Five steps in the digital transformation and how you can generate more sales with IIoT
Do you want to lead your company into the digital age with a “digital transformation” and already have a vision of which IoT solutions are necessary for this? That’s great! But before you start implementing your project idea, we have a few suggestions.
Good preparation is crucial if you want to master the digital transformation in your company and successfully implement your IoT project in particular. In this article, we provide you with important food for thought that you should consider before and during implementation.
1. use a strategy that takes data and partners into account and pursues clearly defined IoT goals
A well thought-out strategy for your digital transformation forms the basis for all further steps. So before you start, you should think about the following points in particular:
Define your most important goals: If you want to develop an IoT solution, the focus should always be on the need. You need to know what problem you want to solve and for whom. Once you know these two factors, you can derive the most important goals.
- Think about how you can use your data: Machine data offers you and your customers enormous potential to improve workflows and processes. However, you can only exploit this potential if you define specific use cases. Let’s assume that you have a high failure rate because some machine components, such as cutting heads, wear out quickly. Instead of replacing these components before they wear out at a certain point in time, data can help you determine the exact service life. This allows you to maximize the service life of the components without having to accept failures.
- Find the right partners: You probably don’t have the resources to implement your project on your own. Digital projects require different skills than machine software. Do you know the strengths and weaknesses of your team? This will allow you to identify specific areas where you need support from external providers. They can support you with the knowledge and manpower you need to successfully implement your IoT project.
2. keep the scalability of the solutions in mind
Your IoT solution should support your needs – today and in the future. Your solution can be as good as it is today. If you have to discard the entire solution in the future, it will be a wasted investment. To see if your solution is scalable, you should keep a few questions in mind:
- Is your solution designed for more devices to be connected in the future (from a few hundred to hundreds of thousands)?
- Is your solution able to handle different types of endpoints (both hardware and software)?
- Can you easily operate your solution on other cloud platforms, as a multi-cloud or in other regions?
- Can it support cross-platform application usage scenarios?
"Think about how you can use your data: Machine data offers you and your customers enormous potential to improve workflows and processes."
3. start small and focus on quick wins
It is not necessary or desirable to build the entire solution at once. On the contrary: start by identifying areas, potentials and optimization opportunities that offer your company the greatest added value.
For example, at logicline we helped a manufacturer of sawing machines to become a digital pioneer in its industry. An ambitious goal that could only be achieved with a well-thought-out strategy.
A decisive step was to gain more transparency about the machines in operation. To this end, a KPI app was developed that provides the company with a comprehensive overview of the availability and performance of its machines. The company can also use the app to access its machines from anywhere.
Machine data enables predictive maintenance
Evaluating the machine data also paves the way for predictive maintenance. Potential problems are detected before they arise and can be rectified via remote maintenance. For the company and its customers, this means less downtime and greater machine efficiency.
In addition to the right focus, a proof of concept can help to prove the value of your technology. Not only can you reduce the costs of your project, but it also makes internal negotiations easier. With a meaningful proof of concept, you can demonstrate the added value of your project much more easily, convince the stakeholders in your company and identify further potential.
Important here: Choose a very specific and ideally measurable use case. It should be possible to prove valid key figures and a good ROI.
4. validate your progress continuously, also with customers
Your idea is only as good as the added value you create for your company. For this reason, you should continuously monitor the progress of your project and the results achieved. Depending on your company, different approaches can be used to validate your business case:
- Internal test environment: You can validate your solution internally in a test setup and measure the effect.
- Employee test: You can ask your employees to use the software in their day-to-day work and give you feedback.
- Pilot project: You can test the project in a pilot project with a selected group of initial customers and ask specifically for feedback.
If you validate your project in advance, you can put your assumptions to the test. This way you can find out whether your priorities are set correctly and gain valuable insights to optimize future strategy and implementation.
5. think about new and expanded business models
Companies do not invest in IoT solutions because they find the technology interesting. They also invest because of economic necessity. IoT solutions can change your business from the ground up. They can influence how you interact with your customers, how you generate profit and what you see as your competitive advantage. Consider in advance how your solution can help your company establish new business models.
The following approaches are conceivable:
- As-a-service models: It is conceivable that you will no longer sell a piece of equipment or hardware, but instead offer a service. In this case, a device or machine can be used by your customers on a subscription model. The subscription fee covers both the costs of selling and maintaining the equipment. Rolls Royce, for example, is an engine manufacturer that has sold its engines to airlines. In the meantime, the manufacturer has developed into a provider that rents out its engines and provides maintenance and servicing.
- Monetize data: Companies that have access to sensor and machine data can use it to generate additional revenue. On the one hand, you can make your raw data available and charge a fee for access to this data. On the other hand, you can offer an analysis of the raw data and alert machine operators to upcoming maintenance work or optimization potential in advance, for example. Billing can take place either via a subscription model or on a success basis.
- Pay-as-you-go: Here, your customers only pay for a service if they actually want to use it. Machine builders charge for the service when customers actually use it. Payment models such as payment per hour, per warning or results-based billing are possible. This can open up new customer groups.
- Revenue sharing: A business model such as revenue sharing or outcome-as-a-service is also an option. For example, an engine manufacturer can help its customers to optimize the engine performance of the machines in order to save operating costs. The manufacturer can profit from this by sharing in the savings achieved.
Digital transformation requires good preparation and agile implementation
Good preparation is crucial for a successful digital transformation in the company. Only if you are aware in advance which problems you want to solve for which target group can the implementation be successful. In addition, you should always keep the added value for your company in mind. Evaluate how your IoT solutions can generate long-term added value for your company.
