THE BUSINESS People, Processes, Services, Service Systems and Innovations in

DAHIR • DRY • PIGNATARO

EXPERT PRESS and Things Business and Society Collection
DIGITAL LIBRARIES
Using Services Innovation to Enable Jim Spohrer and Haluk Demirkan, Editors
EBOOKS FOR the Internet of Everything
BUSINESS STUDENTS
Hazim Dahir • Bil Dry • Carlos Pignataro
Curriculum-oriented, born-
digital books for advanced This book guides the reader through the technological ­advances,
business needs, and societal shifts that drive the Internet of
People, Processes,
business students, written
by academic thought
leaders who translate real-
Everything (IoE). IoE offers many benefits to industries and
­
organizations that embrace it, but there are real adoption and
­ Services, and Things
­success barriers to address and overcome. In many cases, services
world business experience
into course readings and
are the solution because they drive IoE application and impact.
The business and technical services need to deliver IoE and
Using Services Innovation
reference materials for
students expecting to tackle
realize the promised benefits. Discussions include a
­ ­ssisting
candidate IoE customers to assess and rank priority gaps in
­
to Enable the Internet of
management and leadership
challenges during their
business process insight, strategies to connected things, and
­
ways to wrangle and transform data streams of new things
Everything
professional careers.
into ­
actionable information. Knowledge of leading practices,

PEOPLE, PROCESSES, SERVICES, AND THINGS

POLICIES BUILT ­organizational ­values, and sensitivities are keys to successful IoE
BY LIBRARIANS transformations.

• Unlimited simultaneous Hazim Dahir is a Cisco Distinguished Services Engineer. In his

usage ­current role as the chief architect for the “Internet of Everything”
• Unrestricted downloading Services Practice, he defines and influences next generation IoT/
and printing IoE architectures across multiple technologies and verticals
• Perpetual access for a through direct interaction with customers and partners in the
one-time fee manufacturing, oil & gas, retail and healthcare industries.
• No platform or Bil Dry is the principal architect in Cisco’s Software Solution ­Factory
maintenance fees and has more than 15 years of experience in network and soft-
• Free MARC records ware engineering. He has teamed with members of the ­Solution
• No license to execute
Hazim Dahir
Factory to create innovative multimedia Collaboration ­Solutions
The Digital Libraries are a for the global financial and health services markets d
­ riving next
comprehensive, cost-effective
way to deliver practical
­generation, omni-channel consumer and patient ­experiences.

Carlos Pignataro, Cisco Distinguished Services Engineer and NC

Bil Dry
treatments of important State University Adjunct Professor, is a self-described technology Carlos Pignataro
business issues to every change agent who has spent his career on the “bleeding edge.” It all
student and faculty member. begins with innovation. Innovation, he believes, is not just central
to change, it is change. A Services Patent Strategist and co-chair of
the Services Patent Committee at Cisco, he has co-invented more
than fifty patents (issued and pending), co-authored over thirty-
For further information, a five Internet Requests for Comments (RFCs) and two books, and is
a sought-after speaker at networking conferences.
free trial, or to order, contact:
[email protected] Service Systems and Innovations
www.businessexpertpress.com/librarians in Business and Society Collection
Jim Spohrer and Haluk Demirkan, Editors

ISBN: 978-1-63157-100-8
People, Processes,
Services, and Things
People, Processes,
Services, and Things
Using Services Innovation to
Enable the Internet of Everything

Hazim Dahir, Bil Dry, and Carlos Pignataro

People, Processes, Services, and Things: Using Services Innovation to En­able
the Internet of Everything

Copyright © Business Expert Press, LLC, 2015.

All rights reserved. No part of this publication may be reproduced, stored

in a retrieval system, or transmitted in any form or by any means—elec-
tronic, mechanical, photocopy, recording, or any other except for brief
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First published in 2015 by

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 To my father, my favorite librarian, wish this book could have
made it to your shelf; to my mother, with heartfelt gratitude.
To my wife Angela, and to our “three little birds each by
my doorstep,” Hala, Leila, and Zayd, thank you for
your love and patience.
 — Hazim

To my wife, Silvija, for all her patience and understanding

along the way …
— Bil

To Sofía, Luca, and Verónica, with all my <3! /smiles and waves/
— Carlos
 Abstract
People, Processes, Services, and Things: Using Services Innovation to Enable
the Internet of Everything guides the reader through the technological
advances, business needs, and societal shifts that drive the Internet of
Everything (IoE). It continues by explaining the differences and relation-
ships between the Internet of Things (IoT) and IoE. IoE offers many
benefits to industries and organizations that embrace it, but there are
real adoption and success barriers to address and overcome. This book
­discusses those barriers and offers solutions. In many cases, services are the
solution because they drive IoE application and impact. The ­business and
technical services need to deliver IoE and realize the promised ­benefits
that are discussed in this book. Discussions include assisting candidate
IoE customers to assess and rank priority gaps in business process insight,
strategies to connected things, and ways to wrangle and transform data
streams of new things into actionable information. The last section of
this book discusses IoE applications and use cases. It includes in-depth
use cases on manufacturing process changes and retail store operational
improvements from customer queue management to augmented ­reality
along with changes in security considerations, design practices, and
­operating procedures to ensure malicious intent does not disrupt the
emerging and growing IoE networks. Knowledge of leading practices and
organizational values and sensitivities are keys to successful IoE transfor-
mations. This book concludes with a complete checklist of considerations
for IoE transformation success.

