Head of Wireless, Cambridge Consultants
Tim Fowler
BEYOND CONNECTIVITY – THE WINNERS IN IoT
WILL BE SERVICE INNOVATORS
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1. What is the Internet of Things (IoT)?
2. What is Service Innovation?
3. Why are Service Innovators likely IoT winners?
4. How do we adopt Service Innovation?
Cambridge Consultants believes that the winners in IoT will be the Service Innovators
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What is the Internet of Things (IoT)?
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Our definition of Things included in IoT can be summarised as:
1. EMBEDDED IN EVERYDAY OBJECTS: IoT is about embedded communication
between objects & excludes devices for which connectivity is a core function
2. COMPUTING DEVICES: To count as IoT, the network must connect an
embedded computer
3. VIA THE INTERNET: Communication must include an element of wide-area
networking
4. INTERCONNECTED NETWORKS: Data constrained to a single local network
does not meet definition of IoT; any system using public internet meets this
requirement
5. STANDARDISED COMMUNICATIONS: Although proprietary protocols may be
used in part of the system, there must be standardised systems and interworking at
some point in the communications chain
The Internet of Things is the next evolution of the Internet, to reach & influence “everything”
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▪ First technology where global impact
predictions are in trillions of dollars
▪ McKinsey predict 3 to 11 $Trillion by 2025
▪ Forbes predict 14.4 $Trillion by 2022
▪ Bringing Internet disruption
to every industry,
everywhere
IoT will impact every industry
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Winning in IoT may mean survival
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What is Service Innovation?
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Level of Technology Innovation
LOW MEDIUM HIGH
Technology Innovation can be defined as:
to strive for ever better solutions to a problem
Applying science & Engineering to create new THINGS
Focussing on problems that matter
And leadership can be protected with Patents / Trade Secrets
Technology Innovation has determined winners for many years
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Level of Service Innovation
LOW MEDIUM HIGH
Service Innovation can be defined as:
to strive for ever better problems to solve
High levels of Service Innovation also offers greater differentiation
Traditionally, Service Innovation required mass re-training of staff
– digital services do not
Innovative Services cannot be patented
Service Innovation is not a substitute for Service Excellence
Excellent service means users achieve what they want, with fewer
barriers, more quickly & more cost effectively
Service Innovation is a newer activity in the technology sector
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Why are Service Innovators the likely winners in IoT?
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IoT started with a promise:
“Buy this IoT solution… you’ll get rich…”
Next came:
“Buy this IoT solution, you’ll collect data”
and “DATA is MONEY”
Holders of data are seen as being powerful
– But is having data a cause or an effect?
The Internet of Things does not
guarantee success
May 6th 2017
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We believe winners will be businesses that deliver the
BEST OUTCOMES
▪ BETTER OUTCOMES drive success
▪ DATA helps deliver BETTER OUTCOMES,
but does not guarantee it
“The Internet of Things’ killer app is outcomes. It’s outcomes
that customers ultimately want. They don’t even care about the
products; they care about what products do for them.”
Bruce Sinclair, Founder and president of www.IoT-inc.com
Delivering excellent products and services
remains the driver for success
The Internet of Things does not
guarantee success
March 5th 2018
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▪ Retail without a check-out
▪ User checks-in at entry (smartphone swipe)
▪ Technology senses what each user “buys”
▪ Account reconciled at point of exit
▪ Staff can help shoppers rather than:
– Unload,
– scan and
– re-load each item
USER OUTCOME: Great & different retail experience
AMAZON OUTCOME: Space filled with things to buy
Amazon Go is an IoT enabled retail service
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▪ Retail without a check-out
▪ User checks-in at entry (smartphone swipe)
▪ Technology senses what each user “buys”
▪ Account reconciled at point of exit
▪ Staff can help shoppers rather than:
– Unload,
– scan and
– re-load each item
USER OUTCOME: Great & different retail experience
AMAZON OUTCOME: Space filled with things to buy
Amazon Go is an IoT enabled retail service
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▪ Users sign up to a health management service
▪ Includes Smart Connected Blood Glucose Meter
– Consumables included
– Data available to physicians & family
▪ AI system provides personal advice
▪ Users can talk to specialists
▪ Reminders and warnings provided to users
USER OUTCOME: Better health, happier
INSURER OUTCOME: Lower cost
Livongo Health delivers better health management outcomes through IoT based service
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▪ Not all data is equally valuable
– Value1 in information relates to surprise
revealed by data
▪ Collecting data might not unearth “surprises”
– Experience shows that some data collected
has high value in trials, but then only re-tells
what is already learnt
– Not all IoT sensors track the unexpected– many track the expected
Data has value when it tells us
something we don’t already know
1 – Value (or amount of) information in data is called Entropy in
Information Theory
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▪ Not all data is equally valuable
– Value1 in information relates to surprise
revealed by data
▪ Collecting data might not unearth “surprises”
– Experience shows that some data collected
has high value in trials, but then only re-tells
what is already learnt
– Not all IoT sensors track the unexpected– many track the expected
▪ Unearthing unmet (or poorly met) needs is
critical to success for IoT
– IoT has significant value here
– Especially if unmet needs are unexpected
– Hence Service Innovation is key
Data has value when it tells us
something we don’t already know
1 – Value (or amount of) information in data is called Entropy in
Information Theory
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▪ Serving unmet (or poorly met) needs
▪ Finding new problems to solve
– This is a virtuous circle for IoT and
Digital Services
Breakthrough improvements in OUTCOMES
with IoT should deliver increased revenuesIoT Data helps
identify unmet needs
Informs valuable new
problems to solve
Solutions enhanced
by IoT and Digital
Which attract new
users and uses
Which generates
new IoT data
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A position has emerged where winning offerings deliver
high levels of both Technology and Service Innovation
What IoT enables is:
▪ Technology Innovators can add Service Innovation
▪ Service Innovators to add Technology Innovation to
enhance their position, and add protection (Patents)
Winners must adopt Service Innovation
Service Innovation and Technology Innovation
are orthogonal
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Level of Technology Innovation
LOW MEDIUM HIGH
Winning
Position
Ser
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Technology
Innovation
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How can we be Service Innovators?
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▪ Consider adopting Digital Services in your business
▪ Determine your Services Strategy
▪ Ensure your services build on your current expertise
▪ Identify how IoT could link your current products or
services to the new model
▪ Test early and test often
– Build experimental solutions
▪ Be willing to adapt as you learn
Companies who successfully apply both Service
and Technology Innovation will be winners
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Level of Technology Innovation
LOW MEDIUM HIGH
Winning
Position
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In the new world, it is not
the big fish which eats the
small fish, it’s the fast fish
which eats the slow fish
Professor Klaus Schwab
Founder and Executive Chairman of
the World Economic Forum
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KEY TAKEAWAYS
BEYOND CONNECTIVITY – THE WINNERS IN IoT WILL BE SERVICE INNOVATORS
The IoT will grow to influence every market everywhere
Service Innovators will be the Winners in IoT
Every business can adopt Service Innovation in its strategy to be a winner