Highlights from my IoT business session at the recent Sofia IoT Summit
posted by Ivan Dragoev on October 12th, 2016
I have recently announced my participation in the first Internet of Things summit in Bulgaria, organized by the Software University and Microsoft Bulgaria. My session on the ‘IoT adoption process from business perspective‘ was part of the IoT business line of sessions (there was a tech line as well).
My session – I am truly happy about that – got a good number of attendees and, judging by the post-session meetings and conversations, sharing my business experience in this domain did provoked a lot of interest.
Since some of my international contacts asked me about the event and were sorry they couldn’t attend, in this post I’ll be sharing some of the key points from my session. Truly hope those would help initiate a conversation on the topic.
This session had been entirely based on my and IndigoVerge experience with the implementation of IoT-based solutions in Bulgaria, Europe and the USA. And the key point in this session was: How to calculate the business value from the integration of IoT solutions? Unlike a few years ago when the IoT market had been technologically immature, it has right now reached technical maturity. But:
The business aspect of IoT integration is still unclear.
What was my reasoning behind this?
First, we must look at the collection of all kinds of data – something that most companies nowadays do. Yes, the collection of data is extremely important, but we usually observe collection of a specific type of data only, so a particular, temporary problem may be resolved.
At the same time, the new technologies allow us to collect data BUT also run algorithms over them and extract the essence of that data. An example I gave was a conversation with a professor from a Technical University in USA – with whom IndigoVerge had worked on a project. He told me how they integrated a system monitoring 20,000 points in a chemical installation. I was curious to know how they use the data collected – how is it analyzed and processed later on. It turned out – they didn’t use the data collected because they were confused where to start! So, having too much information seems to be as bad as having no information at all!
Another key point which – of course – is a hot topic, was the optimization of costs. I discussed here that the optimization of expenses cannot be done endlessly, there’s a certain limit to that. But, while the expense optimization has a specific limit, the revenue does not. And it is common, when talking about Internet of things, to associate the domain with costs optimization and not with revenue increase.
Hence, a major task for the IoT business is to figure out how to present the IoT-based solutions to their potential clients so they can see the real added value behind it, the value that is significant enough and that would result in new revenue streams for them. This is the major goal for the IoT consultant – to analyze the customer business and explain in what ways IoT may improve the business operations and products/services offered by the clients. When the final benefit for the customer is clear and significant enough, he will eventually start adoption IoT based solution.
A final point tackled in my session had been the risks associated with the integration of IoT and how leveraging technologies based on Azure IoT Hub, Azure Stream Analytics, Azure Active Directory and Azure App Service may help to considerably reduce the risk. Indeed, the integration of IoT does pose risks and they have to be managed. That is why, our practice at IndigoVerge has shown that making prototypes is essential and must-do, when the circumstances allow it. The prototype – regardless of the technology used and time taken to set it up – helps to answer the question ‘Is there an added value or not’?
I’ve seen the reaction of the potential customer when you tell them you were planning to collect their data using a prototype installation. Then, when later on you show the actual data collected, things get completely different. I gave as an example one customer case – a factory producing high-quality wool carpets for hotels and other major institutional buildings. They were painting the wool in huge containers and had to maintain a specific temperature in the container so the resulting color would be exactly as needed. The problem was: every time they were taking the wool out and it didn’t have the desired color, they were repeating the procedure. Sometimes that would take a whole day. Not to mention the huge energy costs incurred – gas and electricity.
What we did in this case was: we hooked the customer’s controller in a week, collected the needed data and showed it to their engineer. He instantly figured out that something had been wrong. Sometimes you see the problem right away, when simply looking at the numbers. No analysis needed.
The above customer case proves that a prototype is your best tool when the customer is still hesitating about the benefits of IoT integration.
To wrap up my session, I summarized what IoT is about – it’s about moving from ‘When it breaks, we’ll fix it’ to ‘Make it so it doesn’t break’. I.e with the use of IoT we move from reactive to proactive approach. And our experience with IoT projects at IndigoVerge has proven that this is exactly the major advantage and benefit from the integration of IoT technologies in customer projects.
I am looking forward to more local and international IoT business events discussing the business perspective of IoT solutions. And – would be glad to meet some of you there as well as connect online and keep the conversation going. Cheers!