Industrial IoT and Business Operations · Study deck
Business Model Cases: Evidence Basics
A connected light above a warehouse aisle has stopped reporting.
Ada is your guide for this deck.
After studying this chapter
Learning objectives
You will be able to:
- Analyze Business Model Transformations: Explain how traditional companies transition to IoT-enabled service models
- Evaluate Financial Impact: Calculate the revenue and margin improvements from Product-as-a-Service
- Identify Success Factors: Assess the key elements that enable successful IoT business model shifts
- Apply Lessons Learned: Extract actionable insights from real-world case studies
Major section
Start With the Story
The monthly offer may lower the first cost.
- It also ties value to long-term operation, repair, data, and a supplier that must remain able to serve.
- A live chart has no value if it does not change a useful choice.
- A building owner may pay while tenants feel the change.
Major section
Start With the Story (continued)
A service team may carry the repair cost.
- Include hardware, install, setup, support, failed visits, replacement, service work, and end of life.
- A case story often reports success without showing every cost or failed site.
- Selling or sharing a record is a new value path and a new risk, not free income.
Major section
Start With the Story (continued)
Multiply support calls, failed units, travel, storage, and service load by the planned customer count.
- This makes unlike offers easier to compare without copying their surface features.
- A model that works in a dense city may fail in remote sites.
- A plan for owned buildings may fail with tenants.
Major section
Start With the Story (continued)
A premium product may carry support cost that a low-price unit cannot.
- A business case is a decision record, not a victory story.
- It should make the reason to stop as clear as the reason to invest.
- A gap between those answers is a useful warning.
Major section
Price the Missing Repair Visit
The customer pays £6 per fixture each month, so recurring revenue is 20 × £6 = £120 per month.
- The remaining £80 is a contribution toward hardware, installation and other costs; it is not yet profit.
- Over a full year with no cancellations, that contribution is £960.
- A dashboard cannot close that gap.
Major section
Price the Missing Repair Visit (continued)
Older wiring, higher mounting points and travel distance may change the cost of ownership at the next site.
- One such visit consumes two months of contribution, since £160 divided by £80 per month equals 2 months.
- The evidence should distinguish a measured visit rate from an estimate.
- That observation establishes that replacement work occurs.
Major section
Price the Missing Repair Visit (continued)
If the service model assumed that the customer would replace failed lamps, but the contract promises provider repair, the earlier economics leave out a real obligation.
- The value proposition must explain why the payer accepts that split.
- Lower energy use may help the tenant, while fewer repair calls may help the owner.
- Counting the same avoided visit as a saving for both parties would inflate the case.
Deck summary
Key takeaways
The monthly offer may lower the first cost.
- A service team may carry the repair cost.
- Multiply support calls, failed units, travel, storage, and service load by the planned customer count.
- A premium product may carry support cost that a low-price unit cannot.
- The customer pays £6 per fixture each month, so recurring revenue is 20 × £6 = £120 per month.
Retrieval practice
Recall check 1 of 3
Ada says: answer from memory, then check your reasoning.
Q1A lighting supplier changes from selling fixtures to charging for an ongoing lighting service. What changes in the business relationship?
Show answer
Answer: C The chapter contrasts one-time product sales with continuing service relationships.
Q2A lighting service covers 10 fixtures at £6 each per month and has £20 in monthly running costs. What is monthly contribution before installation and repair costs?
Show answer
Answer: A Subtract running costs from recurring revenue, then keep later costs separate.
Retrieval practice
Recall check 2 of 3
Ada says: answer from memory, then check your reasoning.
Q3A team wants to copy a managed-lighting case at a new site. The public case shows provider repairs, but its visit rate is unknown. What lesson should guide the pilot?
Show answer
Answer: C The provider's duty becomes a cost that the new site must observe, not copy from an estimate.
Retrieval practice
Recall check 3 of 3
Ada says: answer from memory, then check your reasoning.
Q4A lighting contract promises provider repairs, but its model assumes customers replace failed lamps. What should the team revise?
Show answer
Answer: D The example shows that travel and labour consume contribution and are real contractual obligations.
Print reference
Answers
Answer key.
- C · The chapter contrasts one-time product sales with continuing service relationships.
- A · Subtract running costs from recurring revenue, then keep later costs separate.
- C · The provider's duty becomes a cost that the new site must observe, not copy from an estimate.
- D · The example shows that travel and labour consume contribution and are real contractual obligations.