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IoT Value Chains: The Future Is Not What It Used to Be

Posted on: August 18, 2015

Not too long ago, the world was predictable; at least for technology. For consumers and IT practitioners, Windows gave way to Windows NT, and then ’95, ’98, 2000, ME, Vista, 2003, and other versions. You knew what you were getting. Disruption? PC Standards made sure your cheese never moved too far from your mouse.

At the turn of the last century, cell phones were all the rage and soon two separate platforms, mobile and Internet search, were available on our favorite see-me-addicted-using-the-thumb-wheel-device-named-after-a-fruit that we pretended to loathe. Email available anywhere, anytime. From one hand no less.

Around the same time, a new-one-more-thing was born on stage in January 2001 called iTunes. In 2003, the iTunes Store was launched. In 2007, the iPod evolved into an iPhone with three, integrated platforms: mobile, search, and social. Three years later, iPad offered new experiences with a new form factor.

We know how this story of which-device-experience-would-you-choose has played out. The big bang was not iPhone or iPad. It was iTunes and your trust. The critical path to mass adoption was not only content, iconic form factor, or consumers seeking look-at-me aspiration, but the brand trust you had that Apple would safeguard your credit card for you to monetize compelling content via an application-centric user experience ecosystem. iTunes enabled value chain customization across your authenticated end-points, and Apple understood that before anyone else to achieve a network multiplier effect that spread adoption of its ecosystem.

BlackBerry believed it was a device company and structured its value chain accordingly. Apple shifted its, and the consumer’s, value chain with not only iTunes, but also a compelling UX ecosystem with built-in analytic feedback to continuously improve choice opportunities for consumers to self-manage their experience value chain. As a result, Apple not only continues to dominate the industry profit pool for smart devices, but applications as well.

Engagement is pervasive via paid subscription, freemium and free-based models. Data, for insights, and innovation (applications) are available on-demand and no longer confined behind your firewall. Sunk cost psychology is last century. Pricing is transparent.

Comfort in the Rear View Mirror
In a standards-based, need-to-know, linear controlled world, the future unfolds in a mostly incremental and logical manner. Disruption occurred at the periphery, and we found that comfortably supported our change belief system.

Today, mobile, social, search, applications, cloud, and big data/content are relentlessly converging, with minimal standards, to form new, integrated systems, business models, and marketplaces. Consequently, disruption has moved from the periphery to your distant front view, and now into your seat.

In the world of IoT, integrated ecosystems intensify the rate of innovation and expand traditional competitive boundaries for creating system-centric value at the end-point connection.

When your end-customer value chain shifts, it is possible that you will not have years to respond-or months, or even weeks. By the time you find out, your competitors may already be responding to their markets in real-time- and they’ve been doing so for the last year. They could be ahead of you, over the horizon offering proactive innovation that disrupts because they are earning their customer’s trust, owning their brand promise to win every moment of truth before and after purchase.

Should you respond? Or, does it not matter to you?

Complete Control Does Not Agility Make
Tech is a key enabler but it’s not the critical path. An agile enterprise leveraging OpEx cloud innovation actualizes insights and responds effectively because of its culture, and thus, is a deliberate choice ensuring sustainable scalability. Marketing and IT forge a common language supporting a shared sense of purpose driving measurable results for owners of the brand, and the business. For Marketing, it’s actualization of the brand promise across paid, owned, and earned channels that drives top- and bottom-line revenue. For IT, it’s enabling agility for individualized, secure consumerized mashup innovation accessible behind and in front of the firewall.

The increased appetite (or necessity) for innovation (applications) means that companies are going to be creating their own ecosystems of engagement. In the future, perhaps more of us will no longer strive looking good failing (aka trying) to achieve objectives, alone. Perhaps we choose to get there together. 70% agreement. 100% commitment. Systems-based collaboration. The “I win, everyone else loses” zero-sum fantasy does not mean agility either. Your successful competitors realized it’s not just about the data or the insights.

The companies that succeed believe it takes more than technology and hard work. It takes cross-functional teamwork and a shared sense of purpose. It is our collaborative relationships that enable continuous disruption for first mover advantage that maximize the firm’s profit pool share in the ecosystems in which it competes.

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