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.

1. • Cognizant 20-20 Insights
Maximizing the Business Value of
Connected Devices by Transforming
the CIO’s Role
The proliferation of connected devices and the massive amounts
of data they generate are creating a wide array of opportunities
for high-tech manufacturers. But these cannot be acted upon
without a holistic connected devices strategy where IT leadership
weighs in at key junctures of product development to resolve
issues 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. 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
Logistics
Figure 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 devices
These “connected devices” (see Figure 1) require
and B2B hardware devices. For example, some
connections to the Internet or to other devices to
manufacturers collect device failure information
collect 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 Take
Connected Device Proliferation
B2B Devices Consumer Devices
NetApp’s Auto Support feature: This feature helps Apple’s product feedback functionality: The increasing
NetApp gain control of support situations. The feature adoption of smartphones challenged Apple to create
opens up cases in its support CRM system based on better devices with innovative features. The iPhone
escalation rules. This helps NetApp learn of hardware entered the market with lessons learned from the
issues, errors, warnings, etc. even before the customer company’s iPod experience. Apple was able to track
is aware of them. This technology enabler creates an user actions, preferences and behavior, and react with
effective ecosystem that has changed the game for features and functionality that were more attractive to
companies 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 devices
in the data storage systems market, increase customer with improved aesthetics and usability. While developing
satisfaction and be proactive with a clear support the iPad, Apple designed features such as a sharper
strategy, among other business benefits. screen, lifestyle-based apps, productivity features, etc.
based on its observation of user preferences with the iPod
Cisco’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 home
creating a secure and reliable support mechanism. This security solution in addition to providing cable, Internet
results in direct benefits for Cisco customers in terms of and phone services. As Comcast already runs cables up
dependability 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. tion (see Quick Take on preceding page). This of insights to reflect the operational landscape of
information can enable companies to provide installed devices to manufacturers and vital signs
better customer service and to create value- to customers.
added services. This data can also help to predict
product failures, fine-tune product features and Integrated and Automated Customer Support
functions, forecast customer usage patterns and With the ability to monitor and view IT data in
facilitate 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 includes
of information that is generated, companies are information on environment specs, history and
investing in large and complex data systems logs to better troubleshoot customer issues. In
to capture and manage “big data” and extract some cases, trouble tickets are automatically
meaning via sophisticated analytics. created when certain events occur, and are then
addressed by support personnel to proactively
Potency of Connected Devices resolve critical issues. This embedding of support
There 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 Insight
adopted at such a rapid pace by businesses and
consumers. Along with the ability to analyze the Connected devices allow companies to send
big data collected from a multitude of connected business insight directly for instantaneous
devices, both companies and consumers are analysis and decision-making. Information such
beginning to realize the potential benefits of as how a device is used, what content is being
these new products. accessed and what other devices the customer
uses provides invaluable intelligence about who
Real-Time IT Intelligence the devices’ target customers are and how to
External touch points such as customer-facing engage these customers going forward.
applications are evolving to use connected device
information that can be consumed by an enter- Enable New Business Models
prise’s business intelligence layer, translated As traditional business approaches give way to
and transformed into a meaningful information more innovative ways of working, including sub-
view to the customer. This IT Intelligence helps scription models, companies increasingly must
customers monitor and understand how their embrace new operating strategies to continue
devices work and make decisions on their infra- delivering against their value propositions. The
structure 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 potentially
mined it using proprietary algorithms and built generate new revenue streams by providing
complex data structures. The end result: Delivery subscription and ”pay as you go” services to
Impact 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
Loyalty
Figure 2
cognizant 20-20 insights 3

