A service-based world
Last but not least, your existing business models must also be aligned with an IoT context
. IoT is accelerating the transition from a product-based to a service-based world. Currently, a car can issue a warning about a loss of tire pressure. But in the case of connected tires, that alert would be transmitted directly to the local garage where an appointment to fix it would be scheduled automatically. This completely shifts the focus away from the product and onto the service provided and the customer experience it creates.
In the same way, it is increasingly becoming less about the hardware and more about the software
. By running software updates at regular intervals, companies can offer their customers new services while also creating new touchpoints that would not occur in the case of one-off hardware sales. Many disruptive companies have already understood this message loud and clear and have made the customer experience their top priority. Through their software, they not only provide new services that meet their customers’ needs but also have frequent contact with those customers. Look at how Tesla offers its autopilot functionality via a software upgrade.
In order to truly transform business models, companies also need to redesign their approach to invoicing
. This implies a shift from traditional billing methods to the use of micro-billing systems for the recurring revenue streams that newly developed services generate.