[Part 2/4] IoT Essential Truths: Share Data, Don’t Hoard It

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IoT Essential Truth #1: Privacy and Security Must be a Top Priority

— Part 2 / 4 —

Don’t get cocky because you think you’ve internalized the need to make privacy and security the top priority for your IoT projects.

The second Essential Truth [from The Future Is Smart] also represents a tremendous attitudinal challenge. It asks us to abandon a belief that’s been ingrained in business strategy since the very birth of the Industrial Age: today, we must share data, not hoard it.

Why We’re Hesitant about Data Sharing

Let’s go back a while: to 1789, to be exact. At that time, it was illegal to take plans for one of the revolutionary Arkwright spinning mills out of England because they gave the country such an economic advantage. However, no one could keep twenty-one-year-old mill mechanic Sam Slater from memorizing the plans, then booking passage to the United States, pretending to be a farm laborer, since it was also illegal for a skilled mechanic to emigrate. There he launched the U.S. Industrial Revolution by building a mill in Pawtucket, Rhode Island.

The same zero-sum mentality toward information, in which you were a winner if you possessed proprietary knowledge and I was a loser if I didn’t, continues to shape our business strategies.

With the IoT, it can be mutually advantageous to share the real-time data about things that the IoT produces. It’s a variation on the “network effects” phenomenon that Ethernet inventor Robert Metcalfe discovered: a product or service’s value increases proportionally to the number of users it has.

Indeed, a corollary to “share data, not hoard it” is that we must learn to routinely ask: who else can use this data? For example, Pratt & Whitney now gathers as much as ten gigabytes of data per second from the five thousand sensors on its new jet turbines, which they use to detect the earliest sign of operating problems so they can do less expensive, more rapid “predictive maintenance.” They also offer that data to their airline customers for a fee, creating a major new revenue stream while helping their clients. AirAsia Group, for example, saves up to $10 million in fuel costs yearly using that data to change flight paths and optimize air traffic flow.

Sometimes the benefits of sharing IoT data are realized entirely within your company. SAP created a nifty prototype IoT snack vending machine that recognizes users who opt in by name when they approach using Near-Field Communication (NFC). Then it asks, for example, if they “want the usual,” based on past purchases. It might even offer a package discount for chips and a drink, as well as nutritional information.

That alone would be innovative, but the software firm goes further. Real-time data on the machine’s remaining inventory is sent to the distribution warehouse, where machine-to-machine (M2M) processing updates what the driver will deliver to replenish the machine. If the overall system detects that one of the machines is experiencing especially high demand, then the driver’s iPad will reroute her to that machine—all without human intervention.

Data sharing in this way contributes to one of the IoT’s most important business benefits: letting you squeeze out inefficiencies and operate with maximum precision. Continually analyzing the operating data and identifying deviations will allow you to make continuing, sometimes minute, adjustments to processes.

  2) Become Better Together

Perhaps the most widespread example of mutual benefits from sharing IoT data is the IFTTT (If This, Then That) site, where a constantly growing number of IoT device manufacturers post the Application Programming Interfaces (API) for their devices.

Users—including those without any technical skills—can use the APIs to mash up various devices and commands. For instance, when it’s time for bed, you say, “Alexa, trigger bedtime,” and Amazon’s Alexa will turn off the WeMo switches—two different devices from two different companies, linked into a powerful combination that makes both more versatile, created by a user who just wants to make his life easier!

  3) Harness Other's Insights

Perhaps most striking is how a company sharing its IoT data instead of hoarding it can lead to benefits of a totally different kind. According to Chris Rezendes of IoTImpactLab, Grundfos, the Danish pump manufacturer, now builds sensors into the pumps it installs on remote African water wells, so that it is notified when a pump isn’t working and needs servicing (since it can take days for a repair person to reach there). Grundfos also made that data publicly available, and an ingenious local resident created a phone app that the women from villages miles from the wells can check before they leave with heavy water containers on their shoulders, to avoid a wasted trip if the pump isn’t working.

That’s a great example of a phenomenon that kicks in when you throw open access to IoT data. No matter how smart Grundfos’s are, there’s no way they would have invented this app: their work and life experiences are too different from the villagers’. That’s just one example of how opening up data can harness the insights and needs of many users.

Today, individuals, companies, and government all contribute to the mix, sharing their data. Often this is a side effect of investing in smart devices for their own needs. For example:

• Asthma sufferers become de facto Health Department investigators just by taking a puff on their Propeller smart inhalers (if they opt-in). Built-in GPS units notify the DPH exactly where they were when they suffered the attack, so it can identify and remedy asthma “hot spots.”
• Waze drivers become auxiliary traffic control officers in cities that negotiate contracts with Waze. When they report doubleparkers or accidents, the traffic department and police are automatically notified, dramatically cutting response times.
• The city of Columbus, which won the Obama administration’s “Smart Cities” competition in 2016, is working with commercial truckers on strategies such as real-time scheduling of downtown deliveries to reduce congestion and an interstate truck “platooning” system that will connect long-haul trucks on the region’s interstates, speeding their arrival and reducing emissions.
• The “Things Network,” is one of the most appealing smart cities initiatives, because it is designed not just to improve city services but also to turn the entire city into an IoT laboratory for free use and mutual benefit by city agencies, companies, and residents. Launched in July 2015, it created a free citywide IoT data network. Other residents quickly capitalized on the network, launching novel IoT initiatives such as an Amsterdam emergency alert system using sensors in canal boats’ hulls, to alert owners that they were taking on water, so the boats could be saved. As of the time of this writing, there are either Things Networks or efforts to create them in hundreds of cities and towns worldwide.

WHY YOUR COMPANY NEEDS TO CREATE DATA SHARING POLICIES

Equally important regarding the attitude shifts to sharing data needed to really capitalize on the IoT’s promise is senior management’s policies on data sharing within companies themselves. Back in the days of almost no data gathering on operations and equal difficulty in sharing it, it made sense for senior management to parcel out data when and where they saw fit. …Because almost all of the data was historical, it was of little value in optimizing operations. The very small amount of operating data was usually collected by a low-level employee who would record readings from a few electro-mechanical gauges on a scheduled basis. Supervisors probably checked the records only in cases when the readings were significantly outside acceptable ranges. It was impossible to “ride the dials,” making minute adjustments to fine-tune operations.

Today, by contrast, the IoT allows the instant gathering and sharing of real-time data, not only from assembly lines, but also supply chains, distribution networks, and even customers in the field. This allows the astounding 99.9985 percent quality rate at Siemens’s Amburg “Factory of the Future”—but only if senior management allows real-time access to everyone who needs it, no matter what level of operations they represent. The choice is yours.

Adapted with permission from The Future is Smart: How Your Company Can Capitalize on the Internet of Things--and Win in a Connected Economy by W. David Stephenson, copyright W. David Stephenson.

TO READ NEXT:

IoT Essential Truth #3: Close the Loop

Bring It Home

Whether it was sharing your favorite doll or your treasured monster truck—someone likely encouraged you to share long before you were even in grade school. Ironically, just as we didn’t want to let go of our prized possession back then, our culture still struggles with this mindset when it comes to sharing what we’ve learned.

What benefits of sharing data do you see on the horizon for your company? Comment below with one data gap in your industry that you’d love to see filled. How could having that data in your hands change the future of your company?