Is 𝗜𝗼𝗧 a desired end-in-itself and why adopt IoT?

Originally posted in GiT Switzerland Community Space

Many companies talk about the 𝗜𝗻𝘁𝗲𝗿𝗻𝗲𝘁 𝗼𝗳 𝗧𝗵𝗶𝗻𝗴𝘀 as a wanted outcome, but is IoT really a final goal to be pursued?

Simply put, 𝗻𝗼. It is often forgotten that IoT is 𝗼𝗻𝗹𝘆 𝗮 𝗺𝗲𝗮𝗻𝘀 𝘁𝗼 𝗮𝗻 𝗲𝗻𝗱: creating 𝘀𝗺𝗮𝗿𝘁 𝗰𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 solutions that create value for known or yet unknown stakeholders. The ultimate goal is to 𝗲𝗺𝗽𝗼𝘄𝗲𝗿 𝘁𝗵𝗶𝗻𝗴𝘀, leveraging collective 𝗱𝗮𝘁𝗮 𝗳𝗼𝗿 𝗮𝗰𝘁𝗶𝗼𝗻𝗮𝗯𝗹𝗲 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 and actions.

But let's take a step back and start with what IoT is in the first place, focusing on our private everyday lives. We all have contact with connected devices, as we now live in a highly interconnected world in which technologies have a significant influence on our decisions.

Think of the autonomous vacuum cleaner that scans your home and visualizes in your phone which rooms are already clean, or the oven you pre-program through the app beforehand, which monitors the food to cook it optimally, automatically turning off. 

What do these have in common? They're conventional equipment that gather data through sensors and send those to an endpoint via the appropriate technology to be crunched, while signals are sent to trigger actuators in those devices. They are no longer just conventional ovens or vacuum cleaners; now they are 𝗰𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 and become 𝘀𝗺𝗮𝗿𝘁𝗲𝗿.

And this data can be used for more than just optimizing our smart homes or physical condition - although I must admit I love tracking my rpm when running or altitude difference when hiking. But IoT can further be used to 𝗰𝗿𝗲𝗮𝘁𝗲 𝗮 𝗴𝗿𝗲𝗲𝗻𝗲𝗿 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗶𝗺𝗽𝗿𝗼𝘃𝗲 𝗽𝗲𝗼𝗽𝗹𝗲’𝘀 𝗹𝗶𝘃𝗲𝘀. How?

In the past, I mostly talked about monitoring motors for energy efficiency, as these consume over 45% of the world's electricity (ABB Smart Sensor). Here are a few more existing examples: 

• Monitor methane gas, which is 84% more damaging than CO2 (Sensirion Nubo Air)

• Use energy consumption to help elderly people live independently in their own homes, automatically detecting emergencies (Siima Solutions) 

• Track physical stress factors at early stage with wearables and prevent accidents at work (epyMetrics)

• Ease work for health professionals by alerting, locating people to free up time for actual care (SmartLiberty)

• AI to track women's cycles (AVA, Daysy)

• Monitor glucose levels continuously for diabetic patients (Asencia, Veri, Signos)

• AI to monitor railway systems and make rail operations more sustainable (Konux)

Can you think of more examples where IoT can be the means to a more 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗹𝗲 𝘄𝗼𝗿𝗹𝗱? And what is your personal favorite smart connected technology in your day-to-day?

Now, 𝐖𝐡𝐲 adopt IoT? Companies typically embrace smart connected initiatives for reasons such as product and service innovation, greater customer proximity and improving process efficiency. The last one accounts for 72% of initiatives and leads to cost reduction (MSM Research, 2017). However, the 𝐮𝐥𝐭𝐢𝐦𝐚𝐭𝐞 𝐩𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 of 𝐬𝐦𝐚𝐫𝐭 𝐜𝐨𝐧𝐧𝐞𝐜𝐭𝐞𝐝 𝐝𝐞𝐯𝐢𝐜𝐞𝐬 lies in their ability to address the triple bottom line, the 3 P's: 𝐩𝐞𝐨𝐩𝐥𝐞, 𝐩𝐫𝐨𝐟𝐢𝐭 & 𝐩𝐥𝐚𝐧𝐞𝐭 (Elkington, 1994). The question is, can IoT improve all three intercorrelated dimensions, and if so, how?

1. Let’s start with 𝐩𝐞𝐨𝐩𝐥𝐞: while the automation brought about by digitalization threatens many jobs (Die Zeit, 2015), it also generates significant benefits in 𝐡𝐞𝐚𝐥𝐭𝐡 and 𝐬𝐚𝐟𝐞𝐭𝐲. For instance, IoT enables remote monitoring of patients and reduces the risk of medical errors. See more concrete examples on my last post. It is therefore considered a crucial driver of future 𝐩𝐫𝐨𝐬𝐩𝐞𝐫𝐢𝐭𝐲 for our society, and I am a firm believer in its potential.

