The Internet of Things Drives Business TransformationPatrick Meehan

VP Research

Gartner

Blurring the Digital and Physical Worlds

Physical Digital

Physical Digital

People

eBusiness

Physical Digital

Business

People

Physical Digital

BusinessThings

People

Digital Business

The Journey Onward — to Digital Business

Traditional Business

Goes Online

EDIBI

Portals

E-business

CRMWeb

Web

Static Web Presence

Pre Web

Traditional Business

ERPCRM

Analog

Focus

Entities

Technologies

People People Business People Business

MobileBig dataSocial

D-marketing

Going to the Customers

People Business

Post Nexus

BlurringPhysical &

Digital

Sensors3D printing

Smart Machines

D-business

Digital Business

The creation of new business designs by blurring the digital and physical worlds

Q3. Which level best describes your organization's business today?

N = 356

Pre Nexus77%

Analog Business

1%

DigitalMarketing

41%

Digital Business22%

eBusiness12%

Web-Based Business

24%

People

People Business

Where Are You Now?

Where Do I Start?

Welcome to a "Business Moment!"This is where you start …

Car Crash Scenario

Smartphone detects sudden deceleration.

Interrogates clothing sensors for vital signs.

Sends data to first responders and opens up communication lines for survivors.

Collects damage report from vehicle systems.

Damage report sent to fire, police, towingand insurance companies.

Estimates relayed back from competitors. Negotiations ensue to get best price/delivery.

Collects video from nearby cameras.

Notifies next of kin via texts and Facebook.

Portfolio sent to law firms for assessment.

• Fire• Sanitary and cleanup

• Medical specialists

Consumer Electronics

Government

Healthcare

Financial Services

Automotive

Retailers

Legal

• Smartphone car crash technology

• Law enforcement• Safety

• First responders• Emergency rooms

• Insurance (property and casualty)• Banks (loan risks)

• Damage control sensors• Safety deployment

• SMART clothing

• Accident attorneys

Business Moment

TRANSIENT OPPORTUNITIES

EXPLOITEDDYNAMICALLY

Current Business +

Digital Technologies

= Digital Business

Internet of ThingsSmart machines3D printingHuman augmentationMobile, social, analytics, cloud

Digital TrendsSharing economyUnbanked coming onlineSecond screenQuantified self

New RegulationsLegalization of autonomous vehiclesLegalization of remote prescriptionsTaxation and trade policies on 3D printed goods

Creating a Digital Business

Digital Business, Full-Scale Mandates

Manufacturer +

Digital Technologies

Digital Trends

New Regulations

=

Internet of Things, big data, 3DP

Digitalization of service, maintenance& manufacturing

Industrial Internet

Industrie 4.0Country + =

Digital Technologies

Digital Trends

New Regulations

Smart city, industry competitiveness

Singapore Smart Nation Platform

Internet of Things, 3D Printing, big data

EU directives on IoT and environ.

None

New Competitors and Digital Substitutes

Taxis + =Internet of Things, mobile, social

Sharing economy

Digital Technologies

Digital Trends

New RegulationsLegalization of private drivers taxiing

Cigarettes +

New dispensing technology and Internet of Things

Cessation of smoking, quantified self

Digital Technologies

Digital Trends

New RegulationsLegalization of e-cigarettes by region

e-Cigarettes

=

New Digital Products and Services

Healthcare Delivery

+

Digital Technologies

Digital Trends

New Regulations

=Internet of Things, mobile

Consumers expect/accept telemedicine

Healthcare Insurance

+ =

Digital Technologies

Digital Trends

New Regulations

Internet of Things, wearables

Quantified self, preventative medicine

U.S. Affordable Care Act increases wellness incentives

Increased legalization of telemedicine. U.S. healthcare reforms. More favorable healthcare insurance coverage

> 50% virtual visits

HealthSpot & Rite Aid

New Digital Products and Services

Financial Services

+ =Big data, social

Unbanked coming online

Digital Technologies

Digital Trends

New Regulations

"Mr. Ma (Alibaba), … has a trove of data revealing whether small firms pay their bills on time. He can also bundle together firms that know each other, so that a seller can help guarantee a bank loan to a regular customer. According to Alibaba the proportion of Ali-loan's lending that goes bad is a trifling 0.35%" Source: Economist

Eliminating digital divide. Banking licenses granted to e-commerce players

Digital Technologies

Digital Trends

New Regulations

Auto Insurance+ =Internet of Things, mobile

Young drivers not owning cars, insurance too expensive One-day car

insurance, Tokio Marine

Legalize pay-as-you-drive insurance

31

New Experiences in Digital Future

Entertainment + =Wearables, IoT

Quantified self and wearables as fashion

Digital Technologies

Digital Trends

New RegulationsNone Disney Magic Bands

Advertising + =Analytics, video

Using physical space as medium

Digital Technologies

Digital Trends

New RegulationsNone British Airways

Digital Business Creates Risks

Enterprise Impact

Competitive Impact

Customer Impact

Risk of doing Risk of not doing

• Customers are not ready or don't follow.

• Customers have increased privacy/security concerns.

• You invest too early.• You take on more

brand/political risk due to security, privacy & ethical issues.

• You are unprepared for new digital entrants.

• Digital tech. & trends change customer demands and you cannot meet them.

• Competitors hire digital talent first.

• Your investments are tied up in the wrong things.

• You miss out on benefits that lead to shareholder or citizen value.

• Competitors let you spend money to test models and educate customers on behalf of the whole industry.

• You give up first mover advantage.

THE NEXUS OF

FORCES

THE INTERNET OF

THINGS

Digital Business

Visualize

Lead

Execute