3 Steps to Make Your City a World Leader in the IoT

Posted on 7th January 2016 in China, circular economy, cities, collaboration, data, energy, environmental, government, health, Internet of Things, m-health, maintenance, open data, paradigm shift, smart cities, strategy, transportation

I don’t know about you, but, in the face of grim news globally, I’m determined to make this an incredible year of change and growth.

Happy New Year!

I took a longer than normal time off, to pick up our youngest in Hong Kong after a semester abroad in Thailand, then vacation in Bali.

Hong Kong Internet of Things Association

I started the trip with a speech to the Hong Kong Internet of Things Association, in which I laid out my vision of radical change in corporate management and organization made possible by the IoT, away from the increasingly-obsolete hierarchical and linear forms that made perfect sense in an early 20th-century setting when data was hard to gather and share, but doesn’t when the IoT can allow instant sharing of real-time data by all who need it.

But the most interesting issue came up in the following q & a, when someone asked whether Hong Kong could become a global leader in the IoT.

I told them yes, and followed up with an op-ed in today’s South China Morning Post laying out the steps.

I believe the same steps can help your city become an IoT leader, and that this is a case of the-more-the-merrier: the more cities become IoT leaders the quicker widespread innovation and IoT adoption will become, and the more liveable and efficient our cities — the necessary focus of global growth in this century, especially to meet the challenge of global warming — will become.  So here goes!

  1. Create an IoT community.The one in Boston that I founded is now three years old, and numbers almost 2,000 members. My reason for doing it was that I’d run into many people working in the IoT here (Boston is listed as having the 4th largest concentration of IoT headquarters) but they were largely working in isolation, without a forum to bring them together.

    Forming an IoT network is a crucial step, because the IoT is inherently collaborative: as I’ve written many times before, “network effects” make each individual IoT device or service more valuable if they can be combined with others (for example, Apple’s HomeKit now allows someone to simply say “Siri, it’s time for bed,” and that voice command can trigger collaborative action by a variety of devices from different manufacturers, such as turning down the thermostat, locking the front door, and turning off the lights, which makes each of these IoT devices more valuable than they would be in isolation). Equally important, face-to-face contact may spark ideas that even the most talented IoT practitioner wouldn’t have thought of, huddled alone in his or her garret (or kewl cow0rking space…).

    An association that brings together all of your IoT practitioners will create synergistic benefits for all of them.

  2. Embrace the “smart city” vision. 

    This has the biggest potential payoff for your city, whether or not it becomes a big IoT commercial hub.Traditionally, cities have been laggards in technology adoption, but that’s no longer the case, starting in 2008, when I had the extreme privilege of being a consultant to DC CTO Vivek Kundra (who later became the first US CIO, specifically because of his achievements in DC) when he launched the DC Open Data initiative and the Apps [remember, this was 2008: what the heck are these “apps”???] for America contest to design apps to capitalize on this real-time data.  Hundreds of cities worldwide have embraced the concept, and because it stresses that the solutions be open source, cities that are late to the game can quickly benefit by adopting and adapting creative solutions that others have pioneered.

    When the IoT came along, many of these cities and their entrepreneurial residents were quick to realize their real-time data could lead to IoT apps and services that would deal with many of the prime concerns of cities: traffic control, mass transit, electricity, public health, environmental quality, and water and sewage (Credit where credit is due: IBM’s pioneering Smarter Planet service started working with many of the early adopters even before the smart city movement had a name).

    Cities that have launched comprehensive smart city programs, especially Barcelona’s, which includes projects ranging from free wi-fi to health monitoring for seniors to an app to find parking spaces, have realized tangible benefits while cutting operating costs and that will be the case for newcomers as well.

    Sometimes these initiatives tap the collaborative nature of the IoT to produce a public benefit that would be hideously expensive if they were carried out by municipal workers. For example, in Boston the “Street Bump” smartphone app uses the phone’s sensors to detect if the user’s car hits a pothole, then instantly reports the exact location to the city’s Department of Public Works (DPW). In essence, every driver becomes a de facto DPW employee!

  3. Finally,  join in the worldwide “Things Network” movement.As I’ve written before, this will create citywide, free networks for IoT data exchange, in essence turning an entire city into an IoT laboratory for experimentation and mutual benefit.

    This campaign, which was crowdsourced by only 10 technology enthusiasts in Amsterdam last August, successfully created a citywide data network there in less than a month, using 10 $1200 (USD) “LoRaWan gateways.”  LoRanWan is particularly suited to the IoT because it demands little power, has long range (up to 11 km) and low bandwidth. It wouldn’t require passwords, mobile subscription and zero setup costs.

    There are already 27 cities pursuing Things Networks, and the parent organization is making the concept even easier to deploy through a successful Kickstarter campaign last Fall to raise money to build a new LoRaWan gateway that would only cost $200.

    Unlike the full involvement of city government in initiatives such as opening city data bases, a Things Network is best done by volunteers, so that it will not be co-opted by official government agencies or powerful commercial interests: it is most powerful if it’s open to absolutely anyone who wants to try out a smart Internet of Things idea, while also potentially saving the city the cost of administering an expensive program that could instead be run by volunteers at little cost.

So there you have it: 3 practical steps to make your city a world leader in the Internet of Things that will improve urban life and make the city more efficient even if you don’t make the top 10.  Let’s get cracking!

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Why Global Warming Must Be IoT Focus for Everyone

Posted on 2nd December 2015 in agriculture, automotive, circular economy, cities, data, design, energy, environmental, government, health, home automation, Internet of Things, M2M, management, manufacturing, paradigm shift, sensors, smart cities, smart home, strategy, transportation, US government

Thanksgiving 2015I want to offer you six great reasons — five of them are seated with my wife and me in this photo — why we all should make global warming a primary focus of IoT projects for the foreseeable future.