Keywords
augmented reality, cloud, data analysis, data at rest, data in motion, fog
computing, innovation, Internet, Internet of Everything, IoE, Internet of
Things, people, processes, service innovation, services
 Contents
Foreword�����������������������������������������������������������������������������������������������xi
Acknowledgments���������������������������������������������������������������������������������xiii

Chapter 1 Defining the Internet of Everything���������������������������������1

Chapter 2 Benefits and Challenges of IoE���������������������������������������15
Chapter 3 Drivers of IoE�����������������������������������������������������������������21
Chapter 4 Barriers to IoE Adoption������������������������������������������������25
Chapter 5 Service Innovation for IoE����������������������������������������������27
Chapter 6 IoE Privacy and Security�������������������������������������������������35
Chapter 7 The Changing World: Where IoE Is Making
the Biggest Difference�����������������������������������������������������41
Chapter 8 IoE Use Cases�����������������������������������������������������������������47
Chapter 9 Use Case in Depth—How Will Manufacturing
Benefit from IoE������������������������������������������������������������51
Chapter 10 Use Case in Depth—IoE Solutions for the
Retail Industry���������������������������������������������������������������65
Chapter 11 Conclusions�������������������������������������������������������������������77
Chapter 12 A Service Industry Call to Action�����������������������������������79

References���������������������������������������������������������������������������������������������81
Index���������������������������������������������������������������������������������������������������83
 Foreword
I lead a software platform and applications group here at Cisco. Not
long ago, my kids asked me what was the Internet of Everything (IoE)?
“You know, Dad… What’s IoE?” I told them to imagine a world where
everything they owned, everything they cared about, could not only
­chatter but also engage them in meaningful conversation.
Today we connect to the Internet for all kinds of experiences, but
if you just connect everything to the Internet you only receive a ­partial
­benefit. Real value and memorable experiences happen when things
engage with people to share relevant data and influence behaviors and
outcomes; when you unlock and connect the data that drives the value.
Two years ago, I was really skeptical of the IoE, but with 25 billion
devices connected to the Internet today and 50 billion projected by 2020,
there is real business value that can be unlocked. Business processes that
matter—whether it facilities management or manufacturing—will be
connected, instrumented, and mined for information to drive new value.
It is likely this value growth will ramp in a nonlinear fashion.
In the past, IT delivered results to the “carpeted floor”—in the office
where the company’s decision makers were. Their real business happens
in the field. Neither IT nor the Internet has ever served highly distributed
industrial operations. The IoE changes that.
Train derailments can be catastrophic. There are thousands of
­couplings and miles of track. Imagine if they were all Internet connected,
reporting and replying to measurement and operating status. We now
have modular, hardened routers, and switches with embeddable ­compute
logic to monitor, interrogate, and compute the status of “things” so
the rail operators can actively engage and assess the track they oversee.
­Suddenly, every sensor is now a communicator that delivers actionable
information instead of just raw telemetry data. This is data in motion; this
is data that now matters!
xii FOREWORD

Similarly, the Oil and Gas Industry does not just need video telephony.
It needs platform sensors that register and respond to real time flow devi-
ations and then open collaboration sessions with remote experts to share
live platform video feeds, sensor data trends, and as-built s­pecifications
to diagnose and solve the problem at hand without the delay and cost of
helicopter travel.
Cloud and fog layers accelerate the value IoE brings. The ­computation
and storage capabilities of the cloud deliver the brains of IoE while
the Fog layer offers persistence reliability and localized processing to
­normalize the data offered by intermittent sensors. The Internet links
these two layers providing a central nervous system conveying sensor data
and returning actionable instructions. Combined, we can now deliver
business process as a contextually aware, accommodating service today.
I expect the power of IoE will empower us to deliver entire Industries as
a Service in the future.
 Pankaj Srivastava
 Vice President, Software Platforms Group
 Cisco Systems, Inc.
 Acknowledgments
Innovation is a collaborative exercise. Hats off to all the thinkers and
doers, too many to list, who are pioneering the Internet of Everything.
We would also like to thank our reviewers for their valuable feedback,
insight, and advice.

