machine, which (if you opt in) may offer you a special discount based on your past purchasing habits.

At its most extreme is Caterpillar’s Reman process, where the company takes back and remanufactures old products, giving them a new life — and creating new revenues — when competitors’ products are in the landfill.

Loyalty can also be a benefit of IoT strategies for manufacturers’ own operations as well. Remember that the technological obstacles to instant sharing of real-time data have been eliminted for the supply chain as well. If you choose to share it, your resupply programs can also be automatically triggered on a M2M basis, giving an inherent advantage to the domestic supplier who can get the needed part there in a few hours, versua the low-cost supplier abroad who may take weeks to reach your loading dock.

It may be harder to quantify than quality improvements or streamlined production through the IoT, but that doesn’t mean that dependable revenue streams from loyal customers aren’t an important potential benefit as well.

2nd day liveblogging, Gartner ITxpo, Barcelona

Accelerating Digital Business Transformation With IoT Saptarshi Routh Angelo Marotta
(arrived late, mea culpa)

  • case study (didn’t mention name, but just moved headquarters to Boston. Hmmmmm).
  • you will be disrupted by IoT.
  • market fragmented now.

Toshiba: How is IoT Redefining Relationships Between Customers and Suppliers, Damien Jaume, president, Toshiba Client Solutions, Europe:

  • time of tremendous transformation
  • by end of ’17, will surpass PC, tabled & phone market combined
  • 30 billion connect  devices by 2020
  • health care IoT will be $117 billion by 2020
  • 38% of indiustry leaders disrupted by digitally-enabled competitors by 2018
  • certainty of customer-supplier relationship disruption will be greatest in manufacturing, but also every other market
    • farming: from product procurement to systems within systems. Smart, connected product will yield to integrated systems of systems.
  • not selling product, but how to feed into whole IoT ecosystem
  • security paramount on every level
  • risk to suppliers from new entrants w/ lean start-up costs.
  • transition from low engagement, low trust to high engagement, high trust.
  • Improving efficiencies
  • ELIMINATE MIDDLEMAN — NO LONGER RELEVANT
  • 4 critical success factors:
    • real-time performance pre-requisite
    • robustness — no downtime
    • scalability
    • security
  • case studies: energy & connected home, insurance & health & social care (Neil Bramley, business unit director for clients solutions
    • increase depth of engagement with customer. Tailored information
    • real-time performance is key, esp. in energy & health
    • 20 million smart homes underway in GB by 2020:
      • digitally empowering consumers
      • engaging consumers
      • Transforming relationships among all players
      • Transforming homes
      • Digital readiness
    • car insurance: real-time telematics.
      • real-time telematics data
      • fleet management: training to reduce accidents. Working  w/ Sompo Japan car insurance:
    • Birmingham NHS Trust for health (Ciaron Hoye, head of digital) :
      • move to health promotion paradigm
      • pro-actively treat patients
      • security first
      • asynchronous communications to “nudge” behavior.
      • avoiding hip fractures
      • changing relationship w/ the patient: making them stakeholders, involving in discussion, strategy
      • use game theory to change relationship

One-on-one w/ Christian Steenstrup, Gartner IoT analyst. ABSOLUTE VISIONARY — I’LL BE INTERVIEWING HIM AT LENGTH IN FUTURE:

  • industrial emphasis
  • applications more ROI driven, tangible benefits
  • case study: mining & heavy industry
    • mining in Australia, automating entire value train. Driverless. Driverless trains. Sensors. Caterpillar. Collateral benefits: 10% increase in productivity. Less payroll.  Lower maintenance. Less damage means less repairs.
    • he downplays AR in industrial setting: walking in industrial setting with lithium battery strapped to your head is dangerous.
    • big benefit: less capital expense when they build next mine. For example, building the town for the operators — so eliminate the town!
  • take existing processes & small improvements, but IoT-centric biz, eliminating people, might eliminate people. Such as a human-less warehouse. No more pumping huge amount of air underground. Huge reduction with new system.  Mine of future: smaller holes. Possibility  of under-sea mining.
  • mining has only had incremental change.
  • BHP mining’s railroad — Western Australia. No one else is involved. “Massive experiment.”
  • Sound sensing can be important in industrial maintenance.  All sorts of real-time info. 
  • Digital twins: must give complete info — 1 thing missing & it doesn’t work.
  • Future: 3rd party data brokers for equipment data.
  • Privacy rights of equipment.
  • “communism model” of info sharing — twist on Lenin.

 

Accelerating Digital Transformation with Microsoft Azure IoT Suite (Charlie Lagervik):

  • value networking approach
  • customer at center of everything: customer conversation
  • 4 imperatives:
    • engage customers
    • transform products
    • empower employees
    • optmize operations
  • their def. of IoT combines things/connectivity/data/analytics/action  Need feedback loop for change
  • they focus on B2B because of efficiency gains.
  • Problems: difficult to maintain security, time-consuming to launch, incompatible with current infrastructure, and hard to scale.
  • Azure built on cloud.
  • InternetofYourThings.com

 

Afternoon panel on “IoT of Moving Things” starts with all sorts of incredible factoids (“since Aug., Singapore residents have had access to self=driving taxis”/ “By 2030, owning a car will be an expensive self-indulgence and will no longer be legal.”

