A blueprint for your Internet of Things ecosystem

There’s a lot of talk now about Internet of Things (IoT) ecosystems but very little on how to construct one. We know IoT devices could do amazing things if they worked together. But if you manufacture IoT products then how do you go about spotting potential partners with complimentary products? And how do you persuade them to work with you?

My recent research with Samsung’s health app partner, Quealth, suggests some useful answers to these two questions.

Building an IoT ecosystem

The idea of a business ecosystem has been around for a while. James Moore used the idea to suggest new strategies for firms on the 1990s. And even before that others have looked at how firms become mutually dependent through the technologies that their products are based on. 

Nowadays ‘business ecosystems’ is used a lot to talk about how firms are working much more closely with other firms. Or how the success of one product is based on the capabilities of another product or on a service platform.

People tend to use ‘business ecosystem’ and ‘supply chain’ to mean the same thing. But business ecosystems are not supply chains, they are very different. A supply chain is what manufactures an IoT product, a business ecosystem is how different IoT products work together to help their user. 

An IoT ecosystem conjures up a sense of different IoT products sharing data and capabilities to generate services for their user. On its own each individual product gathers a limited amount of data from its few sensors. And each product has few capabilities, it cannot do very much on its own. 

By itself a refrigerator, a phone, a home heating system or a car only has the capabilities to do a limited number of things. 

But combining the data from many IoT products gives a much richer picture of a user’s situation and what they need. And combining the capabilities from several IoT products generates many more options for producing whatever a user needs.

You can see it already with the Waze app. Waze combines real-time traffic and road information from many Waze users to help other Waze users to avoid the worst traffic. Waze users share traffic speed data passively just by having the same app on their phone or by actively warning other Waze users about accidents or traffic jams. 

Different products working together are even better than a single type of product because the data would be much more diverse. And different products with complementary capabilities can add up to produce a much better service, eg if Waze was used to help traffic light systems in real-time.

Each IoT device has it’s own a self-world – and combining self-worlds is the key to making successful IoT services. 

But how do we choose which other IoT products to link up with and which firms should we partner with? What makes diverse data informative and what makes different capabilities complementary?

Use Customer Journey Thinking

Seeing things through the eyes of the customer is a big thing right now. It has evolved from mystery shopping, customer satisfaction questionnaires and customer panels into a strategic objective for any firms that wants to enhance the customer experience.

Digital products – like web sites and anything with software in it – have a powerful ability to personalise themselves to whatever their users need. Improving the customer experience has gone way beyond any ideas of customisation. 

Customers now expect to be in their own segment-of-one not a group of quite similar customers. Services need to be real-time, on-demand and always-on. And products need to fit whatever individual users need right then and there. 

Firms are doing this and personalising each and every customer experience by using Customer Journey Thinking.

Customer Journey Thinking takes in the whole journey a customer is on. It is not just the sum of the touch points where they contact a call centre, receive a text, see a website or visit a shop. It is about subjective experiences – experiences that are different for each individual customer not whole segments. Customer Journey Thinking sees the customer experience like a ‘video’ not a ‘snap shot’. A video of any length from the seconds of a click-through journey through a website to the years of a customer’s life as they use a bank account.

Walking in their shoes and seeing with their eyes

Customer Journey Thinking helps firms to understand what customers experience when they buy a service or a product. But more importantly it helps firms understand how they think. 

How customers see the world and how they think is based on their personal situation. The situation that they are in on the personal journey of their life. 

Customer Journey Thinking lets firms see a customer’s perspective based on that customer’s past journey and personal future goals. So firms can learn to think like them.

Your customer’s journeys are your blueprint

If you can draw detailed customer journey maps for your customers then you can also see what other products they might use. Which other products have sensors that collect data on these same customers’ lives? Which other products can lend a helping hand with their individually limited capabilities?

If you can answer these two questions then you can see which other manufactures to approach. If you understand the journeys that your customers are on then you now have the logic to persuade these potential partners to join with you – to help your mutual customers to reach their destinations quicker, more easily and with a better experience.

Duncan is a lecturer at Nottingham University Business School and he also writes on his own blog and for Econsultancy’s blog.