The IoT as the Driver of Futureproof Business Models

Constant further development is the only way to stay resilient and flexible, and the Internet of Things helps to make your business futureproof.

“Never change a running system” is a recommendation that is seldom likely to have ever been truly advisable. Especially in an IT context the axiom is considered to be anti-innovation. “Stillstand is a Step Back” is more to the point. Don’t change and in the long term you will lag behind. In business, digitization ensures continuous changes.

Digital pioneers are more resilient, as is shown by the latest Mind Digital SME study. They have coped better with the crises of recent years and are already back on their way up again. Companies with a digital mindset have seen the opportunities that lie behind these challenges. They are betting on digital customer experience, connecting their products via the Cloud and the Internet of Things (IoT) and developing new processes and digital business models. That is how they increase their process efficiency and competitiveness, gain a competitive edge in new customer business and become faster, more efficient and more sustainable overall.

Digital transformation is not an objective in its own right but merely a means to an end. Digitization is, however, the right way to develop a new business model or make operating processes futureproof. That is not, of course, to say that a manufacturer of rolling doors should now only offer his product as a virtual model. But he can fit sensors to the doors, connect them via the Internet of Things and then offer his customers an improved service. Faults can be identified faster by remote diagnosis and maybe even remedied without a service team callout. If a callout is needed, the technicians can bring the right tools and spare parts with them because the fault has been analyzed in advance. Sensors and software identify wear and tear to the doors at an early stage, so maintenance and repairs can be triggered automatically and in time. That reduces downtimes and costs to customers and increases satisfaction. This additional service also ensures longer customer retention over and above the sale of the product.

To stay competitive in the long term, companies must constantly be on the lookout for market challenges and adapt their products and services to customer requirements. IoT solutions, cloud computing and smart networking technologies make it possible to add digital services and functions to physical products and thereby increase customer satisfaction. Connected solutions offer benefits for both customers and manufacturers.  By monitoring the usage data of their products, manufacturers can further improve them and develop innovations.

An important area in which the IoT can be of assistance is energy efficiency. Remote monitoring of plant and equipment provides a precise insight into the energy consumption of customers. More transparency leads to more energy efficiency because companies can only then take targeted measures to reduce consumption. And predictive maintenance can prevent disruptions proactively before outages happen, which is another cost saver.

IoT technology and digitization make the supply chain transparent too. Fit out your goods that are being shipped with an IoT tracker and you will always know exactly where they are, can give your customers a precise delivery date and time – and can notify them early if there is any delay. Or offer them a localization service. Another possible IoT application for use in logistics is status or condition monitoring of products by sensor modules that register, for example, whether the cold chain has been maintained or the product has been subjected to shock in transit. If the supplier can also offer access to an IoT platform that processes the IoT data to arrange it clearly, a digital ecosystem of IoT services can be built up over time, establishing a further competitive advantage.

Another advantage of networking is that manufacturers can open up new lines of business and thereby generate new sources of income. By offering digital value-added services and thereby setting themselves apart from the competition they keep in touch with existing customers and find new customers faster. In the past a manufacturer sold his product, a centrifugal pump for example, to an industrial enterprise and his only subsequent contact with the customer was likely to be if the pump broke down. But if he connects his pump he can offer the customer new services such as needs-based maintenance or an analysis of its consumption data. Or he switches his business model from sale to lease and charges for usage – a centrifugal pump as a service, so to speak –, improving customer retention and customer satisfaction.

Smart connected products: so what do they require? Many products can be retrofitted swiftly and inexpensively. For other products it makes sense to integrate the connectivity during manufacture. Telekom offers not only a full-coverage secure cellular network but also the matching certified hardware from its partner ecosystem. More information about innovative products and services by means of the IoT can be found here.