Defining Your Breakout IoT Strategy
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Mendix and David Stephenson share insight to help IT leaders define their organization’s incremental IoT strategy. Discover a framework for setting your IoT vision and enabling rapid experimentation to deliver quick wins while paving the way for more significant innovations.
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Defining Your Breakout IoT Strategy
- 2. W. David Stephenson Owner, Stephenson Strategies @data4all Insights from:
- 3. Internet of Things Potential to change everything!
- 4. Components • A name for every thing • Real-time monitoring • Instant data sharing • Analyze things’ current state & control them
- 5. The Value •Turn data into insights •Make those insights actionable, to create smart, precise operations and products “IoT could generate up to $11.1 trillion a year in economic value by 2025.” – McKinsey
- 6. IoT Tools & Components Internet Sensors Actuators Data storage & analysis Mobile devices & apps Augmented reality Platform
- 7. Circular Company • Away from hierarchy & linear processes • Circular organizations linking everything & revolving around real-time data hub
- 8. 40% of companies wont survive without IoT! Don’t wait!
- 9. Everyone needing real-time data to do jobs better and/or make better decisions can instantly share it.
- 10. Attitudes • Privacy & security critical • Share data — don’t hoard it • Close loop • Rethink products
- 11. Team Approach Start with an IoT SWAT Team Identify pilot projects Use Agile, visual development DevOps for continuous delivery Create a feedback loop
- 12. First Things First • Data analysis tools • Cloud storage • Data scientists
- 15. Precision: Supply Chain Precision: Supply Chain
- 17. Precision: Distribution & Sales
- 18. Precision: Distribution & Sales AntTail • Sensors monitor medication temperature & light for the “last mile” between pharmacy & patient • App makes data actionable through proactive notifications & workflows • Results: • 99% temperature compliance • Less wasted medicine • Better patient outcomes
- 19. Product Design
- 20. Today: Servitization • Rolls Royce: “Power by the Hour”
- 21. Customer Experience Hortilux: • Monitor light processes with sensors & apps to interpret data & inform grower • Optimizes indoor growing conditions instead of selling bulbs • Predictive maintenance
- 22. Efficiency & Revenue Generation Solomon Group: • Sensor-enabled turnstiles and apps track attendance at large festivals • Ensures compliance with fire codes • Sells more tickets with real-time insight into traffic in/out of venue • Minimizes counterfeit tickets • Optimizes staffing, food & beverage etc. based on traffic patterns
- 23. IoT & Transformation • Make incremental improvements • Make organization real-time data-centric • Empower your workers, share the data • Democratize data, give them the tools
- 24. Download the on-demand webinar to learn more about defining your IoT strategy. Download Webinar
Notas do Editor
- Thank you very much. I’m excited to be talking with you today because I believe the Internet of Things (or IoT) really is one of those rare transformational technologies, such as the Internet itself, that has the potential to change everything in the economy and in our personal lives as well.
- I suspect that everyone participating today knows at least something about the Internet of Things, but let me just give you a quick reminder. It is the concept that: every thing, from assembly-line machinery to cows in a field, can be given a unique name these things can be monitored, using a variety of sensors and other devices the monitoring data can be gathered and shared instantly, frequently wirelessly, usually over the Internet, but sometimes using dedicated networks. this data can be used to analyze the things’ current state, and, in many cases, can be used to adjust and fine-tune their operations. The IoT truly merges the digital and physical worlds, —
- *The IoT’s real value comes from turning data into insight *and making it actionable to drive smarter operations. To do that, you need IoT apps that let users act upon the insights, combining sensor data and data in your enterprise systems such as ERP, CRM, and PLM. This may include 3rd party services such as weather forecast and traffic data. Also, IoT apps should be able to trigger actions in the physical world like turning a system on or off.
