STRATEGIC FRAMEWORK TO DEVELOP AND MANAGE SERVICES USING M2M TECHNOLOGY

by NIck Frank on July 15, 2015

Framework V4I would like to introduce a guest blog on M2m Technologies by Priyansh who is an MSC student at the University of Warwick (WMG). He is finalising his thesis for which I am his supervisor. The project aims to understand if M2M technologies have been used by SME’s to support Service based business models, and what are the key barriers they face. This strategic framework is one of the ideas he has been working on.

STRATEGIC FRAMEWORK TO DEVELOP AND MANAGE SERVICES USING M2M TECHNOLOGY.

 M2M technology enables machines to communicate with each other  without human intervention.  For most companies, one of the important benefits of M2M technology is remote monitoring. Through remote monitoring, companies can track, maintain and manage their assets, whenever and wherever required. Additionally, companies can collect data about their assets and use it intelligently to deliver differentiated or value add services to its customers. By delivering these value add services, the company can become a preferred vendor/ supplier for its customers. On the other hand, the customer can use these services to gain competitive advantage. For product based companies, this win-win situation is possible by using M2M technology in service based business models. The application of M2M technology is widely increasing in product manufacturing companies who wish to increase their revenue and profits by using the ideas of Product-Service-Systems (PSS) or servitization.  M2M can also be a technology enabler to companies who are looking forward to develop the ideas of circular economy, Industry 4.0, re-distributed manufacturing in their strategic business model.

The strategic framework mentioned here, provides a guideline on how companies can change and develop strong relationships with its customers by managing M2M technology to provide services which create value for both company and customers. By using this framework, a company can understand its customer business requirements, models, processes, revenue streams and vendor/supplier management strategies. This can help company to tailor its products and services according to customer’s needs and follow lean approach.

In order to develop this framework, the M2M value chain was studied in detail and elements of M2M value chain identified were:

1)     Sensors and Network

2)     Support Infrastructure

3)     Software

4)     Reporting tools

5)     Analytics

Different industry and academic professionals provide different ways of managing M2M technology, which can be confusing at times. Therefore, it was necessary to relate this value chain to the already established and proven value chain of some related industry. The closely related value chain was the connected devices value chain that has been used in Information and Communication Technology (ICT) sector.  Most of the elements of these two value chain could be clearly mapped to each other. The next step was to explore the facilities required to support the connected devices value chain. When studied in detail it was discovered that the suggested infrastructure requirement for M2M value chain are already present in connected devices value chain. The infrastructure was required to support devices and services delivered through these devices. The ICT sector has been using this support services for a long time, and now they deliver value add business services to their customers using a service management framework called ITIL. The ITIL framework provides guidelines to manage and support technology, and develop value add business services through technology support. As the ICT sector already uses connected device, the ITIL framework for business and technology and M2M value chain can be mapped to connected devices value chain as well as to M2M value chain. This led to a framework that provides robust strategic solution to manufacturing companies who wish to use M2M technology to add services in their business portfolio.

The benefits seen by different industries like IT, smart products, mobility solutions, etc. using ITIL or connected devices value chain are increased market share, customer base, revenue, profits and decrease in asset down-time and maintenance. If M2M technology is managed in similar manner, it can provide similar benefits to the company. The company can improve its business relationship with customers from transactional to relational which can help companies to move from being a  vendor/supplier to strategic business partner.

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