The buzzword of Internet of Things or Industry 4.0 is often connected with the Idea of Digitization. However, the term is inadequate to describe the essence of it. Industrial machinery and products where digitized over 10 years ago, the key changes to happen concern the flow of information. Most production tools are still "silos" where a lot of valuable information is locked and constrained. Connectivity will allow the flow of information and data to create positive effects of increased flexibility and efficiency.
Example of Connectivity over Digitization
A prime example where Connectivity drives innovation for already digital products are Thermostats and our mobile phones.
Digital Thermostats like the one shown above have been around for decades. Although fully powered by microprocessors the devices were still "dumb" since their view of the world was limited to three inputs
- A schedule that defined the target temperature for each time of the day
- A temperature sensor to measure the current room temperature
- A outside temperature sensor to determine the required heating power for the current weather
Getting information out of the Thermostat was only possible through reading the built in display. The degree of connectivity for this type of device was 0.
Another example for a digital product are our first mobile phones. Those device where digital from the beginning. The connectivity of the devices in terms of data that could be sent and received was limited to voice and text messages. The shortcomings of those devices where that they only could connect with a limited set of devices. Ubiquitous machine-to-machine connections where not possible.
Modern Thermostats like tado° on the other hand connect with various data sources to extend their operating model. This ranges from including weather forecasts to avoid heating when warm weather is anticipated up to controlling the need for heating through occupancy and user presence through the users Smart Phone location sensors. Intelligently combining these data sources with user preferences makes the devices smart and better than any conventional digital Thermostat.
For mobile phones it is even more obvious how the drastic the impact of increased connectivity was. Mobile internet fueled global innovation and created the App-Economy and will continue to play an important role in our lives.
From Connected Devices to Connected Businesses
Increasing connectivity of devices allows the transformation of Businesses, so that they themselves can be more connected. Internet connected devices allow to build meaningful relationships between consumer and Businesses as well as between Businesses.
Direct, always available communication on our mobile phones, made "Share" and "On-Demand" business models successful. With the bulk of devices still "offline" there is large room for manufacturers to transform their businesses to take advantage of the new gained connectivity of their devices to offer better service to their customers or improve upon their own efficiency.
For example many processes follow the schema
- Information Retrieval
- Implementation of Solution (a.k.a. creation of value)
Just imagine a service technician being called to a broken machine. His first task it to "retrieve information" from the machine to diagnose the fault. Only after he obtained the information about the fault he can begin fixing it. With self-diagnose sensors embedded into the machine and a machine-to-machine communication the device can send an error-report to the service technician, allowing him to skip the costly information retrieval. In a similar fashion the problem of "information retrieval" will be fixed for a lot of processes. Many new business processes and models will follow along the lines of
In order to solve Problem,
Device or Person needs to know Information
which we can provide via Connected Technology