2. Now let’s talk about 𝐩𝐫𝐨𝐟𝐢𝐭: the 𝘥𝘪𝘨𝘪𝘵𝘢𝘭𝘪𝘻𝘢𝘵𝘪𝘰𝘯 𝘱𝘢𝘳𝘢𝘥𝘰𝘹 entails that companies often fail to achieve acceptable profits (Gebauer, 2020). Unfortunately, about a third of IoT projects are not considered successful, and only 26% of companies with IoT initiatives are considered a complete success (Cisco, 2017).

One reason for this is the Proof-of-Concept trap - 𝐏𝐨𝐂 𝐭𝐫𝐚𝐩 - also called the 'Pocitis' illness by my colleagues at Zühlke. Many PoCs end up as show-cases in a drawer for later use and are never scaled up. Actually, 60% of IoT prototypes end at this stage (Cisco, 2017). However nowadays, the basic technological feasibility is a given, and it’s the business value hypothesis that needs to be proven. That's why my colleagues use a Proof-of-Value (PoV) approach instead, which proves the intended value to the user. While the PoC answers whether if an IoT solution 𝘤𝘢𝘯 be built, the 𝐏𝐨𝐕 answers the following questions: 𝘸𝘩𝘺 should it be built? Is it 𝘸𝘰𝘳𝘵𝘩 it? Will somebody be 𝘸𝘪𝘭𝘭𝘪𝘯𝘨 𝘵𝘰 𝘱𝘢𝘺 for it? Note that the PoV should not be confused with a Minimum Viable Product (MVP), it can be done earlier and faster than an 𝘔𝘝𝘗.

On the other hand, IoT is an enabler of Product-as-a-Service (𝐏𝐚𝐚𝐒) business models, which offer recurring revenues that are less volatile, even in times of crisis. This provides a more predictable and stable profit source for companies. It also allows businesses to spend more on operational expenses (OPEX) and less on capital expenditure (CAPEX), thereby promoting profitable growth.

3. Finally, let’s consider the impact of IoT on the 𝐩𝐥𝐚𝐧𝐞𝐭: as IoT scales and the number of connected devices increases, so too does the consumption of electricity and energy resources (Andrea, 2017). However, IoT also has the potential to reduce greenhouse gas emission. Most research, and my optimistic hope, suggest that it will have a 𝐧𝐞𝐭 𝐩𝐨𝐬𝐢𝐭𝐢𝐯𝐞 𝐢𝐦𝐩𝐚𝐜𝐭 on the environment (Bitkom 2020). Let’s end this week’s post on a higher note and see how. 

As mentioned earlier, IoT is a key driver of Product-as-a-Service (PaaS), which enables users to pay for the outcome or usage of a product rather than the product itself. The concept originated when Michelin introduced paying for km instead of per tire, and when Xerox started charging per copy instead of the copier itself. Another example of PaaS is a subscription-based business model, like the ones of Netflix and Spotify. 

𝐏𝐚𝐚𝐒 can improve 𝐜𝐢𝐫𝐜𝐮𝐥𝐚𝐫 𝐞𝐜𝐨𝐧𝐨𝐦𝐲 by shifting away from the 𝘵𝘢𝘬𝘦-𝘮𝘢𝘬𝘦-𝘸𝘢𝘴𝘵𝘦-𝘦𝘤𝘰𝘯𝘰𝘮𝘺. For IoT specifically, it can contribute to a 𝐠𝐫𝐞𝐞𝐧𝐞𝐫 𝐞𝐧𝐯𝐢𝐫𝐨𝐧𝐦𝐞𝐧𝐭 by optimizing resource efficiency through approaches such as 𝘱𝘳𝘦𝘷𝘦𝘯𝘵𝘪𝘷𝘦 𝘮𝘢𝘪𝘯𝘵𝘦𝘯𝘢𝘯𝘤𝘦, which can extend the lifespan of machines. 

Other examples of IoT applications for the planet include smart agriculture, tools for remote work to reduce commuting, connected trucks to avoid empty runs, fully optimized manufacturing plants, improved grid efficiency and smart buildings. 

In conclusion, the answer is 𝐲𝐞𝐬, smart connected solutions 𝘤𝘢𝘯 achieve an improvement in the dimensions for 𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐥𝐞 𝐝𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 - people, profit and the planet. It’s not easy, as the 3 P’s are highly intercorrelated, but businesses need to carefully balance the trade-offs.

- Next: is the Internet of Things about 𝘛𝘩𝘪𝘯𝘨𝘴? → The topic of the next post will include 𝐃𝐚𝐭𝐚 & 𝐀𝐈 in the context of IoT, or as it's sometimes called: 𝐀𝐈𝐨𝐓.