Omnichannel commerce | Data management
What You Need to Know About IoT and CDM
April 22, 2016
In simplest terms, the Internet of things (IoT) is the ability of everyday objects to send and receive data. According to analyst firm IDC, in the next three years, spending on the opportunities driven by IoT is forecast to be $1.3 trillion, nearly double the $700 billion currently spent.
"There are 28 billion 'things' that are going to be connected to the Internet by 2020," says Ken Edwards, a consultant for Zyme, a solutions provider specializing in channel data management (CDM). A discipline that is becoming especially vital as IoT becomes more ubiquitous, CDM gathers data from a manufacturer's channel partners, distributors, and dealers for use in managing inventory, sales incentive programs, marketing programs, and supply chain logistics. In a sense, it's the b-to-b equivalent of customer relationship management (CRM), which imposes a similar discipline on direct sales mechanisms.
Opportunities and challenges
The potential connectivity of 28 billion items and touchpoints will generate huge volumes of data. That sounds great in theory, but given that organisations have problems maximising the data they currently have access to, IoT will also bring additional challenges. To access and understand the data, embrace the new business models driven by the data, and shape entirely new experiences for both employees and customers, businesses will need to collaborate more than ever.
"How can you figure out whether your channel partners are effective, without channel data management collecting, enriching, and validating all of this data?" Edwards asks. "We have to connect all of these various parties into the transaction. It's going to get more challenging because you have to look at more physical devices, and you have to be able to influence the sales and marketing of those devices."
image: Ken Edwards, consultant for Zyme
What's imperative is making all these real-time data meaningful with quality analytics that deliver actionable insights. What's equally essential is understanding that not all data are created equal.
Businesses accustomed to thinking of data as corporate information that's the basis for decision-making need to complete their shift into leveraging unstructured data from multiple channel sources down to the customer level—information generated by billions of mobile and Internet-enabled devices in as many different locations. These are
the data that arise in social media, or that provide a shopper's geolocation and preferences to stores, or that simply show each device is being used. This is the free, unstructured data on which IoT thrives, based on the connectivity that creates the complete data experience.
Applying CDM tools helps unstructured data work with structured data so that businesses can achieve their goals across the enterprise: in sales, in marketing, on the road, and in the minds of customers whose expectations are based on their connected lives. This visibility into the channel is what delivers the end-to-end data management that aligns all the unstructured data derived from myriad sources with improvements in the most familiar information about sales and partners.
Those sources aren't just shifting to the cloud. In some cases, providers and their services are arising from within the cloud—and that's also driving, and being driven by, the emerging IoT models. The chain that exists from manufacturer to customer, in an IoT world, consists of thousands more partners than ever before.
"In the new world, we call these born-in-the-cloud partners," Edwards says. "There are tens of thousands of those, in the U.S. alone, made up of little companies that are fewer than 100 employees. These born-in-the-cloud partners are really the ones installing and implementing all those IoT device networks. Now the manufacturer has to deal suddenly with thousands of these partners."
Understanding the route to the customer—with potentially thousands of born-in-the-cloud partners—gets a lot more complex. But having that information is crucial to dealing with the service and support of the IoT devices.
"You have to be able to understand the route to the customer, because when the manufacturer gets a service request, the manufacturer doesn't go to the end customer directly; the installer goes to the end customer," Edwards explains. "That's the purpose of CDM, which tracks the distributor, reseller, and installer, so you can route that service request to the installer that will actually do the service on that particular IoT device."
In the older world, the manufacturer was often disconnected from the end customer. But in the new world—despite the fact that there are thousands more devices than ever before—the manufacturer has a deeper understanding of, and more information about, the end customer. One of the advantages of CDM, in fact, is the ability to "see" the market that your partners see.
Good communication that supports buy-in at all levels makes for a smoother transition and makes it easier for a diverse range of stakeholders to see what's in it for them. This is true of the company's channel partners, at the warehouse, and among employees responsible for regulatory compliance and legal issues, for people in IT, and for those in customer service. CDM creates a visibility that engages and energizes everyone within the organisation.
In short, the intelligence gained from CDM informs everything from product development and innovation to marketing. Companies that invest in CDM visibility will be a step ahead and market-ready for the coming IoT revolution. Choosing to implement CDM is really about choosing the answer to your questions about value, within the channels and beyond. The visibility gained translates into value that creates ROI through improved automation and accuracy, but even more in a company's ability to benefit from the deep insight that the data delivers.