There simply is no way to sugar-coat the grim news coming out of the Paris climate talks: even with the most dramatic limits that might be negotiated there, scientists warn we will fall short of the limits in temperature rises needed to avoid global devastation for my grandchildren — and yours.

Fortunately, the Internet of Things can and must be the centerpiece of the drastic changes that we will have to make collectively and individually to cope with this challenge:

“Perhaps one of the most ambitious projects that employ big data to study the environment is Microsoft’s Madingley, which is being developed with the intention of creating a simulation of all life on Earth. The project already provides a working simulation of the global carbon cycle, and it is hoped that, eventually, everything from deforestation to animal migration, pollution, and overfishing will be modeled in a real-time “virtual biosphere.” Just a few years ago, the idea of a simulation of the entire planet’s ecosphere would have seemed like ridiculous, pie-in-the-sky thinking. But today it’s something into which one of the world’s biggest companies is pouring serious money.”

Let me leave you with a laundry list of potential IoT uses to reduce global warming compiled by Cisco’s Dr. Rick Huijbregts:

  • Urban mobility “apps” predict how we can move from A to B in a city in the most environmental friendly manner. Real time data is collected from all modes of city transportation.
  • Using solar energy to power IT networks that in turn power heating, cooling and lighting. Consequently, reduce AC/DC conversions and avoid 70% electricity loss.
  • IP­based, and POE (Power of Ethernet) LED lighting in buildings reduced energy by 50% because of LED and another 50% because of control and automation.
  • Sensors (Internet of Things) record environmental highs and lows, as well as energy consumption. Data analytics allow us to respond in real­time and curtail consumption.
  • Real time insight in energy behaviour and consumption can turn into actionable reduction. 10% of energy reduction can be achieved by behavioural change triggered by simple awareness and education.
  • Working from home while being connected as if one were in the office (TelePresence, Cisco Spark, WebEx, just to name a few networked collaboration tools) takes cars off the road.
  • Grid modernization by adding communication networks to the electrical grid to allow for capacity and demand management.
  • Planning, optimizing, and redirecting transportation logistics based on algorithms, real­time weather and traffic data, and streamlined and JIT shipment and delivery schedules.

These are all great challenges and offer the potential for highly profitable IoT solutions.  For the sake of my six grandchildren, let’s get going!

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Data Is the Hub: How the IoT and Circular Economy Build Profits

Posted on 2nd November 2015 in circular economy, data, environmental, Essential Truths, Internet of Things, M2M, maintenance, management, manufacturing, open data, paradigm shift, strategy, supply chain

Fasten your seatbelts! I think I’ve finally zeroed in on the Internet of Things’ (IoT’s) most important potential economic benefit and how it could simultaneously help us escape the growing global environmental crisis:

make real-time IoT data* the hub of a circular economy and management mentality. It’s both good for the bottom line and the planet.

I started writing about circular business models back in the 90’s, when I consulted on profitable environmental strategies, i.e., those that were good both for the corporate bottom line and the planet.  It galled me that executives who railed about eliminating inefficiency thought reducing waste was for tree-huggers. Semantics and lifestyle prejudices got in the way of good strategy.

Ford’s River Rouge Plant (1952 view)

I could see that it was vital that we get away from old, linear models that began with extracting resources and ended with abandoned products in landfills. Ford’s massive 1 x 1.6 mile River Rouge Plant, the world’s largest integrated factory, was the paradigm of this thinking: ore was deposited at one end, made into steel, and cars came out the other (Hank’s penchant for vertical integration even led him to buy rubber plantations! If you have any illusions about the ultimate impossibility of top-down control, watch the PBS documentary on Ford — he simply couldn’t share power, even with his own son — and it almost ruined the company). The linear model worked for a long time, and, truth to tell, it was probably the only one that was feasible in the era of paper-and-pencil information flow:  it was so hard to gather and transmit information that senior management controlled who got what information, and basically threw it over the transom to the next office.

As for any kind of real-time information about what was actually happening on the factory floor: fugetaboutit: all that was possible was for low-level functionaries to shuffle along the assembly line, taking scheduled readings from a few gauges and writing them on a clipboard. Who knew if anyone ever actually read the forms, let alone made adjustments to equipment based on the readings?

Fast forward to 2015, and everything’s changed!

The image of the circular corporation popped back into my head last week while I was searching for an image of how the IoT really can change every aspect of corporate operations, from product design to supply chain management.  I was happily surprised that when I Googled “circular economy” I found a large number of pieces, including ones from consulting gurus Accenture and McKinsey (the most comprehensive report on the concept is probably this one from the Ellen MacArthur Foundation), about the bottom-line and environmental benefits of switching from a linear (‘take-make-dispose’) pattern.

But how to make the circular economy really function? That’s where the IoT comes in, and, in my estimation, is THE crucial element.

Visualize everything a company does as a circle, with IoT-gathered real-time data as its hub. That’s crucial, because everything in a profitable circular company revolves around this data, shared in real time by all who need it.

When that happens, a number of crucial changes that were impossible in the era of linear operations and thinking and limited data became possible for the first time:

  • you can optimize assembly line efficiency because all components of the factory are monitored by sensors in real time, and one process can activate and regulate another, and/or managers and assembly-line workers can fine-tune processes (think of the 10,000 sensors on the GE Durathon battery assembly line).
  • you can integrate the assembly line with the supply chain and distribution and sales network as never before (provided that you share the real-time data with them), so materials are delivered on a just-in-time basis) and production is dictated by real-time data on sales (the SAP smart vending machine, integrated with logistics, is a great example).
  • you can optimize product redesign and upgrades and speed the process, because sensor data from the products as they are actually used in the field is immediately fed back to the designers, so they have objective evidence of what does, and doesn’t work properly (think of how GE has improved its product upgrade process). No more ignorance of how your products are actually used!
  • from an environmental standpoint, having sensors on key components can make it possible for you to recover and profitably remanufacture them (closing the loop) rather than having them landfilled (I was excited to learn that Caterpillar has been doing this for 40 years (!) through its Reman Program, which “reduces costs, waste, greenhouse gas emissions and need for raw inputs.”).
  • you can create new revenue streams, by substituting services for actual sales of products.  I’ve written before about how GE and RollsRoyce do this with jet engines, helping clients be more efficient by providing them with real-time data from jet turbines in return for new fees, and Deere does it with data feeds from its tractors. Now I learn that Phillips does this, with industrial lighting, retaining ownership of the lighting: the customers only pay for the actual use of the lights. Phillips also closes the loop by taking the lights back at the end of their life and/or upgrading them.

