Case Study 1

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Internet of Things : Case submission 1

Aishwarya Sarda 2013001

1. What is the potential (art-of-the-possible) of IoT to drive business


value/shareholder value?
Internet of Things is defined as a worldwide information infrastructure in which both
physical and virtual objects are identified and connected over a network, enabling
innovative and advanced services. Every interconnected device creates data, which
can be analysed to create further business opportunities.
For the e-commerce players, IoT would enable value creation by expanding the scope
and depth of the industry by analysing customer behaviour and enabling transactions
by linking users and devices, ultimately impacting and improving customer
experience. Using IoT , manufacturers and merchants would understand exactly how
much inventory was required for a particular SKU and customer demands could be
met. This would lead such applications as : Supply Chain Management, Inventory
Management, Smart Homes, Maintenance systems and so forth.
A higher degree of interoperability is captured that enables maximization of value
between shareholders. In developing economies where ecommerce and manufacturing
are shaping to scale at larger units, remote monitoring applications can be adapted at a
faster scale using IoT. Implementation of IoT will make the industry dynamic and
enable faster digitization across processes.
As traditional retailers such as P and G, Zara etc see the potential of using IoT for
better integrated systems, the opportunity to scale across libraries, hospitals, logistics,
apparel etc exists. Low cost RFID chips can be used to tag SKUs to transform
businesses by reducing costs significantly.
Largely, studies have shown that IoT can transform this industry in four broad ways:
Optimised Inventory Management, Location Based Personalised Recommendations,
convenient shopping experience and enhanced after-sale relationships to maintain
customer retention.
To realize the full potential, however, its important that shareholders remain frugal
and pursue only those applications of IoT that maximise their long term growth
aspects. There is a shrinking economy, that needs to be utilized to the maximum
potential to harness the opportunity of data driven decision making.
2. What underlying capabilities underpinned by IoT that enable the value
generation?
IoT would link entities that were offline in the traditional ecommerce and
manufacturing models and transform them by connecting them over internet. This
would enable a larger degree of data extraction and analysis to recommend
personalised customizations to an individual. Manufacturers, merchants and resellers
list the products on the platform to enhance shopping functionality. The platform
works as an online shopping mall or the goods basket. The services would then be
delivered as requested by customers. To link these physical and virtual entities over a
network, the following capabilities are underpinned by IoT to enable value
generation:
1. Device: These are the “things” that need to be connected to implement IoT
2. Data: Data needs to be created, extracted and cleaned from all devices in the
network.
3. Analytics: We need to be able to analyze the data to make the IoT applications
meaningful and useful.
4. Connectivity: Data needs to move – data can be sent or received only when there
is a connectivity present. Connectivity integrates the above three pillars to create
value.

3. What are the enablers (internal and external to the firm) to unleash these new
capabilities to generate business value?
Both external and internal enablers are required to work in tandem to implement the
IoT applications to grow capabilities and generate value. The complete flow of an
ecommerce shopping experience involves a strong business model with planned
activities to generate profits. The following eight elements are required to ensure
internal enablers: value proposition, revenue model, market opportunity, competitive
environment, competitive advantage, marketing strategy, organizational development
and management leadership.
In the case of external enablers, competitive pricing, personalised recommendations
and reduction of search and delivery costs generate value for the firms in this
industry. Companies may plan numerous go-to market strategies, yet the bargaining
power remains with consumers. The threat of substitutes remains high and hence the
bargaining power of customers demanding the product/service remains high.
4. What are the challenges, limitations & risks involved in widespread adoption of
IoT?
Companies are looking to adopt IoT methodologies – however, there are
dependencies on advanced, reliable and secure information and telecommunication
technology infrastructures. IoT can connect almost any device, but at the moment,
most things in use are still not connected. The lifetime value of devices has spanned
over several years which did not warrant the need for such connectivity. Furthermore,
there were standards that were present in adopting IoT but none were fixed that could
be used as standards to expand and bank upon. Additionally, not only is trust and
security a concern, but also the amount of energy spent on creating and maintaining
IoT devices would render the already created ones useless. This would negatively
impact the environment.

sReferences :
1. https://www.mckinsey.com/~/media/McKinsey/Industries/Technology%20Media
%20and%20Telecommunications/High%20Tech/Our%20Insights/The%20Internet
%20of%20Things%20The%20value%20of%20digitizing%20the%20physical
%20world/Unlocking_the_potential_of_the_Internet_of_Things_Executive_summary
.pdf
2. https://www.zinwave.com/das-solution-blog/understanding-the-pillars-of-iot

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