1.
1SMARTER. ENTERPRISE. BILLING.
The Internet
of Things:
An Executive Primer
monexa.com
The
Billing Review:
Prepared by
Prepared by MarketsandMarkets

2. TABLE OF CONTENTS
1. INTRODUCTION 3
2. DEFINING IOT 4
3. BILLING AND THE INTERNET OF THINGS 6
4. BENEFITS 7
5. CASE STUDY: LEVERAGING IOT: VIRGIN’S CONNECTED BOEING 787S 10
6. BUSINESS CONSIDERATIONS 11
7. POTENTIAL CHALLENGES 14
8. CONCLUSION 15
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3. 1. INTRODUCTION
Referred to as the “first real evolution of the Internet,” the Internet of Things (IoT) is set to1
revolutionize how we work, learn, and live. Recent research indicates that it has the potential to
connect 28 billion “things to the Internet by 2020, an over ten-fold increase when compared to the
2 billion devices connected by the Internet and mobile devices.” From bringing offline businesses2
and processes online, to re-configuring how companies price and distribute their products and
services, IoT will provide organizations with an unprecedented ability to collect, analyze, and
monetize data like never before.
The incredible potential of IoT will manifest itself through high volumes of data streams, be they
continuous or intermittent, structured or unstructured. All of these data streams are created in real-
time to provide unparalleled insights into trends and patterns of relevance. As businesses begin to
leverage IoT, companies are examining how to re-configure their business models, re-organize
their operations, and engage with customers.
However, challenges remain when it comes to planning an IoT business strategy. General
challenges include industry fragmentation, an existing market focus on consumer-oriented versus
Business-to-Business (B2B) IoT applications, data security, privacy concerns, and a current lack
of industry standards. For executives, the need to make critical strategic decisions using IoT as is
increasingly important.
THE PURPOSE OF THIS DOCUMENT IS THREE-FOLD:
• To provide a brief overview of IoT, including the intersection between IoT and billing
processes.
• To determine the business benefits and challenges likely to emerge from IoT.
• To discuss key considerations for executives as their businesses look to monetize and
deploy IoT strategies.
Source: “The Internet of Things: How the next evolution of the Internet is changing everything”, Dave Evans,1
Cisco. April 2011. http://www.cisco.com/web/about/ac79/docs/innov/IoT_IBSG_0411FINAL.pdf
Source: “The Internet of Things: Making sense of the next mega-trend”, Simona Jankowski, James Covello,2
Heather Bellini, Joe Ritchie, and Daniela Costa, Goldman Sachs, September 3, 2014. http://
www.goldmansachs.com/our-thinking/outlook/internet-of-things/iot-report.pdf.
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4. 2. DEFINING IOT
IoT refers to a network of devices or objects that are embedded with technology to facilitate
interaction and communication onto that network, thereby empowering information gathering
through the exchange of data streams about status, location, health, and functionality among
others. According to The Pew Research Center’s Internet Project, the Internet of Things refers to:
A
global,
immersive,
invisible,
ambient
networked
computing
environment
built
through
the
continued
proliferation
of
smart
sensors,
cameras,
software,
databases,
and
massive
data
centers
in
a
world-­‐
spanning
information
fabric
[…].
3
Specifically, IoT is the convergence of disruptive technologies such as sensors, telematics, and
Machine-to-Machine (M2M) communication with software services, apps, and Application
Programming Interfaces (APIs). It relies on the seamless integration of the real world with the
digital world to create a hybrid construct, allowing for data collection to occur anywhere, any time,
and at an unprecedented level of depth. Its potential is further realized when it is combined with
related technology approaches such as cloud computing, big data, and semantic technology.4
To better understand the value of IoT, we borrow a detailed example from a recent report
examining its role in relation to business models.5
Layer 1 – Physical Thing: In this example, the physical element is an LED light bulb. It
forms the first layer and supplies the first direct, physical benefit to the user in the form of
light. Since it is a physical object, the bulb is bound to one location and can supply benefits
only in the area in which it is located.
Layer 2 – Sensor/Actor: The physical thing, such as the LED light, is fitted with a
minicomputer powered by sensor technology and relevant actuating elements. The
microwave sensor continuously measures whether people are in the space and the actuator
turns on the LED bulb if human presence is detected (and switches it off when no people are
around.) In this layer, the smart LED light bulb functions without a separate, wired motion
detector to discern presence.
