The Internet of Things and Business Systems Integration

The Internet of Things

How the IOT Will Revolutionize Business & eCommerce

What if your home could wake you up during the lightest phase of your sleep cycle while playing gentle 'wake-up' music, warming the shower water, and brewing your morning cup of joe? 

If this scenario sounds far fetched, I can assure you that these technologies not only exist, but are already being put to use and we have barely scratched the surface of their potential. For reference, take a look at Amazon Fresh's Dash program, which is a tool that allows individuals to use a stick to order a plethora of consumer items from home. Additionally, the implications are perhaps even more staggering for the B2B market than the B2C market, with equipment being replaced or repaired before a problem ever arises.

Welcome to the Internet of Things (IOT), a trend in technology that will revolutionize eCommerce, automation, consumer behavior in regards to product use and the importance of CRM as we know it.

integration of internet connected devices with LOB systems


25 Years in the Making

IOT: An Overview

Believe it or not, the idea of an internet of things is not a new one. In their article in 'Foreign Affairs' magazine, MIT Professor Neil Gershenfeld and Cisco IOT Architect JP Vasseur describe how work on extending the internet into things began as early as 1995. However, implementation was limited by a relatively small, finite number of IP addresses and the cost of necessary hardware integration with everyday objects. Today, these limitations no longer apply. IPv6 and work on the extension of protocols allows for a virtually limitless number of internet addresses for literally every device we could ever want to connect with a network. Additionally, "microcontrollers measure just millimeters across, cost just pennies to manufacture, and use just milliwatts of electricity, so they can run for years on a battery or small solar cell.

Most businesses plan to deploy internet of things in the near future and 82% of them will be connected by 2017, according to BI Intelligence. If Google's $3.2 billion acquisition of smart thermostat Nest is any indication, the Internet of Things will be big business. The chart to the right shows the expected business benefits of IOT implementation. Challenges include securing the web of interconnected systems and the ability of IT systems to quickly adapt to change. Business Insider has a great slide deck on IOT trends that you can view here.

McKinsey&Company breaks down IOT applications into two categories: information and analysis, automation and control. Within information and analysis you have behavior tracking, situational awareness and sensor-driven decision analytics. Within automation and control you have process optimization, resource consumption optimization and autonomous systems. Check out their article here for more in-depth analysis of each category.

However, both BI and McKinsey & Company fail to emphasize a tectonic shift in the way companies will do business.


Sourcing Business Intelligence

How the IOT Will Streamline Predictive Analytics

As a result of thousands of devices streaming information through networks the the companies that sell or manufacture them, businesses will acquire a mind boggling amount of new data on the way customers use their products. Thus, these companies will garner invaluable business intelligence enabling them to improve products, services and marketing messaging. All of this is of course amazing and exciting, yet pales in comparison to the most important factor. The revolution lies in the advent of predicting consumer demand and and the corresponding ability to meet needs instantaneously (well, almost instantaneously). In the age of the internet, where everyone is used to getting what they want in seconds, such advances are irresistibly tantalizing.

Amazon is already working on predictive shipping and home delivery of fresh groceries via Amazon Fresh, which is why I used them in the home delivery scenario above. Individual customers get their groceries exactly when they need them, and Amazon uses this data in aggregate to streamline its business processes by predicting demand and adjusting strategies accordingly. Over time, the ability to predict will only become more robust as historical data is used to predict how wars, natural disasters, local weather, civil unrest, hit movies, popular tv shows, geopolitics and an infinite number of other variables affect demand. The same principles apply to B2B companies who sell products ranging from vehicle parts and industrial equipment to lights and medical devices.

This ability to predict and meet consumer needs almost instantaneously naturally results in a more pleasurable business experience for the consumer, and as such makes them more likely to continue doing business with that company. This is where companies can capitalize on better products and services to increase customer retention strategies that extend the customer life cycle.


The Birth of Amazon Prime, Doordash...

Customer Retention through Automated Service

IOT integration with LOB software | ClarityConvenience in the age of the internet cannot be overstated, and while automation teaming up with customer retention sounds a bit counter intuitive, this partnership provides customers with comforts that will keep them coming back: convenience, ease and simplicity. Customers get what they want or need before they even realize they want or need it. Take the air filter in my house for example. Do I remember to check it monthly? No. Do I take my time bothering to replace it on the off chance I do realize it needs replacing? Yes. Am I highly likely to sign up for a service that automatically sends me replacement filters when they are needed? Yes. The same can be true of light bulbs, fish tank filters, dog food, groceries, game controllers, pool filters and more.

If the customer has the option to search for a product they need only once and then they never have to worry about that process again, don't you think they'd agree to a service that does just that? Of course this is already being done in some respects, but it is not nearly as convenient and streamlined as the IOT will allow it to be. As convenience, service and product satisfaction increases, so too does the likelihood of this kind of arrangement becoming more and more common. The key to this kind of retention lies in eCommerce.


How Does eCommerce Benefit?

eCommerce, IOT and Line of Business Application integration

eCommerce is only going to grow bigger as more and more devices capable of making purchases are connected to the internet. If you don't have an eCommerce website and it's not mobile friendly, stop reading this and get on top of that before your business keels over and dies like Blockbuster.When a customer checks out of an eCommerce web store, their credit card and shipping information must be acquired to ensure payment and delivery. Duh. However, eCommerce allows for easy collection of extra data like email addresses, phone numbers, social profiles and more. This allows companies to avoid any misunderstanding by sending an email reminding the customer that you are replacing their coffee and eggs and that their card will be charged X amount of money. For other companies, it allows them to retain customers by warning them that their product is about to need to be replaced followed by an inquiry as to whether or not they want to order a new one.

However, integration of this data with line of business (LOB) applications like CRM and ERP systems, among others, as absolutely essential. Pulling this information into individual CRM profiles, as well as information from the connected device they have bought allows you to monitor their individual customer profile for replacement, repair, usage and more. As mentioned before, all these individual profiles aggregated can give you correlative insight into usage and the product itself. Without LOB eCommerce integration, not only is none of this possible, but your competition will swallow you alive. IOT, eCommerce and LOB application data needs to be integrated onto one intuitive platform to take full advantage of this exciting new technology.


What about Security?

Challenges Moving Forward

Two obvious challenges are security and integration. Secure smart device networks with private data and sensitive information need safeguards that mitigate the possibility of theft or malicious attack. Thankfully, cryptography is a blossoming field that will help stem a wave of security and privacy concerns. Layered security protocols and consumer education (cough people using simple passwords cough) can also help with the safe implementation of the internet of things.

Integration is challenging for most businesses. Companies worry about total cost over time, ability to scale and adapt, the IT resources needed to maintain the system, time to deploy and security. Additionally, IOT integration with eCommerce and LOB systems will require custom integration. In the end, it all comes down to the company chosen to build the custom integration. We've created this comprehensive guide to integration projects that can help navigate you through a complicated process.

The internet of things is a remarkable technological revolution full of advantages to our everyday lives and the way we do business. For those that take full advantage of this bounty, the rewards are limitless.


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