• Haluk Demirkan, Professor of Service Innovation &

Business Analytics, Milgard School of Business, University of
Washington Tacoma
• Howard A. Fields, Senior Director, Analytics, Advanced
Services, Cisco Systems
• Shaun Kirby, CTO Cisco Consulting Services, Cisco Systems
• Arun Saksena, Director and Lead Data Scientist Cisco
Consulting Services, Cisco Systems
• Jim Spohrer, Director IBM University Programs (IBM UP)
and Cognitive Systems Institute
• Nicola Villa, Managing Director and Global Lead, Analytics,
Cisco Consulting Services, Cisco Systems
 CHAPTER 1

Defining the Internet of

Everything

Once Upon a Time There Was the Internet

A computer network is defined as a set of data communication sys-
tems interconnecting computer systems, and the Internet is defined
as a network or a collection of interconnected networks. The Internet
(with a capital I) is the largest internet in the world. The Internet is the
global system of interconnected computer networks, linking devices
worldwide and connecting public, private, academic, governmental,
and corporative networks. A visualization of the Internet can be seen
in Figure 1.1.
The technical foundations of the Internet leverage a core set of proto-
cols designed with the guiding principle of maximizing interoperability.
The Internet Protocol (IP) standardized at the Internet Engineering Task
Force (IETF) is at the center of these core protocols and is responsible for
end-to-end interoperable communications. At an infrastructure level, the
Internet is comprised of hardware devices (e.g., routers, switches, access
devices) and internetworking software. Layered over this infrastructure,
we find a rich diverse set of services, which have made the Internet a
valuable platform and, in turn, created a vibrant ecosystem. These ­services
provide value by connecting computers that exchange information,
and these new capabilities have created a deep social impact akin to an
information revolution. The greatest impact of the Internet is not techno-
logical but social.
2 PEOPLE, PROCESSES, SERVICES, AND THINGS

Figure 1.1 Visualization of the Internet

Source: The Opte Project by Barrett Lyon, http://www.opte.org/

Phases in the Evolution of the Internet

Looking at the evolution of the Internet, we can identify four very
­distinct phases or waves. Furthermore, each phase has a significantly more
­profound effect on business and society.

• In the first phase, the goal is to achieve networked connectivity,

and consequently, digitizing the access to information.
A couple of decades ago, just getting connected to the
online world was miraculous enough. The World Wide Web
(WWW) flourished, and the distance and time to access
information dramatically shrank. People look for information
online, send e-mails, and search the Web.
 Defining the Internet of Everything 3

• The second phase is characterized as the networked economy,

in which business processes are digitized. People buy products
online. During the networked economy phase, e-commerce is
developed, analytics finds a new anchor point, and the supply
chain is digitally connected providing additional digital
consolidation.
• In the third phase, networked emerging experiences, interactions
are digitized. These digitized experiences belong to both the
business and personal realms. This phase is dominated by
digitally enabled social media and collaboration. Furthermore,
widespread access to digital mobility compounds the effects
of this phase where digital video for personal interactions is
pervasive. People connect digitally with each other.
• The fourth phase, which we are entering, is referred to as
the Internet of Everything (IoE). In this phase the whole
world is digitized! We are entering a phase that unlocks an
unprecedented value for businesses, governments, and society
in general.

Figure 1.2 depicts these four waves and their growing impact on the
world.
Each of these four phases builds on the previous one, and the tech-
nological and social advances of the past few decades have led to IoE.

Digitize
the
world
Impact of the Internet on the world

Digitize
interactions

Digitize
business
processes
Digitize
access to
information

Connectivity Economy Experience IoE

Figure 1.2 Four phases in the evolution of the Internet

4 PEOPLE, PROCESSES, SERVICES, AND THINGS

The IoE creates an incredibly unprecedented opportunity for connected

services—an exciting new world.

And Then There Is the Internet of Things

As we have mentioned, the growth of the Internet is occurring in accel-
erated waves. The acceleration is often explained as following Metcalf ’s
Law, or the network effect, which explains that the value of a network
grows exponentially with the number of endpoints being connected (or
proportionately to the square of the number of users). In other words,
the more things and people connect, the larger the value of the network.
On depicting the size of the Internet as the number of devices
connected, we can see that the milestones of 1,000 devices, one
million devices, one billion devices, and 10 billion devices were reached,
respectively, in the years 1984, 1992, 2008, and 2011. Figure 1.3 shows a
logarithmic graph that helps visualize this exponential growth.
An even more significant milestone is that at some point near 2008,
there were more things connected to the Internet than people in the
world. Even more importantly, the slope of the growth is much steeper,
with a rapid adoption rate of the digitally connected infrastructure. While
the world population is growing linearly with a small slope, the Internet
of Things (IoT) is growing exponentially, to soon reach a higher average
of multiple Internet-connected devices per person. In other words, the
adoption of the digital infrastructure is much faster—multiple orders of

Number of devices
Number of devices connected to the Internet

10,000,000,000 Number of devices

1,000,000,000

1,000,000

1,000

1984 1992 2008 2011

Figure 1.3 Growth in the number of devices in the Internet

 Defining the Internet of Everything 5

magnitude faster—than anything seen before by humankind, including

telephony and electricity.
The beginning of the fourth phase is about connecting the vast major-
ity of objects (or things) that were previously unconnected. These things,
as we will exemplify via use cases later in this book, are rich in variety and
diversity. They include a robot in an industrial factory or a drone, a home
meter, a traffic light, a pair of glasses, and a car. In the IoT, millions of new
devices, sensors, actuators, and, in general, things are being regularly con-
nected to the Internet. Furthermore, there is a shift in the endpoint land-
scape—from individual devices like computers, to things, smart objects,*
and digital clusters such as the multitude of connected devices within a sin-
gle car. Consequently, the IoT creates a network of networks, recursively.
From a couple of million things that were connected to the Inter-
net in the year 2000, technology transitions and trends such as mobility,
embedded computing, and cloud have started connecting the unconnected,
such that at the writing of this book there were about 10 billion things
connected to IoT. And still, most things are unconnected.