- However, unlike the Internet, the IoT is not a single technology, so that it won’t have the same dramatically rapid impact. Rather, it’s a an amalgamation of several technologies: *the Internet *sensors to gather real-time data from things *actuators that control a product’s physical or logical state — opening a valve or turning a motor on or off — through signals from IoT apps or other systems. *data storage and analysis tools such as ERP, CRM, and PLM. *mobile devices and apps created through tools such as Mendix *believe it or not, augmented reality *perhaps most important a platform tying all the components together: managing the sensors and their output, processing and analyzing the data, and proving the APIs to consume and expose services. That means that the IoT’s impact will be more gradual, as each of these components evolves at a different pace and as we learn more about each of them and how they can c0mplement each other. It also means we can be more methodical and strategic in the transition to the IoT, rather than being forced to re-examine every aspect of our businesses simultaneously because of an all-encompassing disruptive change such as the Internet. That’s why this webinar will focus on incremental change through the IoT.
- However, unlike the Internet, the IoT is not a single technology, so that it won’t have the same dramatically rapid impact. Rather, it’s a an amalgamation of several technologies: the Internet data storage and analysis tools mobile devices and apps created through tools such as Mendix sensors augmented reality That means that its impact will be more gradual, as each of these components evolves at a different pace and as we learn more about each of them and how they can c0mplement each other. It also means we can be more methodical and strategic in the transition to the IoT, rather than being forced to re-examine every aspect of our businesses simultaneously because of an all-encompassing disruptive change such as the Internet. That’s why this webinar will focus on incremental change through the IoT.
- But that doesn’t mean you can dawdle, either: Cisco’s John Chambers warned that 40% of the companies attending a recent seminar wouldn’t survive in a “meaningful way” within 10 years if they don’t begin now to embrace the IoT.
- For the first time, everyone who needs real-time data to do their jobs better and/or make better decisions can instantly share it. That emphasis on sharing real-time data, as we’ll see later, means that we will no longer be limited to having different departments, or even vital collaborators such as supply chains, distribution networks or customers, operating in isolation from each other, or having linear processes that come to an end. Instead, everything will be cyclical, and the enterprise will operate around a real-time data hub available to all. The benefits will be incredible But that radical transformation is in the future. .
- For now, let’s begin by concentrating on something that may get obscured in our justifiable fascination with self-driving cars and smart homes: namely, the attitude changes necessary to capitalize on this new technology. Bear in mind that so many of our current business practices, even in the Internet Ages, were adopted long ago in an era when it was hard to gather data and to share share to. and which now hold us back. If we continue to operate, with neat new tech using those obsolete processes, we won’t realize their full potential. As Einstein said, you can’t solve a problem with the same thinking that created it. First, if we are to have successful IoT strategies, we must make our highest priority assuring privacy and security, whether for industrial processes or personal health data. OK, so that’s important, but why make it the highest priority? That’s because users are trusting us with extremely valuable information — emphasis on trust. When I was a corporate crisis consultant I learned that trust was hard to build, easy to lose, and, if lost, difficult or impossible to rebuild. Second is an attitude change that’s extremely difficult because it’s been ingrained in us: we must learn to share data rather than hoard it. For the longest time the way to profits was if you controlled data that I couldn’t get, you were a winner and I was a loser The third attitude shift, to which I alluded earlier, is to shift from the linear processes that made sense back in the day when communication was so difficult — and frequently resulted in errors and misunderstandings similar to the old telephone parlor game, to continuous circular ones that constantly feed back data that is then used to fine-tune processes. Finally, we need to switch to a new attitude in which we rethink the role of products and even how they’re marketed, increasingly moving from product sales to win-win leases based on performance.
- Here’s a great starting approach, as detailed in IoT Solution Architecture – Essentials Guide, a white paper from my friends at Mendix: Build an IoT SWAT team – Build a cross-functional team to bring together people with ideas and the technical aptitude to bring them to life. It’s critical to have an Enterprise Architect in the team to oversee the technical implementation holistically. Identify pilot projects Use agile, visual development – model-driven development to create a common language between business and IT. Use agile development (SCRUM) to develop and test a minimum viable product (MVP) early in the process to ensure the ability to change direction with minimal risk based on what you learn. Implement DevOps – Integrate the development, release and ops processes across the chain to enable continuous integration and continuous delivery (CI/CD) of IoT solutions. Create a feedback loop – It is important to have a mechanism to continuously capture feedback from users to feed the process of continuous innovation.
