• Cognizant 20-20 InsightsMaximizing the Business Value ofConnected Devices by Transformingthe CIO’s RoleThe proliferation...
Examples of Business- and Consumer-Connected Devices                                  Business                Smart       ...
tion (see Quick Take on preceding page). This            of insights to reflect the operational landscape ofinformation ca...
connected customers. Apple is a great example              data that were part of their connected device.             of h...
.    The CIO Role Transformed.                                     Internal                      External          Connect...
Solving the Big Data Conundrum                                                Relevant Actionable                         ...
billion mark by 2016.2 It is a trend that promises     manufacturers. With the advent of the millennialto redefine the rel...
About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process ...
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Maximizing the Business Value of Connected Devices by Transforming the CIO's Role


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With the vast proliferation of connected devices and smart devices, high-tech manufacturers can gain customers, increase loyalty and grow their product lines through the empowerment of CIOs, who are best-suited to take the lead in managing connected-device strategy. The other keys are designing a suitable IT infrastructure and entitlement management to best leverage connected and smart device data.

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Maximizing the Business Value of Connected Devices by Transforming the CIO's Role

  1. 1. • Cognizant 20-20 InsightsMaximizing the Business Value ofConnected Devices by Transformingthe CIO’s RoleThe proliferation of connected devices and the massive amountsof data they generate are creating a wide array of opportunitiesfor high-tech manufacturers. But these cannot be acted uponwithout a holistic connected devices strategy where IT leadershipweighs in at key junctures of product development to resolveissues such as big data and entitlement management. Executive Summary devices initiative. CIOs will be expected to provide much more than tools to connect and interact with In recent times, the cost, technology and adoption enterprise resources. IT organizations that can of connectivity infrastructure has reached a point provide big data and entitlement management where high-technology hardware manufactur- solutions to the product development process are ers worldwide can introduce devices that create, well-positioned to differentiate their company’s share, collect and drive data-intensive capabili- product and service offerings versus its ties in real time that go beyond the limitations competitors. of the device shell. Organizations that leverage this device connectivity infrastructure have a Proliferation of Connected Devices huge advantage over competitors in adapting and providing for the needs of customers and As Mary Meeker of venture capital firm Kleiner themselves. Unfortunately, many organizations Perkins Caufield Byers points out, we are in a struggle with optimizing business benefits by transformational phase for many professional failing to maximize the revenue potential from and personal devices.1 It’s what she calls the their connected devices initiatives. “re-imagination of everything” where nearly all aspects of our lives are powered by new smart, This shift towards connected devices requires a intuitive devices with wireless connectivity that transformation in the role of the CIO organization enable work or play whenever, wherever. The relative to the company’s products and service transformational impact of smart devices with offerings, but also in the way in which product anywhere Internet connectivity is widespread: management and manufacturing groups work with IT to ensure a well-integrated connected • After125 years of society’s landline usage, mobile phone usage has surpassed it. cognizant 20-20 insights | march 2013
  2. 2. Examples of Business- and Consumer-Connected Devices Business Smart Phones Consumer Storage Security Blu-Ray/DVD Temperature Devices Badges Tablets Players Control Automobiles Data Centers GPS Parking Payment Computers Meters Monitoring Devices Toll Security Collection TV Industrial Monitoring Machinery Information E-Readers Set-Top Kiosks Home/Office Boxes Automation Network Medical Supply Equipment Remote Equipment Chain Controls LogisticsFigure 1• After 244 years, the Encyclopedia Britannica of our generation of technology advancement, as suspended the publication of its print edition such connectivity allows people to consume unor- due to Wikipedia, Google and other Internet ganized data remotely and without the need to sources. directly intervene.• After350 years of traditional newspaper ad Many high-tech hardware manufacturers strate- revenues, Internet ad revenues have surpassed gically collect a variety of information from their them. products in the field through data-enhanced con- nectivity. This is true for both consumer devicesThese “connected devices” (see Figure 1) require and B2B hardware devices. For example, someconnections to the Internet or to other devices to manufacturers collect device failure informationcollect and enrich data for users and device man- along with a variety of product usage informa-ufacturers. This will be one of the defining themes Quick TakeConnected Device ProliferationB2B Devices Consumer DevicesNetApp’s Auto Support feature: This feature helps Apple’s product feedback functionality: The increasingNetApp gain control of support situations. The feature adoption of smartphones challenged Apple to createopens up cases in its support CRM system based on better devices with innovative features. The iPhoneescalation rules. This helps NetApp learn of hardware entered the market with lessons learned from theissues, errors, warnings, etc. even before the customer company’s iPod experience. Apple was able to trackis aware of them. This technology enabler creates an user actions, preferences and behavior, and react