The following example essay on “Internet of Things: Future Business and Customer Value Creation” aims to better understand the commercial landscape and the possibilities of the IoT, is to understand the business needs of the Internet of Things and how to generate those values, is to identify partners and competitors and identify how companies help each other create value in the IoT ecosystem.
The conceptual framework was based on value proposition, creation and value creation as well as the generation of business models.
The study was performed using qualitative inductive methods. The data was collected through qualitative research based on information from five IoT case companies as well as field observation data from various workshops and seminars.
The results suggest that rethinking is needed. that data management in IoT is very important; the unwillingness to invest in the Internet of Things; and that employees lack knowledge and skills. The results also showed that the value of IoT can be captured not only during the sale, but especially in the after-sales area, and that this is possible with many non-traditional methods.
In addition, there is no single business model in the IoT. In addition, the EU plays an important role in the future of the IoT.
In summary, this research allows for a better understanding of IoT capabilities and the business landscape through the different types of value creation and retention in the IoT. If you know how to add value to IoT and know when to capture it, companies can offer their customers better value propositions.
This study was inspired by the new technology Internet of Things, or IoT for short, and the challenges of its Business Models (BMs). IoT refers to the concept of connected devices: everyday mundane devices (e.g. streetlamps, cars, fridges, microwaves, handheld devices, and thermostats) that are equipped with sensors, actuators, unique identifications and communication modules that make them smart and allow them to be connected to communication net-works. Smart devices can transmit and receive data; hence, some can be controlled remotely. For example, a person can tell the oven to warm up before she comes home from work through an app in her mobile phone.
The attractiveness of opportunities this emerging technology brings and the untapped market it holds is immensely interesting to all kinds of re-searches and businesses. Many already pursue the market or are venturing into it quickly. This means they need to seek new opportunities or change their business concepts. As Osterwalder (2010) would put it, a BM that make sense in todays environment might be old-fashioned or even obsolete tomorrow.
We all must improve our understanding of a models environment and how it might evolve. However, this study is more about generating new insights, knowing ones own business model as well as customer understanding rather than generating new BMs. Furthermore, this research focuses on the core of any business model: customers needs. The study is done for a global company that has existed for decades.
The company is venturing into a new business area that has not been traditionally in its portfolio. For this reason, the study seeks to understand the best approach for the company to understand value in IoT and capture it in order to expand their business in the area.
This study is motivated by the fact that IoT is a rising concept, but not yet widely understood by the public. Combined with the strongly technical focus of my Company, there could be more focus on a business mindset since the company is pre-dominated by technical personnel. Consequently, the understanding of the business model and value to customers is very fragmented. Being faced with the challenges of IoT, there appears to be a clear need for a better understanding of the IoT business model as well as its domain.
The main objective of the report includes:
To better understand the IoT business opportunities through value propositions
To better understand what the business landscape looks like for IoT now
Sources of Data
The research work was conducted between March 2018 and November 2018. The idea and opportunity to conduct the study presented itself when I got involved in a project from the R&D department in my Company. This involvement meant access to information and meeting relevant people for the study. The project focused on an emerging technology which was new and exciting, and that of course presented its own challenges.
However, it was an obvious choice and starting point to run a study. The topic was initially unclear however, to narrow down the broader view, I engaged in unofficial discussions through different channels and occasions; meetings, workshops, conferences, and the supervisor from the company side. Further information was then gathered through exploring available literature.
The research project in which I was involved in has efforts to study different aspects of IoT concept; from theory to application. I was fortunate to be involved in the ecosystem work package, which largely contributed to getting the right people for the interviews in this study. The business model was also in use to analyse new opportunities. But it is used with different level of competence, the broadness of the model itself makes it challenging to study.
I decided on particularly focusing on one of the building blocks of the business model, mainly the value proposition block because it is the core of the business model. The value proposition is what a company needs to focus on in order to differentiate themselves from others, whether the offerings and products are the same. It caters to specific requirements of the customer.
Altogether there were five case interviews. The persons were selected for the interviews firstly based on their involvement in IoT and their companys business strategies, secondly their accessibility either by direct approach or through someone the researcher knows. Four of the companies were based in Finland and one in Spain. Due to the IoT concept being relatively new and strategically sensitive information may be disclosed, it was agreed in the beginning of the interviews that the identities of both companies and interviewees would not be revealed.
They are small and medium sized companies. We can describe each case shortly however, to get a better idea of what the companies do to understand their relevance in the study. And since there are no company names, we can also indicate the role of the person interviewed at the time. The interviews were conducted with variable intervals, but some time was anyhow left between interviews in order to transcribe and improve questions.
The research approach best suited for this study would be inductive, bearing in mind the purpose of the study, and the methods that are best suited to explore the emerging area in this study. Inductive approach lets you first understand the nature of the problem. By analysing the data collected, I can then make sense of the problem. In an inductive approach, formulation of the theory comes afterwards when the data is analysed. It considers the consequences of people’s actions based on the way they perceived the phenomena. The flexible methodology of an inductive approach allows for alternative explanations of what is going on.
The focus of this study is concerned with a specific context at which events take place, therefore through inductive research; a small sample of subjects is studied through conducting of interviews. Inductive research is further characterized by the researcher being part of the research pro-cess. In this study, that holds true as I have been all the time involved in the process through observations and active participation in different events. There is also less concern for generalization of outcome in this case.