Remember stories about executives in the mid ‘90s who had their assistants print emails and put them in a neat pile on their desks? They used the new tech, but limited its usefulness by forcing it into their existing mindset. There’s an important moral to the story regarding the Internet of Things (IoT): No matter how much IoT technology you buy, if you don’t make significant attitudinal changes, you can’t realize its full potential.
There are four of these attitudes—let’s call them “Essential Truths”:
1. Make privacy and security your top priority
2. Share data; don’t hoard it.
3. Close the loop.
4. Rethink products—and their roles.
They are complementary and synergistic. Adopting several or all produces cumulative benefits that are far greater than each would have produced in isolation.
Essential Truth #1: Make Privacy and Security Your Top Priority.
You can’t just let privacy and security be an afterthought: the owners of the real-time data the IoT gathers, from personal medical conditions to assembly-line operations, treasure it. Let a bad guy steal it due to lax privacy or security protections, and not only will your IoT product or service be ruined, but you’ll also put the entire concept at risk (i.e., guilt by association).
No matter how elegant your privacy and security measures are today, the process of evaluating and updating them must be iterative and never-ending, because the threat from hackers changes constantly. What’s needed is the European Union’s concept of “security by design,” in which security is an integral part of the device’s design from the beginning, followed by an iterative process to make sure it still works as challenges evolve.
Essential Truth #2: Share Data, Don’t Hoard it.
This also represents a tremendous attitudinal challenge. In the past, when it was so hard to gather and share real-time data, if you had data and I didn’t, you were a winner; I was a loser. By contrast, with the IoT, it can be mutually advantageous to share real-time data about things that the IoT produces. We must learn to routinely ask:
Who else can use this data?
For example, Pratt & Whitney gathers as much as 10 gigabytes of data per second from the 5,000 sensors on its new jet turbines, which they use to detect the earliest sign of operating problems so they can do less expensive, more rapid “predictive maintenance.”
There’s more: They also offer that data to customers for a fee, creating a major new revenue stream while helping airlines. AirAsia Group, for example, saves up to $10 million in fuel costs yearly using that data to change flight paths and optimize air traffic flow. Data sharing in this way contributes to one of the IoT’s most important business benefits: squeezing out inefficiencies and operating with maximum precision. Continually analyzing operating data and identifying deviations lets you make continuing, sometimes minute, adjustments to processes.
Equally important regarding the attitude shifts are management policies on data sharing within the company itself.
It made sense in the days of almost no data gathering on operations and equal difficulty in sharing it for senior management to parcel out data when and where they saw fit, with information typically distributed in a linear and/or hierarchical fashion. One department would deal with it and then hand it on, along with their edits and additions, to the next department.
Today, the IoT allows instant gathering and sharing of real-time data, not only from assembly lines, but also supply chains, distribution networks — even customers in the field (quite literally, in the case of agriculture!). This makes possible the astounding 99.9985% quality rate at Siemens’ Amburg “Factory of the Future,” where senior management allow real-time access to data for the people who need it, at various levels of the organization.
Essential Truth #3: Close the Loop.
The third critical attitudinal shift to fully capitalize on the IoT is closely related to the second: Not only do you need to share the data with everyone who needs it to make better decisions or to do their jobs more efficiently, but you must change policies and procedures to be sure the data flows in cyclical, not linear, fashion.
Cyclical data flows help you get fast, accurate feedback on how your products really work. They facilitate upgrades and immediately improve operations through tools such as automatic M2M controls that don’t require human intervention. Continuous circular data flow changes how we design things, how we manufacture them, how we service them, and even how we market them. In addition to predictive maintenance, benefits include:
• Product design: GE issues stripped-down products quickly and rapidly updates them based on data about how owners actually use them. The company’s VP of global software, William Ruh, says ‘We’re getting these offerings done in three, six, nine months … It used to take three years.’”
• Precision manufacturing: A major reason Siemens achieves that 99.9985% quality at its “Factory of the Future” is that the real factory is paralleled by a digital twin that pushes back relevant events on the shop floor to the main data repository. Artificial Intelligence technology analyzes the data and sends the main findings to product development, manufacturing planning or facility planning for further analysis and decision-making. All production events are recorded and relevant.
Essential Truth #4: Rethink products and their roles.
Because the manufacturer no longer needs to guess about whether the customer likes the product and how it’s being used, product design and refinement become a continuous process, as GE shows, increasing the chance that customers will be satisfied.
The critical element of making the attitudinal switch regarding IoT products is to remember that they represent merging the physical and digital. Yes, there’s still a physical product, but its value is substantially increased because now it can link to the internet, reports automatically on its status and is easier to upgrade. It’s also easier to make it more valuable because of the digital value added and the circular feedback flow.
Putting the Essential Truths to Work
It won’t be easy scuttling old attitudes that we’ve inherited from the nineteenth-century Industrial Age. They’re so ingrained in our subconscious, we’re not even aware how much they shape our thinking and restrict our vision and our ability to consider alternatives. However, abandon them we must, because we’ll never realize the IoT’s full potential for customer satisfaction, production precision, and new revenue streams if we don’t embrace the new attitudes—the essential truths—that the IoT entails.
W. David Stephenson, principal of Stephenson Strategies (Millis, Massachusetts), is an IoT consultant and thought leader. His The Future Is Smart (HarperCollins Leadership), is one of the first books on IoT strategy.