The Missed Opportunity of IoT

Maturity of IoT Solutions

Offer basic information support
Offer remote operability support
Offer performance improvement insights

Monetization of Iot Solutions

do not generate service revenues from their
IoT solutions

Integration with Third-Party Solutions

provide IoT solutions that integrate with third-party offerings

Maturity of IoT Solutions by Industry

  • Industrial Manufacturing
  • Medical Devices
  • Utilities and Automotive Manufacturing
  • Insurance
  • Home Appliance and Pharmaceuticals

Methods of Capability Build-Up

Are partnering to develop IoT solutions
Have made acquisitions
Have developed open platforms or APIs

The Internet of Things: Are Organizations Ready For A Multi-Trillion Dollar Prize?


What's stopping us from exploiting

Two recent surveys from Capgemini reveal that while businesses understand the potential, most are a long way from achieving any benefit from the IOT.

The IOT: Are organizations ready for a multi-trillion dollar prize? estimates that less than a third currently generate any revenue from their connected products, mainly due to lack of infrastructure or technical skills to turn Big Data into something practical.

More worryingly, Securing the Internet of Things Opportunity: Putting Cyber Security at the heart of the IOT also reveals that too many businesses developing IOT products are prioritizing speed to market over keeping themselves and their customers safe. Eight out of 10 of the devices surveyed didn’t require a password stronger than 1234, with home automation and medical devices the least resilient to crime.

Just under half of these organizations also fail to provide any privacy related information regarding their IOT products. Consumer nervousness over how personal information may be used threatens to undermine the impact of Big Data, because mistrust makes us less willing to buy connected products.

Both reports highlight that companies are failing to ensure that they have specialized teams with the right skills in place to see through their IOT strategy or development processes from the start, be it a security team, data analysts to translate code into readable insight or an external operator to create the platforms on which to manage the data.

Capgemini’s recommendation is that most are going to need help from expert and vertical partnerships to achieve the necessary change in mindset internally and externally to successfully monetize the IOT.

Lanny Cohen
Capgemini Group CTO

Read about the key principles of governing the Internet of Things
Read about the impact of the Internet of Things on security

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Michelin from selling tyres to delivering smart services

RFID chips in tyres have been on the drawing board for more than 10 years. Connectivity is allowing the manufacturer to gradually reposition its business model.

What impact has the internet of the Internet of Things had on Michelin’s business?

Agnès Mauffrey : “Michelin is changing its game plan. We will obviously continue to be a manufacturer, but our business model, which was based on selling products, is gradually evolving towards the provision of services drawing strength from our renowned product quality. For example, with smart sensors and in-vehicle telematics, we are no longer simply selling tyres, but kilometres for vehicles, or a number of landings for aircraft.”

What data do you collect and how to you use them?

A.M. : “We use new technologies from the Internet of Things to collect a broad array of extremely accurate data, such as tyre pressure. Once the data have been analyzed, our engineers and technicians can issue recommendations, typically for improving the safety and profitability of a fleet of vehicles. Services are created from these recommendations. In June, we deployed a laboratory that operates in real time: the road usage laboratory. What that actually means is that smart sensors have been fitted to 2,800 vehicles throughout Europe. These vehicles belong to drivers with varying levels of experience. Their journeys will be studied over a three-year period. Furthermore, the data collected are not exclusively reserved for developing services. Our researchers use the data to mastermind new products with the aim of continually breaking new ground in the market.”

the Internet of Things forces us to be extremely agile

Has the Internet of Things changed your internal organizational structure?

A.M. : “Yes, our organizational structure is changing, because the Internet of Things forces us to be extremely agile. We are currently working with small mixed teams featuring business and IS profiles. Using complementary skills is one of the keys to successfully leading our projects. It enables us to very quickly check whether a project is viable and fit for its intended purpose. As such, we work with short iterations and we prioritize speed over complexity. This approach means that we can focus on the essentials and paint a more realistic picture of what is actually happening on the ground. It is now been over five years since we implemented these so-called agile work practices. At the same time, we are developing a big data platform. The goal is to prevent our technologies from becoming scattered and therefore enable us to focus on business value above all else.”

