April 2017

Innovations in Comfort, Efficiency, and Safety Solutions.

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Monetizing The IoT

Is it About Light Bulbs, Managing Light Bulbs or Something Else Completely?
Rick Rolston
Rick Rolston,

BuiltSpace Technologies Corporation

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Invariably, any article about the Internet of Things very quickly goes to the hardware or communications between devices, or the falling cost of these devices, leaving potential purchasers to wonder how this technology can be monetized across their operations.

I went looking for exceptions; companies that have made great business cases for their IoT solutions.   I found Philips Lighting. (Site)

At first glance, the idea of giving every light fixture in a building its own IP-address seems like overkill, until you understand Philips' strategy to embed sensors into each luminaire and provide individual control of lighting temperature (color). 

Remote Device Configuration

Philips' offerings start with efficient LED lights (potentially reducing lighting costs by 50% or more when compared to commonly used lighting, if retrofit).  Here are some of the potential benefits that Philips identifies for the IoT:

Productivity For Occupants & Building Managers

Employees can personalize the lighting and temperature at their workspaces using a smartphone app,  while building managers gain real-time data on operations and activities.  Allowing individual occupants or tenants to control lighting mood can attract new tenants wanting to maximize productivity or retails sales, to create a memorable and entertaining retail experience, perhaps with colorful fašade lighting.   Employee productivity benefits may be large, but also difficult to measure.

Building managers gain the ability to remotely control lighting from anywhere in the world, not just that the lights are on or off, but also temperature, intensity and individual control of luminaires.   Value from customer experience, using lighting to provide a dynamic environment, probably outweighs any potential energy savings, in which case the metric could be in revenues per square foot.

Experience For Customers & Guests

Indoor GPS, providing a precise position within the building, is a game changer for facilities operators, their tenants, and guests, providing opportunities for point of sale offers and wayfinding services. 

In retail, geo-positioning allows stores to offer in-store specials, create personalized experiences, or help customers quickly find products they are looking for.  The possibilities are endless.  The measurable result here may be measured in increased sales per square foot.

Operational Efficiency For The Back-of-House

contemporary Smart retailers will be creating a different experience for each store visit, to draw people back to stores, and effectively compete against online retail sales.  Internet of Things technology will create on-demand retail experiences, but successful execution will rely on the ability to deliver back-of-the-house services at the same speed.  Responsiveness in the back will be measured in fault-to-fix service cycle length, increased sales per square foot, or lower vacancy. Efficiency will be measured in hours per work order, for a similar effort.

But there are gaps in the current Philips offering.  Philips uses the example (above) of an installer replacing faulty equipment, and then having a system expert remotely reconfigure the system.  Likely these two service providers will be employed by external service providers. Here Philips provides only a partial solution. The Philips ActiveSite lighting management system can measure the lighting fault but is unable to measure the work effort between the fault and the fixes (i.e. work done by installer and external system expert).

Closing the Gap with Integrated IoT-Class Business Processes

The full value of the IoT will only be realized when the Philips lighting management system can be integrated with whole building operational technologies (i.e. HVAC, security, life-safety, etc., not just lighting) AND with digital (financially-based) service processes that cross enterprise boundaries. 

The IoT should replace manual (human) processes with machine-based processes.   Humans may cost hundreds of dollars per hour. Machines may operate for pennies.  The Philips system can identify lighting or other environmental faults, but it is how those faults are measured and managed (including real-time labour, energy and time), that will determine responsiveness and ROI on IoT implementations.

The IoT is rapidly evolving, with companies like Philips delivering real value to building operations.   IoT-class service management platforms like BuiltSpace, are filling the gap, to fully incorporate operational and information technologies, enabling the monetization of the IoT.


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