As I’ve written before, creating the real-time data is perhaps the easier part: what’s harder is the paradigm shift the circular economy requires, of managers learning to share real-time data with everyone inside the enterprise (and, preferably, with the supply chain, distribution network, retailers, and, yes, even customers). When that happens, we will have unprecedented corporate efficiency, new revenue streams, satisfied customers, and, equally important reduce our use of finite resources, cut pollution, and tread lightly on the earth.  There you have it: the secret to 21st-century profitability is:

real-time IoT data, at the hub of the circular enterprise.

*Oh yeah, please don’t drop a dime on me with the grammar police about the title: in fact, I’m a retired colonel in the Massachusetts Grammar Police, but I’ve given up the fight on “data.” From my Latin training, I know that data are the plural form of datum, but datum is used so infrequently now and data with a singular verb has become so common that I’ve given up the fight and use it as a singular noun.  You can see the issue debated ad nauseum here …

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I’ll Speak Twice at Internet of Things Global Summit Next Week

Posted on 19th October 2015 in aging, automotive, cities, collaboration, EU, government, health, home automation, Internet of Things, m-health, M2M, management, manufacturing, marketing, mobile, open data, paradigm shift, privacy, Quantified Self, retail, security, seniors, sensors, services, smart cities, smart home, SmartAging, strategy, supply chain, transportation, US government, wearables

I always love the Internet of Things Global Summit in DC because it’s the only IoT conference I know of that places equal emphasis on both IoT technology and public policy, especially on issues such as security and privacy.

At this year’s conference, on the  26th and 27th, I’ll speak twice, on “Smart Aging” and on the IoT in retailing.

2015_IoT_SummitIn the past, the event was used to launch major IoT regulatory initiatives by the FTC, the only branch of the federal government that seems to really take the IoT seriously, and understand the need to protect personal privacy and security. My other fav component of last year’s summit was Camgian’s introduction of its Egburt, which combines “fog computing,” to analyze IoT data at “the edge,” and low power consumption. Camgian’s Gary Butler will be on the retail panel with me and with Rob van Kranenburg, one of the IoT’s real thought leaders.

This year’s program again combines a heady mix of IoT innovations and regulatory concerns. Some of the topics are:

  • The Internet of Things in Financial Services and the Insurance sector (panel includes my buddy Chris Rezendes of INEX).
  • Monetizing the Internet of Things and a look at what the new business models will be
  • The Connected Car
  • Connected living – at home and in the city
  • IoT as an enabler for industrial growth and competition
  • Privacy in a Connected World – a continuing balancing act

The speakers are a great cross-section of technology and policy leaders.

There’s still time to register.  Hope to see you there!

 

 

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Claro’s IoT Strategy Creation Guide: important in own right & symbolically

Posted on 1st October 2015 in collaboration, communication, data, design, Essential Truths, Internet of Things, M2M, management, marketing, open data, paradigm shift, strategy
IoT_strategy_cards

Claro IoT Service Diagram Cards — collect the whole set!

Some IoT advances are as important symbolically (especially as key steps in the IoT’s maturation) as in their own right.

I consider Claro Partners‘s new “A Guide to Succeeding in the Internet of Things” in that vein, both showing that it’s not just enough to create a whizbang IoT device or app — you need a methodical strategy to maximize the benefits– and providing a very practical tool to create such a strategy. Written as the IoT reaches the top of the Gartner Hype Cycle, it aims at helping readers identify and meet real user needs and create viable business models. Based on several conversations at last night’s Boston IoT Meetup, it couldn’t be more timely, as (for example) smart home device sales slump, as reflected in Quirky’s bankruptcy.

Claro, in case you haven’t heard about them before, is headquartered in my favorite “smart city,” Barcelona, and is known for its Clayton Christensen-style emphasis on the opportunities presented by disruptive change (hmm: wonder if they have wei ji ideograms on the wall, LOL?), particularly with the IoT.

The Guide is a quick read, but can inspire you for a long time to come.

It’s divided into four portions, which I’m guessing codify the process that Claro uses internally to brainstorm strategies for its own clients:

  1. Define the challenge. “Identify a user-centric challenge to solve.”
  2. Ideate* the solution. “Create a solution that provides new value to the user.”
  3. Develop the offer. “Map out the ecosystem and interactions of your product and service.”
  4. Plan for production. “Identify resources needed and conduct gap analysis.”

They suggest you follow these steps sequentially, even if you already have a solution in mind, because “the exercises will help you to refine, develop or rethink it.”

Now for the details, which include very specific steps and some very helpful graphic aids.

First, Define the challenge. They stress you need to avoid being seduced by the lure of doing something just because it’s technologically possible. Make sure it meets a real
human need. The initial categories they suggest include:

    • Human Needs FrameworkAgeing population (sweeeeet! My “smart aging” paradigm shift!)
    • Work-life balance
    • Urban life
    • Health and wellbeing
    • Local Communities
    • Education
    • Sustainability/Shopping
    • Tourism, Family.

Then Claro suggests that your team go through a 30-minute process where it uses the four questions in this “human needs framework,” such as “what do people want to control?” and decide which challenge you’re going to design for (assume you could think big and try for one that meets multiple questions).