Source: “The Internet of Things Will Thrive by 2015,” Pew Research Center, 2014. http://www.pewinternet.org/3
files/2014/05/PIP_Internet-of-things_0514142.pdf
Source: “Internet of Things: Converging technologies for smart environments and integrated ecosystems”, Ovidiu4
Vermesan and Peter Friess, 2013. http://www.internet-of-things-research.eu/pdf/
Converging_Technologies_for_Smart_Environments_and_Integrated_Ecosystems_IERC_Book_Open_Access_2013.
pdf
Source: “Bosch IoT Lab White Paper: Business Models and the Internet of Things”, Elgar Fleisch, Markus5
Weinberger, and Felix Wortmann, 2014. http://www.iot-lab.ch/wp-content/uploads/2014/11/EN_Bosch-Lab-White-
Paper-GM-im-IOT-1_3.pdf
4
CONT…

5. Layer 3 – Connectivity: In this layer, the sensor technology and actuator elements are
connected to the Internet, thereby making the physical thing more globally accessible. Here,
an embedded radio module enables transmission of the LED light bulb’s status to anywhere
in the world at negligible marginal costs.
Layer 4 – Analytics: Building on the previous layer, sensor data is collected, stored, verified,
and classified. This data is then integrated with the findings of other Web services in order to
determine consequences for actuator elements. In this example, sensor data is collected
about the times in which the LED light bulb are switched on and off, enabling motion
patterns to be discerned. Operating hours of individual light bulbs are recorded as well.
Layer 5 – Digital Service: In this final layer, options provided by previous layers are
structured in digital services and packaged for global accessibility. So, the LED light with a
presence sensor can be sold as a safety lamp that a user can switch on at the click of an
app, sounding an alarm to the owner, a neighbor, or the police in the event of a burglary and
flashing a red light to help drive out a burglar. All of this occurs at negligible marginal costs.
5
Re-created image. Original image from “Bosch IoT Lab White Paper: Business Models and the Internet of Things”, Elgar
Fleisch, Markus Weinberger, and Felix Wortmann, 2014. http://www.iot-lab.ch/wp-content/uploads/2014/11/EN_Bosch-
Lab-White-Paper-GM-im-IOT-1_3.pdf

6. 3. BILLING AND IOT
The very nature of IoT emphasizes the interconnectivity of devices, all of which will produce large
streams of data that need to be accounted for. As organizations become increasingly focused on
IoT as a driver of incremental revenue streams , efficient recurring revenue management is6
essential. It also requires businesses to re-think their operations, business models, product/service
delivery, and Customer Relationship Management (CRM) processes.
For businesses with sophisticated pricing models and multi-faceted billing plans, the need to
enable consumption-based billing capabilities is essential. For businesses with less sophisticated
pricing models, it is essential to process and organize usage data for analysis in order to improve
business performance. An enterprise-grade billing platform will help with monetizing IoT and
maximizing revenue while automating the processing and retrieval of data. These billing platforms
will help efficiently manage simple and sophisticated billing scenarios, and ensure both accurate
and timely billing.
Executives who are introducing, or planning to introduce, business-related IoT strategies should
also sharpen other organizational capabilities while developing offerings using IoT. The right
support and service enablement platforms (including subscription management, bifurcated billing,
and revenue management modules) will help ease go-to-market challenges. An agile billing and
subscription platform will automate the B2B and B2B2C billing relationships, enabling ultimate
flexibility for and across all connected parties.
Source: “The Internet of Things: Making sense of the next mega-trend”, Simona Jankowski, James Covello,6
Heather Bellini, Joe Ritchie, and Daniela Costa, Goldman Sachs, September 3, 2014. http://
www.goldmansachs.com/our-thinking/outlook/internet-of-things/iot-report.pdf.
