Money For Lunch – The value in Connected Products: The New Cognitive autoMOBILE value chain

The value in Connected Products: The New Cognitive autoMOBILE value chain

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By Sebastian Wedeniwski and Stephen Perun


Products today are becoming more and more connected; the transformation is known as the Internet of Things (IoT).  Sure, your smartphone is connected but some of the applications on your smartphone are connecting to physical products and one of the most common is your autoMOBILE.  In this new world of mobility, it’s not just your autoMOBILE it’s your airline, car share company, ride share company and, in the future, even new forms of mobility.  So why are all these companies joining the IoT revolution, an excerpt from our book explains internal and external value brought on by IoT.

“Most companies across all industries struggle with internal value sometimes called soft value in consulting when they are putting together a business case for these new connected solutions. Most companies want to see an increase in revenue or a decrease in costs to drive their business case, and will put key performance indicators (KPI) in place to measure that, but the difficulty to measure soft value creates its own problem. KPIs for soft values are much harder to define and measure—this is what we believe to be the main driver for the lack of investment in connected solutions. As any OEM in any industry looks at a product-to-digital- services transformation, sometimes the focus needs to be on the soft value, and not just on increasing revenue. The CEOs that were early pioneers and made the decisions and commitments are in a much better position with their customers. These companies are more prepared as products change to adapt to a personalized experience.”

At first the value of the autoMOBILE was driven by the thinking of creating new services and revenue streams.  We can debate how successful that was but now if you look at these OEMs they are more prepared in this new world of a personalized customer experience.  Who doesn’t like a personalized customer experience, weather you are at a hotel, a restaurant, or even in your vehicle.  So, what does it take to create this type of experience, the IoT with data so you can learn about your customer and provide better services.  Data is the new currency really means the focus on value comes as much from the internal soft value and its does from external revenue.

The one problem with internal value is how to measure it.  We suggest one type of framework, but many exist, the important factors include understanding your internal organizations and how they are measured.  A simple example is a product organization that’s measured on cost per component, asked to add a connectivity device that’s value is gained by the Connected Service organization.  Quality and warranty is another great example of how internal organizations that don’t make the investment in IoT gain lots of value.  So don’t let the internal measurements and organizational barriers slow your progress in IoT, learn from the automotive industry and see how its transformed from the AUTOmobile to the autoMOBILE.





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