Second, Ideate the solution.  Similar to my “What can you do now that you couldn’t do before” question, this one asks you to not just use the IoT to refine a current approach to the issue you identified, but to “reimagine entirely new capabilities and value that an IoT service can deliver.”

This 40-min. process includes defining the person facing the challenge and aspects of their life, then brainstorming solutions to meet their real needs and how the IoT could be used to enable that solution.

Third, Develop the offer. They share my concern about proprietary IoT solutions, (which they label “intranet of things, LOL), and instead remind your team to, IFTTT-like,

IoT Service Diagram

IoT Service Diagram

“take advantage of the ecosystem enabled by the IoT to create interconnected services, experiences and business models.” In this process, which they estimate takes 40 minutes, you print out the IoT Service Diagram Cards (see above — I imagine “flipping” them and trading with the other kids on the playground, until our Moms throw out our collections…) and use them to map out how your idea will work, including drawing the data flow (don’t forget my dictum that data flow must be cyclical with the IoT!).  The important questions to ask — make sure to ask all of them! — include:

  • Will the device just provide information to the user or will it act on that information?
  • What are the specific inputs/outputs of the service? (eg. sight, sounds, touch, taste, smell, temperature)
  • Could the device learn through its use over time and adapt its behaviour accordingly?
  • Could the service use existing devices, data streams or interfaces?

Finally, in the fourth step, (30 minutes? Dream on!) the rubber hits the road, and you

IoT Canvas

IoT Canvas

Plan for Production!  Claro warns, “Don’t underestimate the complexity of bringing to life an offer that spans both the physical and digital, Do map out all the elements you’ll need to successfully develop and deliver your IoT offer.”

On the IoT Canvas, you bring together all the crucial considerations, such as manufacturing and logistics, revenues and costs, that must be nailed down to make the product affordable and profitable.  Specifically, Claro says you need to specifically state the offer’s value proposition to the end user, use the questions in each box on the form as prompts, fill out the rest of the canvas with details of the product and service idea, and write down “which resources, capabilities and processes you have, and which you’d need to acquire (gap analysis).”

I agree with Claro that these four steps, especially the last one, are iterative, and you need to revisit each of them throughout the entire conceptual and production process.

I have no doubt that, as IoT technology (especially miniscule, low-energy sensors) and experience continues to evolve, this process will be refined, but Claro has done the entire IoT industry, especially makers and entrepreneurs, a real service by codifying this approach and being willing to share it — after all, the IoT’s all about collaboration! 

*we’ll let them off with a warning from the Grammar Police this time. However, please, no more management babble in the future, OK?

 

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Deloitte provides process for nuanced IoT strategy decisions

Posted on 30th August 2015 in Essential Truths, Internet of Things, M2M, maintenance, management, marketing, paradigm shift, privacy, retail, security, strategy

So much of the Internet of Things is still in the gee-whiz stage that we haven’t seen much in terms of nuanced IoT strategies. By that I mean ones that carefully weigh tradeoffs between companies and consumers to try to find strategies that are mutually beneficial and recognize there are new factors at play in IoT strategies, such as privacy and data mining, that may have positive or negative consequences for the customer/company interplay.

Deloitte’s “University” has made an important step in that direction with its “Power Struggle: Customers, companies and the Internet of Things” paper, co-authored by Brenna Sniderman and Michael E. Raynor.

In it, they explore how to create sustainable strategies that will be mutually beneficial to the customer and company — which are not always immediately apparent, especially when you explore the subtleties of how these strategies might play out in the new reality of the Internet of Things.

The study’s goal was to understand the factors that can distort IoT’s benefits, and instead create win-win IoT strategies.

Sniderman and Raynor suggest there are four quadrants into which a given strategy might fall:

  1. (the sweet spot!) “All’s well: Sufficient value is created, and that value is shared between customers and companies sufficiently equitably such that both parties are better off and feel fairly treated.
  2. “Hobson’s choice: A Hobson’s choice exists when you’re free to decide but only one option exists; thus, it is really no choice at all…. Even when customers come out ahead compared with their former options, their implied powerlessness can lead to feelings of unfairness.
  3. “Gridlock: In their quest for value capture, both sides are pulled in opposite directions, with neither able to move toward an optimal outcome. Here, both parties recognize IoT enablement as something that should lead to success, but neither party is able to reach it, since their competing interests or different value drivers are working at cross purposes.
  4. “Customer is king: Although particular IoT deployments might make economic sense for companies, customers end up capturing a disproportionate share of the new value created, pulling this outcome more in the customers’ favor; Craigslist is an obvious example.”

According to the authors, a key to finding the win-win, “all’s well” solution is the Information Value Loop (which I first discussed last Spring) that creates value out of the vast increase in information made possible by the IoT.

As I mentioned then, “This fits nicely with one of my IoT ‘Essential Truths,’ that we need to turn linear information flows into cyclical ones to fully capitalize on the IoT.” When you do that, it’s possible to design continuous improvement processes that feed back data from actual users to fine tune products and processes.  GE has found it leads to much shorter iterative loops to design improved versions of its products.

Here’s the gussied-up version of the cool hand-drawn visualization from the Deloitte brainstorming session that led to the Information Value Loop (print it & place it on your wall next to the one on privacy and security that I wrote about a while ago):

Deloitte Information Value Loop

The information no longer flows in linear fashion: it’s created from using sensors to record how things act in the real world, then goes through the various stages of the loop, each of which is made possible by one of the new technologies enabling the IoT.  The goal is either enhanced M2M integration among things, or improved actions by humans, and, to be sustainable over time:

“A value loop is sustainable when both parties capture sufficient value, in ways that respect important non-financial sensibilities. For example, retailer-specific and independent shopping apps can use past browsing and purchasing history—along with other behaviors—to suggest targeted products to particular customers, rather than showing everyone the same generic products, as on a store shelf. Customers get what they want, and companies sell more.