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7. 4. BENEFITS
Businesses are likely to gain numerous benefits by using the data collected via IoT. While success
depends on the ability to adapt quickly to emerging market trends, enterprises that are staying
ahead of the IoT adoption curve are poised to reap major benefits. Six of these core benefits are:
Improved
Process
Efficiencies: Real-time monitoring can impact businesses with improved and
consistent visibility across business processes. Specifically, through the real-time monitoring
of machines, equipment, devices, appliances, etc., the Internet of Things will help improve
visibility across business processes, including supply chain and inventory. This heightened
situational awareness should lead to improved business decisions, including a reduction of
human intervention and process automation. Furthermore, with greater accessibility to
business information, organizations are better positioned to improve upon process
automation and reduce human intervention. This improved process control helps reduce
energy consumption while enhancing operational and service delivery costs.
Improved
Asset
Utilization:
In addition to improved process efficiencies,
real-time monitoring
facilitates the continuous tracking of relevant business information. This tracking, in turn,
simplifies supervision, increases transparency, and enables predictive and preventive
maintenance. Furthermore, as data analytics tools process data in real-time, businesses
are able to use any insights generated to drive more effective business decisions, thereby
improving asset utilization and enhancing operational efficiency.
Improved
Productivity: Increased operational efficiency will ensure that time, resources, and
human capital are better put towards steering improved business decision-making and
processes. Furthermore, as a result of improved real-time monitoring of assets, the risk of
machine downtime and other technological errors is significantly reduced. This improved
employee and equipment efficacy boosts productivity and service performance.
Improved
Financial
Management:
Effective budgeting, planning, and reporting are beyond
guesswork and should be based on meaningful information referenced to revenue targets.
Applying disciplined analytics to any real-time data generated via IoT enables businesses to
extract significant insights about the market. This extracted value helps to optimize product
availability, improve business efficiency and productivity, and maximize revenue growth.
Through improved process efficiencies and asset utilization, the Internet of Things also helps
in reducing costs associated with operations and service delivery. As a result, organizations
are in a better position to enhance recurring revenue streams, disrupt business models, and
transform the way their business operates. Since large volumes of data can be analyzed in
real-time, businesses have an unprecedented ability to enhance their decision-making in
order to boost revenue generation, avoid revenue leakage, and create and capture market
value differently.
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8. New
Revenue
Streams: IoT is expected to disrupt traditional business activity with the
emergence of innovative business and service delivery models, and is already prompting a
massive shift from transaction-based business models to “-as-a-Service” business models.
These new disruptive models will change the way enterprises do business, unlock additional
sources of revenue, increase returns on R&D investments, and reduce time to market.7
Enterprises can also tap into new revenue opportunities by designing customer-specific
offerings and providing value-added services.
Improved
Customer
Relationships:
IoT helps businesses maximize the value they deliver to
customers as well as respond rapidly to customer needs. Since IoT facilitates the collection
of real-time data, companies are able to gain insights into service usage and consumption,
which can enable them to develop products and services that customers want; they are also
better able to understand which products and services are less likely to work. Access to
information also offers detailed insight into critical processes and transactions, providing
increased transparency and accountability. As a result, IoT can help boost customer loyalty
and retention, enrich the customer experience, and help deliver customer value faster than
ever before.
7 Source: “Internet of Everything (IoE) Value Index”, Cisco, 2013. http://internetofeverything.cisco.com/sites/default/
files/docs/en/ioe-value-index_Whitepaper.pdf and “Reaping the Benefits of the Internet of Things”, Cognizant, May
2014. http://www.cognizant.com/InsightsWhitepapers/Reaping-the-Benefits-of-the-Internet-of-Things.pdf
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9. 9

10. 10
5. CASE STUDY:
Leveraging IoT: Virgin’s Connected Boeing 787s8
In 2013, Virgin Atlantic ordered a new fleet of highly connected Boeing 787s to prepare
for the era of IoT every part of these planes has an internet connection, allowing for a
comprehensive collection of aircraft and flight data. All in all, each plane can generate up
to half a terabyte of data per flight from all the connected devices.
The collected data will provide the company with detailed insights on how the plane is
functioning - including the ability to prepare for any potential problems ahead of time.
This preparation is especially important as approximately 10% of all airline-related delays
are caused by maintenance problems. By using IoT-enabled predictive maintenance, the
company is able to pinpoint existing problems and ensure they are addressed.
Additionally, IoT allows for real-time feedback to the flight crew.
For airline customers and their families, this comprehensive connection allows for better
predictability and a higher quality to their flight experience. It also allows for the ability to
track cargo and, potentially, baggage with RFID tags embedded in mobile devices.
