IoT And R&D: Engineering For The Internet Of Things (Part 2)

Thomas Ohnemus

In Part 1 of this series, I discussed how companies should be engineering products for IoT. In Part 2, I’ll describe how products designed for Internet of Things (IoT) have a profound effect on engineering.

The top business initiative for 2016 is to “improve the experience of our customers,” according to a recent Forrester study. And the top way companies expect to achieve that is to “improve the use of data and analytics to improve business decisions and outcomes.”

Increasingly, that data and those analytics will be driven by IoT technologies. Companies will amass troves of IoT-generated information that will give them new insights into customer behaviors and desires, and ideally help them improve customer experience. In the process, they’ll transform the engineering function.

For more insight on how the Internet of Things is impacting your business, join us at the SAP Executive Summit- IoT on October 27.

Faster data, faster innovation

Engineers have always been the people in your company who gaze into a crystal ball and anticipate the future of your customers, and hence, your products. They determine the new features and new products that will satisfy customer desires and bind them to your brand.

In the past, this activity relied on gut instinct, or iterative, ongoing market research. Marketing and sales had a lot of input into the process, but ultimately, companies had to trust that their engineers could execute on their own vision. Engineers also relied on past experience and their own knowledge to estimate how long a produce would last, how much effort would be required to maintain it, when it would have to be updated, and so on.

Today, IoT-connected smart products can generate an abundance of this sort of data in real time. That fundamentally changes how engineers behave. No longer do they have to make estimates and predictions. Now they can see in real time how a product is actually performing in the field, so they can quickly make design changes that result in higher up time, higher customer satisfaction, and potentially higher profit margins.

They can also leverage that information in designing future, even unrelated, products. They can instantly know how product features are consumed. They can see the consequences of new features or design changes. They can understand how a new material affected performance or whether a new design is easier or harder to service.

And because of the real-time nature of IoT data, they can afford to be more experimental, because they can correct course rapidly. As your competitors do the same, product life cycles will shrink, and the market will come to expect faster innovation.

From connections to culture

But IoT data won’t affect only your engineers. It has the potential to influence corporate culture. Apple, for example, is famous for eschewing focus groups and market research. Instead, it relies on the insights and creativity of its celebrated designers to anticipate what the market desires, even before the market itself is aware of what it wants.

But with real-time data streams from smart products, a company like Apple might have to re-think this approach. The data you capture from IoT sensors might paint a different picture of your products and of the market than the one that exists in your engineers’ heads. Companies will have to consider carefully how they interpret IoT data — and how they rationalize it with the knowledge and experience of their designers.

That’s not to say great brands don’t still require genius thinking, because they certainly do. The visionaries like Steve Jobs who think outside the box are the ones that invent new markets and new business models. That’s something IoT technology can’t do.

But now companies have the opportunity to combine the genius of their engineers with a wealth of data from smart products. That will better equip them to achieve the goals identified in the Forrester study: to improve customer experience and to optimize business decisions and outcomes.

How can your company leverage IoT data in your supply chain process? Read the latest white paper around the importance of digitizing your supply chain in the Digital Economy today or learn more about SAP Extended Supply Chain.


Thomas Ohnemus

About Thomas Ohnemus

Thomas Ohnemus is the Vice President, Solution Marketing, Customer Value Office, at SAP. He is responsible for driving the go-to-market strategy, messaging, and demand generation. Thomas has over 25 years’ experience in business software solutions and his PLM expertise has awarded him key management positions in consulting, product management, service, and global marketing. He holds a master’s degree in engineering, and lives in Germany.