…  “The amount of value created by information passing through the loop is a function of the value drivers identified in the middle. Falling into three generic categories—magnitude, risk, and time—the specific drivers listed are not exhaustive but only illustrative. Different applications will benefit from an emphasis on different drivers.”

OK, so how does this theory play out?

Sniderman and Raynor picked a range of IoT-informed strategies to illustrate the concept, some of which may include unintended consequences that would harm/turn off customers or companies. For example, “An ill-considered push for competitive advantage could well overreach and drive away skittish customers. Alternatively, building too dominant an advantage may leave customers feeling exploited or coerced, a position unlikely to prove viable in the long term.”

Understanding the underlying structure of each type of loop is critical, because they naturally pull an IoT strategy in a particular, divergent way.

The example they pick to illustrate the “all’s well” quadrant of results is the dramatic increase in built-in diagnostic technology in cars.  This is of great personal interest: genetic testing has revealed that I am one of the approximately 10% of men who are missing the male car gene: I can’t stand the things, and view them as a big block of metal and plastic just waiting to develop problems (or, ahem, get hit by deer …), so I need all the help I can get. Sniderman and Raynor zero in on maintenance as one area for win-win benefits for drivers and dealers through the IoT:

“Customers often have little understanding of which repairs are necessary, feel inconvenienced by having to go without their car during maintenance periods, and are frustrated by potential overcharges. In response, automakers are embedding sensors that can run a wide range of reliable diagnostics, allowing a car to “self-identify” service issues, rather than relying on customers (“Where’s that squeaking coming from?”) or mechanics (“You might want to replace those brake pads, since I’ve already got the wheels off”). This creates a level of objectivity of obvious customer value and enables automakers to differentiate their products. Interactive features that work with customers’ information can further add value by, for example, potentially syncing with an owner’s calendar to schedule a dealership appointment at a convenient time and reserving a loaner vehicle for the customer, pre-programmed with his preferences to minimize the frustration of driving an unfamiliar car.

In this scenario, both parties collaborate to provide and act on data, in a mutual exchange of value. The customer captures value in multiple ways: He enjoys increased convenience and decreased frustration, improved vehicle performance and longer operating life, reduced maintenance charges, and—since almost everything about this interaction is automated—fewer occasions for perceived exploitation at the hands of unscrupulous service providers.

Value capture extends to companies in the form of ongoing customer interaction. Linking maintenance programming to the dealership encourages customers to return for tune-ups rather than go elsewhere, ideally leading to continued purchases in the long term. OEMs can also access data regarding vehicle maintenance issues and may be able to identify systematic malfunctions worthy of greater attention. Dealers also have an opportunity to make inroads into an untapped market: Currently, just 30 percent of drivers use the dealer for routine maintenance…”

Kumbaya! But then there’s the opposite extreme, according to Sniderman and Raynor, represented by smart home devices, which would lead to the lose-lose, gridlock scenario.  I think they seriously underestimate the understanding already by manufacturers in the field that they need to embrace open standards in order to avoid a range of competing standards (Zigbee, Bluetooth, etc.) that will force consumers to invest in a variety of proprietary, incompatible hubs, and therefore discourage them from buying anything at all.  All you have to do is look at new hubs, such as Amazon’s Echo, which can control devices from WeMo, Hue, Quirky, Wink — you name ’em, to realize that sharing data is already the norm with smart home devices.

Because this missive is getting long, I’ll leave it to you, dear reader, to investigate Sniderman & Raynor’s examples of the “customer is king” scenario, in which the customer grabs too much of the benefit (have to admit, a lot of the location-based IoT retail incentives still give me the creeps: I hate shopping under the best of circumstances, and having something pop up on my phone offering me an incentive based on my past purchases makes a bad experience even worse. How about you?); and the “Hobson’s choice” one, in which usage-based car insurance runs amok and insurers begin to charge unsafe drivers a surcharge — as documented by the devices such as Progressive’s “Snapshot” (I was dismayed to read in the article that Progressive is in fact doing that in Missouri, although I guess it’s a logical consequence of having objective evidence that someone consistently drives unsafely).

I can’t help thinking that the 800-pound gorilla in the room in many of these situations are the Scylla and Charybdis of the IoT, threats to privacy and security, and that makes it even more important that your IoT strategies are well thought out.

They conclude that, from my perspective, data isn’t just enough, you also need the decidedly non-technical tools of judgment and wisdom (aided by tools such as their Information Value Loop) to come up with a sustainable, mutually advantageous IoT strategy:

“Identifying where the bottlenecks lie (using the Information Value Loop), how each party is motivated to respond, and seeking to shape both incentives and the value loop itself puts companies more in control of their destinies.

“Second, taking a hard look at who benefits most from each IoT-enabled transaction, understanding when a lopsided value-capture outcome tips too far and becomes unsustainable, and taking steps to correct it may also lead to long-term success.

“Lastly, an honest assessment of where IoT investments may not have an appreciable benefit—or may decrease one’s potential for value capture—is just as crucial to a company’s IoT strategy as knowing the right places to invest.”

I may quibble with some of their findings, such as those about smart homes, but bravo to Sniderman and Raynor for beginning what I hope is a spirited and sustained dialogue about how to create sustainable, mutually-advantageous IoT strategies!  I’ve weighed in with my Essential Truths, but what are you thinking about this critical issue, often overlooked in our concentration on IoT technologies? 

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The IoT Can Revolutionize Every Aspect of Small Farming

Posted on 6th August 2015 in agriculture, communication, data, environmental, Essential Truths, Internet of Things, management, marketing, paradigm shift, retail, sensors, strategy

When the New York Times weighs in on an Internet of Things phenomenon, you know it’s about to achieve mainstream consciousness, and that’s now the case with what I like to call “precision agriculture,” enabled by a combination of IoT sensors in the fields and big data analysis tools.

The combination is potent and vital because an adequate supply of safe food is so central to our lives, and meeting that need worldwide depends increasingly on small farms, which face a variety of obstacles that big agribusinesses don’t encounter.