Accounting for these massive volumes of data has its challenges. Nonetheless, Virgin
Atlantic is leveraging IoT to improve operational processes, minimize revenue leakage,
and enable better decision-making.
8 Source: “Boeing 787s to create half a terabyte of data per flight, says Virgin Atlantic,” Matthew
Finnegan, ComputerworldUK.com, March 6, 2012. http://www.computerworlduk.com/news/
infrastructure/3433595/boeing-787s-to-create-half-a-terabyte-of-data-per-flight-says-virgin-atlantic/?
pn=1 & “Big Data, Internet of Things, and Airlines,” “The ShiSh List (MSDN Blogs), 30 November 2014.
http://blogs.msdn.com/b/shishirs/archive/2014/11/30/big-data-internet-of-things-and-airlines.aspx

11. 6. BUSINESS CONSIDERATIONS
IoT promises many business opportunities and socio-economic benefits. However, in order to
capitalize on these opportunities, businesses should take a holistic approach when implementing
IoT. The following are some key considerations to for executives to keep in mind when developing
an IoT strategy:
Examine
current
business
models: Implementing an IoT strategy may streamline business
processes; however, this strategy needs to be aligned with the capabilities of existing and
future technology investments in order to maximize its benefits. This may require new
business unit structures to launch and grow in newly established markets. It may also
require partnering with complementary products and services to monetize new offerings.
ACTIONS TO TAKE:
• Analyze and optimize your internal and external costs and processes.
• Set rates for each type and level of service, including how these plans will be managed
over time, using real-time analytics.
• Automate the billing process wherever possible as part of your business model overhaul.
Identify
the
best
use
cases
for
your
IoT
strategy: It is essential to identify business areas or
operations that can reap substantial benefits by developing the best use cases for your
strategy. These use cases must identify how businesses can apply the data they retrieve
from sensors - including how they work with each other - in order to optimize device-to-
device communication strategies and boost data-driven decisions. In adopting this process,
businesses are better able to anticipate future opportunities associated with IoT.
ACTIONS TO TAKE:
• Define use cases, including operational requirements for every stage of the product
lifecycle.
• Identify how you will charge customers for your offerings.
• Determine how to deliver service-level agreements and Quality of Service (QoS)
expectations aligned with your IoT offering.
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12. Ensure
networks
are
equipped
to
manage
new
offerings: Implementing a successful IoT
offering is dependent on access to the elements of connectivity, including low-cost sensors,
well-priced bandwidth, affordable processing costs, and widespread wireless coverage.
Expanding network bandwidth to accommodate more users and more data, as well as
deploying appropriate systems to store and analyze the data generated, is absolutely
essential. Additionally, businesses must implement protocols to safeguard privacy and
security for customers, employees, and partners while maintaining consistent data
streaming.
ACTIONS TO TAKE:
• Work to enable ubiquitous network coverage. This is often easier said than done.
• Monitor connected devices in real-time and implement diagnostic testing to identify and
troubleshoot any issues across devices and networks.
Determine required investments: Deploying an IoT strategy demands investments in
terms of technology and people. These include investments in IT, network infrastructure,
analytical applications, as well as the empowerment of your workforce to develop
applications and tools that capture new revenue streams and create new business
approaches. To gauge the Return on Investment (ROI), businesses should identify expected
benefits of each investment and define variables to measure them.
ACTIONS TO TAKE:
• Integrate IoT offerings with existing infrastructure and technology systems.
• Configure APIs to meet all your business needs.
• Budget for and create a detailed plan to scale your IoT services around the world.
• Determine maximum data usage thresholds and cost controls.
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13. Train
and
evolve: As IoT continues to take hold in organizations across all sectors, it is
important for companies to ensure they communicate the benefits of IoT to users. This
includes employees, customers, and partners. So much is new and continuously evolving
about IoT that employees should be educated and encouraged to create a multidisciplinary
approach for product improvement and business model development. With the rapid
progress of IoT technology, innovative partnerships within the organization have become
increasingly important. Teaming product management, engineering, support, and marketing
teams to cultivate concepts relevant to IoT, as well as developing new pricing models and
delivering training and continuous SLA support to customers, creates competitive
advantage and drives business sales.
ACTIONS TO TAKE:
• Hire and train people to specialize in both data science and software or hardware
engineering.
