Have you noticed how The Internet of Things, all those myriad of devices that connect through the internet, is now becoming dependent on The Services of Things? It used to be enough to have a great product but now people are discovering what happens when you hook those things up to the internet. But a connection is not enough, there needs to be a service - a customer-centric system - that makes that product's value exponentially greater.
[VIDEO: STEPHAN FERBER - Director of Communities & Partners Networks, Bosch Software Innovations. Besides doing a very good job of explaining the concepts behind the Internet of Things and Services, the gentleman can write backwards astonishingly well!]
The thinking behind this shift is that for many of these devices it is not enough to simply connect to the internet, they need to provide a demonstrable service that adds value over time and in a variety of contexts.
What got me thinking about this was a post by Pascal Portelli, called The Internet of Things Needs a Mother Tongue. We recently installed a Nest in our home, the internet-enabled thermostat which is exponentially cooler than my description would lead you to believe. Sure, it certainly looks sweet (not trivial) but it also learns our behavior and adjusts heating and cooling to the most efficient way possible and it does it across time and in differing circumstances and contexts. That's a service, not just a product and consider the astonishment Honeywell must have felt when they witnessed someone enter their market with a product + service offering! Nest is a game-changer and a harbinger of things to come. Product manufacturers will need to look at attaching services to these products rather soon. So, yes, the product does connect to the internet so it is part of The Internet of Things but it also is a learning system, a service which makes it part of the Service of Things. And, yes, I also use Jawbone UP, Withings scale and blood pressure monitor, Ambient Devices Weather Station and several other products that also have begun to offer something looking very much like services. San Diego Gas & Electric has embraced the Green Button open data initiative which allows customers to engage in a level of service management never seen before from a utility company. If you start connecting the dots between the Green Button initiative, Nest thermostats and a cornucopia of desktop, mobile, tablet, and television screens, you begin to see the Services of Things coming to life.
To further clarify the importance of understanding of the notion of service think of an insurance company. They offer what they call "insurance products" but are they really in the product business? I would say no, they certainly have specific products they offer but from a customer perspective they are a service business. How do I become educated on the insurance you offer? What is it like to buy from you? What happens when I have a problem? And what is the experience if I file a claim with you? All of those are service touchpoints that can be fumbled by a company believing that they only sell a product.
Perhaps this is a good time to point back to the discipline of Service Design because when talking about The Services of Things we are talking about consistent and cohesive interactions over time and regardless of touchpoint or device. So, in essence, this is where Customer Experience, Service Design, and things like customer journey maps become centrally important because we are really looking at products that provide services rather than just a product that has the ability to connect to the internet.
Stefan Ferber notes, "In the field of mechanical and plant engineering, consider the advent predictive maintenance. When a machine is filled with sensors, it can know what condition it is in and, whenever necessary, initiate its own maintenance."
Tim Walters, writing in The Digital Pulse of the Digital Disruption says, "Whatever three letters you use to name it - WCM, WEM, WXM, CXM, CEM, or WTF - the time has come for a fundamental paradigm shift in how we envision and talk about relating to customers and prospects via digital assets. And most importantly, how we organize to make it happen".
Let's jump back to Pascal Portelli's article on the need for a universal mother tongue, "The Internet of Things will stay restricted if it does not transform itself into what we call the Services of Things. In the end all these connected objects must communicate and share information, content, and status with each other to deliver intelligent and ambient operations that really are the future of the connected home. This is really exciting because devices can be more than connected - they can all be interconnected and speak with one another".
But interoperability is a gating factor here. Portelli correctly points out that there are currently connected devices using disparate and oftentimes competing technologies, operating systems, and language protocols and this is starting to become a problem as we anticipate the service requirements people will demand in the very near future.
OK, so what do we have here? I am a consultant so, naturally, I believe that everything can be explained with either a venn diagram or a 4 x 4 matrix. Just kidding. Not really.
If my hunch is correct we are at the dawn of a lot of work for a lot of people. The intersection of the venn diagram, above, means that as people get more and more internet-enabled devices in their homes, their cars, at work, and heaven knows where else, they are going to insist that these devices are not just products they have purchased but services. And that, in turn, means that the whole outside-in revolution where companies look at their products and services from the outside-in, like a customer (customer experience) suddenly comes front and center as does the need for content management systems and data integration programs that support all this… and the crushing need for something somewhere that somehow provides seamless interoperability between all these devices.
Portelli mention Qeo when talking about creating a software framework for connected devices. [Their site explains the concept well.] These are still early days but by using a publish/subscribe protocol any Qeo-enabled object or application can share its status, its actions, its content or anything else that has been decided to be published to others that have subscribed to it. He uses the example of a video doorbell that can share its camera so that a visitor can be seen by any active screen within the home, or even your mobile screen, when it rings. Or imagine that you received a video call on your tablet and then transferred it immediately to a video screen. But beyond that, there is the possibility of connected objects to services that aggregate useful information during the day, interpret them and propose automated task. That's not just a product, that requires services.
Tim Walters encourages us to think about experience. The concept is derived from the notion of learning by doing and by testing - knowledge gained by trial. Experience takes place across time and in various places, or at least, in differing circumstances and contexts. Think about yourself as customer, are you looking for a consistent and cohesive interactions over time and regardless of touchpoint or device? Do you seek context and task-appropriate assistance? Do you want real-time social support? Yes, of course you do and that is what customer experience, service design, and design thinking are all about.
According to a study undertaken by the Institute of Technology Management at the University of St. Gallen in Switzerland, the services attached to these devices create a value an order of magnitude greater than a device alone. Ferber remarks, "Consider the example of a paper making machine, they note that the sale of the machine itself generates a margin around one to three percent, while selling a related service yields five to ten times as much."
There is much work to be done.