Chris Rezendes, a partner in INEX Advisors, who’s been particularly active with IoT-based ag startups, pointed out to me in a private communication that the problem is world-wide, and particularly matched to the IoT’s capabilities, because food security is such a ubiquitous problem and because (surprisingly to me) the agricultural industry is dominated more by small farms, not agri-biz:

“… most people do not have an understanding of the dimensions of food security beyond calories. Feeding the world demands more than just calories. It demands higher nutritional quotient, safety, affordability and accessibility.

“And all that translates in many models into a need for a more productive, profitable and sustainable small ag industry.

“Most folks do not realize that that there are nearly 700 million farmers on the planet. In the US alone, we have 2.3 million ag operations (and, BTW, the number of millennials entering the field is nearly doubling each year) — and that is not counting processing, packaging, distribution, or anything related to fisheries. Most of those farms are pretty small … less than 500 acres on average, and when you strip out the conglomerates and the hobbyist farmers, you are left with hundreds of thousands of small businesses averaging nearly $4 million per year in revenue.”

As reported by The Times‘ Steve Lohr, Lance Donny, founder of ag technology start-up, OnFarm Systems, said the IoT’s benefits can be even greater outside the US:

“.. the most intriguing use of the technology may well be outside the United States. By 2050, the global population is projected to reach nine billion, up from 7.3 billion today. Large numbers of people entering the middle class, especially in China and India, and adopting middle-class eating habits — like consuming more meat, which requires more grain — only adds to the burden.

“To close the food gap, worldwide farm productivity will have to increase from 1.5 tons of grain per acre to 2.5 tons by 2050, according to Mr. Donny. American farm productivity is already above that level, at 2.75 tons of grain per acre.

“’But you can’t take the U.S. model and transport it to the world,’ Mr. Donny said, noting that American farming is both highly capital-intensive and large scale. The average farm size in the United States is 450 acres. In Africa, the average is about two acres.

“’The rest of the world has to get the productivity gains with data,’ he said.”

The marketplace and entrepreneurs are responding to the challenge. The Times piece also reported that IoT-enabled ag is now big business, with a recent study by AgFunder (equity crowdfunding for ag tech!) reporting start-ups have snared $2.06 billion in 228 deals so far this year (compared to $2.36 billion in all of 2014, which was itself a record).  When you add in the big funding that companies such as Deere have done in IoT over the last few years (in case you didn’t know it, this 178-year old company has revolutionized its operations with the IoT, creating new revenue streams and services in the process) and the cool stuff that’s even being produced here in Boston, and you’ve got a definite revolution in the most ancient of industries.

Rezendes zeros in on the small farmers’ need for data in order to improve every aspect of their operations, not just yields, and their desire to control their data themselves, rather than having it owned by some large, remote conglomerates. Most of all, he says, they desperately needed to improve their profitability, which is difficult with smaller farms:

“Those 2.3 million farmers will deploy IoT in their operations when they know that the data is relevant, actionable, profitable, secure and theirs.

“They are not going to deploy third-party solutions that capture farmers’ operational intelligence, claim ownership of it, and leverage the farmers’ livelihood for the solution vendors’ strategic goals.

“For example, we went into a series of explorations with one ag co-op in the East this spring, after going into the exploration thinking that we might be able to source a number of productivity enhancement solutions for vegetable growers and small protein program managers. We were wrong.

“These farmers in this one part of a New England state had been enjoying years of strong, if uneven growth in their output. That was not their challenge: their challenge was with profitability.”

Think of small farms near you, which must be incredibly nimble to market their products (after toiling in the fields!) relying heavily on a mix of CSAs, local restaurants that feature locally-sourced foods, and on farmers’ markets. Rezendes says the small farmers face a variety of obstacles because of their need (given their higher costs) to attract customers who would pay prevailing or (hopefully) premium prices, while they face perceptual problems because small farmers must be jacks-of-all-trades:

“They have only one ‘route.’ They market, sell, and deliver in the same ‘call,’ so their stops are often longer than your typical wholesale food routes. They also have only one marketing, sales and delivery team – and that is often the same team that is tilling, planting, watering, weeding, harvesting and repairing, so they often show up on accounts wearing clothes, driving vehicles, and carrying their inventory in containers that aren’t in any manual for slick brand development manual!

“To complicate things, many of their potential customers could not accept the shipment for insurance purposes, because the farmers didn’t have labels that change with exposure to extreme temperature, sunlight or moisture, or digital temperature recorders.”

Who would think that the IoT might provide a work-around for the perceptual barriers and underscore local farms’ great advantage, the quality of the product?  The farmers suggested to the INEX team once they understood the basics of IoT technology that:

“if we could source a low-cost traceability solution that they could attach to their reusable transport items, they thought they could use that data for branding within the co-op and the regional market. This would reduce the time needed to market and sell, document and file.  The farmers also told us that if the solution was done right, it might serve their regulatory, permitting and licensing requirements, even across state lines.”

Bottom line: not only can sensors in the field improve yields and cut costs for fertilizing and water use through precision, but other sensors can also work after the food is harvested, providing intelligence that lets producers prove their safety, enhance their sales productivity, and drive profit that enables re-investment.

What a great example of the IoT at work, and how, when you start to think in terms of the IoT’s “Essential Truths,” it can revolutionize every aspect of your company, whether a 50-acre farm or a global manufacturer!  

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Give It Up, People: Government Regulation of IoT Is Vital

Posted on 3rd August 2015 in automotive, design, Essential Truths, government, Internet of Things, M2M, mobile, privacy, security, strategy, transportation, US government

Could this be the incident that finally gets everyone in the IoT industry to — as I’ve said repeatedly in the past — make privacy and security Job 1 — and to drop the lobbying groups’ argument that government regulation isn’t needed? 

I hope so, because the IoT’s future is at stake, and, frankly, not enough companies get it.

