How Internet Of Things Data Improves Product Development

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WOODS D., How Internet Of Things Data Improves Product Development, Forbes, 15.05.2015

Type Article
Abstract
Link http://www.forbes.com/sites/danwoods/2015/05/15/how-internet-of-things-data-improves-product-development/
Topics Business Model, Data Protection

Notes

WOODS cites many times: "How the IoT is Shaping the Future of Customer Experience and product Development" by CITO Research.

There are two main ways in which data collected through IoT affect products:

  • Data provided by IoT is becoming an essential tool for product development: there is need for less research on consumer needs; an empirical decision-making is allowed (sensors embedded in products provide hard evidence for product designers and also improve customer service, e.g. anticipating consumer preferences and offering personalized offers: no one-size-fits-all marketing strategy, but segment-to-one strategy).
  • Data is changing the nature of many products (e.g., rather than selling equipment, services are offered, in which the equipment is deployed by the service provider).

So, data collected through IoT is changing both product development practices and the product delivered.

"Connected devices are the major enablers for OEMs to recapture value that would otherwise slip away. More and more we can tell a value-added story about these pieces of equipment based on their real-time operating environment versus their initial design. The ability to deliver services related to the product is crucial," said Joe Bergman, vice president and general manager of industrial technologies at Ingersoll Rand". "IoT data also opens the door to offering HVAC-as-a-service rather than selling equipment. Instead of selling equipment that is becoming commoditized, Trane (a division of Ingersoll Rand that focuses on industrial air conditioning) can sell the service of keeping a building at 72 degrees and deploy the needed equipment to do so."

"The sale is not the culmination of the customer relationship; it’s just the beginning. In many ways, when a customer buys a product, the purchase is less valuable than information gleaned over the course of the customer’s interaction with the product. This may change the price of products, which could become free or even offer rewards in exchange for the data. The flow of data will certainly open up new lines of business: many organizations will be able to migrate into product service and also use sensor data from connected products to develop new applications."

"[T]he flow of IoT data should mean better products, better service, and more value for the customer, with a lower risk for the manufacturer".