If your company is in a product oriented business where commerce is about buying, moving, making and selling physical items, information technology tends to be pretty standard and somewhat out of the mainstream business.  Most product companies have insulated themselves from a significant impact of IT downtime.  Warehouses can often work for an hour or more without IT connection, manufacturing plants tend to reduce dependency on corporate computing and retailers can do business if the network connection is cut.

 

IT funding is commensurate with this risk management philosophy.  These organizations do not want to spend the money to ensure uptime for always connected customer touch points.  After all, their business is products, not IT. 

Well, that is about to change. 

From Product to Service

For companies that make everything from electronic sensors to eye glass frames, a revolutionary question is quickly requiring an answer.  Who will support the service levels and get the data from electronic signals that will emanate from these connected products? 

If the next iteration of Google Glass takes off, will the market leader in eye glass frames roll over or get into the game?  How long till the buyers of frames want the frame to work with any phone from any manufacturer? 

You aren't convinced.  Perhaps they will sell frames to the phone manufacturers.  Leave the selling of frames and fashion to Google, Apple and Microsoft.   Well, the frame manufacturer will have to ask themselves if they want to escort potential competitors to their distribution channels.  And the phone manufacturers will have to ask themselves if they want to sell eye glass frames to doctors and electronic parts to industrial manufacturers.  All connected product manufacturers will face this question.  It seems highly unlikely that your product company will escort a new entrant to its customers and the internet of things is too massive to centralize.  This problem must be managed by the connected product manufacturer. 

And that is where you come in.

It's All Opportunity

Participants in a recent GigaOm conference describe the opportunity:

“The greatest opportunity in the internet of things is transforming a product business into a service business. Once a static product is connected, it becomes a service opportunity,” said Jahangir Mohammed, CEO of Jasper, which offers its own IOT management technology used by ABB, Starbucks and others and also manages and brokers agreements between service providers.

When it comes to the arena, tangible products — fitness trackers, home sensors — are trojan horses to get customers interested and hooked. But a one-off sensor has limited value. Aggregating the data from that sensor with other collection points in your home, on your commute to work, so that your house is not overheated or over air-conditioned and your commute is as short as possible, is probably worth additional payments.

There are many ways to market — things will be bought through traditional retail or online channels. But the service that brings together all the data, aggregates it and applies analytics to it, is where the money is,” said Bob Hagerty, CEO of Icontrol Networks."

Act Now

The conclusion for IT is that when your company's products - appliances, machinery, eyeglass frames, jewelry, vehicles, etc. get connected, then the services, support and value creation of connectedness becomes an IT responsibility.  So when the product management group lifts their heads and realizes the ramifications of their brilliant connected product will they think of you?  Will they proclaim your effectiveness at day to day tasks and consider you the right person to take on the future of the company or will they remember the outages and imagine the customer calls that will result? 

You need to get ahead of this curve and you must begin now.  Do you have a plan to evolve your IT from internal support to a customer value provider?  Do you have the architecture, processes and systems in place to support an IT capability your customers depend on? Opportunity is knocking.

Michael Lee is the Managing Director of Quality Deployment. He can be reached at insights@qdbve.com.

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