I’m referring to the Chrysler recall last week of 1.4 million Jeeps for a security patch after WIRED reported on an experiment in which two white-hat hackers remotely disabled a Jeep on an Interstate from miles away, exploiting a vulnerable link between its entertainment and control systems.  Put yourself in the place of reporter Andy Greenberg, then tell me with a straight face that you wouldn’t be out of your mind if this happened to you:

“As the two hackers remotely toyed with the air-conditioning, radio, and windshield wipers, I mentally congratulated myself on my courage under pressure. That’s when they cut the transmission.

Immediately my accelerator stopped working. As I frantically pressed the pedal and watched the RPMs climb, the Jeep lost half its speed, then slowed to a crawl. This occurred just as I reached a long overpass, with no shoulder to offer an escape. The experiment had ceased to be fun.

At that point, the interstate began to slope upward, so the Jeep lost more momentum and barely crept forward. Cars lined up behind my bumper before passing me, honking. I could see an 18-wheeler approaching in my rearview mirror. I hoped its driver saw me, too, and could tell I was paralyzed on the highway.

“You’re doomed!” Valasek [one of the hackers] shouted, but I couldn’t make out his heckling over the blast of the radio, now pumping Kanye West. The semi loomed in the mirror, bearing down on my immobilized Jeep.”

OK: calm down, get a cool drink, and, when your Apple Watch says your heart beat has returned to normal, read on….

But, dear reader, our industry’s leaders, assumedly knowing the well-publicized specifics of the Chrysler attack, had the hubris to still speak at a hearing of the Internet Subcommittee of the House of Representatives Judiciary Committee last week and claim (according to CIO) that that government regulation of the IoT industry wasn’t needed.

CEA CEO Gary Shapiro said in calling for government “restraint”:

“It’s up to manufacturers and service providers to make good decisions about privacy and security, or they will fail in the marketplace….. Industry-driven solutions are best to promote innovation while protecting consumers.”

Sorry, Gary: if someone dies because their Jeep got spoofed, the survivors’ attorneys won’t be content with the company’s failure in the marketplace.

There are some important collaborative efforts to create privacy and security standards for the IoT, such as the AllSeen Alliance. However, as I’ve written before, there are also too many startups who defer building in privacy and security protections until they’ve solved their technology needs, and others, most famously TRENDnet, who don’t do anything at all, resulting in a big FTC fine.  There are simply too many examples of hackers using the Shodan site to hack into devices, not to mention academics and others who’ve showed security flaws that might even kill you if exploited.

One local IoT leader, Paddy Srinivasan of LoMein, gets it, as reported today by the Boston Globe‘s Hiawatha Bray:

“‘I think it is a seminal moment…. These new devices need a fresh approach and a new way of thinking about security, and that is the missing piece.'”

But it’s too late to just talk about self-policing.

Massachusetts’ own Ed Markey and his Connecticut counterpart, Richard Blumenthal, have called the associations’ bluff, and filed legislation, The Security and Privacy in Your Car Act (AKA SPY Car, LOL)  that would require the National Highway Traffic Safety Administration (NHTSA) and the Federal Trade Commission (FTC) to establish federal standards to secure cars and protect drivers’ privacy. It would also create a rating system — or “cyber dashboard”— telling drivers about how well the vehicle protects drivers’ security and privacy beyond those minimum standards. This comes in the wake of the Markey study I reported on last Winter documenting car companies’ failure to build in adequate cyber-hacking protections.

Guess what, folks?  This is only the beginning.  Probably the only thing I’ve ever agreed with Dick Cheney on (ok, we agree it’s cool to have been born in Wyoming and that Lynne Cheney is a great writer), is that it wouldn’t be cool for the Veep to have his pacemaker hacked, so you can bet there will be legislation and regulations soon governing privacy and security for wearables as well.

As I’ve said before, I come at this issue differently from a lot of engineers, having earned my keep for many years doing crisis management for Fortune 100 companies that bet the farm by doing dumb things that could destroy public trust in them overnight. Once lost, that trust is difficult, if not impossible, to regain.  Even worse, in this case, cavalier attitudes by even one IoT company, if the shock value of the results is great enough, could make everyone in the industry suffer.

So, if you’re arguing for no regulation of the IoT industry, I have just one suggestion: shut up,clean up your act and take a positive role in shaping regulations that would be performance-based, not prescriptive: the horse has already left the barn.

Now I have to check my Apple Watch to see when my heart rate will get back to normal.

 

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The IoT Can Improve Safety and Profitability of Inherently Dangerous Job Sites

Posted on 9th July 2015 in collaboration, communication, data, energy, Essential Truths, Internet of Things, M2M, maintenance, management, mobile, open data, paradigm shift, sensors, strategy, supply chain

You may remember I wrote several months ago about a collaboration between SAP and SK Solutions in Dubai (interesting factoid: Dubai is home to almost 25% of the world’s cranes [assume most of the rest nest at Sand Hill, LOL], and they are increasingly huge, and that makes them difficult to choreograph.

I’m returning to the subject today, with a slightly broader emphasis on how the IoT might manage a range of dangerous job sites, such as mining and off-shore oil rigs, allowing us to do now that we couldn’t do before, one of my IoT Essential Truths.

I’m driven in part by home-town preoccupation with Boston’s bid for the 2024 Olympics, and the inevitable questions that raises on the part of those still smarting from our totally-botched handling of the last big construction project in these parts, the infamous “Big Dig” tunnel and highway project.

I’m one of those incurable optimists who think that part of ensuring that the Olympics would have a positive “legacy” (another big pre-occupation in these parts) would be to transform the city and state into the leading example of large-scale Internet of Things implementation.

