Embracing IoT Demands Embracing Design Thinking as Well

We have been identifying the rise in prominence of design thinking across many service providers for well over a year now and as we highlighted in this PoV, we anticipated it to continue coming to the forefront in 2015. One of the biggest drivers for this is the increased attention to not only running enterprises better but also running them differently as well. In parallel to this trend, we are witnessing renewed attention to IoT and believe activity in this space will necessitate every participating service provider to adopt a design thinking approach. 

At its core, IoT involves two components. 1) The association of data to a physical device. 2) The delivery of this data from that device to a centralized repository for further processing. The devices delivering the data may or may not create the data themselves and may or may not process the information prior to delivery.  i.e. They can be intelligent or dumb – ranging from an item tagged with an RFID chip that is coded with a unique identifier to a large sophisticated windmill processing data onsite regarding its power generation. Further, the communication of the data may be done via a combination of wired and / or wireless networks. These networks can be either open or private and while this communication is often carried out via IP protocol, it is not a requirement. As a result, IoT includes a broad set of activities some of which have been ongoing for decades such as certain aspects of industrial control.

As such, many see IoT as nothing new and though an important trend not one to get overly excited about. However, we believe associated activity around IoT will surpass most expectations. The reason is twofold. First, IoT is not a tightly defined technology market but rather an operational concept that relies on the deployment of a broad range of underlying technologies – many of which are actively deployed already today. Second, as the costs of creating, gathering and analyzing data continues to drop, business cases for embracing IoT will dramatically rise. This will result in the definition broadening from one largely focused on heavy machinery to one touching every industry – including even consumer-packaged goods. Such activity is already happening today and we anticipate it will accelerate throughout 2015.

However, given the breadth of technologies and use cases around IoT, there are few predefined roadmaps for adoption, as such, it demands enterprises also adopt a creative approach to deriving maximum benefit while minimizing risk and cost. Enterprises are encouraged to embrace Designing Thinking alongside any effort of IoT. Doing so will ensure enterprises do not simply apply IoT to digitize and automate current processes but instead unlock new value in their enterprises. Design thinking allows for – even demands – a cross functional approach to ideation and problem solving that can help an enterprise take new approaches to old problems. Design Thinking can also help it identify and evaluate new opportunities to pursue. Conversely, traditional methods of process improvement such as Six Sigma tend to codify existing approaches. The gains to be had from IoT are broad, from process improvement to the creation of entirely new products and services, and Design Thinking will allow all of this to be explored.