Rather than following a one-size-fits-all approach, the most successful businesses are rapidly tailoring offerings for customers in real time.

The internet of things (IoT) has emerged as an effective method for providing real-time value. Across the globe, IoT deployments are rapidly gaining steam. According to analyst firm Gartner, there will be 20.4 billion connected things in use by 2020. Of these, 7.6 billion will be used by businesses. It’s clear that IoT will soon touch consumers’ lives in a myriad of ways – whether you realised or not.

With IoT growing rapidly due to the cost of hardware dropping and connectivity between IoT devices, cloud and on-premises systems becoming easier, many businesses are beginning to explore its benefits. As shown in a recent report, the top two technology trends that IT leaders are currently investing in or are planning to invest in are big data and analytics (57 percent) and the internet of things (52 percent). These two trends fit hand-in-glove. Especially when you consider that to enhance customer experiences, businesses need to not only collect data, but also analyse and put the data into context to make it actionable.

Connecting the layers of IoT
Successful IoT deployments consist of layers, including the devices that collect the data, the networks that deliver the data, and the applications that analyse and make sense of that data. While they need to work together as an integrated whole, it’s important that organisations future-proof their businesses by making the components modular. Essentially, the components need to be managed independently, given the rapid pace of technological change. This will allow components in place now to be altered or swapped out in relatively short order in the future, to take advantage of enhancements.

“It’s imperative that changes of any kind do not impact the different layers and cause everything to break versus bend.”

For example, IoT sensors may need to be replaced every few months, networks may need to be changed every few years, and legacy systems may need to be tapped into in various ways overtime. Whether changing an IoT sensor or tapping into a new data source, it’s imperative that changes of any kind do not impact the different layers and cause everything to break versus bend. For example, an organisation should be able to quickly plug in a new IoT device or easily swap out its network without having any adverse effects on the applications themselves. Additionally, it’s important that the data itself is held independently from any particular system, so multiple parties can use it in different ways. For example, data gathered from a motorway could be used to monitor congestion, provide real-time guidance for drivers, and also allow for more informed planning of new roads.

To design IoT infrastructure in a modular and agile fashion while democratising the data collected, organisations are starting to build application networks. Underpinned by APIs, application networks enable applications, data and devices to be plugged in and out seamlessly without negative knock-on effects. Therefore, when a change is made – something that is inevitable – there aren’t dependencies that would constrict advancement and evolution.

Another benefit with taking an API approach is that security is built in by design, as IT teams can regulate and enforce who has access to what data. Given security is a critical factor when designing and deploying IoT projects, there needs to be a way to not only identify the devices on the network and to confirm they should be accessing stored data but also authorise that the devices only have access to the data they require to complete their particular task.

Putting IoT into action
When it comes to IoT deployments, the retail sector is currently leading the charge. Using data generated by everything from intelligent vending machines and shop shelves to point-of-sale systems, retailers are able to gain insights into shopper tastes and habits previously not possible. With this new data, retailers can adjust everything from store layouts and stock mixes to match the requirements of particular customer groups. Where previously data would have been gathered for later analysis, IoT deployments allow this analysis and insight to happen in real time.

IoT-powered innovation is also being seen in a range of other areas. At Sydney’s iconic Bondi Beach, the local council has installed an IoT project comprising of network-connected rubbish bins. The bins monitor how full they are and communicate with rubbish collectors when they need to be emptied. Meanwhile, safety on Australian docks is being improved as a result of the rollout of an IoT project that tracks the position of staff and heavy machinery in real time. By using a combination of RFID tags, radar and wireless networking, staff movements can be monitored to ensure their safety is not compromised when heavy machinery is working.

Additionally, one of America’s fastest growing restaurant chains is analysing beer consumption with IoT sensors. By connecting its IoT flow sensors with its point of sales system via APIs and an application network, the restaurant chain is able to measure pour volume against sales transaction data to predict preferences and optimise inventory planning. As a result, the restaurant chain can improve the customer experience while operating more efficiently.

Looking forward, the role and value of IoT will continue to grow and deliver customer experiences not yet anticipated. With a thoughtful approach to designing and deploying IoT projects correctly now, organisations will enjoy significant added benefits in the future.

ABOUT JONATHAN STERN//

Jonathan Stern is regional VP, ANZ at MuleSoft.

For financial services companies, fresh challenges are appearing on all fronts. Existing customers are demanding the ability to interact with their chosen financial institution through channels, in locations and at times of their choosing. Increasingly this is coming to centre on mobile devices, which customers are adopting as their primary means of Internet connectivity. Indeed, many customers regard having to visit a physical branch as an option of last resort.

Customers are also demanding a different style of relationship with their financial services provider. They want to be recognised as an individual and have their relationship with one department recognised and understood by others; meanwhile, new competitors are turning up the heat and alternative currencies, such as Bitcoin, and crowd-sourced borrowing platforms, such as the Lending Club, are offering enticing alternatives.

At the same, time non-traditional competitors, such as Apple, Square, Google and even Facebook, are becoming rivals for established banks. Many are beginning to realise they risk becoming irrelevant to a large portion of their customer bases, unless they improve their interfaces and redesign their service offerings.

The need for change
Confronted with these growing challenges, financial services companies must make some significant changes and invest in technology that will allow them to become more flexible and able to meet evolving customer demands.

Just as the Internet allowed the move to online banking, now the prevalence of mobile devices is causing another shift. Institutions must work to ensure their front-end systems can be readily accessed and used by customers on tablets, smart phones and even smart watches.

