When Exploring the IIoT, Service Leaders Should Focus on the Business First, Not Tech

I’ve always seen technology as an enabler. The question is not whether a technology works. The question is whether it can deliver the capabilities to support your business models and processes.

Given that the Industrial Internet of Things can enable so much, I understand why there’s so much fanfare around it. However, you can’t build a service business on hype

A couple of weeks ago, at LiveWorx, I attended a session hosted by Steve Postma, an enterprise architect at Sysmex, who spoke about his company’s use of the IoT to deliver some pretty interesting services. One of his opening remarks was that only 26% of IoT projects succeed. Why?

Go back to basics

Before you even think about the IIoT, you need to ask yourself three questions:

  • What’s my product?
  • Who’s my customer?
  • How do I make money?

Going back to square one will reveal which capabilities will help you succeed as a services organization. Keep in mind that you can't address these considerations based on today’s environment. To be successful, you must answer these questions with the future in mind.

Let’s look at Trane as an example. The company answered the questions above and came up with the following answers:

  • Our products control temperature.
  • Our customers are businesses and consumers who want control over their indoor environments.
  • We make money by selling products and services.

In 2014, Dane Taival, former VP of Building Services and Customer Care, mentioned that for every dollar in equipment sales the company earned, Trane created the opportunity to sell eight dollars’ worth of services.

However, Taival realized customers weren’t going to pay top dollar for break-fix services. Trane needed to figure out a way to not only prevent equipment from failing, but also help their customers get as much value from their HVAC equipment as possible. That’s when they looked to technology.

Why do you need remote monitoring?

Remote monitoring could enable any number of outcome-driven services, an obvious one being prescriptive services. Here are some not-so-obvious models a service leader could build off this capability:

  • Process support: The data you gather from your installed base could help you develop a consulting organization that advises customers on how to better use your products.
  • Process delegation: This is one of the advanced service models Dr. Wolfgang Ulaga discussed in a recent article. This is when you absolve a customer of managing, executing, and refining a non-critical process in which your products operate. For instance, Trane could, theoretically, offer to manage a movie theater’s entire environmental control system.

My main point is this: The reason why companies are exploring the IIoT, blockchain, machine learning, and other technologies is because they present real business opportunities. When there’s a lot of fireworks around a technology, it can be easy for even the shrewdest service professionals to lose sight of that.

How do your service capabilities measure up against your competition? Take our free, online assessment to learn where you stand in the market:

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