witheffective ecosystem that has changed the game for features and functionality that were more attractive tocompanies such as NetApp. It has helped NetApp gain a its customers. Apple accomplished this with a connected-strong foothold among competitors EMC, Hitachi and HP device strategy that used information from its devicesin the data storage systems market, increase customer with improved aesthetics and usability. While developingsatisfaction and be proactive with a clear support the iPad, Apple designed features such as a sharperstrategy, among other business benefits. screen, lifestyle-based apps, productivity features, etc. based on its observation of user preferences with the iPodCisco’s Smart Call Home feature: This feature integrated and iPhone and the need for a better tablet form factor.with Cisco iOS helps Cisco devices deliver real-time trou-bleshooting and auto generation of support requests, Comcast’s Xfinity Home: Comcast Xfinity offers a homecreating a secure and reliable support mechanism. This security solution in addition to providing cable, Internetresults in direct benefits for Cisco customers in terms of and phone services. As Comcast already runs cables updependability and reliability of support. to customers’ homes, it can easily enable home security features and provide remote management capabilities — all leveraging existing hardware and software infrastructure. cognizant 20-20 insights 2
  3. 3. tion (see Quick Take on preceding page). This of insights to reflect the operational landscape ofinformation can enable companies to provide installed devices to manufacturers and vital signsbetter customer service and to create value- to customers.added services. This data can also help to predictproduct failures, fine-tune product features and Integrated and Automated Customer Supportfunctions, forecast customer usage patterns and With the ability to monitor and view IT data infacilitate the development of new products and real time comes the ability to use this informa-services. To effectively manage the large amount tion to enhance customer support. This includesof information that is generated, companies are information on environment specs, history andinvesting in large and complex data systems logs to better troubleshoot customer issues. Into capture and manage “big data” and extract some cases, trouble tickets are automaticallymeaning via sophisticated analytics. created when certain events occur, and are then addressed by support personnel to proactivelyPotency of Connected Devices resolve critical issues. This embedding of supportThere are many reasons why connected digital is a key differentiator for connected devices.devices are such a hot topic and are being Direct Business Intelligence and Insightadopted at such a rapid pace by businesses andconsumers. Along with the ability to analyze the Connected devices allow companies to sendbig data collected from a multitude of connected business insight directly for instantaneousdevices, both companies and consumers are analysis and decision-making. Information suchbeginning to realize the potential benefits of as how a device is used, what content is beingthese new products. accessed and what other devices the customer uses provides invaluable intelligence about whoReal-Time IT Intelligence the devices’ target customers are and how toExternal touch points such as customer-facing engage these customers going forward.applications are evolving to use connected deviceinformation that can be consumed by an enter- Enable New Business Modelsprise’s business intelligence layer, translated As traditional business approaches give way toand transformed into a meaningful information more innovative ways of working, including sub-view to the customer. This IT Intelligence helps scription models, companies increasingly mustcustomers monitor and understand how their embrace new operating strategies to continuedevices work and make decisions on their infra- delivering against their value propositions. Thestructure needs. Companies such as NetApp have ability to be continuously connected to customers’consumed massive amounts of inflowing data, devices allows a persistent channel to potentiallymined it using proprietary algorithms and built generate new revenue streams by providingcomplex data structures. The end result: Delivery subscription and ”pay as you go” services toImpact of the Connected Devices Real-Time IT Intelligence Renewals, Cross- & Up-Selling Direct Business Enablement Intelligence Connected Faster Product Devices Evolution Integrated & Feedback & Automated Customer Upgrade Cycle Support Increased Enable New Adoption & Customer Business Models LoyaltyFigure 2 cognizant 20-20 insights 3
  4. 4. connected customers. Apple is a great example data that were part of their connected device. of how companies can leverage their devices’ Ultimately, this device loyalty enhances the connectivity. It started by creating the ability for bottom line of device providers, as it is much less customers to purchase music; it then progressed expensive to retain current customers than to to games; and eventually it offered a full-blown acquire new ones. app store – all thanks to the rich information obtained through its Developing a Successful Connected From a revenue- connected devices platform. From Devices Strategy generation a revenue-generation perspective, Many high-tech manufacturers have succeeded in perspective, the the device itself has become less this new limitless frontier. However, only a sliver of a focus; the services that are of the full potential has been realized, and some device itself has provided through the connected companies even have a fully-built-out connected become less of a device have become the value that devices platform that does not produce thefocus; the services the customer is willing to pay for. expected results. Many connected device efforts end up in the same group with failed product or that are provided Faster Product Feedback and IT experiments due to three key areas: the CIO through the Upgrade Cycles organization is not fully involved in the product connected