‘Data-Facturing’ in the Internet of Things †a Shakeup Ahead Hult Blog

Many experts believe that the development and incorporation of internet-connected sensors – constituting the Internet of Things (IoT) – will optimize the production, consumption and maintenance of all types of existing products and services. But the IoT, in conjunction with so-called artificial or augmented intelligence (AI), creates an emergent and convergent industry of â€Å"data-facturing†, forced by data analytics intermediaries, which will lead to a complete overhaul of global production and its economics. The industrial Internet of Things (IoT) consists of four converging technologies: small sensors that can be attached to products, bodies, or machines; ubiquitous internet connections to send data from these sensors into massive data warehouses in the cloud; the hardware machines that make products, and analytics software to extract insight from Big Data. This software not only provides empirical evidence of trends, but it can learn to manipulate its data to find trends that even its software programmers did not envision. It can also enable machines to learn and automatically adjust to new trend insights. In a recent HBR article (â€Å"How Smart, Connected Products Are Transforming Competition, Harvard Business Review, November 2014), Michael Porter and James Heppelmann argued that, because products will be linked in real time to the manufacturer’s operations, to other products, and to third party service providers, the IoT may change the power of rivals, substitutes, new entrants, suppliers and buyers in existing industries. There’s no doubt that the IoT will reshape almost every product and service in the medium term. However, Porter and Heppelmann’s recommendations for how business leaders can exploit this revolutionary trend stop short of preparing you for the vast revolution that is about to explode your industry. We are not just looking at a structural shift of expanding industry boundaries. We are looking at a potentially dramatic transition of power to data analytics intermediaries that will conduct â€Å"data-facturing.† These data-facturers will use IoT data to predict and even control consumer buying patterns and expectations. Companies like Alibaba, Amazon, Baidu, Google, IBM, Microsoft, and Salesforce will augment their existing channel power to â€Å"help† (or perhaps even force) manufacturers to change their designs, value propositions, prices, and even profits. The source of their power will be the data they have assembled, the design, pricing and promotion conclusions they have extracted, and the manufacturing-machine learning this enables. They will increasingly have the flexibility to meet rapidly changing customer needs through their core strength – rapidly harvesting data from a trillion global data connections that will yield a myriad of opportunities that mature and fizzle quickly, perhaps too quickly for traditional manufacturers to grasp. As a result, much of the value of production may migrate to these data-facturers in the future. Just as all roads led to Rome, soon al l value chains may lead to data intermediaries. But with control over the data, timing and touch points to the consumer, these intermediaries will not just optimize the value chain. They will steer it. By forging relationships with multiple vendors, manufacturers, and customers, the intermediaries parlay their leverage into a contract with the vendor and manufacturer to supply goods of certain characteristics and upgrade capabilities. Analytics intermediaries may in fact acquire certain manufacturers to disrupt larger, more monolithic manufacturing incumbents. Combining their complementary skillsets, these â€Å"data-facturing† disruptors will be able to configure and re-configure valuable resources rapidly, navigating and assembling multi-dimensional value webs. For illustration: an e-commerce intermediary could promote a certain product to consumers to flatter its own margins, even if its data can determine that the consumers might – all things being equal – prefer a different, less lucrative offering. The data-facturers could in fact create new terms for sellers and buyers, thereby anointing kings in the manufacturing world. But it doesn’t stop there. So empowered, data intermediaries operate across industry boundaries. Indeed, because they have multiple empirical perspectives on a customer’s life – from previous purchases (and near-purchases) of consumer goods to services to leisure experiences – intermediaries enabled by the IoT will force sectors to converge. There will no longer be an automobile industry or a navigation industry or a shipping industry or an entertainment industry. For instance, the car of the future will combine all of these into a unified value proposition. How, for instance, would you characterize a service that custom-designs, promotes and dynamically prices a vehicle for a certain buyer profile based on life patterns, schedules for both work and play, geographic context, a user’s social contacts, mood and aspirational profiles, financial capacity and driving characteristics? It would then rely on touch, noise, olfactory, motion, and other sensors within the vehicle, connected to cloud-based analytics engines, and command-and-control intelligence through all of the user’s electronic interfaces to continue to manage and upgrade the car throughout its lifecycle. Is this a digital butler, a driving experience, a logistics service, or a luxury product? This scenario suggests that a manufacturer’s competitive advantage must incorporate both the control of its own data and its relationship with these intermediaries. For all but the most avant-garde manufacturers that still presents a steep learning curve. Therefore, managers in all production-based industries would do well to build both capabilities to predict the future and processes to adapt to that future. It is high time to secure talent, culture and operational structures and processes to ally with – and defend against – the budding sector of IoT-enabled intermediaries. Written by Olaf J Groth, PhD. Professor of Strategy, Innovation, Management Economics;  Program Director of Digital Futures; Lead for Strategy Innovation Global Postgraduate Faculty Council,  Hult International Business School. Olaf Groth is an executive, adviser and capacity builder with 20 years of experience developing new innovation strategies, ventures, organizations and ecosystems. As such, he was recently invited by the World Economic Forum to join its global Expert Network community to provide thought-leadership on business and societal strategies for disruptive trends, such as the 4th Industrial Revolution, IOT, Autonomous Vehicles and AI. Olaf currently develops future leaders as a Global Professor for Strategy, Innovation, Management Economics and Program Director for Digital Futures at Hult.  He also serves on the Global Faculty Council as Lead for Strategy Innovation. From a home base in San Francisco he works throughout the school’s global network of campuses, which includes Boston, New York, London, Dubai, and Shanghai. If you would like to find out more about Hult’s global business programs,  download a brochure here. This article was published by Ashridge and Economonitor. Make the most of what your career has to offer with a Masters in International Business from Hult. To learn more, take a look at our blog The Hult Business Challenge: What I learned from the experience, or give your employability a huge boost with an MBA in international business. Download a brochure or get in touch today to find out how Hult can help you to explore everything about the business world, the future, and yourself. Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021 Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021"> During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . Happy New Year, Hultians! . Happy New Year, Hultians! .