1. Organizations are facing a new era of low-cost, small electronic devices with sensing, communications and computing capabilities, commonly known as the “Internet of Things” (IoT). Changes driven by the IoT will likely be far more profound than those brought about by previous IT eras. In particular, the digital data streams (DDSs) generated by the widespread adoption of IoT devices will create opportunities to transform the business landscape.

2. Agenda Potential to Reshape Businesses
The IoT and Digital Data Streaming
IoT Elements
Identifying IoT Business Opportunities
Findings
Lessons Learned

3. The Internet of Things Has the Potential to Reshape Businesses
“These mechanical slaves jump to our aid. As we step into a room, at the touch of a button a dozen light our way. Another slave sits twenty-four hours a day at our thermostat, regulating the heat of our home. Another sits night and day at our automatic refrigerator. They start our car; run our motors; shine our shoes, and curl our hair.”
Nash, J. B. Spectatoritis, Sears Publishing Company, Inc. 1932, p. 265.

4. The Internet of Things Has the Potential to Reshape Businesses
Major IT shifts in the past have endangered and sometimes destroyed an incumbent’s value proposition.
What major IT shifts are you aware of?
Coupling that evidence with the premise that the IoT portends a shift at least as disruptive as the commercial Internet and mobile IT, then CIOs and IS professionals must prepare to answer two key questions:
How can my firm improve its value creation effort as more and more physical objects incorporate computational capabilities and (inter)connectivity?
How can we leverage the emerging IoT capabilities to improve customer value and customer service?
While the outcomes will vary by company and industry, this research help structure the answers to these questions by drawing insights from analyzing the initiatives of 191 IoT pioneers.

5. Agenda Potential to Reshape Businesses
The IoT and Digital Data Streaming
IoT Elements
Identifying IoT Business Opportunities
Findings
Lessons Learned

6. The Internet of Things and Digital Data Streaming
The term IoT refers to “the network of physical objects—devices, vehicles, buildings and other items embedded with electronics, software, sensors and network connectivity—that enables these objects to collect and exchange data.”
The promise of the IoT is substantial. Gartner predicts that 6.4 billion IoT connected devices, constituting a $235 billion industry, will exist worldwide by the end of 2016, up 30% from 2015.
To harness the IoT to business strategy, CIOs must focus not on chips and protocols, but rather on the business value that the IoT enables.
Previous work has identified five archetypes of value creation through DDSs: DDS Generation, DDS Aggregation, Service, Efficiency and Analytics.
This research posits that the DDS stemming from the widespread adoption of the IoT can produce value in each of these areas.

7. Agenda Potential to Reshape Businesses
The IoT and Digital Data Streaming
IoT Elements
Identifying IoT Business Opportunities
Findings
Lessons Learned

8. IoT Elements
The IoT is rooted in tangible objects with their “mind” in the cloud.
While the objects are physical and resemble common everyday things, they are augmented by software capabilities.
In their simplest form, IoT applications are based on a three-layer architecture, where the objects can communicate with an application layer through a network infrastructure.
To deliver their value proposition IoT devices need four capabilities deployed in concert:
Identifying
Sensing
Communicating
Computing

9. Agenda Potential to Reshape Businesses
The IoT and Digital Data Streaming
IoT Elements
Identifying IoT Business Opportunities
Findings
Lessons Learned

10. Using the Customer Service Life Cycle to Identify IoT Business Opportunities
In 1984, Ives and Learmonth refocused IBM’s resource life cycle from internal resources onto the products or services a firm provides to its customers.
This model helped businesses to address the following questions: How does your customer learn that he requires your product (requirements)? How does he obtain it (acquisition)? How does he use it (stewardship)? How does he recycle it (retirement)?
To better capture the model’s customer orientation, it was later renamed as the Customer Service Life Cycle (CSLC). This framework has helped managers identify how the Internet and IT can impact their firm’s relationships with its customers, improve customer service and provide a competitive advantage.
The CSLC’s four main phases were renamed as requirements, acquisition, ownership and retirement.

11. Customer Service Life Cycle Phases and Their Stages

12. Agenda Potential to Reshape Businesses
The IoT and Digital Data Streaming
IoT Elements
Identifying IoT Business Opportunities
Findings
Lessons Learned

13. Number of Initiatives by CSLC Stage
Phase
Stage
Initiatives
Requirements
Establish Req. 31
Specification 13
Acquisition
Source Selection 18
Ordering 10
Authorization and Payment 8 24
Testing and Acceptance 41
Phase
Stage
Initiatives
Ownership
Integration 15
Usage Monitoring
134
Upgrading 5
Maintain 36
Retirement
Transfer or Disposal 7
Auditing and Accounting 20
None 27

14. Number of Initiatives by Sector

15. Agenda Potential to Reshape Businesses
The IoT and Digital Data Streaming
IoT Elements
Identifying IoT Business Opportunities
Findings
Lessons Learned

16. Lessons Learned 1/2
For executives grappling with the IoT, the key, as with most IT innovations, is finding a balance between innovation and control.
The upside potential of the IoT is very significant, but IoT initiatives involve new technologies and are thus difficult to control properly; organizations are still struggling to develop the expertise necessary to take advantage of the IoT.
From the analysis of the 191 IoT initiatives, this study have distilled five lessons to help guide this uncertain IoT journey.

17. Lessons Learned 2/2 Create Direct Real-time Customer Relationships
Leverage IoT Digital Data Streams and Communities of Users
Leverage Your Existing Competitive Position and Competencies
Create seamless Interoperability as a Prerequisite for Value Creation
Beware Reliability, Security and Privacy Traps