Planning to sell a Thing? With IDC projecting that the global Internet of Things (IoT) market will be worth $1.7 trillion by 2020, enterprises from all sectors are embracing the opportunity to cash in on connecting their products, services, and devices of all kinds to the Internet.
But selling an IoT device isn't like selling any “traditional” product. With IoT technology comes a fundamental change in business models and the ways in which you engage with customers. Your relationship with them will likely be continuous, with new payment models and new expectations for service. But can your enterprise software systems support this new style of relationship? It's not what they were designed for.
So let's do a quick check of the enterprise software capabilities you need in order to start profiting from the IoT.
- Manage and fulfill a multi-modal product.
Your IoT product likely comprises not just hardware, but also software, data, and services – think Apple Watch: Apple tracks usage of the watch, but the app providers own the data around the interactions in the app– or some combination of these. This means it crosses over several categories that your traditional enterprise systems probably kept separate, which raises the question: can your ERP system handle the challenges of managing and fulfilling a multi-modal product?
It's not currently possible to handle multi-modal products using traditional ERP solutions. Right now, it takes your staff extra time and effort and it creates errors that can undermine customer satisfaction. But, some next-generation ERP systems enable you to leverage a unified data model that creates custom data-rich objects so you can wrap all the details of products and related services into a single “Thing” for ease of management.
- Bundle up
Bundles are a key characteristic of IoT offerings, and chances are your customers will want you to offer a wide variety of them. The options may look good on your website pages, ads or brochures, but behind the scenes, it's probably not going to be pretty.
Most businesses end up using spreadsheets with a tangle of tables and joins to describe each product or package of services because their existing business applications and ERP systems cannot support multiple fulfillment, invoicing, and revenue streams for the same product. You too might be able to support your offerings for a while this way, but it's going to cost you. Efficiency and customer satisfaction are likely to suffer, and you might not even get paid fully for your offering because of flaws in the system. It doesn't have to be this way. Next-gen ERP offers all the flexibility you need to mix and match your offerings as many ways as you like and manage them as coherent entities, without complex and fragile connections.
- Differentiate & innovate
One value of introducing an IoT offering is to quickly differentiate your product from other companies'. So many businesses will be stuck trying to sort out how to incorporate multi-modal offerings into their enterprise systems that it will be challenging for them to get their products to market quickly. But for your business to succeed, it is essential to deploy enterprise systems that can match that flexibility, or you might not be able to deliver, track, and invoice accurately. With the right tools in place, you should be able to carry out extensive customization of your offerings and introduce new ones as your business innovates without ever touching a line of source code in an ERP. You should be able to add new fields, logic or workflows—and keep your customizations during updates so you can take advantage of new technologies and capabilities.
- Leverage a single, unified view of the customer
Part of the problem with complex IoT offerings is that they can fragment your view of your customers. Take the example of mobile applications on an iPhone – the usage and behavior data of a single user may be spread across 30 or more apps, Apple, as well as the mobile carrier, like AT&T or Verizon. Each “owner” of this data has a partial view of the customer, but no one entity has a complete view.
Don't let legacy systems or management by spreadsheet fragment your view of the customer, because you can only understand and anticipate what customers might need next when you see the whole picture. Insist on systems that deliver access to a secure, real-time single source of master data, transactions, and conversations, and allows you to create custom reports and dashboards to spot customer trends—for individuals and groups—across product and service lines.
- Don't settle for what you've got, scale up to what you want.
You've got to creditearly adopters of the multi-modal product model, like Tesla for example, for their ingenuity. But don't follow them too closely: even though they're leading the way with a new offering, they may be risking customer satisfaction—and they might not actually be recognizing 100% of the revenue they've earned. Most have patched together some data from their ERP system and other data from Excel spreadsheets, which makes fulfillment and invoicing problematic. Such companies can't reliably generate an accurate real-time understanding of everything still owed to a customer—or to the company.
Thanks to the early adopters and the lessons learned from watching them, you have options they didn't. You can start with a more complete understanding of what's required to successfully sell and support an IoT offering. And you can benefit from the development efforts of companies and user groups who have been busy creating next-gen business applications to support this new wave of market change.
It's exciting to focus on how you're going to create and deliver a breakthrough entrant to the IoT market. It's not so exciting to think about those classic ERP functions—global financials, order-to-cash, procure-to-pay, inventory management, and planning and production processes. But the bottom line is… well, the bottom line. Getting paid is mission-critical. Clearing a profit, operating efficiently, keeping customers happy—those tried and true values are core to your success.
So don't let your technological enthusiasm carry you ahead of your revenue stream. Start researching solutions now and make sure they have the capabilities you need to succeed. This way, when you're ready to launch your next generation of products into the IoT market, you'll be able to manage them effectively—and profitably.