  • vehicles now have broader range of connectivity now
  • do we really want others to know where we are? — privacy again!
  • who owns the data?
  • what challenges do we need to overcome to turn data into information & valuable insight that will help network and city operators maximize efficiency & drive improvement across our transportation network?
  • think of evolution: now car will be software driven, then will become living room or office.
  • data is still just data, needs context & location gives context.
  • cities have to re-engineer streets to become intelligent streets.
  • must create trust among those who aren’t IT saavy.
  • do we need to invest in physical infrastructure, or will it all be digital?
  • case study: one car company w/ engine failures in 1 of 3 cars gave the consultants data to decide on what was the problem.

Circular Company: Will Internet of Things Spark Management Revolution?

Could the IoT’s most profound impact be on management and corporate organization, not just cool devices?

I’ve written before about my still-being-refined vision of the IoT — because it (for the first time!) allows everyone who needs instant access to real-time data to do their jobs and make better decisions to share that data instantly —  as the impetus for a management revolution.

My thoughts were provoked by Heppelmann & Porter’s observation that:

“For companies grappling with the transition (to the IoT), organizational issues are now center stage — and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.”

If I’m right, the IoT could let us switch from the linear and hierarchical forms that made sense in an era of serious limits to intelligence about things and how they were working at thaFor companies grappling with the transition, organizational issues are now center stage—and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.t moment, to circular forms that instead eliminate information “silos” and instead give are circular, with IoT data as the hub. 

This article expands on that vision. I’ve tried mightily to get management journals to publish it. Several of the most prestigious have given it a serious look but ultimately passed on it. That may be because it’s crazy, but I believe it is feasible today, and can lead to higher profits, lower operating costs, empowering our entire workforces, and, oh yeah, saving the planet.

Audacious, but, IMHO, valid.  Please feel free to share this, to comment on it, and, if you think it has merit, build on it.

Thanks,

W. David Stephenson


The IoT Allows a Radical, Profitable Transformation to Circular Company Structure

 

by

W. David Stephenson

Precision assembly lines and thermostats you can adjust while away from home are obvious benefits of the Internet of Things (IoT), but it might also trigger a far more sweeping change: swapping outmoded hierarchical and linear organizational forms for new circular ones.

New org charts will be dramatically different because of an important aspect of the IoT overlooked in the understandable fascination with cool devices. The IoT’s most transformational aspect is that, for the first time,

everyone who needs real-time data to do their jobs better or
make better decisions can instantly 
share it.

That changes everything.

Linear and hierarchical organizational structures were coping mechanisms for the severe limits gathering and sharing data in the past. It made sense then for management, on a top-down basis, to determine which departments got which data, and when.

The Internet of Things changes all of that because of huge volumes of real-time data), plus modern communications tools so all who need the data can share it instantly. 

This will allow a radical change in corporate structure and functions from hierarchy: make it cyclical, with real-time IoT data as the hub around which the organization revolves and makes decisions.

Perhaps the closest existing model is W.L. Gore & Associates. The company has always been organized on a “lattice” model, with “no traditional organizational charts, no chains of command, nor predetermined channels of communication.”  Instead, they use cross-disciplinary teams including all functions, communicating directly with each other. Teams self-0rganize and most leaders emerge spontaneously.

As Deloitte’s Cathy Benko and Molly Anderson wrote, “Continuing to invest in the future using yesteryear’s industrial blueprint is futile. The lattice redefines workplace suppositions, providing a framework for organizing and advancing a company’s existing incremental efforts into a comprehensive, strategic response to the changing world of work.”  Add in the circular form’s real-time data hub, and the benefits are even greater, because everyone on these self-organizing teams works from the same data, at the same time.

You can begin to build such a cyclical company with several incremental IoT-based steps.

One of the most promising is making the product design process cyclical. Designers used to work in a vacuum: no one really knew how the products functioned in the field, so it was hard to target upgrades and improvements. Now, GE has found it can radically alter not only the upgrade process, but also the initial design as well:

“G.E. is adopting practices like releasing stripped-down products quickly, monitoring usage and rapidly changing designs depending on how things are used by customers. ‘We’re getting these offerings done in three, six, nine months,’ (Vice-President of Global Software William Ruh said). ‘It used to take three years.’”

New IoT and data-analytics tools are coming on the market that could facilitate such a shift. GE’s new tool, “Digital Twins,” creates a wire-frame replica of a product in the field (or, for that matter, a human body!) back at the company. Coupled with real-time data on its status, it lets everyone who might need to analyze a product’s real-time status (product designers, maintenance staff, and marketers, for example) to do so simultaneously.

The second step toward a cyclical organization is breaking down information silos.

Since almost every department has some role in creation and sales of every product, doesn’t it make sense to bring them together around a common set of data, to explore how that data could trigger coordinated actions by several departments? 