According to Agnès Mauffrey, this change implies new work practices.

Agnès Mauffrey
Chief Information Officer, Michelin Group

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Everything connected and nothing is connected

Today you can connect lots of things to the internet, some you would never expect.
Perhaps an easier question to ask then is 'What can you NOT connect to the internet' these days? I honestly think this is a rapidly diminishing list.

Ultimately, Internet of Things is about automated data collection from the source itself and as an Insurer, this is imperative to your success. It’s what drives our very industry, right from the very first research, through to quote, bind and every event thereafter that drives your risk, pricing and actuarial teams. Getting this and monitoring this directly from its source has huge potential in today’s traditional insurance business model.

One example of positive uses of data is Uber whose data is supporting city planners with urban transport. Insurers could use the same data to avoid accident black spots, congestion and much more. Traffic systems would be linked directly to the flow, density, type and vehicles themselves. Basic data such as time of day, postal code or gender is simply not enough anymore. IoT Connected services can change all of this.

Insurers can also use data to know in advance of an event, ultimately improving customer experience, security and well-being, based on what you know and offering the appropriate cover to maintain peace of mind for your customers.

With everything connected, what could go wrong?

Opportunities come with a health warning too. For me, there are three key things insurance organizations should consider:

  • 1. Insurers are really competing on data, nothing more.
  • 2. Consider the implications of cybersecurity.
  • 3. Understand how this will and can drive New Business Models, based on customer demand.
For once, the insurance industry could be as quick as everyone else to adopt, or be ahead.

We are at the forefront of data enrichment and much more. We can better price, engage and interact with our customers and prospects as a result of this. We can interact with each and every stage of the insurance life cycle, we can join and automate the dots faster and better than ever before.

It’s an exciting time, and while it may be a while before the legacy oil tanker turns, you better be ready and at the wheel if you are to own or orchestrate the opportunity.

Nigel Walsh
Vice President – Insurance

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They wanted to track my daughter? Great, but why?

Connected vehicles:An insurance opportunity lesson for automotives

The other day at around two in the afternoon my daughter passed her driving test. At 2:30 I was already being asked to secure her insurance. So, I knew I needed to do some quick research.

After looking around I found a good deal, and was about to pay when I was told that the deal would be even better if I was prepared to accept the installation of a “small telematics device” in the car to monitor her driving.

It turns out, the insurance company wanted to use her car's data to look for trends and insights from a network of drivers to optimize their costs and services. They offered to reduce the annual premium by €500 if I would allow them to collect data from the car!

Whilst I was delighted with the deal as a consumer, I was also worried as a lifelong-member of the automotive industry.

How could an insurance company value collecting this kind of data so highly, yet the car industry still debates the value of having full connectivity in vehicles? We’re still talking about if it is worth fitting dongles on OBD ports or sensors on the CAN-bus!

I’m old enough to remember mobile phones used to be called “car phones”, and yet somehow the car industry never made a penny from the technology. Surely this is not another innovation that is going to pass the industry by? The data generated by vehicles can be monetized by the automotive industry. I certainly hope we’ve done so by the time my daughter is buying insurance for her children!

Nick Gill
Auotmotive Lead , Capgemini

Read why the automotive industry should stop selling cars.
Watch how car customer Lily benefits from her connected car.

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Monetizing IoT: The challenges and opportunities for telcos

Cast your eyes over analyst forecasts for the Internet of Things (IoT) and it’s hard not to get excited over the sheer size of the apparent monetization opportunity.

At first glance, telcos would appear to be in a good position to take a lead in delivering IoT solutions: They have own critical parts of the infrastructure—of course networks and connectivity, but also billing, customer relationship management (CRM), data centers, and operational and support systems (OSS/BSS)—in place to help enable innovative services. And they have strong brands.

