Why Deploy an M2M Application?
Recently, I was a presenter on two panel sessions at the M2M Evolution 2012 Conference in Miami, Florida.
One panel was entitled: Why is Smart Grid an M2M Market?
Not too surprisingly, the same question can be asked of many markets:
- Why is Fleet Management an M2M market?
- Why is Telematics an M2M Market?
- Why is Telemedicine an M2M Market?
- Why is Home Security an m2M Market?
Surprisingly, the very first response is not a technical one! At the topmost level, it is not the cool to deploy M2M factor, or whether you have the the correct technology, the best M2M data transport, the right radio module to use, the cheapest M2M network, etc.
Rather, the reasons for deploying an M2M Application, like most other such reasons, is the outcome of a business decisionmore accurately, the outcome of a financial decision.
Two Simple Decision Drivers
In other words, it is a "Keep It Simple, Stupid" or KISS principle:
Basically, there are two important, yet simple, decision drivers for all companies:
- Businesses want to increase Revenues
- Businesses want to reduce Costs
These are what increase profit (or perhaps help in achieving positive profit)!
If an increase in revenues or a reduction in costs (ideally both, of course!) can be achieved by deploying an M2M Application, then the business willmaybe even mustdeploy that M2M Application.
Plus, even if deploying an M2M Application causes costs to increase, as long as the resulting revenue increases faster (leading to higher overall profit), the deployment will still be an overall profitable success.
Connection to Other Factors
Sometimes, the connection to the above two decision drivers is indirecta specific cost reduction or specific revenue enhancement may not be directly related to a particular M2M Application deployment.
But, usually, a connection and causal relationship can be found.
Electric Utility Example
In the electric power industry, there is a need to smooth out energy use during the day, to reduce the generation requirements during peak times. Reducing the peak power use reduces the cost of maintaining power generation capacity for peak usage.
Yet, utility customersparticularly residential customersare unlikely to change their daily usage behavior unless they receive an obvious incentive: monetary rewards (i.e., a reduction in their bills).
One way is for the electric utility to offer lower usage rates during non-peak hours to residential customersthe oft-quoted examples for cost reduction are:
- Run your washing machine at night,
- Do your laundry after hours,
This incentive offer drives a requirement to measure the actual usage, on-peak and off-peak, so that the incentive can indeed be measured and billed. Yet, to send a human meter reader twice a day (as opposed to the earlier monthly meter reads) to every residence is clearly impossiblethe cost would be astronomically high, even if it were practical!
Reducing the impossibly high cost of a human twice-a-day-meter-read is thus a natural use for an M2M Applicationsmart meters that read the electricity usage at least twice a day (or more frequent intervals) can make the rate incentive become a practical reality.
In the automotive world, increasing sales revenue and market share is a normal goal for the manufacturers. One way to achieve higher revenue (or increased sales growth rate) is to increase the valueboth perceived and realof the brand, model and specific features of the vehicles.
Thus, automobile manufacturers add Telematics features to their vehicles to increase the value of the vehicle in the eyes of the buyers. These feature lists are long and include, for example:
- Direct safety benefits (air bag deployment notification, etc.),
- New driver capabilities (updated route guidance, etc.),
- Vehicle management and control (remote door unlock, etc.),
- Dealer-Owner relationship management (service notifications, etc.)
Providing these new features requires the deployment of an M2M Applicationa telematics device in the vehicle and corresponding back-office functionality, web site, etc.
The addition of an M2M Application in each vehicle increases costsboth immediate (the added cost of the Telematics unit) and on-going (the service cost). Yet, providing these M2M Applications results in better value for the buyers, increased vehicle sales and, thus, increased revenue for the auto manufacturer.
One of the main costs for repeat visits to a medical facility (hospital or Doctor's office) is for patients with a long-term or chronic medical issueelderly patients and otherwisethat requires examination.
Sometimes, the visits are not strictly required for a medical issue, but the patients cannot determine this easily for themselves. These unnecessary visits are a cost burden for both the patient and the medical facility.
To reduce unnecessary visits, what is needed is a device that can make, or record, the necessary medical measurements for the patient:
- Blood pressure
- Sugar levels
- General health status
and transmit the gathered information to the health-care provider facility.
Such a device can be a self-contained M2M Application unitfor example, a simple health monitoring system (like the Bosch Health Buddy System) has been shown to eliminate some hospitalization occurrences and reduce the overall cost of healthcare.
The peace of mind provided to the patient that they can take the necessary measurements and can transmit them to their health-care provider, along with the ability for the provider to monitor patient risk since they receive data more often, can lead to better health-care and better health outcomes.
Other Benefits of M2M
Yes, there are other benefits of deploying M2M Applications (and, yes, they are related to the two financial decision drivers).
For example, for the Smart Grid (or electric utility industry):
Some of these may be more obvious than others, of course. And each market and industry will find their own advantages to deploy an M2M Application.
So How to Decide?
To make the decision to deploy an M2M Application in the first place, ask yourself many simple questions:
- Will deploying the M2M Application reduce my costs?
- Is the deployment going to increase my revenue?
- Are the added feature(s) nice-to-have or will they help increase sales?
- Is there a government regulation that forces the need?
- Do I need a unique capability to distinguish my product from my competition?
- Do I have a product reputation that would be enhanced by an M2M capability?
- Can I use the M2M data and information elsewhere? For other purposes?
before proceeding to the next steps of determining the technology to use, the detailed feature specifications, the M2M radios to design with, etc., etc., etc.
If the answers lead you to a decision that you do need an M2M Application deployed, or even if you need help with the questions, then please come talk to us at Aeris!