At the same time back-end systems must be critically examined to ensure they are capable of providing the support required by the business. Banks must assess whether new capacity and capabilities can be added without causing disruption, while also determining the most cost-effective way of achieving this goal.

Financial institutions must also acknowledge that their various divisions can no longer work as silos, but instead they need to work together, sharing data to allow the creation of holistic customer views.

Institutions need to also consider how they are going to respond to the increasing number of new entrants in the market. Alternative approaches might include partnering with other operators, the acquisition of smaller competitors or assessing how new technologies (such as Bitcoin) can be put to work within the business.

The role of APIs
Meeting these challenges will require a fundamental transformation within many financial services companies. Methods that might have worked well for years must be examined and re-architected in light of the new business landscape.

Underpinning everything is the need for an efficient and constant flow of information. These flows must occur within existing back-end systems, between them and new systems, and with external resources and partners.

It’s important to acknowledge that the legacy IT systems sitting at the heart of banking operations are not going anywhere soon. Representing years of investment and supporting critical core functions, they need to be linked to new systems in innovative ways.

Such linkages rely on APIs. They allow disparate old and new systems to be woven together quickly and effectively, creating seamless information flows that can support and power future business opportunities. They also allow financial institutions to taken advantage of cloud-based platforms to underpin new activities. These could include the delivery of new customer interfaces or the creation of a test and development environment for future applications.

For example, APIs can allow a core banking system to share data with a new cloud-based front end designed to support mobile devices. APIs could also allow a bank to send and receive transactional data from a partner or share customer details with a newly acquired subsidiary. It’s all about the organisation becoming a ‘composable enterprise’.

To support this shift, IT departments within financial services companies must transform from their traditional function as a technology provider into an adaptive, responsive and nimble group. By doing this, they will be able to add significant value in what is a time of far reaching change.

To achieve this goal, the old approach to IT of developing, building and running systems must change. Rather, APIs should be used to link together existing and new resources to create the flexible and responsive infrastructure that financial services firms will need to flourish in the new business landscape.

ABOUT JONATHAN STERN//

Jonathan Stern is regional VP, ANZ at MuleSoft.

On one hand, employees are demanding access to core applications and data stores from their mobile devices. On the other, customers are also expecting to be able to interact with the business at times and from locations convenient for them.

The result is an enterprise IT landscape that is becoming increasingly fragmented. Connections need to be established with thousands of smartphones and tablets, and traditionally protected apps and data exposed to the outside world.

This is happening at the same time as great change within the business’s technology infrastructure. Where once all apps and data were held within a corporate data centre, now they are increasingly being shifted to external, cloud-based facilities.

These trends are resulting in many businesses undertaking digital transformations. They are keen to have the infrastructure in place that will meet the challenges while also supporting business activity in the future. To do this well, companies need to have a strategy in place for connecting their digital assets in different ways as their operational needs change.

Taking an open data approach
Increasingly, businesses are coming to realise that the best way of tacking the challenge of digital transformation is to take an open approach to data. This, in turn, will allow the fluid exchange of information between internal systems and those belonging to third parties.

The most effective way to accomplish an open data strategy is through the use of Application Programming Interfaces (APIs). Once in place, appropriate APIs can support a move to a more connected business environment.

Businesses can also create new revenue opportunities by leveraging APIs to make the most of digital technologies.

Big business benefits
The business benefits of API use can be significant. For example, travel booking company Expedia has an API that allows people using third-party websites to make use of its functionality to book flights, cars and accommodation. Nearly half of Expedia’s $US4 billion annual revenues is generated by delivering its services to partners through affiliate APIs.

APIs can also help improve the functioning of internal business systems. For example, they can facilitate the flow of information from legacy, in-house systems into cloud-based software-as-a-service facilities such as Salesforce.

On the technology vendor front, many players are using APIs to differentiate themselves from their competitors. By highlighting the simplicity and power of their API, they sell themselves on their ability to easily connect with the systems of prospective clients.

For example, APIs can help a company connect its mobile app or a public facing e-commerce site to marketing and sales automation systems, significantly streamlining back-end processes.

Businesses can also reach new groups of potential customers by pairing their application with the API of another company operating in a similar industry. For example, United Airlines has recently started to use Uber’s open API. From within the United Airlines app, customers can synchronise with their Uber account. In the event of a plane delay, the API communicates to the Uber app to delay a driver’s pickup time. This capability opens up a whole new ecosystem of connectivity for United and will drive new revenue opportunities.

It’s clear that all businesses will eventually deliver services through APIs, both to their customers and their internal teams. The trend will cause a change in the way we think about how to manage a business. With an API-led approach, companies can say goodbye to conformity and undertake the digital transformation they need.

A journey, not a destination
Businesses need to be aware that there is no ‘right’ moment to start on a digital transformation journey. Instead, they simply need to make a start as part of their next IT project.

Digital transformation is about making changes in technology, process and culture. For this reason, taking small steps with an ongoing focus on change is the best approach.

A successful strategy will enable a business to self-serve data without having to go through the central IT department every time. As a result, the IT department will become a platform for the business rather than responding to requests in a project-to-project fashion.

As a first step, the IT department can offer APIs for many of the data sources requested by the business for reporting or building new applications for consumers or partners.

Having a connectivity platform strategy will enable a company to unlock the value of its data assets internally and externally through APIs, allowing both employees and partners to build innovative products and applications.

A good connectivity platform will also allow a company to adopt new technology more quickly and integrate it into existing processes. With this approach, tackling the trends and changes of the future will become much easier.

ABOUT JONATHAN STERN//

Jonathan Stern is regional VP, ANZ at MuleSoft.