How to Conceptualise and Implement a ‘Connected Product’ Through IoT? — Part 1
A reference guide to Product Managers / Business Analysts
‘Commoditisation of Hardware’ is a common phenomenon across OEMs (Original Equipment Manufacturers) in various industries now. Due to which OEMs are having a tough time to differentiate and find a value proposition for their products. This is forcing them to do hefty price cuts to drive sales, which in-turn shrinks their margins. Although OEMs do this consciously, they themselves know that cutting the price is not going to be sustainable in the longer run and they need a better solution.
To address this, OEMs are planning to adopt ‘Digital Transformation’ Strategy to make their Product Connected through IoT, thereby enabling a dual value proposition of Product and Digital Services for the customers. This is the main reason for the increase in adoption of Industrial IoT in recent times. Adding to this, recent technical innovations like Miniature Hardware, Enhanced Connectivity even in the remotest place, Ability to process huge volumes of Big data have led to further growth of IoT.
`Spending on IoT platforms would see a 40% CAGR between 2019 and 2024’ — AnalyticsInsight
So what happens next, Once the OEM decides to get their Product Connected through IoT?
OEMs will try to bring interdisciplinary expertise by reaching out to their own Engineering teams or their Technology Partners for the Implementation. And typically, it will be the responsibility of a Product Manager or Business Analyst to conceptualise the needed use cases and come up with an Implementation plan.
I have been part of such Digital Transformation initiatives for Organisations in recent times. Based on my learnings, I want to propose a simple WHY — WHAT — HOW approach for a Seamless Implementation of IoT in a Product in this article. So that it might be of help to Product Managers or Business Analysts community.
Different Layers of a ‘Connected’ Product:
Before we deep dive in, want to give a general overview of a ‘Connected Product’ . Below flow depicts the Different Layers of ‘Connected Product’, and how we can bring Dual Value Proposition (Phygital) to a Product.
Although Transforming a Physical product to Phygital looks simple with the above sequential steps, it’s not as straightforward as we think. This is where the Product Management role becomes critical. As a Product Manager / BA, we need to ask the right questions (which you will see in the below checklist questionnaire), for us to make our product connected.
WHY — WHAT — HOW approach in Action:
Part 1 of this article is going to be focussed on the WHY aspect.
WHY we need IoT: Discovery
‘Understanding WHY’ is the first and a critical step in the ‘Connected Product’ Journey. And the decision to implement loT will always be business and customer centric, so we shouldn’t force-fit our solution.
From the customer perspective: We need to understand the current user pain points and analyse whether addressing the pain points by connecting the Products will add more value to them.
From a Business perspective: To understand whether there is a need to connect the Product first, then to check on whether we have the capability to solve the problem through IoT and possibility of monetising the solution for OEMs.
Based on the above pointers, we will decide on Go — No Go for the Implementation. You heard it right, if implementing IoT is not going to bring any value to the Business or the User, then we will decide ‘No-Go’ for the Implementation.
For better understanding, let’s take two use cases,
B2C: An OEM that manufactures and sells a specialised Tablet to educational institutions for remote education. They will have education related applications running on the tablet
B2B: An OEM that manufactures and installs wind Turbines for enterprise companies to generate Power. They also maintain the turbines with a yearly maintenance cost.
Checklist Questionnaire: To Understand the Pain Points of our current users in using our Product and whether they can be addressed through IoT:
1. Are our customers facing problems while using our Product currently?
2. If yes, What are those Problems and how critical is that to them?
3. Will solving those problems add more value to our customers?
4. Can we solve the problems by making our product connected through IoT?
5. Is there a way to monetise the solution?
We need to ask the above questions first, before we proceed with the Conceptualisation and Implementation (What and How) of IoT solution. Let’s try and answer the above questions with our use cases to see whether IoT implementation makes sense there.
Discovery for a B2C Product:
High level problem statement is that the Educational Institutions are not able to understand the Product / Application usage by students, because of which they are not able to measure the success of this mode of education delivery.
This problem is critical because institutions want a way to monitor students on how they are using the application. As they don’t want the tablet to be misused. So, solving this problem through IOT will be really beneficial to the Institutions. From the OEM perspective, they also could get instant feedback about the Product usage and make the needed changes if required. With the added value and faster feedback loop to the institutions, there is a good possibility of monetising the solution.
Discovery for a B2B Product:
High level problem statement is that the Enterprise customers want a way to ensure that the installed turbines are working fine with good availability, service continuity withstanding the environmental impact. Similarly, they also want to see how much power each turbine is generating.
This problem is critical because the enterprise customer’s business is heavily dependent on the power generated. So any downtime is going to impact their business significantly. From the OEM perspective, having a connected solution through IOT will help them to identify Turbines which are at the risk of malfunctioning and fix them immediately. As we enable the enterprise customers to avoid downtime and predict the Turbine health, there will be a willingness to pay from their side. So there is a very high possibility of monetising the solution.
Next Steps: WHAT and HOW: I will be covering this in detail in Part 2 of this article. However, to give you an overview,
WHAT we need to achieve through IoT: Conceptualisation: Once the Pain points are identified, we need to come up with a set of use cases to solve the user Problems and add more value.
- Expected Outcome: BA/ PMs will coordinate with Business stakeholders and Intended Users to finalise on the needed IoT use cases and the corresponding priorities.
HOW we can achieve value through IoT: Planning and Implementation: Once the use cases and the priorities are defined, the next step would be to do a meticulous Planning on which use cases should we shortlist for MVP, and What are the needed solutions at each layer of IoT for them: based on user / business value. Once we come up with the solution for the use cases, we need to do analysis on ‘Build vs Buy’ for us to decide on the Implementation approach. Upon finalisation of the approach, we will start the implementation of IoT solution incrementally to add digital value to the product.
- Expected Outcome: BA/ PMs will coordinate with the Technical team for deciding on the required technology in each layer of IOT to transform the source data to user insights and with the Business stakeholders and Intended Users for getting the needed feedback on the features.
Once we define what needs to be done at each layer for all priority use cases, We will pick one use case initially and build the needed solution end to end. The idea is to get the user feedback quickly on whether the solution delivered the intended value to users, thereby iteratively developing the Solution. Initially, we will start with a minimalistic approach by delivering only the main functionalities (MVP) catering to the early adopters in our target segment first. But, once the Product starts maturing, we need to bring in the needed Scalability and Security to the solution. So that we can scale up to the mainstream user segment.