Collaborative big-data analysis tools such as GE’s Predix, SAP’s HANA, and Tableau facilitate the kind of joint scrutiny and “what-if” discussions of real-time data that can make circular teamwork based on IoT-data sharing really achieve its full potential.

The benefits are even greater when you choose to really think in circular terms, sharing instant access to that real-time data not only companywide, but also with external partners, such as your supply chain and distribution network – and even customers – not just giving them some access later on a linear basis.  For example, SAP has created an IoT-enabled vending machine. If a customer opts in, s/he is greeted by name, and may be offered “your regular combination” based on past purchases, and/or a real-time discount. That alone would be neat from a marketing standpoint, but SAP also opened the resulting data to others, resulting in important logistics improvements. Real-time machine-to-machine (M2M) data about sales at the new vending machines automatically reroute resupply trucks to those machines currently experiencing the highest sales. 

With the IoT, sharing data can make your own product or service more valuable. With the Apple HomeKit, you can say “Siri, it’s time for bed,” and the Hue lights dim, Schlage lock closes, and Ecobee thermostat turns down. By sharing real-time IoT data, each of these companies’ devices become more valuable in combinations than they are by themselves.

Hierarchical and linear management is outmoded in the era of real-time data from smart devices. It is time to begin to replace it with a dynamic, circular model with IoT data as its hub.

Amazon Leads IoT With Comprehensive Services, Platform & Devices!

Several months ago I predicted that Amazon’s Echo might become the IoT’s killer device, primarily because it is voice activated. It appears that prediction is coming true, which should give the entire consumer IoT a boost because Amazon is also providing a soup-to-nuts approach of devices, platform, and storage meeting a wide range of IoT needs, which puts a real emphasis on customer ease of use.

 Amazon Flywheel

Amazon Flywheel

Even more exciting from my perspective, is that part of that success may be due to something I was unaware of that fits beautifully with my “circular enterprise ” vision of the IoT: Jeff Bezos’ back-of-the-envelope sketch when he founded the behemoth, of what he called the “Amazon Flywheel,” It’s as good an illustration as I can think of regarding my vision of circular organizations and strategy — not to mention their profitability!

Even the WSJ got on board with an article about Amazon in regard to the IoT, although it focused solely on Echo and its voice app, Alexa, and ignored the all-important mechanics that it also provides.

 Amazon IoT Button

Amazon IoT Button

The latest step in fleshing out the ecosystem was the announcement earlier this month of the AWS IoT Button, modeled on its highly successful DASH button, which allows ordering more than 100 different consumer products from Amazon by simply pressing the button (the “button” is also now also available in virtual form as a software service, so that a number of products, such as a Whirlpool smart washing machine, will determine that the owner is running low on detergent, and automatically send an alert to her phone. A simple touch on the phone triggers a refill order from Amazon). The 1st edition IoT button sold out instantly!

It joins a comprehensive, and growing, package of IoT devices and services from Amazon that I suspect will quickly make it the platform of choice for the consumer IoT:

You get the idea: this is a conplete solution, from platform to cloud storage to devices to highly-personal (voice) interface.


 

And there’s that matter of the Amazon Flywheel that I mentioned previously.  I came across it in researching this post, in a blog post by John Rossman in which he referred to the Flywheel as “a long-tested systems dynamic view of Amazon’s core retail and marketplace business” (music to my ears: it was exposure to Jay Forrester & Peter Senge’s work on systems dynamics that first got me interested in cyclical processes, back in the late ’80s). He explains how this continuous loop leads to dynamic growth, especially in Amazon’s infrastructure offerings:

“When thinking through an IoT solution, what is most obvious is the end device.  But this is the classic “tip of the iceberg” in creating an end-to-end solutions.  The IoT Value Chain is defined by devices, connectivity, big data, algorithms, actions, and connection to the rest of the enterprise.  As more and more IoT Devices get introduced, a greater amount of data (both big and small) is generated. This data, once integrated with algorithms create a greater overall customer IoT impact generating more demand for more devices. All of these devices and services can be hosted on AWS and utilize their infrastructure capabilities leading to greater growth of the infrastructure. At this point, the loop looks familiar: infrastructure growth leads to lower costs, which means more services and companies rely on the infrastructure locking into a cycle of higher customer impact.  Amazon Web Services has several existing IoT enabling products include AWS Redshift, AWS Kinesis, AWS Machine Learning and recent acquisition of 2lemetry show that the big bet for Amazon is not in creating devices for its retail business, but in providing cloud infrastructure and software to thousands of companies needing to build IoT devices and capabilities.  This is the AWS IoT flywheel and the real business in IoT for Amazon.”

Yeah, but the bucks that it will get from Dash orders and from Echo ain’t shabby either. Keep up that cyclical thinking, Mr. Bezos!

 

PS: this also makes me more and more confident that Echo and Alexis can be the key to the robust “SmartAging” approach that I visualize because its use of voice will help seniors, especially the tech-averse, manage their health AND their homes and allow them to age in place healthily! Gonna have to get me some partners to go after Alexa Fund backing…

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