device Connected devices enable product strategy and development efforts; the strategy to management teams to receive drive big data realization from connected devices have become the instant feedback on bugs and is insufficient; or a robust system of entitlement value that the features and to push out upgrades management is lacking to manage connectedcustomer is willing and fixes rapidly and scalably. device services. Customer feedback and the to pay for. response to feedback have created The Connected Device CIO a more agile process, resulting How an organization can achieve connected in better products. Rather than devices success will depend upon how integral the harvesting customer feedback through surveys CIO is throughout the process. With the advent and interviews, feedback is instantaneous at the of managing and analyzing data collected from point of interaction, with minimal additional cost devices outside of the enterprise, the CIO role has and time in collecting data. fundamentally changed from mainly managing and analyzing internally-generated, enterprise Renewals, Cross- and Up-Selling Enablement A well-managed connected device and data strategy helps companies receive information on Creating a Connective Devices entitlement, device usage and feature usage, and Organizational Strategy to plan for up-sell or cross-sell of products and services. Messaging can be configured to alert customers about product expirations and to offer avenues like online renewals. Hardware vendors Transformed CIO Organization are increasingly leveraging a connected device model to implement messaging around product features, upgrades, upcoming renewals, etc. Addi- tionally, if a particular service has expired or has not been used appropriately, companies can build the capability to locate, remotely shut off and disconnect devices. Connected Increased Adoption and Customer Loyalty Devices The ultimate benefit of well-integrated connectiv- Strategy ity to customer devices is the increase in adoption rate or the loyalty of customers who consume the Big Data Entitlement Management services and content provided by the connected devices. With a captive audience that shares and consumes valuable data, it becomes hard for customers to move to other devices, connected or not, where they lack the services or historical Figure 3 cognizant 20-20 insights 4
  5. 5. . The CIO Role Transformed. Internal External Connected Enterprise Data CIO Data Devices Figure 4 data. Further, enterprises’ increasing adoption table when discussing key business objectives of private and, more recently, public clouds has and strategy for developing connected devices. added to the technical complexity of managing not only data that flows into the enterprise but Big Data Strategy for Connected Devices also data that exists in the cloud infrastructure. As Whether a connected device is a sensor, e-reader the adoption of cloud infrastructure for business or a tablet, it needs to record and transmit applications increases, we anticipate that enter- machine-readable data. When this influx of prises will start deploying big data solutions in data reaches corporate networks, it needs to the cloud within the next couple of years. CIOs are be parsed, translated, interpreted and stored in now getting to redefine their role as the external corporate systems. This requires a coordinated data custodian and enabler, necessitating that data management strategy because of the incom- they create initiatives and reorganize around patibility of information captured and recorded in device-generated data management and analysis. different formats. For the CIO to be effective in this key data role, There is also a widespread corporate mandate to a strong connection between the product devel- collect and store all forms of information. Orga- opment organization and the IT organization nizations need a well-coordinated information must be forged. While product development is management strategy that can dictate the data responsible for designing products that generate types to be collected and stored and how this data device information, the IT group is responsible can be leveraged for creating a superior business for multiple activities: they not only consume value chain that satisfies all business objectives. and report this information in a meaningful way to meet stakeholders’ business objectives and Organizations can optimize big data benefits enable timely actionable results, but they also when their business objectives are clearly stated must be responsive to other connected device and executed. To enable clarity around business users. IT also should be involved in deciding how objectives, organizations need a well-defined to deliver and present this data effectively to end strategy on how information needs to be used. users — and this requires they have a seat at the Organizations often merely collect as much data as possible with the hope that they can make The CIO Balancing Act Traditional Internal Data Management Connected Device "Big Data" Management • Sourced from internally generated data. • Sourced from external user-generated data. • Structured data. • Unstructured data. • Predictable, growing storage needs. • Potentially unpredictable, unlimited storage needs. • Closed-end enterprise data ecosystem. • Supporter of product capabilities. • Potentially externally exposed data ecosystem. • Enabler and enhancer of product capabilities. Figure 5 cognizant 20-20 insights 5