But competition will be fierce. Telcos will need to find ways to monetize services in the face of competition from established over-the-top (OTT) service providers with strong consumer connections, such as Google, Amazon, Facebook and Apple—as well as a host of new players wanting a slice of the IoT pie.

The challenges for telcos will be many and varied, but put the right people, processes, and technology in place and the opportunities will be equally great.

Here’s just a taster of the many things that will need to be considered:

Put the necessary infrastructure in place to take advantage of the growing requirement for cloud computing

IDC predicts that more than 90% of all IoT data will be hosted on service provider platforms within the next five years as cloud computing is adopted to reduce the complexity of supporting IoT.

Advanced services will need to be supported by elasticity in storage and computing and also on the networking level. Close integration of hardware, software, and distributed computing and storage will be needed to handle burgeoning IoT data. Powerful analytics tools will also be needed to ensure that data is processed effectively to provide the real-time services customers expect.

Move beyond being a connectivity provider to developing a more proactive role in managing the platforms that power the IoT ecosystem

To drive towards a next level of benefits, service delivery and operations requires policies, compliance and governance orchestration catering to an ecosystem – not just for individual OEMs and companies. The telecom industry has a track record of driving towards standardization and interoperability. Robust and flexible real-time billing and charging solutions will be required to support different business models and vertical industries (B2B and B2C) in order to monetize IoT services. Do so, and the rewards will follow.

Ensure that you have the technology and skills in place

Protecting organizations from the increased security and privacy issues that IoT brings will be key to any IoT proposition over time. In essence, ensure the capability to promise, maintain and manage data and SLAs.

Put the necessary channels and vertical partners in place to provide competitive and relevant IoT solutions across different industries. Put emphasis on the ability to quickly demonstrate possible solutions, and the ability to fail fast and iterate during solution and service development.

Karl Bjurstrom
Head Digital Strategy & Transformation

Read more about the future of the "Internet of Everything"

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10 Steps to Launch Your IoT Project

  • 1. Identify a need and market

    The value of the smart device lies in in the service that it brings to the customer. Identify the need to develop a strong offer that brings value rather than creating a simple gadget.

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  • 2. Validate your idea

    Carry out market research to determine whether the device in question already exists. Benchmarking will allow you to pinpoint any competitors, find sources of inspiration, and areas for improvement.

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  • 3. Prototype the device

    New digital creation techniques, such as 3D printing, are the ideal solution for producing prototypes faster and for less money. They also promote iteration, which is key process when designing the device.

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  • 4. Connect the 'Thing'

    Right now, there is no mandatory standard for interconnecting different devices. Choosing the right technology is essential if the device and the service are to enrich the information system and eventally the user experience.

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  • 5. Develop the application

    Today, the main smart devices are linked to an dedicated mobile app. Since the app transforms the smartphone into a remote control, it must be easy to use for your end-users.

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  • 6. Manage the data

    Fitted with a multitude of sensors, smart devices generate an enormous amount of data, which need to be processed and stored with the utmost security.

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  • 7. Analyze and exploit the data

    By processing and analyzing the data, the company can extract the key information required to deploy the right service at the right time an din the right place.

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  • 8. Measure the impact of the smart device

    Set up probes to monitor your devices and data traffic quality. This will help you measure the impact of the smart device in real time and adapt its actions accordingly.

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  • 9. Iterate to fine-tune the device’s use

    After launching the project, feedback needs to be taken into account in order to adjust and fine-tune the project. Due to its very nature, digital technology requires continuous adaptation and iteration.

    "Try & learn" is the fundamental principle behind digital transformation when imposing a new use.

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  • 10. Prototype again

    Continuous adaptation and iteration means that your company needs to produce a new prototype.

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Read how designers could upgrade to Design Thinking 2.0 in face of Internet of Things