The IoT Reference Architecture

During the IoT World Forum Conference in October 2014, Cisco, in
collaboration with Intel and IBM, announced an IoT Reference Model
as shown in Figure 1.4.
The model breaks down the idea of data capture, data management,
and data analysis into smaller subcomponents. It identifies the various
technologies, their hardware and software components, how they relate
to each other, and the boundaries and interfaces among the various layers.
Understanding the interfaces and the boundaries facilitates a multivendor
environment and ease of interoperability among the various layers.
This model describes interconnecting the things at the bottom layer
(the edge). The things are any operational devices or elements: A tem-
perature or pressure sensor in a factory, a security camera at a retail store,

* A smart object can report any or all of its included sensor readings in context
to its current task. A Wi-Fi-enabled programmable thermostat is an example of
a smart object.
6 PEOPLE, PROCESSES, SERVICES, AND THINGS

Levels

7 Collaboration and processes

(Involving people and business processes)
Center
6 Application
(Reporting, analytics, control)

5 Data abstraction
(Aggregation and access)

4 Data accumulation
(Storage)

3 Edge computing
(Data element analysis and transformation)

2 Connectivity
(Communication and processing units)

Physical devices and controllers Edge

1 Sensors, devices, machines,
(The Things in IoT)
intelligent edge nodes of all types

Figure 1.4 IoT World Forum reference model

a wearable activity monitoring device, a cell phone, or any other device

used by an internal process or by a customer or channel partner to con-
duct business or interact with others. The next layer provides connectivity
among all these sensors or edge devices using a gateway or a ­connectivity
layer that links local devices together. The model then introduces the
­concept of edge-computing.
At the edge-computing layer, users acquire specific data from the edge
devices based on a set of rules and then have the ability to conduct local
analysis and produce results that can be translated into actions locally
and without having to immediately transmit data upstream for further
analysis. This does not imply that this is an analysis layer as much as it is
a local action layer facilitating real-time action based on data in motion.
If a particular process is approaching a threshold of some sort, this layer
will give us an early alert before the data is processed at the upper analyt-
ics layers, at the same time it will send an action toward the lower layers
to capture additional data to improve our sample or detect trends with a
higher degree of accuracy (Figure 1.5).
The upper layers are concerned with managing the data from opera-
tions and processing and delivering it for analysis to the analytics entity
for gleaning insights. The term process in this context is mainly concerned
with the process data that has been integrated into business software like
enterprise resource planning or customer relationship management to
name a couple.
 Defining the Internet of Everything 7

Levels

7
Center
IT Query Data at Non-real
6 based rest time

4 Event Data in Real

OT based motion time
3

2
Edge
1 Sensors, devices, machines,
intelligent edge nodes of all types

Figure 1.5 Data-in-motion and data-at-rest

This discussion is a short introduction to the reference model. It will

be helpful when we present, later in this book, detailed use cases about
two industries implementing IoE capabilities to gain deeper insight into
their current processes so that they can introduce data-driven changes
to enhance the efficiency of their operations and improve their business
outcomes.

The Internet of Everything

So far, we have looked at the Internet through two different lenses: The
Internet as an interconnection of devices and things and as a platform
for human collaboration. While these two views are accurate, there is
an additional ingredient of dynamism. There are two fundamental
elements that complete the forward-looking story: First, people and things
are interconnected to realize various processes. And in those workflows,
there are significant amounts of data created. For example, the year 2012
created more information than the past 5,000 years combined. The Internet
is ubiquitous.
These two additional items, process and data, complete the value
­picture of the Internet. Because of this, in May 2011, the United Nations
called the Internet a “Fundamental Human Right.”*

* Olivarez-Giles (2011).
8 PEOPLE, PROCESSES, SERVICES, AND THINGS

People Process

Internet of
everything

Things Data

Figure 1.6 Internet of Everything

IoE, which is the next phase of the Internet, is about connecting

people, process, data, and things in new ways to unlock untapped value
(Figure 1.6).
IoE, driving the next wave of dramatic growth of the Internet, will
come from the confluence of people, process, data, and things. In a way,
IoE can be thought of as a network of networks creating new connections
that never existed before (e.g., a car, a traffic light, and a doctor) and
spawning new opportunities as well as new risks. With increased process-
ing power, decentralized architectures, context awareness, and real-time
analytics, new services are constantly created. When these new capabili-
ties are applied to the multidimensional platform, that is, IoE, they have
the potential to dramatically increase global corporate profits, create new
businesses, and invent brand new services. The IoE makes networked
connections more relevant than ever.