  6. 6. Solving the Big Data Conundrum Relevant Actionable Trustworthy Acquired & Learned Created Knowledge Data Inference Just-in- Focused Time Capabilities Customers Markets Channels Value Risks Investors Chain Insight Regulatory Disruptions Expected Outcomes Heard Inference Action Innovation Extracted Originated Value Value Value Captured Captured Transaction Captured Value Value StreamFigure 6sense of it all somewhere down the road. The connected devices, proper validation of softwarereality is that further down the road they’re stuck and service entitlements, tighter integration ofwith a huge bunch of data in which wheat can’t be hardware with software and the ability to fortifyseparated from chaff, and they often must then the process by virtually eliminating entitlementclean up the data and reevaluate their data-gath- discrepancies on devices.ering policies. The ideal is to converge strategywith execution in order to achieve maximum The Future of Connected Devicesimpact from big data initiatives and stop the Growing Connected Devices Marketcycle of false starts. This will lead to a more fully The market for connected devices has hit aleveraged connected devices platform. definitive inflection point. According to analysis from IDC, device shipments will move beyondEntitlement Management Strategy for one billion units this year and approach the twoConnected DevicesHaving an entitlement management strategy is aprecursor to an overall connected devices strategy. Device DestinyEntitlement management is how device manufac-turers and service providers control and track theusage of their devices and/or services through Number of Connected Devices, Globalauthorization to ensure they are used appropri- 3.50 30ately and that the providers are compensated for 3.00 25their usage. A robust entitlement managementstrategy includes integrating an entitlement pro- 2.50 20visioning back end with product development and 2.00manufacturing. This ensures a 360-degree entitle- 15 Billionsment view for a successful customer experience. 1.50 10Without this alignment, customer experience is 1.00distorted, with bad or incorrect activations, missed 5up-sell opportunities, revenue leakage and partner 0.50dissatisfaction, along with unreliable entitlement 0 0data. Software compliance issues that lead to 2012 2014 2016 2018 2020revenue leakage can be addressed with a properly Average number of devices per persondesigned entitlement management approach Total number of devicesleveraging the connected devices strategy. Keyconsiderations toward forging a more robust enti- Source: Authors’ interpretation from IDC research.tlement management process include the ability Figure 7to accurately identify and configure any variant of cognizant 20-20 insights 6
  7. 7. billion mark by 2016.2 It is a trend that promises manufacturers. With the advent of the millennialto redefine the relationships that technology — mobility era, users of smartphones and tabletsand technology managers — have with business will find increasing ways to consume data on theirdevelopers, product developers, R&D, marketing personal devices. This trend will further accelerateand beyond. and create an increased need for hardware manu- facturers to adapt their connected device strategyWhat is even more impressive is the potential $1.8 around areas that include enhanced device intel-trillion revenue opportunity for connected devices ligence, increased data consumption and display,by 2020, according to a study conducted by device information interoperability, communica-Machina Research and funded by the GSM Associ- tion protocols, etc.ation.3 There are currently nine billion connecteddevices this year, a figure that could grow to 24.45 However, the potential for connected devicebillion by 2020.4 From mobile phones to kids’ growth is limited only by how hardware manufac-toys to pet collars, device mobilization has the turers can best leverage the data connectivity. Forpotential to enrich the user experience with data companies to capitalize on their efforts, the CIOthat is enabling individuals and organizations to organization must be entrenched in the productreimagine the future of personal and professional management and development of these efforts.interactions. We will see a faster convergence of Along with focused IT strategy in developing bigmobility and connected devices by 2015. Industry data and entitlement management capabilities totrends around mobility have accelerated the enable connected device products, the companyadoption of personal devices into the enterprise will be well positioned to drive sustainablearena. This “consumerization” of enterprises with connected device results going forward.personal devices creates new needs for hardwareFootnotes1 5/30/12 D10 Conference – Internet Trends.2 IDC Press Release 3/28/2012, http://www.idc.com/getdoc.jsp?containerId=prUS23398412.3 CNET, CTIA 2012 Review, http://reviews.cnet.com/8301-12261_7-20118339-10356022/wireless-execs-see- connected-devices-as-next-big-thing/, Oct 10, 2011.4 ibid.About the AuthorsTom Pai is a Manager within Cognizant’s Business Consulting Practice and advises technologycompanies on customer experience, online operations strategy, mobile marketing strategy, social mediaenablement and enterprise business challenges. Tom has more than 12 years of experience working forsuch companies as Deloitte, Accenture and IBM, serving a number of online, software and hardwareclients. He can be reached at Tom.Pai@cognizant.com.Sriram Sundararajan is a Principal within Cognizant’s Business Consulting Practice, where he advisesclients on product development, sales, service and marketing strategy, software licensing, businessoperations, compensation planning, products and business model transformation. Sriram has over 15years of experience in operations and consulting at Fortune 500 companies in the retail, banking andtechnology industries. He can be reached at Srirams@cognizant.com.Chinmay Sardesai is a Senior Consultant within Cognizant’s Business Consulting Practice, where headvises high-tech, online and ISV clients. His functional expertise includes IT strategy, business processdesign and reengineering, business transformation, and product lifecycle management. Chinmay hasfive-plus years of experience in technology and management consulting. He can be reached Chinmay.Sardesai@cognizant.com. cognizant 20-20 insights 7
  8. 8. About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 156,700 employees as of December 31, 2012, Cognizant is a member ofthe NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performingand fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7121 0102 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com©­­ Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.