The Power of Consumer Engagement With The Internet of Things · The Power of Consumer Engagement...

The Power of Consumer Engagement With

The Internet of Things

Prepared by Vernon Turner Principal and Chief Strategist

Causeway Connections

A White Paper for the Health Care Industry including a Case Study on

The Power of Consumer Engagement With The Internet of Things - Page 1 Copyright 2018 Causeway Connections

Executive Summary

New sense and respond value systems are fueled by data and today much of that data is created outside the walls of the traditional business value chain. This data is provided through the Internet of Things (IoT) and while collecting that data is valuable, building an ecosystem around it can create huge additional impact to any business. In this whitepaper, we will review how businesses should rethink about the value

of the data they can create from IoT and how they can use it to open up traditional

workflows into multi-tenant ecosystems. Finally, we will look at a case study of a

new company in the healthcare market, Wellsmith, who are reshaping everyday

health through data collected from sensors and are placing patients firmly in the

center of the ecosystem.

As a result of better and timely communication points between partners, patients

are more in control of their medical outcomes and this ecosystem engagement

model enables the Healthcare industry to be run more efficiently.


Welcome to the Internet of Things (IoT) As we head toward 2020, it is clear that we are becoming a more and more connected world. By this, we mean that objects that previously haven’t been classified as “being intelligent” are now equipped with technology to make them “talk” to one another, as well as to other devices, to make up a network of smart, data-sharing social groups. These ecosystems are rapidly changing the way that we need to run traditional businesses. Today, businesses have a typical linear ‘left to right’ work flow: a product is made, put into a distribution channel, and is eventually bought by a consumer. However, with the in-crease of “intelligent objects”, this business model is rapidly changing. Ecosystem participants will be very interactive within each other, while not conforming to any current business model shape. They will put the consumer in the middle of their engagements and not at an end. This new type of business model is best described as a “sense and respond value system”. These new sense and respond value systems are fueled by data, generated in many cases by the sensors placed the whole value chain (not the supply chain) of the consumer life-cycle. Welcome to the Internet of Things (IoT). The Internet of Things is not a new phenomenon – it’s evolution began over thirty years ago when wafer-thin microprocessors were equipped with global positioning software that told it, or the goods that it was at-tached to, where in the world it was. This technology was commonly known as RFID – and is still in use today as a very inexpensive way to track an object (be it a fine bottle of wine, or a slow rusty shipping con-tainer). RFID moved forward when mobile phone technology became ubiquitous and these devices could begin to send data for the first time to each other. RFID evolved into Machine to Machine (or M2M). About five years ago, M2M took on a new life of its own when software intelligence was embedded into the device and it became fully interac-tive with any other smart devices. This confluence of technology became the first IoT devices which created a lot of real time data. If you (individually or as a company) wanted to act upon the information from the device, you could impact the way that it behaved or performed. It is forecasted that by 2020, over 57,000 IoT devices will be connected to the Internet every minute --generating data about themselves and their environment at an unprecedented rate. This new source of data is now fueling the digital economy where data is now more valuable than ever before. Currently, we think we live in a world awash with data. By 2020, with exponential growth rates, projections show that the average person will generate 1.5GB of data a day -- or five times the amount they created in 2015.

It is forecasted that by 2020, over 57,000 IoT devices will be connected to the Internet every minute -- generating data about them-selves and their envi-ronment at an unprecedented rate. This new source of data is now fueling the digital economy where data is now more valuable than ever before.

Currently, we think we live in a world awash with data. By 2020, with exponen-tial growth rates, projections show that the average person will generate 1.5GB of data a day -- or five times the amount they created in 2015.


Don’t Let The Data Age Let’s stop for a moment and ask the question, are we making the best use of that data? Data has been described as this century’s new oil of the 18th Century. Like oil, those who see data’s basic value for what it is, and can enrich it and use that outcome, will likely reap huge economic and social rewards. We are now firmly entrenched in a digital economy where data is more valuable than ever. It is the fuel to the seamless functionality of almost every market in both the private and public sectors. However, research shows that only 1% of all objects that could be connected have been connected. Added to that, ironically, only 1% of the data generated by those objects is actually processed, while the remaining 99% is discarded. When the two statements are combined, you can see that we are creating a glut of data that is barely being used to efficiently fuel the digital economy. We are creating huge reser-voirs or data lakes of data that is aging without generating any economic benefit.