IoE Connection Types

IoE connects both machines and people. This diversity creates the follow-
ing IoE connection types:

• Machine-to-machine (M2M)
• Machine-to-person (M2P)
• Person-to-person (P2P)

The M2M communication, called the Internet of Things or the IoT,

connects data sent and received to and from machines and things. In this
context, the word machines not only includes computers, but also includes
 Defining the Internet of Everything 9

sensors, robots, actuators, drones, light bulbs, TVs, wind turbines, trains,
mobile devices, and in general machines previously unconnected.
In the M2P communication, information is transferred from a
machine to a person (or vice versa). This not only includes traditional
Internet workflows such as downloading a web page, but also includes less
traditional ones such as a human interacting with a remote point-of-sale
machine at a kiosk. If a person retrieves information from a database or
from a big data repository, something we call data and analytics also falls
in this category.
Finally, P2P communication is often referred to as collaboration.
Increasingly, P2P communication happens virtually (in instant messen-
ger, voice, video, or a combination) as well as personally. These yet-to-be-
invented collaboration means that connecting people together over the
Internet is a key component of IoE. Figure 1.7 visually depicts these three
connection types.
These connection types are not mutually exclusive. Most commonly,
people will interact with things and other people on a single interactive
process workflow. Furthermore, the business value increases when more
connection types are used for a given interaction. Consequently, the high-
est value for IoE, where new business models, services, and innovation
happen, is at the intersection of M2M, M2P, and P2P connection modes.

Machine-to-machine (M2M)
connections

Highest
IoE value

M
ac n
hin
e rso ns
co -to-p o -pe ctio
nn er
ec son n-t ne
tio rso on
ns (M2 Pe P) c
P 2
) (P

Figure 1.7 IoE connection types

10 PEOPLE, PROCESSES, SERVICES, AND THINGS

IoT Versus IoE

One common source of confusion is the distinction between IoT and
IoE.
In IoT, devices and things (i.e., sensors, robots, drones, etc.) are con-
nected to the Internet and networked wirelessly or wired with standard-
ized protocols, in particular the IP (see the section titled “The Internet
Protocol”). IoE covers much more than merely things. IoE makes connec-
tions between things, people, data, and processes, and leverages analytics
to make connections between apparently unrelated pieces of information.
Information and analytics are the intelligence behind IoE.
In other words, IoT is a part of IoE; IoT is the subset that focuses
on connections between machines. IoE, on the other hand, focuses
on heterogenic connections among things, people, data, and processes
(Figure 1.8).

The New Currency of Value

The IoE brings together four elements from the Internet as we know it
today: people, process, data, and things. These four elements brought
together create new networked-connections and unlock unprecedented
value.
It is anticipated that the majority of the value created comes from
new, seemingly unrelated connections being made of all the new elements
connected to the Internet.
One of the corollaries of adding connections to the Internet is the
explosion in the amount of data. New people, things, and processes

IoE

IoT

Figure 1.8 IoE versus IoT

 Defining the Internet of Everything 11

contribute massive amounts of data. This data, by way of analytics,

gets turned into information (capturing the most useful pieces of data),
which in turn gets correlated with other pieces of information to create
insight. There is a clear distinction between the raw data, the captured
and ­prioritized information, and the correlated insight. However, that is
not the end of the IoE workflow. For this data to ultimately be of value,
it needs to be turned into actions. Data and insight-driven actions create
new capabilities and richer experiences (Figure 1.9).
Consequently, in IoE, the value (business monetizable value) is about
sifting through immense amounts of data, realizing actions from priori-
tizing information, and correlating it into insights.
The main corollary is that what matters to IoE is the outcome of these
connections. The connections themselves and the additional data gener-
ated, as well as the improved visibility, are a means to an end. The actions,
business outcomes, better decisions, and new opportunities are the goals.

An Architecture for the IoE

IoE presents a completely new paradigm. As such, many of the com-
monly used architectural tenets and assumptions will not suffice or might
not even be adaptable. At the core of this paradigm shift is the scaling
element of an IoE. This section explores some key architectural building
blocks supporting the IoE.

Action

Insight
Value

Information

Data

Figure 1.9 Turning data into action

12 PEOPLE, PROCESSES, SERVICES, AND THINGS

Data

We have already seen a glimpse of the massive implications of the explo-

sion of data as we connect previously unconnected things. Furthermore,
data is the key ingredient to capitalize on the value of IoE, and data ana-
lytics is the engine to extract this value, it is paramount to understand
what architectures can scale to leverage this data.
The requirements for data analytics of IoE are related to understand-
ing big data. Connecting the unconnected brings new volumes of data.
For example, 30 minutes of flight create 10 terabytes (10,000 gigabytes)
of data by a jet engine. The world generates over two exabytes (over
2,000,000,000 gigabytes) of data daily.
And it is really more than just the amount of data. IoE brings diver-
sity and variety in the sources of the data (e.g., data created by humans
is structured differently than machine-generated or sensor-created data).
If we are to categorize the IoE data, we can find the following classes:

• Based on the structure of the data:

 Structured data, such as including clear semantics (e.g.,

XML)
 Unstructured data, without associated format and schema

• Based on the dynamisms of the data:

 Data at rest, for example, in a data center

 Data in motion, flowing as part of a business or industrial

process

The speed or velocity of the generation of data as well as the need for
results and actions calls for the creation of what is termed real-time
analytics. Basically, the processing of data into action needs to take
seconds, or even small fractions of second in some industries, instead
of weeks.