• Management should take steps to enhance collaboration and communications among
various business units.
• Create a platform to engage employees, customers, and partners in creative
development of innovative solutions, services, and use case scenarios.
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14. 7. POTENTIAL CHALLENGES
Organizations must overcome key challenges to extract the value of IoT. These challenges include:
Business
capabilities:
To manage the complexities associated with any IoT business model, executives
must push to implement agile systems and invest in quality technology. Developing desired skills and
processes is fundamental to tap into the opportunities put forward by IoT and avoid failures. Additionally,
technical issues related to solution implementation, system integration, interoperability, connectivity, data
storage and management, analytics, and security must be addressed.
Privacy
and
security
concerns:
Significant privacy and security concerns arise because more connected
devices means multiple entry points for potential hackers. Securing data and infrastructure components
from attacks and unauthorized use is a major concern, especially as data breaches may lead to critical
information being stolen or devices malfunctioning. These breaches may cause a catastrophic
technology failure resulting in financial and reputational risk.
IoT
ecosystem
readiness
and
adoption: The IoT ecosystem is still in its infancy with OEMs focusing on
component miniaturization and low power consumption; network service providers working on improving
connectivity and network reliability; software providers and system integrators analyzing technologies to
extract value from data collected; regulators developing security and privacy policies; and businesses
identifying new solutions and services that can be monetized.
IoT
adoption: At this stage, innovators and pragmatists are adopting IoT solutions. This provides a reality-
check for those expecting to see large revenue streams immediately. As the IoT ecosystem develops, the
technology powering IoT will become less expensive and drive large-scale adoption. While the
widespread adoption of connected technology is inevitable over the next five years, it will be more gradual
in the short term.9 Businesses can capitalize on the opportunities in this market by focusing on the7
customer experience and providing exceptional value through easy-to-use devices/apps.
Current
lack
of
IoT
standards:
The lack of standards and interoperable technologies pose difficulties in
connecting devices and systems from different manufacturers. Defining standards for the IoT ecosystem
may ensure interoperability of connected devices thus enabling technology implementations for a variety
of market opportunities. Technology companies along with industry leaders are forming a consortium to
adopt common IoT standards and promote its usage.10 Such collaboration is becoming effective with the8
active participation of innovative enterprises as well as corresponding improvements in technology
infrastructures.
9 Source: “Internet of Everything (IoE) Value Index”, Cisco, 2013. http://www.cisco.com/web/about/ac79/docs/
innov/IoE-Value-Index_External.pdf & “Reaping the Benefits of the Internet of Things”, Cognizant, May 2014. http://
www.cognizant.com/InsightsWhitepapers/Reaping-the-Benefits-of-the-Internet-of-Things.pdf
10 Source: http://iofthings.org/
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15. 8. CONCLUSION
IoT is poised to bring about revolutionary changes in how organizations address business
challenges. Companies are connecting to IoT for a wide variety of reasons: to stay ahead of the
competition, create new revenue streams and improve existing revenue streams, build cost-
effective and efficient business processes, increase productivity, and improve customer
experiences. In order to realize the full potential of IoT, enterprises need to lay a solid foundation
that includes an integrated deployment plan with direct IT involvement as well as support from
other business units, such as production, marketing, sales, and customer services. While industry
leaders and early adopters continue to advocate the importance of IoT as the future of technology,
the ability for the enterprise to integrate these newly available technologies with their existing
business dynamics remains a challenge.
When designing IoT strategies, executives should take a holistic view of the foundational
elements, such as security, privacy, data and subscription management tools, and billing systems.
This means any IoT application will re-engineer a number of business operations. Executives
should also consider investing in powerful technologies and compelling product/service design, as
well as building a holistic business strategy.
Finally, operational excellence and data-driven customer insights will help enable companies to
capitalize on opportunities associated with IoT.
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16. ABOUT MONEXA:
Founded in 1998, Monexa Services Inc. helps organizations drive top and bottom line results though more
innovative, timely, transparent and customer friendly billing solutions.
Monexa provides an agile, cloud-based billing management platform that lets our customers react quickly to
market changes while reducing billing costs and complexity.
Transform your billing into a positive and innovative customer experience.
Get in touch with us at sales@monexa.com or call us at 1-877-604-7277.
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