Given that in a digital economy we are in the business of connecting things for sole purpose of creating business outcomes from the use of data, how do we measure the value of that data? The author of this paper has been looking at this problem for some time now and has created ‘Turner’s Law of Connected IoT’ as a way to create a proxy or scale for each IoT solution. The ‘Law’ is defined as ‘The value of the IoT solution is proportional to the speed and the number of times the original IoT data is analyzed and acted upon’. In it, the law is based on 5 variables:

1. The amount of data created by the sensor. 2. The number of times the data is read by the original sensor. 3. The number of times the data is shared with other IoT sensors or systems. 4. The speed by which the data is read and processed – real time or in ‘batch’ mode. 5. The distance by which the outcomes are acted upon from the original source.

Turner’s Law of Connected IoT is defined as “The value of the IoT solutions is proportional to the speed and the number of times the original

IoT data is analyzed and acted upon.”


Turner’s Law of Connected IoT

Figure 1: Turner’s Law of Connected IoT Figure 1 shows that as data from an original IoT sensor (Iot #1) is integrated with a second IoT use case (IoT #2), then a third (IoT #3), then a 4th (IoT #4), etc., the cumulative business value of the original sensor data rises exponentially. An example of the law in action may be as follows:

IoT #1: My vineyard is connected with IoT sensors gathering agricultural, and environmental data for my grapevines.

IoT #2: Being part of a co-operative farming community, I share my vineyard data with my co-operative to ensure that we collectively are in the same harvest cycle since we share assets such a bee hives, irrigation demands, labor, machinery, transportation, etc.

IoT #3: We coordinate our activities across the co-op to maximize our labor and natural resources assets.

IoT #4: We employ an AI (Artificial Intelligence) system to forecast irrigation needs, market pricing, labor optimization workloads.

IoT #5: A back-end enterprise management system may initiate a series of work flow processes to support the co-op ecosystem.


Turner’s Law of Connected IoT, cont. Turner’s Law highlights several key properties of sensor-driven data. For example, the amount of data created is dependent on the number of times data is generated by the sensor (every second, minute, hour, day, by exception, etc.). The number of times the data is read is critical to the business value of the data. For example, we can assume that most of us wears, or has worn, a fitness monitor. The data is generally more useful to us when we first wear the monitor. Over time, however, as we see the pattern and progress of our lifestyle, the data becomes less impactful and motivational. In essence, the data is only as valuable as how public we make it. If we were to share that data with others, then the value of the data takes on a new meaning – lit-erally! Sharing can be within our family, peer group, social, medical, or economic interest – the number of ecosystems and the number of participants are endless, and therefore so is the value of our original data. In this model, every participant is in the center of their own ecosystem and therefore has effectively created their own sense and respond value system for vendors and suppliers across adjacent industries. Some of these industries might be standalone industries such as retail, healthcare or insurance, but could easily become cross-industry partnerships. This new sense and respond value system has created the foundation for new business models that will be driven by innovation and will disrupt incumbents. This system has created a very transparent economic environment whereby suppliers see and feel the impact of their solution on their customer or consumer of their services because these customers/consumers are in the middle of both their supply and value chains.


Connecting IoT With The Digital Economy The sense and respond value system model sets the stage for markets to become very efficient and therefore enables participants to enjoy the economic benefits of such an environment. However, these ecosystems have to be managed, and will typically run on a software platform that gathers and aggregates the data outcomes. To be done well, these platforms have to be able to:

ingest data from disparate sources, provide meaningful levels of analytics, present the outcomes in a secure, visual manner, over a scalable mobile infrastructure, and to enable the consumer and suppliers to easily navigate and communicate

with each other. Recently, the World Economic Forum announced the project, Platforms and Ecosystems – Enabling the Digital Economy, as part of their ‘Shaping the Future of Digital Economy and Society System Initiative’. They commented that “….platforms transform the way businesses, govern-ments and individuals interact… over the next 10 years, platform-driven interactions will enable approximately two-thirds of the value for business and society.” Initially the scope of this project will focus on business to business (B2B). The author of this paper believes the scope of this project will quickly expand to the business to consumer (B2C) where many of its top issues including smart city, healthcare and citizen involvement will be addressed through the platform and ecosystem lenses. The good news is that there are platforms and ecosystems being built today to create new digital economies. One such place is in the healthcare industry which has all of the traits of a very linear supply and value chain but is in dire need of transitioning to a consumer-led (in this case the patient) sense and respond ecosystem. Just six years ago, the United States was spending over $750 Billion, or eight times as much money as the Pentagon spent for each year of its operations in Iraq, on unnecessary health-care costs. Over 70% of the costs came from unnecessary services, inefficient delivery of care and excess administrative costs. As a result of this, there has been a drive to figure out how to reduce waste, make the healthcare system more efficient while at the same time maintain or increase the quality of service and care. Traditional thinking has been to put the burden of this task on the shoulders of the doctors, the producer of the product (health care services) and deliver it in a dif-ferent manner to their consumers (the patient) while servicing and being serviced by the health-care payer system. As described earlier, this has the traits of being a very linear process that simply cannot solve the crisis. However, what would happen if we flipped this liner model into the ecosystem led model described earlier? What would happen if we had a consumer-lead, data-fed environment where the democratization of outcomes motivated everyone in the system?