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 the
focus; 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 connected
customer 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. .
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. 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 Stream
Figure 6
sense of it all somewhere down the road. The connected devices, proper validation of software
reality is that further down the road they’re stuck and service entitlements, tighter integration of
with a huge bunch of data in which wheat can’t be hardware with software and the ability to fortify
separated from chaff, and they often must then the process by virtually eliminating entitlement
clean up the data and reevaluate their data-gath- discrepancies on devices.
ering policies. The ideal is to converge strategy
with execution in order to achieve maximum The Future of Connected Devices
impact from big data initiatives and stop the Growing Connected Devices Market
cycle of false starts. This will lead to a more fully The market for connected devices has hit a
leveraged connected devices platform. definitive inflection point. According to analysis
from IDC, device shipments will move beyond
Entitlement Management Strategy for
one billion units this year and approach the two
Connected Devices
Having an entitlement management strategy is a
precursor to an overall connected devices strategy. Device Destiny
Entitlement management is how device manufac-
turers and service providers control and track the
usage of their devices and/or services through Number of Connected Devices, Global
authorization to ensure they are used appropri- 3.50 30
ately and that the providers are compensated for 3.00 25
their usage. A robust entitlement management
strategy includes integrating an entitlement pro- 2.50
20
visioning back end with product development and 2.00
manufacturing. This ensures a 360-degree entitle- 15
Billions
ment view for a successful customer experience. 1.50
10
Without this alignment, customer experience is 1.00
distorted, with bad or incorrect activations, missed
5
up-sell opportunities, revenue leakage and partner 0.50
dissatisfaction, along with unreliable entitlement 0 0
data. Software compliance issues that lead to 2012 2014 2016 2018 2020
revenue leakage can be addressed with a properly Average number of devices per person
designed entitlement management approach Total number of devices
leveraging the connected devices strategy. Key
considerations toward forging a more robust enti-
Source: Authors’ interpretation from IDC research.
tlement management process include the ability Figure 7
to accurately identify and configure any variant of
cognizant 20-20 insights 6

7. billion mark by 2016.2 It is a trend that promises manufacturers. With the advent of the millennial
to redefine the relationships that technology — mobility era, users of smartphones and tablets
and technology managers — have with business will find increasing ways to consume data on their
developers, product developers, R&D, marketing personal devices. This trend will further accelerate
and beyond. and create an increased need for hardware manu-
facturers to adapt their connected device strategy
What 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 connected
devices this year, a figure that could grow to 24.45 However, the potential for connected device
billion 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. For
potential to enrich the user experience with data companies to capitalize on their efforts, the CIO
that is enabling individuals and organizations to organization must be entrenched in the product
reimagine 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 big
mobility and connected devices by 2015. Industry data and entitlement management capabilities to
trends around mobility have accelerated the enable connected device products, the company
adoption of personal devices into the enterprise will be well positioned to drive sustainable
arena. This “consumerization” of enterprises with connected device results going forward.
personal devices creates new needs for hardware
Footnotes
1
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 Authors
Tom Pai is a Manager within Cognizant’s Business Consulting Practice and advises technology
companies on customer experience, online operations strategy, mobile marketing strategy, social media
enablement and enterprise business challenges. Tom has more than 12 years of experience working for
such companies as Deloitte, Accenture and IBM, serving a number of online, software and hardware
clients. He can be reached at Tom.Pai@cognizant.com.
Sriram Sundararajan is a Principal within Cognizant’s Business Consulting Practice, where he advises
clients on product development, sales, service and marketing strategy, software licensing, business
operations, compensation planning, products and business model transformation. Sriram has over 15
years of experience in operations and consulting at Fortune 500 companies in the retail, banking and
technology industries. He can be reached at Srirams@cognizant.com.
Chinmay Sardesai is a Senior Consultant within Cognizant’s Business Consulting Practice, where he
advises high-tech, online and ISV clients. His functional expertise includes IT strategy, business process
design and reengineering, business transformation, and product lifecycle management. Chinmay has
five-plus years of experience in technology and management consulting. He can be reached Chinmay.
Sardesai@cognizant.com.
cognizant 20-20 insights 7

8. About Cognizant
Cognizant (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 in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry
and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50
delivery centers worldwide and approximately 156,700 employees as of December 31, 2012, Cognizant is a member of
the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing
and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
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