Businesses want to differentiate themselves from current and future competitors.  If you are only thinking about the product, then standard components, open source software, and Google Search make that difficult.  However, when you add your service business into the equation, you have a wonderful opportunity to create unique services that can be hard to copy and add considerable value to your customers. And the Internet of Things (IoT) will create the greatest opportunity we have ever seen to create and implement these unique, value added services.

What is the Internet of Things?

Forecasters project that by 2020 there will be 20 billion smart devices with unique IP addresses as well as sensors, actuators, and either local or wide area communications capabilities in use worldwide.  While billions of these devices will be smartphones, tablets, and computers, many more will be industrial or consumer devices. They will be transmitting streams of data either directly to another device (machine to machine communications) or to servers where the data will be stored and easily accessible.  Cognizant computers like IBM’s Watson, or servers running Big Data software like Hadoop or R, will analyze the data to obtain meaningful and unique insights.  Oftentimes, the data streams will be combined with other device data or data from totally unrelated sources to help you answer the tough questions that customers have no way to answer now.

A real world example

John Deere got into this game early.  They provide GPS receivers for many of their farm implements and can add interesting sensors to equipment like combines and plows.  Communications can be to a central computer in the farm office that directs unmanned implements on optimum paths that maximize the number of seeds planted between needing to refuel.  They can adjust the seed spacing based on manufacturers recommendations and soil conditions and later on, the central computer accesses remote moisture sensors and controls individual spray heads based on soil conditions within feet or yards of the sprayer. And when it is time for the harvest, unmanned combines harvest the grains and report amount of load in their onboard hopper so an unmanned hopper can connect with the combines and transfer the right amount of grain so that the combines can work continuously and the number of hoppers is minimized.

While all this is going on in multiple fields across the country, all the data is also streaming in to a server that Deere can access.  They compare grain yields to all the other parameters in the set-up and, using data from the National Weather Service, adjust yield for climatic conditions.  All this data is used to modify the algorithms for the next planting season.  That is Value Added!

A transportation example 

In a previous blog post, I described how Daimler Trucks North America remotely connects its large diesel engines to a central monitoring center.  When an engine sensor identifies a fault, the center technicians diagnose the issue and recommend a plan to remediate the issue.

Sounds reasonable for a large piece of transportation equipment like an 18-wheeler.  But lets look at the Tesla.  There are so many sensors in the car, all connected via Wi-Fi or wireless communications to Tesla’s central control center, that the car has been described as a smart device configured to have 4-wheels and some seats! A recent study says that most cars contain about 50 separate electronic control units (ECU’s), connected through a controller area network (CAN) or other network (such as Local Interconnect Networks or Flexray).

One of the features of the Tesla is that as appropriate, Tesla downloads a new software update to fix any bugs and add new features.  For example, some users wanted an additional setting on their ride control software to make it something between luxury (soft) and sport (stiff) modes.  Since the car also has electronically controlled actuators, it was possible to satisfy the customers request – all in software.

Moving forward

While these examples are about large businesses making expensive equipment, there are businesses of all sizes starting to do their homework about the IoT.  This chart is from an Oxford Economics report, produced in partnership with PTC, based on a survey of 300 manufacturing companies currently running IoT projects – note the top five reasons for their actions:

If your company has not already started exploring the IoT, it should be starting now.  And Services Management should be playing a key role so that you can influence the produce planners in your company to make sure the capabilities (sensors, communications, on-board processors, etc.) will be available in the products. You have to figure out how to commercialize these capabilities, what new skills you will need, how this whole thing will impact your world and the rest of the company, and how will these value added services be sold.