The IoT (Internet of Things) is facilitating servitization and a transition toward a more outcomes-based economy. But the real question for you is do you understand how your company can leverage it to help you work smarter, not harder? The other key points that companies need to rethink in today's connected economy is the way products are designed and manufactured to the way they're sold, operated, and serviced. And this last point--product servicing--is worth underlining. For years here at Connected World, we've been saying that one of the key selling points of the IoT is its ability to "open doors to new revenue streams."
In the past, manufacturers naturally focused on sales of their products, such as drills or aircraft engines, as standalone offerings. Servicing those products was considered a cost center for those businesses--an expensive, back-end operation required when products failed in the field. Today, the manufacturing landscape has shifted, and servicing now opens the door to better customer outcomes, decreased operational costs and even potential new revenues for manufacturers, as well as an opportunity to differentiate from competitors. As formerly offline tools become connected, and service moves from reactive to predictive, we see the manufacturing sector is moving towards services as a core business model. According to a study of field service organizations by the Aberdeen Group, 26 percent of respondents have been able to generate new service-driven revenue streams1.
When you hand over your credit card for a new washing machine or refrigerator, would you pay an extra fee to receive alerts about how well it's working, or if you need to call a service technician? Manufacturers of consumer goods are banking on you saying "yes" to the extra cost, just like enterprises do today for service on hardware investments like jet engines and assembly-line technology. This Everything-as-a-Service (XaaS) business model--one which has helped companies in the B2B space generate continuous revenue from their products--is being eyed by consumer companies hungry for income that lasts beyond the initial product purchase. Through "servitization"--combining products with services--businesses can innovate faster and deepen their relationships with customers by providing more value. That value includes data insights derived from IoT-powered devices--from thermostats to wind turbines.
The last five years have been the, "coming of age," period for technologies like the Internet of Things (IoT), machine learning, mixed reality (MR), and blockchain. By late 2017, these technologies gained enough maturity and stability for use in industrial settings. As such, 2018 is shaping-up to be a pivotal year for these promising technologies to be applied in several realms of supply chain, such as end-to-end visibility, product tracking, fraud, settlements, compliance, productivity, worker safety, and delivery speed. Here are seven key trends that are driving innovation, change and agility in today's supply chains.
We've been hearing hype about the Internet of Things (IoT) for a while, but now we're at a time where it is becoming a reality. Many are calling IoT the fourth Industrial Revolution; the other revolutions brought us factories, the steam engine, and the internet. At its most basic definition, Internet of Things is "a network of internet-connected objects able to collect and exchange data," according to Business Insider. A McKinsey Quarterly article points out, "while the consumer's adoption of fitness bands and connected household appliances might generate more media buzz, the potential for business usage is much greater." Global IoT spending is predicted to reach $1.29 trillion in 2020.