Part 1 Recap
In our last issue we had a quick look at the Internet of Everything (IoE) and how it will have a major impact on everything we do – either personally or in business – over the next 10 to 20 years. Various bodies are projecting increased global business in the range of $15 trillion dollars over the next 10 years.
We identified IoE as a network of sensors linked via the internet with intelligence applied to give the user results they require, such as monitoring and reporting, and automatic pre-planned action generation.
What’s in it for Me?
So what, you say. How does that affect my retail or service business in Bali? The answer is, of course, it depends. IoE is not in itself a solution, it is a tool or an enabler. It is there to be used to enhance your business capabilities in helping your customers get their job done and achieve the outcomes they desire. So consideration of IoE for your business occurs further in the decision process.
The Business Development Process
Seems to me there are two key ways a business will develop and innovate.
- In most small business cases the person starting off has a core technical competence and then looks for products or services customers want related to that technical area. You might be a yoga teacher or have a flair for clothes design, or manufacture surfboards. But you start there and then bolt on other needed competencies in marketing, operations, technology, and finance.
- In the second case, a person or business sees a customer need and then models a business to provide products and services to meet that need. At the small business level, it is a real entrepreneur. A prominent big business example is General Electric. GE has recognized a market for what it terms the Industrial Internet (or Internet of Things, or M2M) with a market size of around $15 trillion over the next 20 years, and it wants a decent slice of that. It will focus on aircraft, health, and energy where it already has a level of core capabilities.
But whichever way you start, keep in mind the entrepreneur with a food stall; the first requirement is a hungry crowd, a sizable market. If someone had the market to himself he could serve up dog chow in a bowl and people would buy it because they had no choice in solving their hunger problem – just don’t show the can. But there are other outcomes people want from that meal that the food stall is leaving unmet. And that is where your opportunity as competition steps in (a competition that isn’t just another brand of dog chow!)
The job people need to get done is to relieve their hunger, and that won’t change, but when you recognize those other unmet outcomes you have a market. So think of the journey that competition has provided from a hunk of a charred mammoth on a stick to a fine dining experience. You too can ask them what you need to do to meet your customers’ desired outcomes. Think of the capabilities that have had to be tacked onto that original food stall.
You have to start remembering people’s names and their preferences and anticipate their needs. You have to help them get the job done. You have to plan and provide an emotional experience that delights the senses. You have to provide information that will tempt them to buy including new and additional products and services. You have to provide all this while keeping your operating costs in check.
You are building capabilities that are essential for you to differentiate your business in how well you meet customer’s desired outcomes, and in how well you prosper.
Capabilities are what you need to help your customer to achieve the Gains they desire, and how well you help eliminate or reduce the Pains involved in achieving those desired outcomes. Any additional capabilities are an unnecessary overhead. Your business capabilities come from a set of managed resources that include your business culture, staff capabilities, tools in the form of applications and productivity implements, and equipment.
Summary to Date
- Find a hungry crowd – a market big enough to provide volume – with a job to be done.
- Understand their unmet or under-met desired outcomes in getting that job done.
- Invest in, develop and refine your capabilities to ensure consistent quality of delivery at a profit to you.
- Produce a product/ service that provides those outcomes excellently.
The rest of your business model builds from this base.
In previous issues, we have discussed the concept of customer experience as a focus for developing your brand delivery capabilities. We’ve mentioned that while over 90% of businesses say they want to excel at delivering an excellent customer experience, only about 25% are actually delivering.
In many cases, this is because the technology the business currently has doesn’t support the modern customer’s needs and expectations for integrated in-person and online interaction throughout the customer journey. And it is often also the case that the business has not yet been able to provide the required and managed supporting capabilities.
Gaining Value from IoE
These two customer experience needs – an integrated interaction experience backed by a whole of business approach in delivering the customer experience – are reflected in what is now understood as the most important IoE enablers for delivering realized value.
In decreasing order of value, these are:
- Quality of technology infrastructure and tools (things)
- Inclusiveness practices (people – collaboration)
- Information management practices (process – using information strategically)
- Human capital practices (people – talent development)
- Measurement practices (process – tracking progress)
- Information ease of use (data)
- Information accessibility (data)
- Information accuracy (data)
Technology is the necessary bedrock for IoE but it will be your own management practices that will account for more than 50% of realizing potential value. In the final analysis, it is how well your business is able to apply technology to improve or leverage people and process capabilities that decides how big a winner you will be.
Your Strategic Focus
Your focus in your own business strategic plan for the next few years should be about how you intend to transform your business, to place it in a position of competitive advantage in this very new environment. The old rules of business size and development being an advantage are being overturned. Your special focus needs to be placed as follows (again ranked):
- Investing in new technologies
- Integrating new and existing technology
- Updating processes
- Strengthening internal collaboration skills
- Recruiting or developing new skills needed
How you choose new technologies can make or break your future competitive advantage. Your choice must be driven by three key factors:
- How well the technology supports your core capability needs.
- How well the technology can link with other needed technology components. Your technical functionality needs to link with finance, CRM, content management, partnerships, or inventory. This usually occurs using Application Platform Integration or API’s.
- How well the technology integrates with what you already have. Often you will have a large investment in previous software, hardware or networks
We will examine a checklist to help in choosing new technology as the base for your own IoE application.