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Internet of Things as a Foundation for Customer Engagement

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As I move into my new role from customer engagement to heading up SAP’s global IoT and Innovation business, people are saying “Wow! That’s a big change!” But here’s the interesting thing. The IoT and customer engagement are more closely linked than many people realize. And the reason is that the IoT is providing a closer connection than ever before between the products many of SAP’s customers manufacture and the people who use those products. Let me give you an example.

It is well known that modern automobiles have evolved into highly complex, computer controlled machines. A modern, high-end car typically contains about 100 million lines of code, much of it used to monitor and control its various mechanical systems. It is also estimated that in less than 5 years, 250 million cars will be connected to the internet. This means that increasingly, auto manufacturers will be able to monitor automobile performance in near real time, and apply analytics to sensor data in ways that allow them to anticipate mechanical problems before they become serious problems for the car owner. This capability has major implications for the auto industry. For instance, auto manufactures will be in a better position to detect faulty system components early, and adjust a manufacturing process or a supply chain operation so they can avoid a costly product recall in the future.

Turning cars into connected things will do a great deal more than just improve the manufacturing process. The same monitoring and analysis technology can be applied to how people operate their cars and how they use the car’s features, which can lead to design improvements that strengthen customer loyalty. Consumers, who are already widely “connected” through their smartphones and wearable technologies, are increasingly becoming wirelessly connected to their cars. This not only creates a new way for auto manufacturers to understand how consumers interact with their products, but it opens the door to entirely new product and service opportunities.

In the Our Digital Planet vision, SAP postulates that data-driven business frameworks are the future. In a hyper connected world, the collaborator is king and 21st century companies need to think outside the four walls of their offices and embrace digital transformation. The Internet of Things is already revolutionizing business, generating revenue and improving customer experiences. Read up on SAP and how IoT fits into the Digital Planet vision at this link.

Lots of numbers are flying around about how many billions of connected things there are in the world today, and how many billions more there will be in five years, and how many trillions of dollars of new business will come because of the IoT. These numbers are so big that it’s hard to grasp what they mean to a business or a manufacturer. But I did see one statistic recently that made me think how much is just over the horizon. One industry analyst estimated that with all the connected devices we have today, only 1 tenth of one percent of the things that could be connected actually are connected.

Keep an eye on this blog space, because I’ll have lots more to say about the IoT in coming months.

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      Author's profile photo Birgit Fien-Schmalzbauer
      Birgit Fien-Schmalzbauer

      Totally agree customer engagement & Commerce fits perfectly to IoT: enhancing the customer touch points & interactions - offering a new & inspiring user experience 🙂

      Author's profile photo Oliver Betz
      Oliver Betz

      Interesting spin on IOT: While IOT is so far focusing a lot on manufacturing and asset management it could also fundamentally change the way consumer engage with products. This not only changes the way customers intearct with the products (e.g. their car) but finally also who they engage with the vendor (car manufacturer). Think about a future where the vendor knows in detail what you have done with your car and even can predict how you want to use it in the future...

      Author's profile photo Namita Gupta-Hehl
      Namita Gupta-Hehl

      The title of this post reminded me of a study I read around a year ago (old yet still very relevant).

      The Study titled - Customer Experience in the Internet of Things – talks about ways companies can use sensors to create mutual benefit for both brand and consumer through the entire customer journey. Enterprises gain visibility; consumers gain empowerment.

      An interesting read, particularly for those involved in drafting marketing strategies related to IOT and customer experience.

      Executive Summary: The Internet of Things is not some pipe dream, Jetsons-esque future state; it is an entirely new paradigm for building relationships. Yet determining when, how, and to what extent to apply connected products and other sensor-generated data to the customer experience remains poorly understood by marketers and digital strategists. Our research finds that the unique opportunity in the Internet of Things is that it has the potential to mutually benefit both enterprise and consumer. Enterprises gain visibility; consumers gain empowerment. This report reveals five use cases illustrating how consumer-facing brands can embrace the Internet of Things to create actual value for businesses and consumers alike.