There are a couple of lessons from SAP and SK Solutions’ collaboration in Dubai that would be relevant here:

    • The system is real-time: the only way the Boston Olympic sites could be finished in time would be through maximizing efficiency every day. Think how hard that is with a major construction project: as with “for want of a nail the kingdom was lost,” the sensitive interdependence between every truck and subcontractor on the site — many of which might be too small to invest in automation themselves — is critical. If information about one sub being late isn’t shared, in real-time, with all the other players, the delays — and potential collisions — will only pile up. The system includes an auto-pilot that makes immediate adjustments to eliminate operator errors. By contrast, historical data that’s only analyzed after the fact won’t be helpful, because there’s no do-overs, no 2025 Olympics!
    • The data is shared: that’s another key IoT Essential Truth.  “Decision-makers using SK Solutions on a daily basis span the entire organization. Besides health and safety officers, people responsible for logistics, human resources, operations and maintenance are among the typical users.”  The more former information silos share the data, the more likely they are to find synergistic solutions.
    • The system is inclusive, both in terms of data collection and benefits: SK Solutions’ Founder and Inventor Séverin Kezeu, came up with his collision-avoidance software pre-IoT, but when the IoT became practical he partnered with SAP, Cisco, and Honeywell to integrate and slice and dice the data yielded by the sensors they installed on cranes and vehicles and other sources.  For example, the height of these cranes makes them vulnerable to sudden weather changes, so weather data such as wind speed and direction must be factored in, as well as the “machinery’s position, movement, weight, and inertia…. The information is delivered on dashboards and mobile devices, visualized with live 3-D images with customizable views. It’s also incredibly precise.”As a result, by using SAP’s HANA platform, a system developed to reduce construction accidents also makes predictive maintenance of the cranes and other equipment, and lets the construction companies monitor Key Performance Indicators (KPIs) such as asset saturation, usage rates, and collisions avoided.  McKinsey reports that construction site efficiency could improve dramatically due to better coordination: “One study found that buffers built into construction project schedules allowed for unexpected delays resulting in 70 to 80 percent idle time at the worksite.Visibility alone can allow for shorter buffers to be built into the construction process.”

Several other great IoT solutions come to mind at the same time, both relating to dangerous industries. Off-shore oil rigs and mining were treated at length in the recent McKinsey omnibus IoT forecast, “The Internet of Things: Mapping the Value Beyond the Hype:”

  • off-shore rigs: “Much of the data collected by these sensors [30,000 on some rigs] today is used to monitor discrete machines or systems. Individual equipment manufacturers collect performance data from their own machines and the data can be used to schedule maintenance. Interoperability would significantly improve performance by combining sensor data from different machines and systems to provide decision makers with an integrated view of performance across an entire factory or oil rig. Our research shows that more than half of the potential issues that can be identified by predictive analysis in such environments require data from multiple IoT systems. Oil and gas experts interviewed for this research estimate that interoperability could improve the effectiveness of equipment maintenance in their industry by 100 to 200 percent.” (my emphasis). 
  • mining: “In one mining case study, using automated equipment in an underground mine increased productivity by 25 percent. A breakdown of underground mining activity indicates that teleremote hauling can increase active production time in mines by as much as nine hours every day by eliminating the need for shift changes of car operators and reducing the downtime for the blasting process. Another source of operating efficiency is the use of real-time data to manage IoT systems across different worksites, an example of the need for interoperability. In the most advanced implementations, dashboards optimized for smartphones are used to present output from sophisticated algorithms that perform complex, real-time optimizations. In one case study from the Canadian tar sands, advanced analytics raised daily production by 5 to 8 percent, by allowing managers to schedule and allocate staff and equipment more effectively. In another example, when Rio Tinto’s (one mine) crews are preparing a new site for blasting, they are collecting information on the geological formation where they are working. Operations managers can provide blasting crews with detailed information to calibrate their use of explosives better, allowing them to adjust for the characteristics of the ore in different parts of the pit.”
 In all of these cases, the safety and productivity problems — and solutions are intertwined.  As McKinsey puts it:
“Downtime, whether from repairs, breakdowns, or maintenance, can keep machinery out of use 40 percent of the time or more. The unique requirements of each job make it difficult to streamline work with simple, repeatable steps, which is how processes are optimized in other industries. Finally, worksite operations involve complex supply chains, which in mining and oil and gas often extend to remote and harsh locations.”
Could it be that the IoT will finally tame these most extreme work situations, and bring order, safety, and increased profitability?  I’m betting on it.
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GE & IBM make it official: IoT is here & now & you ignore it at your own risk!

Posted on 20th April 2015 in 3-D printing, cities, data, design, health, Internet of Things, m-health, M2M, management, manufacturing, mobile, open data, strategy

Pardon my absence while doing the annual IRS dance.

While I was preoccupied, GE and IBM put the last nail in the coffin of those who are waiting to launch IoT initiatives and revise their strategy until the Internet of Things is more ….. (supply your favorite dismissive wishy-washy adjective here).

It’s official: the IoT is here, substantive, and profitable.

Deal with it.

To wit:

The two blue-chips’ moves were decisive and unambiguous. If you aren’t following suit, you’re in trouble.

The companies accompanied these bold strategic moves with targeted ones that illustrate how they plan to transform their companies and services based on the IoT and related technologies such as 3-D printing and Big Data:

  • GE, which has become a leader in 3-D printing, announced its first FAA-approved 3-D jet engine part, housing a jet’s compressor inlet temperature sensor. Sensors and 3-D printing: a killer combination.
  • IBM, commercializing its gee-whiz Watson big data processing system, launched Watson Health in conjunction with Apple and Johnson & Johnson, calling it “our moonshot” in health care, hoping to transform the industry.  Chair Ginny Rometty said that:

“The Watson Health Cloud platform will ‘enable secure access to individualized insights and a more complete picture of the many factors that can affect people’s health,’ IBM says each person generates one million gigabytes of health-related data across his or her lifetime, the equivalent of more than 300 million books.”

There can no longer be any doubt that the Internet of Things is a here-and-now reality. What is your company doing to catch up to the leaders and share in the benefits?

 

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