Switching on the IoT opportunity
IoT is transforming organizations across all sectors. Digital leaders at Eurostar, ThyssenKrupp, Piaggio and BT reveal how the technology is enhancing their businesses.
The opportunities presented by the Internet of Things (IoT) are not bound to specific sectors. While many industries are showing an interest in the potential benefits, approaches and motivations differ. Some have been sagely developing their strategy for several years, others have found themselves unexpectedly swept along by the evolving technology trend. But there’s one common thread to their experiences – the feeling that IoT is a genuine game-changer.
Until recently, international train operator Eurostar hadn’t really considered the strategic potential of IoT technology. “It sort of crept up on us,” acknowledges Neil Roberts, the company’s head of digital. The team’s focus had always been on marketing-led, customer-facing digital services – its website, apps, display boards, ticketing, on-board entertainment and the like.
“We’d been maturing the online area for some years, and had a funnel of various data streams that gave us lots of visibility on the sales and marketing side of the business. But when it came to operational analytics, we had very little. In fact, as recently as three years ago there were still people in the organization routinely faxing things to one another,” he says.
It wasn’t until the company started to replace its aging trains with new, state-of-the-art stock that the benefits of IoT were understood. “The lifecycle of a train is around 30 years, so you don’t get the opportunity to change them very often. On our old trains, maintenance was down to the knowledge of employees, which was shared in very traditional ways. But the new fleet has on-board computers, WiFi and telemetry – a bit like a Formula 1 car,” says Roberts.
Now Eurostar has real-time diagnostics on its fleet of trains, allowing it to monitor remotely whether the doors are operating effectively, the gearbox is overheating and so on. “We can do things that were impossible previously, essentially because we made the right purchasing decision at the right time,” he says.
And the operational improvements in problem analysis probably do more to please customers than any amount of branding and marketing. “For us, if a train breaks down that’s not great, but for our customers it can be disastrous. Now, we are looking at preventative engineering to pre-empt faults before they occur. This means the fleet is available more often and we can transport more customers on time,” says Roberts. “That’s a significant benefit and we’ve made quite a rapid movement into IoT without having any set strategic plans to do so. It’s just happened cumulatively over the last two or three years.”
For 200-year-old global elevator and escalator specialist ThyssenKrupp Elevator, it was clear early on that IoT offered vast potential for the company to improve service and reduce operational costs. As Wilhelm Nehring, CEO for the UK and Ireland, for ThyssenKrupp Elevator, says: “Our main business is elevator maintenance. Traditionally, if an engineer has to visit a site to find out what’s wrong with an elevator, then they’d have go away to source any required parts before returning to do the actual repair.”
With IoT-enabled components in elevators, though, the company is able simultaneously to reduce downtime and dramatically improve efficiency and productivity. “When you have all the information beforehand and know exactly why something’s failing, you save so much time,” says Nehring.
However, one of the hardest things for the company was embracing the idea of close partnerships with technology companies to make the vision a reality. “ThyssenKrupp has been quite a conservative [investor in IT] in the past, and it took a lot of effort for us to open up to this kind of innovation and share know-how with other companies,” says Nehring.
But technology partnerships have paid off. Since teaming up with Microsoft three years ago to develop the MAX cloud-based IoT system for monitoring its IoT-enabled elevators (see Delivering dramatic RoI and customer value with IoT), the company has seen a 50% improvement in elevator uptime. That spawned further engagement and has raised the company’s IoT ambitions to new heights. “In future, by using machine learning algorithms for predictive maintenance we’ll be able to change components before they fail, which could result in reliability of up to 99%,” says Nehring.
But he stresses that openness has been key to the company’s ongoing IoT transformation: “By being open for innovation, by sharing information, many other projects and partnerships developing that we hadn’t even thought of. And it still feels like only the start of this exciting journey.”
Italian scooter, motorbike and minivan manufacturer Piaggio, whose iconic brands include Vespa, Ape and Moto Guzzi, is in the process of introducing IoT technology to help it continually improve features for customers and, critically, to make its vehicles ever safer. Luca Sacchi, senior VP and head of strategic innovation, says the company is rolling out IoT-enabled features such as remote locking and on-screen fault diagnostics for customers, as well as combining real-time data with predictive analytics to enhance the safety of its connected vehicles.
“With so much more information being streamed from a vehicle we can develop new iterations and optimize products much faster,” Sacchi says.
Unlike most of the automotive industry, development of autonomous vehicles isn’t pipeline for Piaggio — at least not yet. But Sacchi says it has many other ideas for connected bikes. “It’s very hard to imagine a two-wheeler that can drive by itself, but enhancing and empowering drivers with more specific information about what’s happening on the road around them and letting other vehicles know automatically that a motorbike or scooter is approaching is obviously very valuable,” he says.
UK-headquartered telecoms giant BT is ploughing resources into IoT on a number of fronts. It uses the technology to keep track of assets such as vehicle fleets and network cabling. This gives the company new visibility of its physical assets, while also allowing it to provide better customer service by locating and fixing critical faults more quickly. In its retail stores, meanwhile, the company is focusing on improving the customer experience by using IoT sensors.
On the B2B side, it is using IoT to support insurance providers by offering usage-based driving insurance solutions that take into account people’s driving styles and distances. A telematics box fitted to customers’ vehicles uses BT EE’s mobile network to transmit driving behavior data back to the insurer. The technology has led to a 40% drop in serious accidents among new young drivers and has enabled insurers to cut premiums by around 30% for this group.
But the transformation brought by IoT hasn’t just been to business models, says Guillaume Sampic, BT’s IoT strategy director, but to the mix of skills in the organization. “One critical benefit of IoT is that it is a major driver of transformation of talent and skillsets. You need the right mix between network minds, software minds, IT minds and operational minds to make it work,” he says.
• Neil Roberts, Wilhelm Nehring, Luca Sacchi and Guillaume Sampic were speaking at TechXLR8 2017 in London. Piaggio image: Alamy