Why IoT got stuck
Why is the adaptation of #IoT going so slowly? Over the past few months I came across many articles on my LinkedIn feed regarding this topic. Some people think that it is because of expensive cellular modules. Some people believe that there is a need for more maturity and interoperability if it comes to connectivity methods, communication protocols and IoT platforms. And some people think that it got stuck because there is no clarity about data ownership. There is some truth in these statements. But I think that the main problem here is that we just don't know how to start innovating.
Let's be honest, how many of us have done it before? In the past 30 years we have seen many game changers and disruptors but only a few innovators. If it comes to innovating, the most of us haven't done it before. And that's a big problem because there are many new technologies at our doorstep, not to change a game or disrupt but to #innovate. Yes, I am talking about the cliche terms like AI, blockchain, machine learning. But you know what? With the right attitude I think it should be easy to create a unicorn which can solve world problems with his magical sparkles. Let alone AI, #blockchain and IoT.
Don't get me wrong. I know that we have achieved some great stuff over the past few decades. We started by using computers and digitalizing the data of our companies. A few years later we went online with our products and services and many years later we started with agile transformation. Well done. Seriously! But we were not innovating, we were just using innovations to optimize our business processes and improving both the quality and quantity of our services. But today, with IoT, we are all in the innovation seat. We have something and we need to make it connected to create new ways of adding value for our customers.
The biggest mistake that we are making while adapting IoT or any other new technology is that we are doing this with the status quo in our mind. I find it very hard to explain what I exactly mean with this statement. So first I will give an example of a situation where it has worked to start with the status quo. There’s a big chance that your organization adapted the agile method of software development in the past 8 years. But software development is something what we were already doing for decades before implementing agile. So it was easy to transform from the former methods to a new method. The former method of software development were serving the same goals as agile software development. So to figure out how to transform to agile, we just had to look at the status quo. For example, there was an analyst who tried to gather all the requirements and translate it to a clear instruction for the developers. Now we have refinement teams who are getting these jobs done. We just changed the game (thankfully).
If we look at IoT we cannot do it the same way. Because the status quo, the current situation without IoT, is not serving the same goal as your future goal with IoT. This applies for everyone in the IoT chain. Whether you are the manufacturer of coffee machines, a water utility company, a software developer of an IoT platform or maybe the connectivity supplier. Today, the water utility company is supplying water. Tomorrow, using IoT, the water utility company will supply insights on the quality of water and many other kinds of data regarding water. Two completely different goals. A telecom supplier is now delivering communication services to a company so that the employees can call each other and with customers. So today, the telco is facilitating the business management of the customer. But tomorrow, by delivering IoT connectivity, the telco has direct impact on the business of the customer's company. E.g. yesterday T-Mobile delivered some smartphones and 4G subscriptions to the water utility company (which is helping the employees to communicate). Today, with IoT connectivity, we are delivering a service to the water utility company which enables the water utility company to deliver new services to their customers. So even for the telco we can say that with IoT connectivity he's serving a completely different goal than what he was doing before IoT.
IoT is not just a game changer, it is an innovation which brings new value, products and solutions. When you are going to apply IoT, it doesn't make sense to start from your current situation. Because today you are doing other stuff than tomorrow with IoT. And yet many companies got stuck by looking at their status quo and starting from the current situation. Especially the big corporates. Before applying IoT they start with questions like 'how are we going to implement it in our existing procurement system, which business unit will be responsible for it, where is the handover from service delivery to the customer service exactly'. All these questions only exist because the procurement system and the service delivery are part of your current situation and your status quo of doing business. Some parts of your current situation will not be part of your future situation. And some parts of your current situation will play another role in your future situation. In my case, service delivery is not a part of our IoT business. The ARPU of IoT connectivity is extremely low so we needed a scalable and smart way of fulfilling the service delivery. Hence, we automated everything. Customer Service on the other hand, is becoming more important for our users, because we are delivering a new service and still need to learn a lot. But for the manufacturer of coffee machines customer service will become less important because the coffee machines will be fixed before they are broken. So we really need to stop thinking about our current situation, otherwise you are limiting yourself while you try to figure out how to act in a new situation.
So what should we do then? Experiments. A lot of experiments. Question everything what you are used to doing and check if there is another way to do the same. A way that you did not try before. You need to have a team with the full freedom to experiment. A team with an exemption for security policies, procurement processes and IT policies. This way you are giving them the full space to get rid of the current situation and find out how to innovate. And to make sure that it will be a success you need to create a team with people who are eager to learn. Of course, everyone says he's eager to learn but I am sure that you can see the difference between someone who's claiming it and someone who gets satisfaction from learning.
Nice story. But does it really work?
Let me explain to you what we have done at T-Mobile. We already knew that IoT was something different for us as a telco. So we created a separate team with people who are extremely eager to learn new stuff. We knew that we were about to deploy a new cellular IoT technology (NB IoT) for low powered IoT devices. As a company we were used to make powerpoint slides to show the people how amazing the new technology will be and how much we know about it and how amazing we are. Instead of doing what we used to do we invited some people who are involved in IoT to a barbecue somewhere at a parking area. One of the first things that we learnt is that it will take years before we will know who our target customer will be or maybe we will never have a specific target customer. So we created a product which is easy to use for everyone: corporate, start-up, software developer, hardware developer, infrastructure company, water utility company etc. If we would have done what we used to do, we would still be chasing verticals today.
After a few barbecue sessions we deployed our NB-IoT network. We could have done what a telco is used to do: spending months to create a proposition and then invite some 'friendly' customers. But wait a minute. Friendly customers? That's what we are used to right. But shouldn't all your customers be friendly customers? Yes. So we just started an Early Access Program and invited everyone to develop an IoT solution for free on our network. What did we learn? We learned about a new and upcoming craftsmanship: the IoT designer. The IoT design company sometimes has a hardware development background, sometimes it is an experienced software developer and sometimes it is just an all-round nerd. The common thing is that these companies are very good in prototyping of the end-to-end IoT solution and it should be very easy for them to start with small pilots. So we created an accessible proposition which makes it possible to easily sign-up for small amounts, low investment and even the possibility to have a monthly subscriptions instead of long contracts. If we would have done how we used to do it, we would still be trying to create a product for a friendly customer who were already working together with us for years and we would never have met the new craftsmanship which is just starting up and getting more important day by day.
And then we started a pre-commercial pilot offer for a symbolic fee. What did we learn? There was a utility company who needed an IoT solution but didn't order the connectivity. It was the hardware developer who ordered the connectivity. So the hardware developer became or customer and the utility company became the end-user. But for another use case we had the situation that the utility company ordered the connectivity and also hired the hardware developer. And we also had the M2M solution provider who ordered the connectivity for two use cases. For use case one he was working together with a hardware developer which is specialized in smart-metering and for use case two he worked with a hardware developer for tracking solutions. That's why we are creating an online workspace where companies can add different users to their IoT connectivity projects.
In my opinion it definitely works to have a seperate team with people who fiddle around just to learn how to act in a new world. With pride I can say that we are one of the few who are ready to scale up with connected things. Now we're waiting for the others. So please stop organizing IoT events to figure out why IoT got stuck and just start fiddling around! ;-)