How to turn data into profit

A clear scope that aligns with long term strategic objectives is crucial when defining where to invest in data utilization and data-driven business models.

 

IoT business models offer great opportunities to differentiate…

  • Significant revenue increase through creation of new business models and revenue streams
  • Better understanding of customers, their needs, and potential solutions
  • Major cost reductions through streamlined operations and thereby higher overall  efficiency

… but a clear scope is necessary for successful implementation

  • How can we create value with our company resources in a data-driven way?
  • What are our company’s use cases?
  • Which part of our business can we further refine with data?
  • How can data be managed effectively across the external supply chain and internal value chain?

Four steps towards a data-driven IoT business model

Four steps towards a data-driven IoT business model

  1. Ideation is driven by a combination of value chain and technology disruptions and trends that present opportunities for new business and threats to existing models. Data driven businessmodel innovation requires answering a wide range of questions related to the customer, product, internal organization, and partner network.
  2. The business model design process is guided by 3 canvases, each addressing critical questions to why, what and how to create a competitive business model. There is no one “right” answer to “build, buy, or partner” for a particular element of the tech stack. The decision is based on competencies and strategic positioning.

  3. The IoT Decision Framework provides a structured process for assessing potential challenges and risks across the tech stack and key decision areas. A company’s portfolio of solutions should also be assessed to ensure that value creation is balanced in order to avoid over or under-investment in specific areas.

  4. There are four critical success factors for achieving profitable growth in IoT markets: Product, Revenue Model, Prospecting, and Distribution. The advantage of digital solutions is their ability to benefit multiple stakeholders with marginal impact on cost. It is thus critical to ask “Where is value left on the table?

Many stakeholders will be involved in the journey from idea to validated business model, but a core team should own the process from beginning to end.

 

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