- For today, our incremental IoT strategy should begin where so many of us are concentrating anyways, acquiring tools, and hiring data scientists to gather, store, analyze and act on mushrooming quantities of data about our customers, our operations, and now, about our products and how they actually operate. Data analysis tools and cloud storage are the absolute pre-requisites for IoT strategies, because, as much as your data streams are increasing already, that’s nothing compared to the amounts of data you’ll be harvesting 24/7 in the near future, and without tools and strategies to manage and profit from it, you’ll simply be overwhelmed. So accelerate your data analysis strategies and make sure they are robust and flexible enough to handle the IoT onslaught. You’ll also need to hire a new category of staffers: data scientists, to work closely with your subject-matter experts to fully exploit the IoT.
- A major theme with the IoT is that it will allow degrees of precision in all of your operations that was impossible before. That begins with maintenance. As with many areas of the mechanical world that will be transformed by the IoT, most new manufacturing equipment has not be redesigned to have built-in sensors that you can use to monitor and fine-tune operations and maintenance, but that won’t stop you from acting today to add on external sensors, especially ones that detect sound and vibration that might indicate the need for repairs long before there’s a serious problem. For example, Augury offers a twofer in this regard. Its hand-held sensor that plugs into a smartphone measures vibration and/or leaks. They can give you an early indication of possible problems, allowing you to begin doing “predictive maintenance,” an IoT hallmark. Unlike scheduled maintenance, whose intervals are often based on guesstimate about when parts or fluids should be replaced, or corrective maintenance, which is done on an emergency basis after a failure, predictive maintenance is done by detecting minute irregularities at their earliest point, so that you can have the parts in hand and do the maintenance when it fits into your schedule, for minimal costs and disruption. Equally important, you don’t have to buy the Augury device: it is available on a “Diagnostics as Service” basis, which we’ll explore in detail later, because it may revolutionize both your product design and how you market it: no longer selling something and then rely on hit-or-miss servicing once the product’s in the field, but leasing it to the customer with guaranteed maintenance as part of the deal, so they are paying only when the product works. This kind of service is great not only for tactical, but also strategic reasons as you test the waters with the IoT: implemented quickly, pay rapid bottom-line benefits and therefore may lure skeptical senior management who might then be willing to then try bolder measures.
- Another key incremental step that sensors make possible is precision manufacturing. Instead of a human having to “ride the dials” and make hit-or-miss adjustments to one piece of apparatus based on changes in the operation of another, it is now possible to share this data directly from one machine to another, so that the adjustments are minute and precise. This is how Siemens’ “Factory of the Future” at Amberg gets such an amazing quality rate, 99.9988 percent, which is even more incredible when you realize this is not mass production with long, uniform production runs: the plant manufactures more than 1,000 varieties of their Simatic controllers (which, incidentally, when in the field, will allow customers to achieve their own amazing quality rates), with a total volume of 12 million Simatic products each year, or about one per second. Here are some of the other benefits of what they call an emphasis on optimizing the entire value chain: ▪ shorter delivery time: 24 hours from order. ▪ time to market reduced by up to 50%. ▪ cost savings of up to 25%
- When you extend the precision mindset to the supply chain and distribution network the economic and qualitative benefits mount, again largely through M2M automatic integration. For example, I suspect that Asian suppliers may lose much of their advantage, perhaps leading to “reshoring” of jobs, if an automated order to a supplier two miles away goes out when inventories of a critical part drop to pre-determined levels, and that supplier can have the part to you within an hour rather than wait weeks depending on ocean conditions, etc. Interestingly, a major recent development may lead to simultaneous IoT security improvements and addressing a key IoT vulerability: poor privacy and security protections. The development is thinking of additional applications for blockchain, the technology underlying the bitcoin cryptocurrency, bitcoin. Supply chain improvements are on of those applications, and they underscore the benefits of the incremental approach to the IoT, because they can bring other benefits to a manufacturer while simultaneously building the IoT infrastructure. According LoadDelivered, there are many benefits from building your supply chain around blockchain, and they improve security at the same time: ▪ “Recording the quantity and transfer of assets – like pallets, trailers, containers, etc. – as they move between supply chain nodes ▪ Tracking purchase orders, change orders, receipts, shipment notifications, or other trade-related documents ▪ Assigning or verifying certifications or certain properties of physical products; for example determining if a food product is organic or fair trade ▪ Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc. ▪ Sharing information about manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors.” That kind of information, derived from real-time IoT sensor data, should be irresistible to companies compared to the relative inefficiency of today’s supply chain. The article goes on to list a variety of benefits: ▪ “Enhanced Transparency. Documenting a product’s journey across the supply chain reveals its true origin and touchpoints, which increases trust and helps eliminate the bias found in today’s opaque supply chains. Manufacturers can also reduce recalls by sharing logs with OEMs and regulators ▪ Greater Scalability. Virtually any number of participants, accessing from any number of touchpoints, is possible (Forbes). ▪ Better Security. A shared, indelible ledger with codified rules could potentially eliminate the audits required by internal systems and processes (Spend Matters). ▪ Increased Innovation. Opportunities abound to create new, specialized uses for the technology as a result of the decentralized architecture.
