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The Internet of Things - how will it impact your industry


In Nov 2014 the Harvard Business Review published an article by Michael Porter and James


Heppelmann on how the Internet of Things will disrupt industries. Their thesis was that the combination of on-board processing, data creation, and data connectivity creates new functionalities that can transform value propositions, and industries. Looking at a number of industries, including the energy and utilities sector we can see how new superior products and services can be developed and disruptive new business models can emerge.

This is not crystal ball gazing – this is happening today. Some examples from the HBR article are as follows:

  • AGCO connecting farm machinery to irrigation systems and soil and nutrient sources, linking this to information on the weather and commodity prices to provide a farm optimisation service

  • Smart homes linking HVAC (Heating Ventilation and Air Conditioning) , entertainment and security

  • Joy Global connecting mining equipment with other equipment to improve mining efficiency

  • Tesla creating vehicles that can autonomously call for a software fix via download or if needed send a notification to a customer inviting them to let Tesla send a valet to pick up the car and take it away for repair

  • Networked wind turbines adjusting their blades to minimise their impacts on the efficiency of turbines nearby

  • Babolat tennis racquets with sensors and connectivity in the racquet handle allowing players to track and analyse ball speed, spin and impact location

  • Ralph Lauren Polo tech shorts monitoring distance covered, calories burned, movement intensity heart rate to the wearer’s mobile device

So where else might disruption occur as Internet of Things enabled devices and services take hold?

Let us take the burglar alarm industry…….

Occupancy sensors equipped with communications could alert householders that there was an unexpected presence in their home for a fraction of the cost of a traditional burglar alarm installation.

Let us take the baby alarm industry…….

Baby clothing with in-built sensors and microphones could give feedback on not only crying but the overall well-being of the childe – again for a fraction of the cost of typical alarm hardware

Let us take Home temperature control…..

Again an example of what is here today with products like Google’s NEST intelligent thermostat learning to control heating as economically as possible by learning about the thermal characteristics of the building and the occupancy habits of its residents

Let us take ovens for cooking…..

Intelligent ovens could link to a chosen recipe, weigh the fish or meat to be cooked and optimise the cooking conditions to produce the optimum result

Let us take domestic appliances in general……

Internet of Things enabled appliances will be able to judge their performance against the population of similar appliances and notify their users (and maintenance and supplier companies) when repair or replacement is warranted

Let us take local electricity generation…..

Networking this with commodity price signals, current supply levels, and future demand forecasts, and energy storage will enable these machines to optimise their performance to minimise their cost of ownership

Let us take the world of golf…..

Like Babolat sensors in the club can feedback performance data to the player, golf balls may even have communications built into them so a lost ball becomes a thing of the past

Let us take Carbon Monoxide sensors……

CO poisoning causes 50 deaths per year in the UK, and an estimated 2000-3000 hospital admissions. Smart sensors could alert emergency services, neighbours and relatives causing early response saving lives and avoiding hospitalisation. Indeed the sensors could communicate when they are about to run out of power so that they can be fixed and kept fully operational

The list is endless.

The message is clear. 2015 is the year to think about what the Internet of Things may do to your industry.

A number of the Thinking Approaches we teach are particularly suited to tackling this task.

Option Generation and Selection allows the generation of a long list of options and the selection of those most beneficial to the enterprise. Pyramid Thinking allows the value proposition to be communicated compellingly. Business model Generation then allows the design of the business to successfully deliver the new value proposition.

Why not take the "internet of things" to be the opportunity to engage in "learning through doing". Please contact us to talk through how we could transfer these approaches to you at the same time as tackling the "internet of things challenge".

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