Fog Computing

As we continue introducing new concepts and defining new terms, the

one that follows is the most important ones in the context of IoE.
 Defining the Internet of Everything 13

Data center or cloud

Fog

Devices

Figure 1.10 IoT computing model

Traditional computing follows a centralized approach, in which data

is moved to a data center, in a client-server model, to be processed. In an
IoE world, the amount and velocity of the data does not allow for all data
to be moved to a central location and then analytics be performed on it.
For IoE, there is an intermediate layer between the end devices and the
data center or cloud, and that layer is termed fog. The distributed IoT
computing model can be seen in Figure 1.10.
The term fog implies that it is like a cloud but closer to the edge. It is
an expansion of the cloud paradigm, extending the architecture into the
physical world. In the fog layer, some processing (e.g., analytics) is per-
formed to provide actions close to the edge without having to send all the
volumes of data to the cloud. The traditional data processing of Store→
Analyze→Act→Notify is replaced by Analyze→Act→Notify→Store.
Fog computing was highlighted in The Wall Street Journal of May 19,
2014, as the “Tech’s Future.”*

The Internet Protocol

The final architectural building block is an interoperable protocol to pro-

vide connectivity, by way of location and identification. IP serves this
role, and it can be seen in two versions coexisting in the Internet: the
historical (legacy) IP version 4 (IPv4) and the current IP version 6 (IPv6).

* http://www.wsj.com/articles/SB10001424052702304908304579566662320
279406
14 PEOPLE, PROCESSES, SERVICES, AND THINGS

Among many other things, IPv6 provides much enhanced and

improved scalability, which is why it is the protocol of choice for IoT
and IoE. For example, while IPv4 addresses are 32 bits, IPv6 addresses
are 128 bits. While this book does not dive deep into the technical
­underpinnings of the IPs, curious readers can refer to the Internet request
for comments 6272, “Internet Protocols for the Smart Grid.”
 CHAPTER 2

Benefits and Challenges

of IoE
Connecting and mining information from unconnected and untapped
things instigates positive changes in business processes and outcomes.
New opportunities can be captured as they are created by two main
changes: networking the previously unconnected data and utilizing previ-
ously unused data. The value and growth of IoE is created with these two
capabilities: connectivity and data.
Many benefits of IoE are somewhat obvious and directly relate to
being connected. For example, if a water smart meter is installed for read-
ing water usage, then company technicians do not have to physically
inspect the meter to record the reading; the water usage can be continu-
ously measured. However, the benefits clearly do not stop there, and in
fact, second, third, or higher order correlations make for innovative value
creation.
Generalizing the example, we can say that outages detection, usage
trending and baselining, seasonal adjustments, and fault remediation are
some of the improved areas in the utilities sector.
These benefits do not come without a set of unique challenges. Going
further with the water meter example, the readings of the meter can be
tampered with in ways that were considered impossible before, thereby
creating a security challenge. Additionally, if every sensor is suddenly
sending data, there is the challenge of managing the new volumes of data.
Clearly, IoE imposes a different order of things and consequently
brings additional challenges, which are further explored in the following
sections.
16 PEOPLE, PROCESSES, SERVICES, AND THINGS

Scale of Service Creation

The exponential growth in connectedness creates many different types
of scaling challenges. The first one is scaling the massive volume of data.
As we discussed in Chapter 1, processing needs to shift closer to the edges
for decisions and actions to be taken before transmitting all the data,
which often seems impractical. Scaling is a challenge when it comes to the
number of connections as well as the amounts of data.
However, there are additional dimensions to the scaling challenges.
That is, the diversity in the types of new services and dynamism in the
rates at which they can be created, spawned, and instantiated.

Predictability and Reliability

Internet users expect a website to be available always. When we factor in
the Internet of Things (IoT) and a number of sensors and things being
connected, the playing field rapidly expands. Sensors are often battery
powered and expected to last for years or even decades. Consequently,
they are often in sleep mode, waking up intermittently. Traditional ways
of managing devices cannot be applied to sensors and things.
Because it is expected that more and more things will be intermit-
tently available, multiple standards development organizations are cre-
ating new protocols and methods to enable their management. This
work is happening at multiple layers of the stack. They include wireless
communications, long and short-range communications, mobile net-
works and devices, and various approaches to maximize different variables
in the trade-off of power consumption, range of distance, and transfer
rate. As a consequence, there is a proliferation of new communication
protocols that optimize various scenarios, such as minimizing power con-
sumption in favor of data rates and communication ranges. Certainly,
reliability decreases as we increase the number of devices and data rates.
But order-of-magnitude improvements are still being made.
Furthermore, many cases and scenarios necessitate reliable manage-
ment, including centralized controllers. For example, home and building
automation, health care, and smart metering require management access
to things. While there are a number of candidate protocols, different
criteria result in various communication protocol design principles. There
 BENEFITS AND CHALLENGES OF IoE 17

are multiple ongoing efforts for standardization of IoT in several industry

forums, including, in particular, connectivity for most scenarios.

