To date, much of the focus in IoT has been on the enabling technology – from devices and sensors (or ‘things’), to the cloud. Open source hardware and tools make it easier and more inexpensive to build devices and sensors, while new networks and protocols efficiently move device and sensor data to the cloud. Data scientists using cloud-based big data and predictive analytics platforms analyze device and sensor data in real-time. Meanwhile many developers are utilizing IoT platforms such as GE’s Predix to build applications more holistically and faster.
The pace of innovation for these IoT technologies is extremely rapid, and with almost every company on the planet jumping into the IoT fray, many of the technologies are either being disrupted quickly or are becoming commoditized. Companies realize that the business models and third-party ecosystems surrounding these technologies will be the key to whether or not they can build a sustainable IoT business. As investment in the new IoT businesses increase, CEOs and CFOs also look for rapid ROI while minimizing the financial risk associated with investing in these new product and business model innovations.
The Industrial IOT Business Challenge
Manufacturing is being revolutionized by the Internet of Things more than any other industry. Manufacturers are set to invest up to $70 billion in the Industrial Internet of Things (IIoT) by 2020. Many enterprise companies, in particular manufacturers of ‘things’, are looking to IIoT as a new growth engine that will help them differentiate their offerings by adopting subscription/recurring revenue business models. However, the effectiveness and capacity to implement Industrial IoT solutions in today’s manufacturing processes is often questioned. This new world of cloud-native products, which is very different from the traditional business, creates new technological and business challenges, such as:
- Fast innovation cycle times, for both the product and business model, as customer, competitor, and market demands shift.
- Lean “thinking” – build-test-measure-adapt every feature, product, and business model to minimize the associated financial risk.
- Focus on building products and business models that maximize customer lifetime and recurring revenue.
- Quote-to-cash processes that are customer-centric vs. traditional transaction-centric models.
- Revenue models based on recurring and subscription models vs. large, one-time transactions.
It’s not just about technology innovation
This move to cloud-native products impacts almost every business/functional role in the company. Product teams use Minimal Viable Products (MVPs), agile development, cloud services, and DevOps to quickly and efficiently innovate and iterate on their cloud-native products. Customer facing and finance teams, however, depend heavily on the CIO to provide an army of subscription business analysts and developers to define, build, and integrate custom solutions and enable an iterative approach to business model innovation.
Not only does this severely handcuff the business teams’ ability to take advantage of the rapid product cycles, but it also results in multiple quote-to-cash processes: one for the traditional business, and another for the digital business. The CIO also has to balance these new needs without disrupting the existing business, which is frequently the source of funding for the new digital business.
Identify Your Weakest Link
Relying heavily on developers and custom solutions, to enable the transformation to a digital business, is just not sufficient anymore. Companies must retool their business operations to support the new subscription and recurring revenue models, since existing quote-to-cash
processes and tools are inadequate. Every analyst and company involved in IoT expects the market dynamics to change rapidly over the next several years. They all understand that to build a profitable business, companies will need to adapt fast or die as market needs evolve. They need to make changes to their products and business model in hours and days instead of months, all while managing the financial risk associated with adapting to these changes.
Supercharge Business Operations
Now that the app being built is ready to be monetized and pushed out to the market as SaaS, it becomes necessary to create the business processes and measurements needed to create a profitable business. One service that helps you easily adapt to changes as they occur and successfully monetize the cloud-native IoT products is Nurego.
Nurego helps you:
- Control the entire customer journey across the company, from onboarding to billing.
- Manage subscription entitlements in order to maximize up-selling opportunities and customer retention.
- Measure everything, usage to the monitored assets, revenue and associated costs in order to alert and recommend actions that will increase profitability.
- Easily build-measure-learn-adapt offerings while managing the costs associated with launching and scaling products, packages, customer segments and product distribution channels.
- Identify problems with revenue, customer engagement and costs quickly to minimize losses.
To use Nurego on Predix, go to the Predix catalogue.
For use cases and product information on Nurego, visit www.Nurego.com.