How to deliver what customers really want—value
Why do people buy things? Purchases really come down to perceived value. Smart businesses realize and acknowledge this characteristic of their customers, whether those customers are other businesses or they are individual consumers. End users do not purchase products; they purchase value.
As both technology and end-user sentiment change, the means to deliver value also changes. Organizations often become comfortable with the status quo, delivering the same value as before, only to be bypassed by savvy competitors leveraging a new technology to deliver enhanced or different value. This idea is common across multiple industries, and is illustrated by what are now some famous, and perhaps overused, examples:
- Aerospace: Relief of maintenance headaches through power by the hour
- Electronics: Enhanced comfort through intelligent thermostats—for example, Nest
- Automotive: Reduced worry about getting from one place to another through ride-sharing operations—for example, Uber
The service product
Businesses are really selling services, whether those services are for personal or business purposes. That these businesses utilize products to deliver these services seems beside the point—ultimately, service delivery is the point. Delivery of services requires an infrastructure of capability provided by smart, connected devices.
Traditionally, the infrastructure of personal services is human centered. For example, a maid and a butler are intelligent human beings that have access to supporting infrastructure. Today’s infrastructure for service delivery, however, is the Internet of Things. Like a maid and a butler, the Internet of Things delivery mechanism is intelligent; the primary difference is that today’s intelligence is provided by software. Additional intelligence is available today because the delivery of the service can be measured and analyzed easily using computational technologies that surpass human capabilities.
As an infrastructure for value delivery, the Internet of Things is quite complex; although, the complexity can be hidden for successful businesses, and the service delivered can seem simple. Behind the scenes, physical devices alone or in tandem with other devices, are driven by software intelligence to perform specific functions. The operation of these devices can be analyzed in such a way to predict their functional and maintenance needs. The reaction of the consumer to these devices can be assessed. This data can then be used by human engineers to derive insight for how to improve on the service delivery and to deliver ever-increasing value to customers.
A process of perpetual improvement
Several technologies can be used to manage the complexity of delivering this ecosystem. First, driving the entire process involves understanding and designing how the service will deliver value. This value delivery entails managing the requirements for the service. Clear requirements state how all the various component parts come together to deliver the whole.
Second, the overall system of delivery then needs to be modeled to understand the architecture required to instantiate the service. This architecture enables comprehending how data flows, knowing which component talks to another component or supports back-end systems, understanding which actions to take when specific events occur and so on. It also specifies how functionality will be delivered in support of the service—whether that support is through software, electronics or mechanical means.
Quality management is essential to validate that the system operates as designed and to verify through testing that requirements are being met. As devices are in operation, the data they generate from sensors needs to be captured and analyzed. Quite often, collection and analysis occur on a cloud platform capable of quickly addressing extraordinarily large volumes of data. Insight is then derived from this data—insight that can be used by engineers of the system to understand deficiencies and to make improvements. Many aspects are required to support delivering value in this manner:
- Managing requirements
- Modeling the functional ecosystem and deriving design architectures
- Verifying requirements are met
- Delivering software to devices securely to update and enhance functionality
- Capturing and storing operational device data
- Using analytics to make predictions
- Predicting maintenance needs and ensuring quality
- Managing the assets used to deliver service
- Providing secure application access to devices and data
- Performing sentiment analysis to better understand customer wants and needs
- Providing a design environment in which all these technologies can be applied
A continuous engineering ecosystem
Application of these technologies in a closed loop of perpetual improvement is called continuous engineering. In today’s competitive business environment, sitting still is not an option. Value is subjective and should be constantly defined within a transforming landscape of changing technology and customer sentiment. Businesses need to continuously evaluate customer needs and wants to understand how well they are meeting market demands, and continuously reengineer their strategy and means for delivering value. Smart businesses are recognizing that product development is simply a means to an end. They are realizing that products are just one tool for delivering a service that provides a desired value.
IBM provides the technologies required to help businesses use smart, connected products for delivering what their customers demand. Learn more about how continuous engineering enables enhanced development for the Internet of Things by registering for the IBM Continuous Engineering Internet of Things conference, 3–4 November 2015, in Chantilly, Virginia.