User Experience
Users demand a certain quality of experience. However, traditional
devices are not the only means by which users access connected value.
Mobility is increasingly becoming the mainstream (and sometimes even
the only) media. Similar user experience is expected no matter whether
the user is accessing a service via his or her mobile phone, at a connected
kiosk in a public area, at a smart endpoint (such as a smart automatic
teller machine [ATM] or a connected point of sale [PoS] terminal), or say
from his or her car.
It is both a challenge and an opportunity to provide a consistent user
experience across a user’s devices and interfaces. On one hand, it might
appear to be problematic to ensure a seamless user experience. H ­ owever,
when looking at it from both a user-center design as well as from­
simplification perspectives, a new viewpoint arises:

• It is the differentiator that provides a seamless interface across

the platforms.
• Designing for the less detailed platform will bring simplicity
to the more detailed and capable platforms and interfaces.
• A portable design can play to each interface’s and platform’s
capability.

In particular, combining these three factors, we can see how, for

example, designing for a mobile platform can result in a much better user
experience in a desktop interface, a kiosk, or a TV.

Complexity
Tied to the previous element of user experience, the additional volumes
of connected devices and data cannot directly translate to the user expe-
rience in increased complexity. In fact, the most successful services have
simplicity as a core design principle. Designing with simplicity is different
18 PEOPLE, PROCESSES, SERVICES, AND THINGS

than managing complexity—and the former is the result of successfully

conquering the complexity challenge.

Management
The increase in the number of devices and things connecting to the
­Internet brings multiple challenges. One of the most immediate ones is
how to provide a scalable, secure, and real-time management layer for all
these things. For example, how do we perform inventory management
and essentially account for them? How to provide fault management for a
new type of element connected to the Internet, one that, as we have seen,
could turn itself off to conserve energy? If a sensor is not responding, is it
sleeping or is it broken?
On taking a different perspective, the quality of data collected and
retrieved from the thing population is a key concern.Often, this raw
device data is incomplete with missing or partial data fills. As this raw
data is acquired via device push or system pull, the IoE system must pro-
cess, interpolate, predict, fill, and flag missing and manufactured values.
Metadata describing the omission marking scheme and algorithms calcu-
lating simulated data fills are required by information processing systems
so that they can signal the validity—and degree of uncertainly—of the
statistics and recommendations they produce.

Data Integration and Reconciliation

As mentioned in the previous chapter, data is the source of the new cur-
rency. However, to make data usable, we need to integrate and reconcile
varied data sources from previously unconnected and disparate systems.
This is, again, a challenge as well as an opportunity.
To perform this data reconciliation, data virtualization systems should
be created. The objective of data virtualization is to abstract the underly-
ing data and provide a single unified view and application programming
interfaces to the upstream consumers of the insights generated. In this
way, the system not only provides data but also the right context for bet-
ter decision making. Better decision-making is the monetizable improve-
ment created by IoE.
 BENEFITS AND CHALLENGES OF IoE 19

Security
Security is probably the biggest, the least understood, and the most
underestimated challenge. Yet, it is likely the most important.
Basically, IoT and the IoE greatly increase the attack surface and
­create new or increase existing attack vectors. A few reasons for this are
as follows:

• Interconnected systems: IoE transforms separate closed

systems into Internet Protocol (IP)-based networked systems.
• New devices: From the whole universe of new devices
introduced by IoE, smart meters and wearables are just the
beginning.
• New protocols: The IoT stack creates new capabilities and
new attack vectors.

The impact on security is shown in Figure 2.1, where new opportuni-

ties create new threats because of the increased surface of attack.
Additionally, when cybersecurity exposure, threads, and attacks bleed
into the physical world, the impact is compounded because it is no longer

Interconnected systems

Separate closed systems

Known devices
Existing New devices
protocols

New protocols

Figure 2.1 Increased surface of attack

20 PEOPLE, PROCESSES, SERVICES, AND THINGS

just information theft and unwanted repurposing of software applications

but an issue of the control and misuse of physical devices such as control
valves and pumps that are now connected to the Internet.
New things need protection, and that is an opportunity. This
opportunity is unchartered, and it tests the known boundaries of the
security. Identity takes a new meaning with devices. When the Internet is
attached to the real world, physical protection and anti-tampering become
critically important. When a sensor is battery-powered for decades, its
supplied cryptographic protocols must be equally resilient to protect the
sensor from malicious attacks throughout its operating life.
 CHAPTER 3

Drivers of IoE
There are multiple drivers of IoE. This section explores the key drivers of
IoE in two different dimensions: business drivers and technology drivers.

