Tag Archives: IoT

Vixxo – Monetizing Data & Analytics

WEBINAR WITH WARREN WELLER,

VIXXO CHIEF SALES AND MARKETING OFFICER

This webinar was hosted by the Center for Services Leadership Community of Practice on Monetizing Data and Analytics.


About Vixxo: Vixxo is a leading technology-enabled asset management and business insight company providing integrated facility management solutions and services that unite asset and facility management. Through deep expertise across 100+ trades, time-tested processes, and a comprehensive technology platform, Vixxo delivers the complete asset management that allows clients to focus their energy instead on their customers.

About Warren WellerWarren Weller is the Chief Sales and Marketing Officer at Vixxo, responsible for all aspects of sales, marketing and profitable revenue growth. Prior to joining Vixxo, Mr. Weller held various leadership positions at IBM, serving as the Vice President, Financial Services and also as Vice President, Mid-Market Services. During his 25+ year tenure, he drove operational excellence and innovation across the organization.

Vixxo Case Study

Over the years, Vixxo’s core business model has evolved from providing traditional facility management services, such as lighting, plumbing etc., to offering asset management and optimization services. Moving beyond improving efficiency of traditional assets (e.g. refrigerating, heating), Vixxo has built a highly successful business model around improving efficiency of revenue generating assets, e.g. coffee brewing machines at Starbucks or the baking ovens at supermarkets. The company’s services enable Vixxo’s clients to understand how these assets perform over time, and subsequently make better asset decisions from cost and investment perspectives.

Vixxo currently supports over a billion-dollar worth of spend across 65,000 assets in over 250,000 physical locations. Its primary client segment consists of businesses with widely-distributed retail-estate portfolio (supermarkets, restaurants, convenience stores etc.), where ensuring effective asset management across all locations is a major challenge. By leveraging its expansive supplier network of over 150,000 certified local suppliers, Vixxo is able to provide high quality, consistent services in a very cost-effective manner.

Vixxo’s value proposition to the customers is driven by the company’s 15-year experience in data collection and analytics. Over the years, the company has been able to collect clean and reliable data by leveraging emerging technologies such as mobile devices (tablets, smartphones), to integrate information from clients, suppliers and service centers. Vixxo applies its deep analytics and data mining capabilities to generate insights for clients to improve their CapEx management programs – understanding which assets to repair, replace, invest in etc. for greater customer experience, product reliability and profit maximization.

In the next phase of its evolution, Vixxo is working to monetize IoT and M2M capabilities, by placing sensors inside assets to get real time asset performance information. Sensors can detect and signal issues in assets, allowing Vixxo to dispatch technicians even while the asset is still operating. Vixxo is also focusing on developing the entire IoT eco-system. This includes collaborating with manufacturers to help build assets equipped with IoT capabilities, in exchange for data & insights on asset performance.

Vixxo’s revenue model is based on charging clients for various asset management services they use. The company takes a strong position to ensure clients are paying a fair and transparent price for received services, while the suppliers are guaranteed a prompt payment by Vixxo after each servicing call. Vixxo achieves this by automating its entire work-order management process through the “Continuously Analyzed Pricing System” (CAPS) application, where each supplier locks details of each service they provide to Vixxo’s client. CAPS contains pre-determined and agreed on rates for each element of the work order management process (such as for labor, duration, materials etc), guaranteeing that clients pay a fair market price and receive an itemized breakdown for delivered services. Moreover, Vixxo uses other features such as geo-fencing and supplier rating system to ensure that suppliers provide high quality and timely service. In return, suppliers receive fair and prompt payment for their services as well as training and development.

Backed by its extensive supplier network and over 15 years of data analytical capabilities, Vixxo is a clear leader in the asset management services industry. By implementing and harnessing the IoT and M2M capabilities, the company will be favorably positioned to take full advantage of analyzing granular, real-time data for deeper insights, and to help clients achieve higher profits & operational optimization.

Aligning Business Model & Culture to Maximize the Analytics Opportunity

In a recent blog post Analytics in Services: Actions versus Talk, we reviewed how companies are applying big data and analytics for both internal and external uses. That review led to a survey and executive panel discussion at the November 2015 Arizona State University Center for Services Leadership (CSL) Annual Compete Through Service Symposium where we further explored adoption rates, challenges, and lessons learned.