https://www.weforum.org/projects/platforms-and-ecosystems-enabling-the-digital-economy


Case Study: Wellsmith Our lifestyles, what we eat, drink, how we exercise, smoke or how we manage stress, drive a vast majority of chronic or lifestyle diseases like Type 2 Diabetes, COPD or CHF. According to FightChronicDiseases.org, these chronic diseases are responsible for 7 out of every 10 deaths in the U.S., killing more than 1.7 million Americans every year. Wellsmith, a health and wellness solutions startup company based in Austin, have found a potential solution to this problem by developing a platform-driven solution supporting a con-sumer (patient) driven sense and respond value ecosystem infrastructure. In their model, Wells-mith, using sensors, puts the consumer as the central casting role in his or her own ecosystem, surrounded by vested partners who want the data enriched as frequently as possible. This estab-lishes the patient to become the central consumer of healthcare services. Wellsmith’s Chief Strategy Officer, Yuri Teshler, said recently that it is impractical to expect the health care system - which engages/interacts with the average consumer less than five days per year - to solve the na-tional health crisis that is being caused by behaviors that are occurring 365 days per year. The promise lies in the sensors and instrumentation, allowing consumers to become much more en-gaged and aware of what’s happening to their health in real-time, putting them in the center of the model.

Stating the problem Wellsmith believes that activated consumers are going to be the ones that drive health care reforms. First, they believe that consumers will use technology to im-prove their own health. And second, they believe con-sumers will help revolutionize the way healthcare is actually delivered. There are two major challenges to making the change. The first is the reimbursement model. Teshler commented that the health care industry believed that most in-person visits are unneces-sary. An article written by Tech.co stated that the American Medical Association estimates that up to 70% of in-person doctor visits could be replaced by phone, email or video consultations. The fact that a physician must physically see a patient to be reimbursed for care is a major challenge in changing the delivery model. The second challenge in changing the model is that doctors and clinicians have typically been the only ones empowered to interpret what is happening to our bodies. Traditionally, the patient’s care team has been those of the doctors and their immediate medical professionals. At Wellsmith, a consumer’s care team often extends beyond the borders of the medical profes-sion to include a life-style support system (ranging from the supermarket and food store, exer-cise and fitness providers, medical device suppliers). These are all outside the doctor’s office and outside their sphere of influence to the consumer.


Wellsmith’s consumer-centric model

So how do you bring everyone together? Wellsmith tackles the issue about

the value of data in the health care system. To quote Teshler, ‘Today, the

medical system is set up to treat diseases that are within the ‘nest’ of the population, but we

need to be able to connect them with the ‘wild’ of the rest of the world if we are to eradicate life-

style diseases’. Sensors and IoT provide an ideal approach to connect patient in the ‘wild’ to

their healthcare professionals in the ‘nest’.

With a blend of sensors, a software driven services model (SaaS), a high quality mobile experi-

ence and a very scalable platform, Wellsmith turns all of the consumer data into a rich real-time

contextual interaction that is valuable and readily available to everyone in the ecosystem. The

Wellsmith platform encourages the consumer to be engaged by taking control and by maximiz-

ing the health benefits from their health care professionals.

With three trials and now a product rollout, the benefits of the Wellsmith approach to the health-

care system are becoming clearer and significant. In their platform and ecosystem model, the

consumer experience is driven by efficiency and cost reduction. For example,

1. Consumers have a 1:1 relationship with anyone in their ecosystem without having

to make a physical visit. Also, they will have the ability to have a 24X7 relationship

with the right professional help. Conversely, they can be given the right priority of

feedback based on what their contextual driven information is saying about

them.

2. The potential to disrupt the health care payer model is significant. In this ecosys-

tem, transparency is a given asset, and as a result the outcome of any services is

immediate. Consumers will only have to pay for what they need and suppliers will

only be able to supply what is demanded.

3. Over provisioning of healthcare services should be minimized and therefore cre-

ate significant savings across the board.


It is also clear to see how Turner’s Law of Connected IoT can be applied to the value being created by Wellsmith. In this case it might look as follows:

IoT #1: My fitness tracker/wearable gives me information of my activity levels.

IoT #2: My Coach sees that I am doing the activity at the levels I or my coach set.

