We’re in the era of the “smart” product – connected devices that collect and transmit a vast range of valuable data that often goes unharvested and unrefined. Mined and used effectively, that data can provide previously impossible insight into almost every aspect of the way your organization, customers and marketplace behave, allowing you to make significant future improvements and efficiencies to the way you do business.
“The challenge today is not the technology,” says Rob Holston, our Global Consumer Products Commercial Analytics Leader, “but the inability of most large organizations to operationalize it at the pace and scale needed to create differentiation.”
Realizing the full potential of data
The rise of the Internet of Things (IoT) and smart technology doesn’t just provide opportunities for new product lines, or even for new revenue streams through selling the data collected by your new connected devices. Approached in the right way, it can open up whole new ways of thinking, working and doing business.
“Now that we can see the digital world in a digital format, what does that mean?” asks Edwina Fitzmaurice, our Global Advisory Business Development Leader. “Everything that now exists, including people, is going to be monitored inside a computer at a very precise level. We've never had that before.”
“Many large organizations recognize their business models have been or are going to be disrupted by the rise of these new technologies,” says Holston, “but they’re not seeing the full picture. They can’t see where this could take their business or what is required for them to be competitive in this new environment.”
“Too often, businesses are pondering how technology can make existing processes better,” says Holston, "when they should be asking, ’what’s our unconstrained vision of the future given all these market dynamics, access to technology, data, algorithms and people?’”
The short-term improvement
“The Internet of Things is really about sensors,” says Fitzmaurice. “An IoT device is a monitoring device, gathering data.” With detailed data on how your customers are using your products and services, their behavior can be analyzed to discover trends and patterns that can help you to identify ways to improve your offerings and increase customer loyalty.
Modern video games are a great example. Being entirely digital, and born into a digital world, they have long been able to monitor user behavior and adjust the game in response. If users are frequently finding particular sections difficult, then the game can be altered to make it easier — or vice versa, to increase the challenge and make the game more fun. Increasingly, this kind of adjustment can even be done algorithmically, in real-time, and in a way personalized for individual gamers.
“Now apply that to your supply chain,” says Fitzmaurice, “being able to monitor that in real-time and track every asset in the supply chain back to the original source.” You will be able identify inefficiencies and improvements throughout your entire business, radically improving your operations, perhaps even in real-time.
With the rise of the smart product, this kind of approach is increasingly possible in the real world. But this is still thinking small. It’s just optimizing existing processes, rather than creating new processes and business models.