How to become an Industrial IoT business model innovator
Uncertainty and flux characterize much of the Industrial Internet of Things (IIoT) market. How do you initiate and deploy IIoT initiatives? How can you find and build on promising ideas? Is it possible to capitalize on opportunities provided by this new technology wave? Many IoT doers are looking for guidance, in particular when it comes to IoT business model innovation.
Last year at an innovation event I heard a provoking statement: “Digitization is unavoidable” . Yes, if you are a product manufacturing company stuck in the value chain with product margins dropping, digitalization could be considered a threat. But you could also view it as a tremendous chance to create new value for your customers, partners, and your organization. Even late adopters should have realized by now that “wait and see” is not an option. That’s why there is huge demand right now for systematic support regarding how to start defining future strategies, business models, and capabilities for IoT business.
Industrial Internet Consortium takes action
That is why, just recently, the Industrial Internet Consortium published its Business Strategy and Innovation Framework (BSIF) for the Industrial IoT. The BSIF is a comprehensive compendium that describes requirements and best practice for how companies can succeed in the IoT. I am going to briefly introduce the BSIF to you. Specifically, I will highlight an IoT business model innovation tool that is featured in the BSIF and which I co-developed.
BSIF is an IIoT framework comprising expert vision and experience from IIC members InterDigital, Hewlett Packard enterprise, Machina Research, and Bosch Software Innovations. It sets out a robust approach that companies seeking to engage in IIoT can apply.
The illustration above is the core synthesis of BSIF and it is a good starting point for organizations embarking on strategic IoT activities. While some companies might already have a clear view regarding market trends, scenarios, and their own role and vision within, others may lack an understanding of drivers and how to position themselves.
For IIoT Business Model Innovation, the BSIF relies on the IoT Business Model Builder. This is a framework developed by Bosch Software Innovations and experts from the University St. Gallen:
The IoT Business Model Builder provides a list of helpful techniques. These can be applied when identifying and refining IoT opportunities. This network-centric approach aligns value creation across multiple stakeholders. It also supports the phases of ideation, preparation, evaluation, and initiation with a range of tools, such as IoT-specific business model patterns and value driver mapping. The core work item is an assumptions list. This reduces risk, derives work packages, and makes the hypotheses underlying the business case transparent.
IoT business model innovation is about orchestrating value networks
As opposed to traditional business models, we see that IoT businesses require enterprises to join forces to deliver end-to-end solutions. In part because customers (both B2C and B2B) increasingly expect a holistic user experience when literally everything connects and platforms and assistants are on the rise. That is why it is so important to focus on standards (even when it comes to business model approaches) and orchestrating value networks. Underpinning all of this with a convincing plan, such as the business model roadmap, helps to streamline all stakeholders involved in creating future-proof business models.
Because adapting your business to the fast-moving aspects of digitalization is a challenge, it requires systematic and structured guidance. If you have based your strategy on IIoT businesses, you legitimate different teams for brainstorming ideas. It is crucial to filter these ideas for your business and make them tangible. This provides you with a proper foundation for any change decisions. The IoT Business Model Builder supports all these steps in the process of developing business models and concepts.
Do you want to become an IoT business model innovator? Would you like to learn more about the IoT Business Model Builder? Then join me for my webinar session entitled “How to sketch out IoT solutions.”