The IoT Ecosystem |
Find a value proposition to all actors involved in the ecosystem. |
Buchener and Uckelmann (2011) Ehret and Wirtz (2017Ehret, M., & Wirtz, J. (2017). Unlocking value from machines: business models and the industrial internet of things. Journal of Marketing Management, 33(1-2), 111-130.); Leminem et al. (2015); Ghanbari et al. (2017Ghanbari, A., Laya, A., Alonso-Zarate, J., & Markendahl, J. (2017). Business development in the Internet of Things: A matter of vertical cooperation. IEEE Communications Magazine, 55(2), 135-141.); Saarikko, Westergren, and Blomquist (2017Saarikko, T., Westergren, U. H., & Blomquist, T. (2017). The Internet of Things: Are you ready for what’s coming?. Business Horizons, 60(5), 667-676.). |
Increasing complexity in coordinating all the partners involved in IoT. |
Buchener and Uckelmann (2011); Glova et al. (2014Glova, J.; Sabol, T.; Vajda, V. (2014). Business Models for the Internet of Things Environment. Procedia Economics and Finance, 15(14), 1122-1129.); Leminem et al. (2015); Novales et al (2016Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched” digitized” products: building blocks and challenges. In AMCIS 2016 Proceedings - AIS.), Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.), Verdouw et al. (2013Verdouw, C. N.; Beulens, A. J. M.; Van Der Vorst, J. G. A. J. Virtualisation of floricultural supply chains: A review from an internet of things perspective. Computers and Electronics in Agriculture, v. 99, p. 160-175, 2013. ), Wortmann and Flüchter (2015Wortmann, F.; Flüchter, K. (2015). Internet of Things: Technology and Value Added. Business and Information Systems Engineering, 57(3), 221 -224.), Bilgeri and Wortmann (2017Bilgeri, D. & Wortmann, F. (2017). Barriers to IoT Business Model Innovation, in Leimeister, J.M.; Brenner, W. (Hrsg.): Proceedings der 13. Internationalen Tagung Wirtschaftsinformatik (WI 2017), St. Gallen, S. 987-990.), Ghanbari et al. (2017Ghanbari, A., Laya, A., Alonso-Zarate, J., & Markendahl, J. (2017). Business development in the Internet of Things: A matter of vertical cooperation. IEEE Communications Magazine, 55(2), 135-141.); Saarikko, Westergren, and Blomquist (2017Saarikko, T., Westergren, U. H., & Blomquist, T. (2017). The Internet of Things: Are you ready for what’s coming?. Business Horizons, 60(5), 667-676.). |
Define the control over hybrid solutions, the hardware, and the software side. |
Ehret and Wirtz (2017Ehret, M., & Wirtz, J. (2017). Unlocking value from machines: business models and the industrial internet of things. Journal of Marketing Management, 33(1-2), 111-130.) |
Security in the transactions between business partners. |
Burkitt, (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.), Ehret and Wirtz (2017Ehret, M., & Wirtz, J. (2017). Unlocking value from machines: business models and the industrial internet of things. Journal of Marketing Management, 33(1-2), 111-130.); Keskin and Kennedy (2015Keskin, T. and Kennedy, D. (2015). Strategies in smart service systems enabled multi-sided markets: Business models for the internet of things. In System Sciences (HICSS), 2015 48th - IEEE.); Novales et al (2016Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched” digitized” products: building blocks and challenges. In AMCIS 2016 Proceedings - AIS.), Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.), Rong et al. (2015Rong, K., Hu, G., Lin, Y., Shi, Y., & Guo, L. (2015). Understanding business ecosystem using a 6C framework in Internet-of-Things-based sectors. International Journal of Production Economics , 159, 41-55.), Verdouw et al. (2013Verdouw, C. N.; Beulens, A. J. M.; Van Der Vorst, J. G. A. J. Virtualisation of floricultural supply chains: A review from an internet of things perspective. Computers and Electronics in Agriculture, v. 99, p. 160-175, 2013. ) |
The Product/ service development |
Higher complexity in product design - servitization and products as-a-service demand new capabilities in traditional products. |
Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.), Tesch (2016Tesch, J. F. (2016). Discovering the role of scenario planning as an evaluation methodology for business models in the era of the internet of things (IoT) In Twenty-Fourth European Conference on Information Systems (ECIS) - AIS.), Wortmann and Flüchter (2015Wortmann, F.; Flüchter, K. (2015). Internet of Things: Technology and Value Added. Business and Information Systems Engineering, 57(3), 221 -224.) |
Synchronizing the processes of software and hardware development. |
Novales et al (2016Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched” digitized” products: building blocks and challenges. In AMCIS 2016 Proceedings - AIS.), Wortmann and Flüchter (2015Wortmann, F.; Flüchter, K. (2015). Internet of Things: Technology and Value Added. Business and Information Systems Engineering, 57(3), 221 -224.) |
Keep simplicity of product design/user experience. |
Novales et al (2016Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched” digitized” products: building blocks and challenges. In AMCIS 2016 Proceedings - AIS.) |
The Value proposition |
Define the value proposition for clients - services with real aggregate value. Customer demands and expectations are still hard to discern. |