- And I’ll mention another somewhat far-fetched benefit of an IoT-based supply chain that I hope will underscore that fully capitalizing on the IoT requires that you fundamentally rethink everything, even your marketing. The supply chain example is FedEx’s SenseAware package delivery for products such as vaccines or even organs for transplants, where knowing and documenting not only the chain- of-custody, but also factors such as the internal temperature of the container and whether the contents were exposed to light. Because FedEx can share this real-time data with the customer, customer confidence increases and the shipper can charge for this data and the peace-of-mind it produces. Or a friend who is a grocery chain executive told me that some food companies now use access to blockchain data to charge a premium for product because they can actually pinpoint which cow the milk came from: no longer milk from Stop ’n Shop, but milk from Bessie.
- Similarly, the same kind of M2M ordering based on real-time data can be added at the other end, for your distribution network, with similar increases in precision as a result. For example, SAP has a prototype vending machine, using Near Field Communication that can greet you by name (if you’ve opted in to the system), offer you special prices on your “usual,” or otherwise facilitate just-in-time marketing innovations. But that’s not all. Say it’s a really hot day, and a delivery van from the beverage company is heading to your office to restock the machine. Suddenly the driver’s iPad display shows a new route, to a seaside machine where demand has soared because of the heat. No humans intervened.
- And, as precise monitoring of supplies conditions can be critical, as we saw earlier, so too for the distribution chain. Mendix has a great example of this with its client AntTail, a pharmaceutical supply chain company. AntTail’s particular innovation is using sensors to precisely monitor medications’ temperature. Their app monitors each shipment to ensure proper temperature and to remind patients to take their medication on time. All the data goes to a central router hub, using Vodafone’s Managed IoT Connectivity Platform to connect to Amazon Web Services, plus a Java service that puts the data into Hadoop, where it’s stored. Then AntTail uses Mendix to add context to the stored data by assigning roles to each sensor. The app takes into account where in the process each sensor is used, to determine the role and assign a trigger. For example, some sensors are assigned the role of “Last Mile” because they travel from the pharmacy to the patient. These sensors monitor not only the temperature the medication is being stored in, but also the adherence, making sure the patient takes the medication. The sensor is triggered when the patient opens the package and deactivates itself. Other sensors are placed in warehouses and must be up and running 24/7; if no data is being collected and the sensor is offline for more than 30 minutes, an alarm profile is set up to notify the caretaker. Basic shipments also carry sensors that start at point A and deactivate when they get to point B in order to trigger a notification that the shipment has made it to its destination. With Mendix, the app can visualize all the sensors and evaluate the data for any triggers. AntTail uses Mendix’s REST services module to access JSON-based REST APIs. The module serves three goals: consuming services, publishing services and synchronizing data between apps by combining consume and publish. By using the native REST service, AntTail’s customers can access the data quickly — 10,000 records in less than a second — to make important business decisions in real-time. The results in all aspects of distribution and consumption are impressive: a 99% success rate in tracking and alarming, keeping the medicine at proper temperatures and patients taking the medicine at the prescribed intervals due to reminders from the app. The company plans to next make the app mobile so they can provide predictive notifications 24/7. A warehouse manager would get an alarm no matter where she is if a sensor stops operating, then act immediately. The mobile solution would let patients, pharmacists and logistics customers access and interpret sensor data anywhere, any time. I’ll bet that will lead to new uses they can’t even visualize now.
