Using Service Design to build your IoT strategy

Illustration and Animation : Zhi Wang & Thuy Nguyen

Earlier this year I started my new role as Principal Service Designer at Above. An innovation agency that offers a seamless fusion of strategy, design and technology. We merge industrial and digital product design with tech and engineering skills to transform businesses and brands and equip them for the future.

As a Service Designer, the opportunity to design truly seamless physical and digital experiences with such a broad talent is really exciting. Especially at a time when a growing number of products around us cease to become just things and start to be as much a services as they are products.

However, around the same time as I started at Above three reports came out that showed strong evidence that many IoT initiatives are heading towards a major bump in the road.

The first of those reports came from Cisco. Their findings were that the majority of IoT projects are doomed to fail. The report sites that 60 percent of IoT initiatives stall at the proof of concept stage and only 26 percent of companies have had an IoT initiative that they considered a complete success. Even worse: a third of all completed projects were not considered a success.

A couple of months later came Gartner’s 2017’s report on the hype cycle around emerging technologies. This years report showed that IoT platforms are now moving out of the innovation trigger phase and into the peak of the of inflated expectations phase. After which comes the dreaded trough of disillusionment.

A large percentage of current home consumer products on today’s market mainly use their connectivity to feed data back to the companies that created them. For those companies who historically have not been able to gain access to their products until they come back for service or repair, the possibility of gaining usage data from their customers and products is of course attractive.

However, inside-out perspective is never going to be a defining USP for me as a consumer. And in the long run, an after-sales service and repair business case is not a strong foundation to build your IoT strategy upon.

Such data can of course, be transformable to a company, but only if they succeed in leverage the data they gain, and evidence in HCL Technologies report shows that is proving difficult. The report found that on average, only 48 percent of data collected from the IoT is analysed, while IBM puts the number at just 10 percent.

So how do you secure that your IoT strategy does not slip into disillusionment?

Customer focused innovation

Customer focused innovation is driven by an outside-in perspective to problem-solving. The goal is to develop an unbiased understanding of your customer needs and behaviours. By understanding what ‘jobs’ your customers are buying your products to do, you will be better equipped to improve your product’s social, functional, and emotional dimensions.

Enabling you to create services and functions that can make a positive impact. Instead of designing a product that comes with the ‘noise’ of an undesired app or in the worst case creates problems in the customer journey where before there were none. All which comes with a higher price tag.

Siemens, with their Home Connect platform, has both good and bad examples of how IoT can create both value and noise in customer’s lives.

The humble kitchen refrigerator has long been used as an example of how the bright future of IoT will be rushed into our homes. We have been told the future smart fridge will be able to tell you what food you have at home and even automatically order new supplies when you are running low.

Today, however, Siemens has taken a pragmatic approach to this promise. Their connected fridge has two internal cameras that allow you to see what supplies you have at home. Making it possible for to look into your fridge via your phone when standing in the food store so you can buy the supplies you need. An effective solution with a convincing user case, even if their marketing material is not that convincing……

I really don’t think his fridge is top of mind right now. Source: Siemens.co.uk

At the other end of the scale are Siemens’ connected washing machines — of which I have personal experience. Here the user case is not so convincing.

Via the app, you can remotely start and monitor the progress of your washing machine. The obvious issue here is that I still need to be in front my washing machine to load and unload it. The ability to control the start time of my wash cycle has been available for a long time and mirroring this functionality from the products own display into my mobile phone is actually unnecessary — The world does not need more pointless digital interfaces to control it.

Of course, there is the user case for improved service and repairs. But rather than using the app to inform me what error message E18 on my machine actually means. The real value would be if Siemens used their connectivity to monitor a possible upcoming problem, and proactively contact me to book a service before my machine beeps E18 at me.

You don’t need to be smart

I am not a fan of using the word smart when describing IoT products. Smart implies that the product should have some form of inherent intelligence. That, of course, can be attained, but if we only focus on making traditionally dum products intelligent, we might be missing opportunities that simple connectivity can offer.

As customers, we know the real power and magic of IoT is realised when we connect multiple products together. ifttt.com, the web-based service that connects API’s with child like simplicity, has seen a huge rise in physical products being added to their service. There is also been a huge growth in users creating ‘recipes’ that connect different products & enterprise web services together, to solve their problems.

IFTTT has fast become the leading IoT solution platform for consumers to take control a variety of devices and automate simple tasks. But that is only possible if the products and services they are using have an open API. When designing digital products the mantra has been to be ‘mobile first’ but when moving into IoT we should be designing ‘API first’.

By creating an open API your customers will be able to connect your products to a wide range of other products and services that make sense to them. And by monitoring what they connect to will help you better understand what value your products are creating and how to develop even more meaningful services in the future.

Don’t focus on making your products smart at first. Make them connected and connectable, and allow the “smartness” to come from your customers.

Partner up

The future of today companies is less defined by the assets they own and control, and more by the ecosystems (the services, partnerships and assets) that they manage. And by IoT partnerships, I am not talking about IT partners like Cisco, but rather other companies that you share your customer’s ecosystem with. If you can identify those other companies, you can create partnerships that will, in turn, provide a greater value for all stakeholders, customer included.

One example of such a partnership is the collaboration between Volvo Cars, PostNord (A Nordic logistics and delivery company) and online two e-commerce sites Lekmer.se and Mat.se. Together they made it possible for their customers to use their car as a delivery point for web orders. Volvo owners who have the Volvo On Call service could order food, toys and other items from Lekmer.se and Mat.se and get them delivered directly to the car while parked. Using GPS to find your car, a PostNord driver could get a one-time key to open the car and deliver the goods. All without you needing to be there.

If Siemens were to apply this type of partnership thinking to their washing machines just think of the value that they could offer. Let’s say for example they were to partner with fashion house H&M and washing detergent Tide. That could open up the possibility for my clothes, my washing machine and the detergent I use to monitor each other. Which could not only save me money but reduce the impact on the environment, for all involved.

Service design

On the surface, IoT may sound like it is all about technology, but human factors like culture, organisation, and leadership are critical to the success of any IoT initiative.
 
At Above we use service design to place equal value on the customer experience as the business processes needed to deliver.

We design from an outside-in rather than an inside-out perspective. Using a range of methodologies to gain the information necessary to generate a good design. Identifying the end customer and understanding what they are trying to accomplish, through an unbiased view of their behaviours, needs and pain points.

The first step in defining your customers’ needs and expectations is to get out there and really understanding what your customers are doing and what value your services or products are providing them. During this research, you will not only develop an empathy and deeper understanding of what motivates and connects your customers with your products and services, but you will almost certainly gain insights to what they are experiencing contra their needs. Which will help you improve the value you create in every touchpoint.

But gaining empathy for the customer is only half the story. Moving an organisation from a product to a product/service organisation means a shift in processes and thinking. It requires designing and managing internal expectations as well as an increasing number of customer-facing touch points. This puts pressure on the whole company to act as one in order to deliver consistent customer experience.

Using the findings from your research we can start to define the organisation’s purpose from a functional, emotional and social perspective.

By securing that these roles are well formulated and clearly communicated internally, we help the internal organisation to better understand not only how they need to work together, but why. Together we co-create with our clients and coach them to find the right KPI’s that can establish a smoother transition to a more customer-centric organisation.

Through technology, we understand what we can do and through Service Design we understand what we should do.

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