With the advent of Internet of Things (IoT) businesses have transformed to a great extent, creating billions of dollars in the process. But personally I would like to read more about how businesses are examining and adapting their business processes to integrate IoT. I believe that the analysis on business processes needs to happen first. Without that, transformational, technologies like IoT don’t really matter.
“When evaluating a new technology with a vendor, CIOs should be aware of how this new technology can improve the existing business processes”
About 7 years ago, I was working for a mobile carrier, exploring opportunities for future business growth, not just incremental but new businesses promising significant growth. IoT (at that time, it was called Mobile to Mobile, or M2M) was a new frontier. Sending information about the location and condition of physical assets and human beings over the wireless network will make many things possible. Instant update of information about asset location, asset condition, and patient vital signs will help to prevent loss, minimize machine maintenance costs, reduce labor costs, and hospital stays. Remote monitoring of asset conditions, remote asset tracking, mobile health are predicted to be the big areas of growth fostered by IoT.
IoT—A Growth Driver for Businesses
In the ecosystem of IoT solution providers, chip manufactures, mobile carriers, software vendors, and system integrators will collectively grow billions of dollars in revenue from new value creation. But among them, who will see the most growth? It’s the software vendors and system integrators. Because they give businesses the opportunity to retune the business processes and use software tools to support the retuned business processes. That’s why I decided to explore the software business, and I decided to focus on asset tracking, one of the three big growth areas.
When I first looked at the asset tracking function in businesses, I found it inefficient for businesses just to track a certain set of assets in a standalone application. That application hosts the data about the location and condition of these assets, while the majority of asset related data, such as costs, funding sources, contract and project information, maintenance history, chain of custody, work orders are stored elsewhere. The department that is responsible for tracking these assets, typically of high value or high loss rate, provides information to other departments with manual reports. Why should this subset of assets data stay in a separate application?
Then I learned how hard it is to share the asset data across different applications. Because of that difficulty, resulted from organizational and technological legacies, some businesses deploy the new technologies in a sub optimal way. They have deployed asset tracking software that is connected to RFID or GPS devices, tracking a subset of their physical assets, to solve the most immediate pain points (loss of high value assets or sending personnel to remote areas to check the condition of machines).
What if they have examined the holistic opportunity for tracking all physical assets with that asset tracking software, including $800 laptops? These laptops may not be of high value individually, but the large quantity in the organization and fast refresh cycle make them a high value asset group collectively. What other opportunities can you discover if you approach asset tracking from a holistic, business process centric perspective?
I would want our customers to ask these questions. That’s why I have decided that my company shouldn’t just provide asset tracking solutions. We should provide asset management solutions, enabling businesses to holistically manage their physical assets, by improving business processes and collaborating cross functionally.
I have shared my belief with our customers and the broader asset management professional community. Last summer, I spoke in the National Property Management Association’s annual conference in Dallas, TX. The topic was “The Challenges in Implementing Enterprise Asset Management Solution”. One of the key challenges was that the deployment of asset management solutions lacks the broader organizational participation and the holistic approach, and therefore falls short of its promised value. Many people, all asset management professionals, came up to me after the session and asked for permission to share my presentation with their bosses.
Among our customers, I found that if the leaders of the organization, CFO and CIOs, approach asset management as a business processes improvement opportunity, and drive organizational alignment in this, the implementation of asset management solutions will be successful in delivering its value. In one case, we have worked with a customer as they hired a consultant to examine their end to end process for managing physical assets. As a result, they have found multiple sources of returns from improving the process.
Initially, this customer just wanted to find a solution that helps them to automate their annual inventory audit. They were talking to a vendor that provides barcode readers. But after they examined their entire process for managing equipment and supplies, they uncovered many opportunities, including these two areas:
• Every month, they spent a lot of labor hours reconciling the assets in their purchasing systems, expense reports (bought with employee credit cards), and the list of active assets in their access database. What if you can eliminate these labor hours?
• Every year, they spend a lot of labor hours reporting on the usage history of equipment purchased with different funding sources, and provide reports to different funding organizations. Again, these labor hours can be eliminated.
These opportunity areas have nothing to do with asset tracking technologies. This customer has taken a holistic assessment of the business processes. They have deployed asset management technologies in a way to not only save time in inventory auditing, but also eliminate those other stress points in their business process.
That’s why I believe analysis of the business processes has to come before deploying any transformational technologies. If a business is thinking about deploying asset tracking technologies such as RFID, low energy Bluetooth, or cellular chips, there is an opportunity for them to assess their entire physical asset management processes so they can drive enterprise wide improvement.
CIOs play a critical role in supporting business process improvement by deploying technologies. When evaluating a new technology, CIOs can ask their team to work cross functionally to identify what processes can be improved with this new technology, and have a clear understanding on the business value from the new technology. When evaluating a new technology with a vendor, CIOs should be aware of how this new technology can improve the existing business processes.
As a software vendor, I love it when the senior leaders in a business or government agencies ask me questions about the process improvement opportunity with our software. Because I know that’s when transformation will begin to happen.