Wading Through the IoT Hype

There's been a lot of talk about the Internet of Things (IoT) lately, with everyone from IBM to GE announcing they're all in on connecting devices and enabling everything, from the refrigerator to the toothbrush, to communicate to intelligent systems. If you haven't gone all in yet, don't worry, you're not alone. For all the marketing hype, most companies are only beginning to consider how they might take advantage of intelligent devices and the Internet of Things.

That said, IoT poses very interesting opportunities for customer service professionals. If you're considering dipping your toe in the IoT waters, some of greatest return on the investment lies in using the intelligence of software to deliver more proactive customer service.

Some companies have been working on it for years. IBM, for example, has a number of customers doing what they call predictive maintenance, enabling companies like Boeing to equip their components with sensors that can detect and communicate when they need maintenance before they reach failure. Salesforce.com customers are using IoT and Chatter to IoT-enable their products, such as routers, to launch their own service cases and, in some cases, resolve service issues before customers even know they have a problem. Still others, like the City of South Bend, Ind., are combining weather, sensor, and other data to predict when public infrastructure is likely to be taxed by excessive rainfall, for example, and open auxiliary pipes automatically to reduce flooding.

While there are successes, there are also risks associated with pursuing an IoT strategy. To avoid being a casualty on the IoT highway, here are a few key things to keep in mind:

First, focus. There are loads of interesting things you can do when devices start talking, but not all of them deliver value. Use breadth and repeatability as your guide as you plan and pilot your IoT strategy. The greater the number of people or processes a project touches (breadth), and the more frequently they're impacted (repeatability), the greater the potential returns. What could be the most interesting IoT project might not be the one that delivers the greatest value.

Second, pick a vendor that has already delivered successful projects to companies like yours. The risk of any new technology project largely lies in the delivery and success of custom code, so the more pieces they've already built and tested, the better off you're likely to be. You should keep in mind, as well, that if keeping your IoT strategy going means maintaining and updating a lot of custom code, you'll be saddled with greater support costs over time, and you're likely funding the effort of a vendor trying to build a product for the space. If you're willing to take the risk with a vendor that doesn't have an established customer list, that's OK, but make sure that they're picking up the lion's share of the new development cost on their dime.

Third, make sure your business case delivers rapid payback. This one seems obvious, but we've seen many companies get excited about the promise of IoT and forget that their project, no matter how interesting it might be, needs to deliver business value. Given the rapid pace of change in the IoT space, you should expect a pilot project to deliver payback in nine months or fewer or you should rethink your project plan.

To drive faster payback, make the cloud a part of your deployment plan. Whatever you might have heard (or believe), cloud has, on average, far greater potential for return on investment and higher security and reliability than most on-premises systems and applications. Cloud makes sense, particularly for IoT, because of the source, volume, and likely spikiness of the data you'll be collecting and acting on. It also makes sense because what's innovative today is likely to be IoT in a short period of time, and the iterative nature of cloud applications means you'll be better positioned to evolve your IoT strategy over time without rebuilding the wheel (or breaking the bank).

Finally, remember that IoT in customer service is not just about replacing agents. IoT can provide agents with better information to accelerate issue resolution, open up new opportunities to make agents salespeople and product development experts, and give customer service experts more ways to differentiate their services to drive customer retention and advocacy. Done right, IoT is a way to accelerate innovation in your customer service organization and drive better, higher-level opportunities for customer service agents and managers.

Rebecca Wettemann is vice president at Nucleus Research.