A Three-Step Approach to Build IoT Business for Manufacturers

Manufacturers have been building products (or things) for a very long time. A major shift is in the competitive landscape is about making these products or things “smart”. Now, people not only need a light bulb, but they want a “smart” light bulb. Now a blood pressure meter has to be able to save historical data, provide trend analysis, and make it available to doctors for better care of patients. Same is true for any other product that we can think about. A new IoT industry is emerging rapidly with smart, connected products that can do much more than traditional capabilities of these products.

Any manufacturer who does not seriously pursue a “smart products” strategy will definitely be left behind and go out of business. It is written on the wall, although some people may not see it.

The question for manufacturers is how should they pursue a smart products strategy and get into the Internet of Things or IoT universe.

If we look at the evolution of smart things, it can be described in a simple diagram as follows. Most of the manufacturers are creating “things” at the very left hand side. The target is to move the right with smart connected things that can integrate into consumer and business applications. The big question for manufacturers is how to get there?


  • Step One – The first step in the IoT strategy for manufacturers is to identify what intelligence they can build into their products. At minimum the products should be able to collect data. Ideally any product should be able to take some action based upon the collected data, receive instruction through standard protocols, and take some action based upon received instructions. The manufacturers need to think about “use cases” for their products. A smart light bulb can change color of light, intensity, and other characteristics based upon surroundings, is able to conserve energy, and so on. This is where the imagination of people is the only limit. A manufacture must believe that each product can do more than what it is doing today.
  • Step Two – The second step in the strategy is to build capability where smart products can communicate with external world and with each other. A manufacturer can get help from open source protocols, Internet and wireless service providers, and software components built by different vendors. Partnership with external companies can play a key role in expediting connectedness of smart things. Cellular wireless networks may be the best choice for mobile products or remote areas. On the other hand, traditional networks may work well for stationary products. In some cases manufacturers may have to build “gateways” to talk to smart products and external vendors can help achieve this goal very quickly.
  • Step Three – Any IoT strategy needs to bring value to the manufacturers in terms of money and to consumers in terms of better functionality and convenience. Integration of newly smart products with business or consumer applications is a must to achieve value. Typical consumer applications are focused on mobile phones whereas business application integration may include customer relationship management systems, ERP, data analytics and so on. While thinking about integration, the manufacturers must adopt standardized APIs and other interfaces so that any application vendor can consume data, make decisions and communicate back to the smart things/products.

Connected smart products are not only business imperative but also can generate new revenue streams for manufacturers in terms of ongoing service contracts. By adopting this approach and logically dividing the IoT journey in different parts manufacturers can use a divide-and-conquer approach to quickly go to market.

About Rafeeq Rehman

Consultant, Author, Researcher.
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