Adoption rates

The survey of 42 CSL member-companies and Symposium attendees revealed that roughly 25% have actually deployed initiatives using this technology, 25% have not considered how they will utilize analytics, and approximately 50% are developing a plan or are in pilot. Interestingly, these percentages are consistent whether companies are trying to improve marketing effectiveness and operational efficiency, helping set service levels, or attempting to expand markets and build new sources of services and solutions revenue.

Analytics_adoption_rates

Intent

The survey also asked respondents to describe what they were doing in each of these areas, from which the panel discussed several case studies in some detail. What emerged was an interesting set of objectives that can be captured as:

  • Efficiency – improve operational efficiency and reduce risk.
  • Experience – enhance every aspect of the customer’s experience.
  • Expansion – generate new services-based revenue streams.

As noted in our prior blog, the drive for efficiency has been well documented and the data reinforces that it is the most broadly adopted.

The second area, experience, generated a great deal of discussion and it became clear that this is where much of the energy in the market is focused. Experience encompasses all aspects of the customers’ journey: understanding each as an individual, marketing more effectively, setting and attaining appropriate service levels, providing support proactively, and anticipating future needs. It was evident that for a number of respondents this was the path to revenue growth both in terms of wallet share and market share.

Which leads to the third objective, expansion. A number of technology companies are aggressively pursuing the opportunity to be suppliers of technology, infrastructure, and consulting for analytics. However, a relative few organizations are also leveraging analytics to turn the data they own/access along with their expertise to generate new services revenue streams.

The executive panel was comprised of companies who fell into both of these categories: Siemens, IBM, DuPont Pioneer and Intel.

Challenges

A broad set of inhibitors were cited by the survey respondents and we subsequently discussed during the panel. The challenges fell into three major categories, with some unexpected challenges emerging:

Analytics_Challenges

  • Data

There were two distinct sets of issues identified here. The first regarded the capture, integration, and filtering of data from a rapidly growing array of sources.
The second set of issues centered on data security/privacy/rights/integrity – and the potential financial and brand risks of getting it wrong.

  • Resources & Infrastructure

Not surprisingly, skills in data science and analytics were frequently cited. Not only acquiring a skill set that is not traditionally found in many companies, but also nurturing and retaining those critical resources in a highly competitive market.
The infrastructure necessary to support new analytical workloads and the growing volume of data was something that many respondents cited as a ‘hidden’ cost—or at least one which was not always factored in up front.

  • Business Model

The most frequently cited issues were associated with establishing a clear and compelling business model—particularly in regards to establishing new services revenue streams. The age-old challenge of competing priorities was compounded by the lack of effective means for calculating the ROI for the customer and the concerns over financial risk cited above. As one panelist pointed out, we are entering an age where data is the new currency—and yet there is no accepted methodology for measuring ‘return on data’.

Summary – Ideas to Consider

The executive panel shared their insights and made some compelling suggestions for companies considering leveraging big data and analytics to drive top line growth. Ideas that were discussed in the interactive session with the symposium attendees included:

  • Integrating internal & multiple external data sources combined with your expertise for more value
  • Identifying new markets and buyers for the services offerings based on data + analytics + expertise
  • Developing a ‘skunk works’ first-of-a-kind team to launch and experiment—avoiding the culture trap
  • Bringing on new skills and augment with university and industry programs
  • Considering building a partner eco-system to fill gaps in your infrastructure and skills
  • Establishing credible means for measuring the ROI for both the customer and the business

Internet-of-Everything and the Future of Service

By Darima Fotheringham

Two weeks ago I attended Frontiers in Service, (#frontiersinservice) a global conference on service research. This year, the conference was sponsored by IBM and a lot of discussion was around the Internet-of-Things (IoT) or Internet-of-Everything, as it was frequently referred to. One of the presentations that I found especially interesting was by Irene Ng, Professor of Marketing and Service Systems and Head of Service Systems Research Group at the University of Warwick. She talked about smart technology, interconnectedness and data in a different context than the one that prevails in the IoT industry discussion. I found her perspective both simple and deeply profound. It highlighted a few important questions that I want share with you.

