Amazon does some pretty amazing things. This is the company that first took over the bookselling world, then over the retailing world. This is also the company that pretty much kicked off the cloud computing craze of recent years. And they are poised to shake up the delivery business and upend the grocery industry.
The thing is, Amazon doesn’t have some secret technology or access to resources that other companies don’t. They didn’t invent the internet, or cloud computing, or package delivery. What Amazon has is imagination and the ambition to act on their imagination.
As a business, their level of imagination and drive has enabled them to shake up not just a single industry but several; and they keep doing it. They’ve chosen to look at their business not as a static income stream but as a malleable value generating machine that can grow and change.
They routinely look at their current strengths, the technologies that are developing, and the market’s needs and wants. And they then find those few sweet spots where the three intersect.
Know Your Strengths
But why can’t any company be an Amazon of IoT? Finding those intersections is a matter of asking the right questions. It’s the ability to metaphorically float above your business, your industry, and the technology being developed and see how they may or could impact one another.
This is the imagination part. And anyone who knows their business and keeps abreast of developments in technology can have these kinds of discussions.
Gaining value from the Internet of Things isn’t really a technology challenge. The challenge is really one of imagination and perspective.
One of the biggest challenges is understanding the true value propositions your company offers. To create IoT business value, a company must first understand what it uniquely offers to its customers, and why those customers keep coming back. Your company does something, some things, really well. IoT can enhance what you do well and also provide entirely new ways to serve your current and new customers.
Once you know how you already thrill and delight your customers, and what it is that keeps them coming back to you, then it’s much easier to identify ways to strengthen and augment your value propositions with IoT technology.
Back to Business Basics
Business, on a high level, is taking resources and adding value to them such that others are willing to pay more than your costs. This added value may come from transforming them to new things by combining resources with other resources.
These resources may be physical (steel, silicon, oil, copper, wood) or they may be virtual (information, ideas, financial data, medical knowledge).
Businesses bring these resources together into more complete products so that each person in the next part of the process has less work to do and can specialize their labor, more efficiently producing their product or service.
IoT as a Business Resource
The Internet of Things (IoT), and its components, is one of those perspective changing resources. Tapping IoT as a business resource is something your business can do.
In what way is IoT a resource?
The Internet of Things is a new way to collect data about your operations and your customers. But because it uses physical sensors or devices it also allows you to interact with your operations and customers.
Because these devices are out in the real world actively collecting information or interacting, they are like an extension of you, or your company’s representatives. They extend your ability to perceive and understand, to monitor and control. And because they are machines, they extend your ability to automate and optimize.
Where you add value and how your business can take advantage of IoT is deciding what data you need and what interactions enhance your business’ value propositions.
Two Categories of IoT Business Value
Though IoT requires you to use your imagination, it helps to have some guiding constraints.
Typically, value is found by either reducing costs or increasing revenue. Internal cost reduction can then be turned into a service or product offering externally after some mastery is gained. Revenue generation can be increased by enhancing current products or services or by offering completely new products.
Your company can also enter adjacent market spaces by taking your current products or services, augmenting with IoT solutions, and then applying them to a different (perhaps related) market or vertical. One suggestion for gaining value from IoT is to take a look at the RPMA product catalog and seeing how you could potentially integrate one or a few of those solutions into your own business or offerings.