IoT #3: My doctor and the health system can see how the cumulative data from trackers (population) is affecting overall health.

IoT #4: An AI (Artificial Intelligence) system can compare other variables of people who moved to tailor activity plans to specific patients.

IoT #5: An enterprise management system may initiate a series of work flow processes to support the ecosystem.

As with the example earlier, each time data collected by a patient is shared, the higher value that data collection has. A good example of this is the story of John (name changed for privacy) who is a 52-year-old patient with Type 2 diabetes. John had a history of fluctuation with his weight, and felt his “numbers were out of control” when it came to the scale as well as his glucose readings. He knew he needed a structured program and accountability, “to get a better handle on what’s going on, and make better choices.” Wellsmith recorded each time John noted when he took his medication and what his glucose levels were. While normal glucose readings should be between 80-120 mg/dL (depending on if you have just eaten), after nine weeks of monitoring, his doctor saw John’s average weekly glucose never went below 200 mg/dL, and in some cases got as high as 250! Pre-viously the doctor might have assumed that John was not taking is medication, but with Wells-mith the doctor knew he was. In fact, John had almost 100% medication compliance, so the feed-back system helped identify that something else wasn’t working. Without waiting for the next quarterly check-up, or John requesting an emergency appointment, his doctor adjusted his medication and monitored the impact it had in real time. The effect was almost immediate; John’s average weekly glucose immediately dipped below the 200 mg/dL level and eventually hovered around 150. This kind of rapid course correction is one of the bene-fits of the Wellsmith platform; but is also a good example of Turner’s Law of Connected IoT in ac-tion. John had the benefit of seeing the problem and knowing it was fixed, his doctor had the benefit knowing his changed prescription had worked, his healthcare provider did not need to schedule an emergency appointment and his healthcare insurer didn’t need to pay for that ap-pointment. In addition, Wellsmith improved John’s relationship with his primary care doctor and he feels like he’s both empowered and accountable for his health. This is an example of data taken once but used multiple times to deliver value across the spectrum of health.

Turner’s Law of Connected IoT


Challenges for Wellsmith There are several significant challenges to the Wellsmith model. For example, the healthcare in-dustry is known to be extremely risk adverse to change. This new approach has the ability to cre-ate disruption to existing segments of the industry as it firmly places the consumer in charge of their own roadmap to a healthy life style. Part of the challenge is to make the consumer excited about wanting to make this shift which will not happen unless they can see the benefits of sup-plying all this data. Equally, this model works best when the pool of consumers and partners is large and comprehensive.

Instrumenting patients with sensors is hardly a new idea and has been talked or tried about for years. What is different with Wellsmith’s approach is the way they use the sensor data to help consumers and their care teams remain connected. This connection creates engagement. The belief is that this engage-ment can lead to consumers learning more about their conditions to the point that they will eventu-ally hold themselves accountable. This is what Wellsmith believes it has proved this in their trials.

If the same results occur in a broader rollout, this is self-accountability will clearly signal the role for IoT in helping a financially strapped healthcare system.

In conclusion The Wellsmith’s solution exemplifies many of the features and benefits of using IoT data under

Turner’s Law of Connected IoT. Taking data and enriching it in a timely manner while sharing it on

a common platform drives motivation for better outcomes for all participants. It is leading the

way in which the provision of healthcare services is being upended in the same way that ride-

sharing disrupted the taxi hailing industry. They are enabling the patient to become the con-

sumer of healthcare services through a diverse set of partners in a well-curated platform. They

have shifted the healthcare model from a passive narrow set of advocates to a broad diverse

pool of participants who directly set the economic rules for the industry. By taking friction out of

the business process, it is only natural to assume that costs will fall while efficiency and produc-

tivity will rise – and therefore improve the quality of services being delivered and consumed in

the healthcare industry. This is achieved by being able to connect the right data at the right time

with the right person to give contextual driven outcomes for everyone to act upon.

About Causeway Connections Causeway Connections the ICT market research firm that has its roots firmly placed in real-world Internet of Things (IoT) experience. Founded by Vernon Turner, IDC’s former IoT Research Fellow and Senior Vice President, the mission of Causeway Connections is to provide customers with strategic advice and services that goes beyond the initial influence of an IoT environment. We are the only independent research firm that has real time market intelligence for both the technology buyer and supplier. As a result of this unique position, we offer strategic advice that is both quantitative and qualitative and rarely only opinionated. For More Information Contact: Vernon Turner Principal and Chief Strategist Email: [email protected] Mobile: (508) 524-5076

@vernonxt

www.linkedin.com/in/vernon-turner-40b4163

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