Technology developers are constantly pushing the envelope of what’s possible. However, it seems that in their fascination with the new technological capabilities, companies sometimes lose track of the most important element; humans as the ultimate customer and consumer of IoT. It is important to bring the human factor front and center into the design and use of smart things. IoT allows smart things to track and make use of large amounts of data, but it’s humans who are the integrators of data. It is not about our smart dishwashers being able to talk to our smart fridges. It’s about how these capabilities of smart appliances, and their “conversations”, can be integrated in our lives in a useful and empowering way.

We are generating vast amounts of data by using smart things, but we also give this data context, without which any data will be meaningless. Currently most of the data that’s being tracked is fragmented and owned by a few big players, such as Google, Facebook, Amazon. Opening access to the data and giving ownership back to the individuals can take IoT to the next level. Think of what you could do if you had access to the insights from the data that’s being collected about you across different service providers, and what new applications, new business models and services could be developed for us and with us. By the way, Irene Ng and her research team launched a project called Hub-of-All-Things, or HAT, to enable just that by creating a new platform powered by the IoT. I highly recommend checking it out. You can even sign up for your personal HAT to try, once it becomes available. Currently, it’s limited to UK and Singapore.

The new technological advances enable smarter things, smart phones, smart appliances, smart homes, which can do amazing things at a speed and accuracy that are outside of our ability. News reports share unnerving statistics about how many of our jobs will soon be taken by robots in the near future. For example, Gartner predicts that about one-third of jobs will be done by smart machines by 2025. Stories about the powers of AI make us believe that we are in direct competition with our smart devices. However, as Irene Ng pointed out in her presentation, a more useful approach is to view these smart things as amplifiers. They amplify and enable us to do more, by extending our capabilities. These smart objects are created by humans, for humans, and ultimately should be used to improve our lives. It brings to mind the example of the electronic spreadsheet invention, which eliminated hours of tedious manual calculations and transformed the industry. As a result some jobs were lost, but even more new ones were created and new horizons opened. NPR Planet Money did a great episode (Episode 606: Spreadsheets!) on this subject.

When you change the lens through which you look at smart things, it becomes clear that these objects are not smart on their own, they need collaboration with humans. It’s us, humans, who breathe life into these inanimate objects and make them smart. As humans, we operate in a complex social world, and it is not enough for the devices and products to be simply smart, they have to be “socially smart”, as Irene Ng puts it. She goes further to explain the meaning of “socially smart” in the context of smart objects:

  • It means co-creation, collaboration with a human. An object cannot be smart on its own, without a human input. Socially smart objects can amplify our abilities by removing or reducing our limitations and opening new possibilities that we co-create together. It is not about simply serving us ready-made solutions based on predictive analytics.
  • It means understanding context. We live complex and unpredictable lives, responding and reacting to a variety of different situations every day. Socially smart objects are able to fit in and amplify our capabilities within the context of each situation or scenario, independent of how consistent or irregular these situations or scenarios are.
  • “Socially smart” does not mean socially responsible. Socially smart objects can amplify to serve a good purpose or a harmful one, all without moral judgment. They have no intentions, positive or negative. The moral judgment is completely in the hands and minds of those who control the smart objects. Take the story about Uber tracking and sharing stats about one-night-stand rides of shame on one hand, and on the other hand, the story of online Syrian activists transforming the media, social movement, healthcare and financial services during the Arab Spring, as two very different examples of data use.

This Frontiers in Service presentation was a good reminder to bring the focus back to the customers, the humans who are the ultimate consumers of the smart IoT.  It also gives a lot of food for thought about the future of the fully connected world and the design of a socially smart IoT that will power new services. You can find more information about the HAT project and Irene Ng’s keynote presentation at Hub-of-All-Things website and watch the video of her presentation on YouTube.

While the Frontiers in Service conference is over, there is another conference focused on services that you may be interested in attending this year. It is the annual Compete Through Service Symposium (CTS) hosted by the Center for Services Leadership. It will take place in Scottsdale, AZ, on November 4-6, 2015. We hope to see you there!

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Darima_headshotDarima Fotheringham is a Thought Leadership Program Manager at the Center for Services Leadership (CSL), W.P. Carey School of Business, ASU.

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