What's your tire? Using IoT to transform your product into a service

Consider the humble car tire. This round treaded rubber tube is arguably the most important component of your automobile, particularly when it comes to performance and safety. It’s the only part of your vehicle that actually touches the ground — the tire lives, quite literally, where the rubber meets the road — and it has a number of very important jobs. A tire makes the car accelerate, turn and stop. Remove just one tire and the car isn’t going anywhere.

Tire companies are starting to sense that there might be some new jobs for their product. They’re now embedding sensors in tires to monitor tire pressure, thread wear and tire temperature. With three billion tires sold globally every year, think of how much information sensor-enabled tires could collect (fuel consumption, driver performance, road condition, distance travelled). Harvesting and analyzing this valuable information could position a tire company to be more informed about your driving history than your auto insurance company.

The business model opportunities here are vast: A smart tire company could provide services such as safe driver certification, car operator monitoring, accident report verification and road condition reporting. Smart tires could provide immediate customer benefit, improve service and efficiency, and enable a fundamental shift from a reactive to a preventive and proactive service model. Imagine a tire repair subscription service, one that remotely monitors wear and sends a technician out to replace a customer’s tires at his home. Looking at a possible next generation of this technology, the amount of on-the-ground mobile transmitters could provide a way to track and enhance driver safety. Future tires could communicate with autonomous vehicle control systems, sensing road and weather conditions and adapting to them.

But this is much bigger than tires. There are so many physical objects we interact with in our daily routine that could be a gateway to a larger service model. The technology in products is growing more sophisticated as is the ability of products to solve very specific user needs. These highly focused products will bring more attention to larger service models that either provide an unmet need or streamline a connection to the end user.

So, what’s your tire?

Here are some digital transformation identifiers to consider when determining if there’s a larger service model for the products your company produces. Is there a place for them in the connected digital ecosystem? Could your office chair monitor posture and wellness? Could your light switch monitor the inside of your walls? Let’s determine if connectivity could drive a new business model for your organization.

Identify the larger activity
Achieving and maintaining excellence at your product’s core activity is a lifetime of constant evolution and iteration … but this is not enough if you wish to use digital to expand into the service arena. To do so, your product must partner with its intended user and context to understand how it can enable a heightened relationship.

How can your product partner with customers to address unmet user needs? It’s important to identify the larger activity the user is engaged in when using your product and discover how to support the user’s overall goal — and not just address a singular aspect of it. For instance, Nest’s mission is “to create a home that takes care of the people inside it and the world around it,” which goes beyond selling single thermostat or home monitoring system.

Own the larger ecosystem
Once you’ve identified the larger activity, consider the collection of products and services that can be incorporated under the umbrella of your product’s service model. Does this ecosystem allow the freedom to adapt product offerings while staying true to your product’s core intent? If this is the case, you can provide multiple experiences for your customers by establishing a single platform to satisfy multiple customer needs. For example, Caterpillar has built a data ecosystem that helps its customers cut operating costs and increases productivity. The company is now extending this ecosystem to non-Caterpillar equipment, maintaining its core function as orchestrator of increased efficiency, productivity and safety in construction equipment.

Consolidate where possible
“Simplify, simplify,” wrote Henry David Thoreau in Walden, and he was on to something. You should cast off unneeded layers of interaction to achieve a more direct dialogue between your product and your customer. Don’t allow a third party to step in between your product’s service and your customer. Blockchain, for example, is a decentralized system that can quickly prove ownership of information, eliminating the need for third-party intermediaries and reducing overhead costs when people trade assets directly with each other.

Allow the customer to participate
Be transparent about the data you are collecting with your connected device and give the user access to this data. This will allow users to personalize and develop unique ways to interpret and employ the information. In turn, you’ll be able to use these insights to create offerings catered directly to your customers’ needs, which should result in a personalized delivery of service.

In 2018, it’s a very good idea to be as open as possible with the people you’re serving. Today’s consumers are well aware of the tradeoffs here. They understand, for instance, that in giving their data to Waze, they get the app’s superb and reliable navigation software — but they don’t feel like their trust is being abused. If you’re going to go the data collection route, be as open with the data donators as you can be.

Our current state of digital transformation is allowing us to reconfigure our relationship with the product and services that surround us. Understanding how your product can better engage with users and promote information sharing is paramount. You can now activate your product and strengthen important connections with the user to create more direct pathways of interaction. How can your product become less static, learning, adapting and evolving based on user behavior? The success of your product is its ability to customize itself to the user’s contexts and needs. Smart connected products require a rethinking of design to humanize technology and develop a stronger relationship with the people using them. Companies that can accelerate this transition from product to service will be able to establish business models they can own and control. This heightened connection with users could also make a huge positive impact for society. With great product positioning comes greater responsibility, and the objects of today need to act as the bridge for the product services of tomorrow.

Question is, are you ready to take a spin? At the very least, you should go and kick the tires.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.