Smart technologies are usually disruptive "game changers" and for vendors to realize the full potential often requires both the enabling industry conditions and a reconceptualization of their industry and the firm's "business models". It's not enough for the technology to work in isolation. It has to work within the new system or infrastructure...and the takes cross-industry cooperation and collaboration, which many start-ups aren't prepared to do.
A good example is the in-car telematics market, where your car alerts you before something is about to break down or a part needs replacing. Auto pundits have long predicted that this would be the "next big thing" in automotive but forgot that the lack of a new, appropriate, requisite business model that adds a novel value to the consumer will leave this technology high and dry in the starting gate.
The experts thought:
"Once cars are equipped with smart sensors and actuators, a global positioning system, a wireless communications connection and a link to a service provider, the sky is the limit on what services could be available."
But consumers thinks differently:
"Paying for telematics is a different matter, however, with many potential customers baulking at paying monthly subscription fees for e-call or remote door unlocking services they may never need." "The consumer is going to think: 20 euros a month, that's 240 euros a year," "How often does it happen that I'm going to have an acute car problem? Maybe once every 5 years. That is 1,200 euros for that one telephone call. I think I'm not going to do that."
That is the problem that we have with telematics.... a less then adequate business model and not the technology. (see Car to driver: Please replace my fuel pump)
A new business model could focus on the telematics' ability to feed back data on how cars are performing and what potential problems may soon arise. This could save millions by allowing dealers to stock only the parts they know customers will need at their next service visit.
A telematically-ordered car part could be much cheaper to the consumer then one that was ordered: "while you wait" and "unannounced".
Jeff Wacker, EDS's inhouse futurist recently asked a thought provoking question at a talk he gave in Toronto in July.
"Who would benefit by knowing that my package has just passing mile marker number 26? on route 192 ?" i.e. GPS tells me where my package is on route and where the delivery vehicle is as well.
Who could benefit?
1. Shipper
2. Recipient
3. Transporter
Ok, those are the easy ones
4. Shipping agent
5. Receiving agent
6. Owner
Now dig a little deeper
7. Transportation insurance company that wants to provide route-sensitive insurance
8. Bank that has a lean on the contents of the package
9. Content insurer that wants to know that the package hasn't been stolen
10. National Security that needs to make sure that the package doesn't approach within 50 miles of a sensitive area (geo-fencing)
How about these
11. Taxing authority who wants to impose a mileage tax on each package, (...instead of a goods and services tax)
12. Roads department who wants to estimate when the road will need to be repaired
13. Traffic control who wants to know how fast traffic is going
14. The dispatcher who uses the info from traffic control to select an alternate route
15. The restaurant who wants to entice the driver to pull in for lunch
16. The gasoline station who wants to plan fuel deliveries
Maybe even
17. The recipient's customers who need to plan their production schedule on the arrival of the package
18. The retailer who wants to redirect the package to a new location where it is needed more
And obviously
19. The information broker in decides to get into this business and resell this information to the above clients
Etc. etc. etc.
Yet how many are currently incorporating this information into their current business process and business model ? 3, maybe 4.
As you can see with the above example, it's not the technology per say, but the novel new business model supporting the new smart technology that opens up dozens of new opportunity windows.
Most businesses will adopt a smart technology without giving a second thought to rethinking the current industry or the firm's "business model" and will suffer the consequences: from needless delays to outright smart product failures.
For Information on our Workshop: Designing winning business models for smart technologies, call or email me.
© 2005-2006
Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight,, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "
To arrange for an in house presentation on smart technology see here
To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together
.....Strategy without action is a day-dream; action without strategy is a nightmare"- old Japanese proverb
.......Ours is the age that is proud of machines that think and suspicious of men who try to. - H. Mumford Jones
"Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought." A. Einstein
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