- Now, as your incremental IoT strategy takes hold and begins to increase profits, cut costs and improve operating efficiency, you’re ready to make bolder moves. Consider product design. In the past, this was always something of a crapshoot: you never really knew how the products actually performed in the field, and what features worked or didn’t. Now, as you begin to build sensors into the products, you can get authoritative information from the product that can allow you to upgrade more methodically. In this case, we see an emerging tool, the “digital twin,” where a wireframe duplicate of the device exists in the design lab, and the designers can see how the actual product, miles away, is operating right now, so they no longer have to speculate about whether it works or not. According to GE’s William Ruh, that’s allowing them to drastically cut the amount of time required to do upgrades to products: ““… G.E. is adopting practices like releasing stripped-down products quickly, monitoring usage and rapidly changing designs depending on how things are used by customers. These approaches follow the ‘lean start-up’ style at many software-intensive Internet companies. “’We’re getting these offerings done in three, six, nine months,’ he said. ‘It used to take three years.’” It can even lead to giving customers a direct role in configuring the product. In the past, John Deere used to build three different tractor engines. Now, it builds one engine, but allows the farmer to choose which of three performance configurations he wants.
- As you make these more radical changes, the IoT can even transform marketing. Increasingly, we won’t sell products but will lease them, with the price determined — as with the Rolls Royce turbines — by how reliable the products are: if they’re siting on the ground not being used, the customer won’t pay, a great stimulus for predictive maintenance. It’s a win-win: even the environment can win because there’s an incentive to upgrade the product instead of sell an entirely new one.
- Similarly, Hortilux decided to differentiate itself in an increasingly competitive grow light market through customer serviceably helping customers optimize availability and lifetime of grow light systems, and cut energy cost. Using Mendix tools, they created Hortisense, a digital platform that monitors and safeguards various grow light processes in the greenhouse using sensors and PLCs. Software applications interpret the data and present valuable information to the grower anytime, anywhere, and on any device. With Mendix, Hortilux created an application to collect sensor data on light, temperature, soil, weather and more. Now users can optimize plants’ photosynthesis, energy consumption, and greenhouse maintenance. The app even allows predictive maintenance, predicting bulbs’ life expectancy and notifying maintenance to replace them in time to avoid distruptions.
- That’s where I’d like to bring in Mendix. You’ll remember that I earlier mentioned that the truly transformational aspect of the IoT was that, for the first time ever, it allowed all who needed real-time information to — emphasis on the verb — share it in real time. Consider The Solomon Group, a company that stages a variety of large public events such as Lollapalooza and Essence. Fire marshalls limit attendance at these events for safety reasons. However, the company was sure that the number of attendees leaving during the day should allow them to admit more people later. But how to prove the turnover? Solomon was already using Mendix to create its ERP software but realized it could do more with the platform. Employing the concept of empowering your workforce by shared access to real-time data, Solomon gave employees access to Medix, and they were able to use its visual models to build apps with the same attendance data quickly and without coding. Specifically, the company created special turntables that could result the in- and out-flows wirelessly, and they used the Mendix app to visualize that data to prove to the fire marshals that more people should be allowed in —a ten minute process rather than 10 hours if coders had to do the work. Now the company is partnering with its event clients to use Mendix to develop ‘custom instances’ on the Mendix platform — they’ve got ones in the works with RFID wristbands and gamification that will improve and personalize the attendees’ experiences, and can visualize how these will work before deployment.
- The Solomon Group examples demonstrate the point I made at the beginning. Once all of the enabling technologies for the IoT are mature and their synergies are explored, we will be able to move on to more fundamental change, away from the linear and hierarchical processes necessary in the past because of limited information, to new continuous circles drawing on shared access to real-time data. Tools such as Mendix will empower every employee, especially those with deep expertise in specific issues, not just elite programmers, to collaborate and create apps, products and services to capitalize on that data. That will be the true IoT revolution! Thank you.