Ehret and Wirtz (2017Ehret, M., & Wirtz, J. (2017). Unlocking value from machines: business models and the industrial internet of things. Journal of Marketing Management, 33(1-2), 111-130.); Leminem et al. (2015), Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.), Burkitt, (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.), Verdouw et al. (2013Verdouw, C. N.; Beulens, A. J. M.; Van Der Vorst, J. G. A. J. Virtualisation of floricultural supply chains: A review from an internet of things perspective. Computers and Electronics in Agriculture, v. 99, p. 160-175, 2013. ); Bilgeri and Wortmann (2017Bilgeri, D. & Wortmann, F. (2017). Barriers to IoT Business Model Innovation, in Leimeister, J.M.; Brenner, W. (Hrsg.): Proceedings der 13. Internationalen Tagung Wirtschaftsinformatik (WI 2017), St. Gallen, S. 987-990.), Ghanbari et al. (2017Ghanbari, A., Laya, A., Alonso-Zarate, J., & Markendahl, J. (2017). Business development in the Internet of Things: A matter of vertical cooperation. IEEE Communications Magazine, 55(2), 135-141.) |
Privacy issues need to be considered in the value proposition. |
Burkitt, (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.), Ehret and Wirtz (2017Ehret, M., & Wirtz, J. (2017). Unlocking value from machines: business models and the industrial internet of things. Journal of Marketing Management, 33(1-2), 111-130.); Keskin and Kennedy (2015Keskin, T. and Kennedy, D. (2015). Strategies in smart service systems enabled multi-sided markets: Business models for the internet of things. In System Sciences (HICSS), 2015 48th - IEEE.); Novales et al (2016Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched” digitized” products: building blocks and challenges. In AMCIS 2016 Proceedings - AIS.), Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.) |
The firm’s internal capabilities |
Chance of new entrants and nontraditional competitors increase as smart, connected products become part of broader product systems; it challenges the firm’s capabilities. |
Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.) |
Identify specific organizational capabilities to support the strategic implementation of IoT based products/services. |
Burkitt, (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.), Li et al (2012) Li, Y. et al. (2012) Towards a theoretical framework of strategic decision, supporting capability and information sharing under the context of Internet of Things. Information Technology and Management, 13(4), 205-216. ; Novales et al (2016Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched” digitized” products: building blocks and challenges. In AMCIS 2016 Proceedings - AIS.), Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.) |
A realistic assessment of which capabilities should be developed in-house and which new partners should develop is key. |
Burkitt, (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.), Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.) |
The Technology Infrastructure |
The high complexity of technology components and IoT infrastructure. |
Burkitt, (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.), Ehret and Wirtz (2017Ehret, M., & Wirtz, J. (2017). Unlocking value from machines: business models and the industrial internet of things. Journal of Marketing Management, 33(1-2), 111-130.); Ju et al. (2016Ju, J., Kim, M.S.; Ahn, J.H. (2016). Prototyping Business Models for IoT Service. Procedia Computer Science, 91, 882-890.), Leminem et al. (2012); Novales et al (2016Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched” digitized” products: building blocks and challenges. In AMCIS 2016 Proceedings - AIS.); Porter and Heppelman (2014Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November, pp. 64-88.), Tesch (2016Tesch, J. F. (2016). Discovering the role of scenario planning as an evaluation methodology for business models in the era of the internet of things (IoT) In Twenty-Fourth European Conference on Information Systems (ECIS) - AIS.), Wortmann and Flüchter (2015Wortmann, F.; Flüchter, K. (2015). Internet of Things: Technology and Value Added. Business and Information Systems Engineering, 57(3), 221 -224.) |
Definition of interfaces, interoperability protocols, and standards. |
Burkitt, (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.), Buchener and Uckelmann (2011); Hognelid and Kalling (2014)Hognelid, P.; Kalling, T. (2015) Internet of Things and Business Models Empirical Illustrations of How the Business Model Concept Helps Us to Understand Strategic Implications of Internet of Things Investments. In IEEE 9th International Conference on Standardization and Innovation in Information Technology.; Leminem et al. (2015), Verdouw et al. (2013Verdouw, C. N.; Beulens, A. J. M.; Van Der Vorst, J. G. A. J. Virtualisation of floricultural supply chains: A review from an internet of things perspective. Computers and Electronics in Agriculture, v. 99, p. 160-175, 2013. ); Ghanbari et al. (2017Ghanbari, A., Laya, A., Alonso-Zarate, J., & Markendahl, J. (2017). Business development in the Internet of Things: A matter of vertical cooperation. IEEE Communications Magazine, 55(2), 135-141.) |
Large volumes of data need to be kept and analyzed |
Burkitt (2014Burkitt, F. (2014). A strategist’s guide to the Internet of Things. Strategy+ Business, 77, 1-12.) |
The generation of Revenues |
Forms of monetization of data are complex/difficult to define/forecast |
Tesch (2016Tesch, J. F. (2016). Discovering the role of scenario planning as an evaluation methodology for business models in the era of the internet of things (IoT) In Twenty-Fourth European Conference on Information Systems (ECIS) - AIS.), Verdouw et al. (2013Verdouw, C. N.; Beulens, A. J. M.; Van Der Vorst, J. G. A. J. Virtualisation of floricultural supply chains: A review from an internet of things perspective. Computers and Electronics in Agriculture, v. 99, p. 160-175, 2013. ); Bilgeri and Wortmann (2017Bilgeri, D. & Wortmann, F. (2017). Barriers to IoT Business Model Innovation, in Leimeister, J.M.; Brenner, W. (Hrsg.): Proceedings der 13. Internationalen Tagung Wirtschaftsinformatik (WI 2017), St. Gallen, S. 987-990.) |