Blog June 18, 2020 Mirza Kotorcic Go to Market Manager , Tele2 IoT

The Classic IoT Use Case

Monitoring & tracking

We spend a lot of time explaining technologies and enablers, but we recognize that we also need to spend time on the drivers for IoT – and you might recognize yourself or your company in some of them.

Before you even started (or start) thinking about IoT there had to be a reason why you were going to do this – a driver towards change. So, in this post let’s go back in time to the original use case, the classic one that is still valid today: Monitoring & Tracking

A key driver to this use case is the KPI that everyone runs to when things are getting rough: cost. Cost is beautiful in the sense that when you need clarity, when revenue is going down, when the cost of labor is increasing it is the mother of KPIs, the one that your CFO will start looking into right away. And boy do they love cutting costs! They will start with asking questions like:

  • Why are the maintenance costs increasing?
  • Why are the FTEs (full time employees) increasing over budget?
  • Why are we replenishing assets faster than planned?

In response to these questions the COO and the operations team go into problem-solving mode, the natural state for the engineers and technicians, who are often the backbone of the organization.

They see that the reason the maintenance costs are increasing is because their devices and machines break down faster than expected, and it probably happens in a drastic way. Machines wear down differently depending on factors like usage patterns in the environment they are placed in. By default, most companies follow a standard OEM protocol when things are due for service, often following time intervals. Accelerated wear and tear means that when one thing breaks there may be a domino effect, with other things also breaking in the machine. This requires more people and time for repairs, and even new machines to replace because the broken ones not worth fixing.

All of these factors drive that famous KPI: cost. So, how to solve the puzzle?

Mirza Kotorcic Go to Market Manager Tele2 IoT

Well, by monitoring your device, machine, or asset by connecting it and receiving data from it you can get a better view of the usage of that asset. You can learn that the usage patterns for this particular machine are completely wrong for what it was designed for – which can lead to switching it for a more appropriate one. The right asset at the right place means decreased costs – and probably increased sales. 

To be clear, I’m not talking about advanced use cases where you put a lot of new sensors on things that didn’t have them before. This is all about connecting to information that is already in the machine – and making sure that that information is sent straight to your company and doesn’t wait for a field technician to plug in manually with an OBD scanner to get the data out.  

 The other sweet spot is that the cost of connecting your machines is relatively low compared to the investment. You probably don’t need to change the whole device or machine – you just need to upgrade it. And best of all, the business case towards your CFO is clear: cost cutting is the focus and that’s exactly what you’ll be doing. 

IoT is all about connecting the physical and digital worlds, but it’s about a lot more than technology. IoT is about understanding how it can enhance your business, in both the short and long term.   

There are any number of use cases across sectors, such as healthcare, but for now let’s keep focus on the more traditional ones. Some of the oldest use cases involve tracking a fleet of vehicles or are like the case described above for monitoring machines. While one is on the move and the other is static, the quantifiable benefits of connecting them are similar. For the fleet, you can optimize the routes compared to manually designing them based on pure assumption. You can also monitor driver safety and behavior, fuel consumption, and much more. With static machines there is the usage pattern example, but also monitoring other information that is otherwise collected on site.  

IoT is just part of your larger business model and the transformation digitization brings when your CFO comes knocking at the door with that cost KPI to be lowered.

When you connect an asset, you have the cost of the technology and a predictable connectivity monthly cost as your investment. In return you get all the information you need in your business operations systems, laptop, or app to optimize that asset.

So, when getting that question on the investment you have to be prepared and have asked yourself:  Does it makes sense to connect assets and get an overview of them that is constant and quantifiable? You will find that it makes exponential sense after adding up the costs of even one on-site visit. 

So, what are the other benefits? What is your ROI?  You save money on maintenance costs, number of FTEs, and asset utilization, which are the 3 questions asked previously by your CFO, but the benefits also extend well beyond that.  

Think about the assets you have and, starting from the OG of IoT use cases Monitoring and Tracking, ask yourself where it makes sense to connect.

• What value will you get from connecting an asset? 
• What is the additional business potential? 
• What pain points will be addressed?
• What are other companies in your industry connecting and what value are they getting?  

Here is probably when the CTO or CMO need to join the room to explore these opportunities together, when you go beyond operational savings only. But maybe we can lean into that in a separate blog post.

Mirza Kotorcic
Go-to-market Manager
Tele2 IoT
mirza.kotoric@tele2.com



Mirza Kotorcic
mirza.kotoric@tele2.com
Go to Market Manager
Tele2 IoT