Business Drivers
It is particularly critical to articulate the problems that we try to solve
in IoE. IoE potential ideas need to have a return on investment order-
ing—ideas that deliver great impact on both topline as well as bottom-
line, leverage the new IoE data paradigm, and then those that result in
connectedness.
Fundamentally, IoE business drivers fall into two key categories:
revenue-generating drivers and expense-reducing drivers.
Many IoE business drivers address the key challenges mentioned in
Chapter 2, including IoT security and a contextual, linked IoE experience
such that the user feels the IoE system is reading his or her mind. Experi-
ence is king. IoE offers opportunity to create new methods for interacting
with devices and with one another. Finding methods that truly delight
customers unlocks IoE’s business benefits. For example, multichannel
experiences with HD video, mobility, digital signage, and social knowl-
edge all together transform the customer experience at a sports stadium.
When we overlay video analytics, the equation results in a much improved
bidirectional engagement with the stadium operators, local sports teams,
and even the night performers reaching out to interact with fans.
Some business drivers seek to satisfy customer demands by new ways
of interacting. For example, finding new ways to seamlessly connect with
customers with new engagement and interaction media in digital kiosks.
New business opportunities open up when interacting differently with
customers in health care environments or when leveraging new connec-
tions in, for example, an oil and gas rig.
22 PEOPLE, PROCESSES, SERVICES, AND THINGS

IoE accelerates the pace of innovation. In addition to opening new

markets and transforming the customer experience in multiple market
verticals, IoE drives the massive and pervasive automation of business
processes, because new things have more and easy-to-access digital con-
necting points which simplify the creation of automated processes. These
newly automated processes and advances in predictive analytics expose
data correlations unavailable prior to IoE. These new correlations and
insights deliver significant productivity improvements across all indus-
tries—more connectedness and more data result in higher productivity
improvement due to automation.

Technology Drivers
Technology transitions often predate market transitions, which in turn
create business transitions. Consequently, understanding technology
transitions give business and governments an edge to predict the forces
that can disrupt the markets and create new businesses.
In particular, in the case of IoE, the key technology drivers with
material market and business impact are as follows:

1. New devices types—including holistic intelligent solutions:

• There is a fundamental shift in the endpoints that dominate
the process edge and technical landscape.
• This shift also ripples in the whole ecosystem. Developers
shift from a focus on the endpoint (e.g., mobile phones)
into a focus on the fog (e.g., industry focused system-based
applications).
• This fog layer precipitates from digitally enhanced devices—
things—which incorporate embedded event processing,
reasonably sized onboard data storage capabilities, and IP
network connectivity.
2. Volumes and types of new data generated:
• This technology trend gives way to a data virtualization layer.
• To deal with the volumes and types of data, the platform
becomes a data fabric, from which distributed applications
can access data in a normalized way.
 DRIVERS OF IoE 23

New device Volumes and

types types of data

IoE

Cloud Real-time
technologies

Figure 3.1 Technology drivers of IoE

• This trend dissolves the boundaries between the network and

the data center or cloud.
3. Easy access to cloud technology:
• This is made even easier when the cloud is extended to the
edges via the fog.
4. Real-time nature of data interactions:
• Data is processed in seconds or minutes instead of large
overnight or week-long batch jobs.
• The application of this analytics ranges from business
intelligence to industrial automation.
• Analytics applications are embedded and distributed.
• Real-time analytics paradigm first acts and then stores (as
compared with the traditional model that first stores, then
analyzes, and later acts).

These four key technology drivers are depicted in Figure 3.1. All these
technology trends are key drivers for value created with IoE.
 CHAPTER 4

Barriers to IoE Adoption

So far, we have explored the definition of IoE, along with some of its
benefits, challenges, and drivers.
In this chapter, we list some of the key barriers to adoption of IoE.
The main intent is to understand these roadblocks and to explore how a
services approach can deal with them.

Intrinsic Barriers
First, some of the barriers to adoption are fundamental and inherent
resistance to new technologies. IoE is actually a set of new interrelated
technologies, making this resistance and inertia much bigger. These
include:

• Unmanaged data
• Increased security attack surface
• Physical security threats.

Transformation Barriers
Second, additional barriers to adoption stem from the application of
IoE and the transformation of businesses, industries, and cities, and are
transitional in nature. For example, these include:

• Information technology (IT) systems are not keeping pace

• Operational technology (OT) systems are managed by
different administrative groups
• The integration of new technology with legacy systems is
nontrivial
26 PEOPLE, PROCESSES, SERVICES, AND THINGS

• The ability to update current processes to absorb new and

emerging technologies is finite and reaches a saturation point.

Extrinsic Barriers
Lastly, there are specific barriers to adoption that predate IoE, yet
continue to be relevant. For example, regulatory compliance and data
sovereignty are two of the most important ones.
 CHAPTER 5

Service Innovation for IoE

We have surveyed the societal and business opportunities ignited by IoE,
as well as the barriers, that may hamper the adoption and e­xpansion
of IoE. Let us now focus on service and consulting industry’s role in
­launching IoE and furthering its acceptance.

Navigating IoE Size and Scope with Services

A big area for new IoE services includes analysis of device or thing capa-
bilities to deliver relevant, crisp information, while hiding complex-
ity. As all device capabilities are relevant in some context, it behooves
the manufacturer to make application-programming interface (API) as
granular as possible. Granular (i.e., down to the particulars) APIs allow
downstream partners and clients to customize their software appli-
cations interfacing with the device. Customizing enables application
developers to interrogate specific indicators emitted by the device or
thing and deliver the exact calculation or data point needed by the
business to meet its objectives. However, IoE’s tenet of more insight
from more connected devices presents formidable challenges to device-
heavy industries operating a vast array of legacy systems. Service orga-
nizations with detailed knowledge of industry processes and equipment
operations bring a discerning order that forms the link between their
clients and IoE business insights. These service organizations create
this link by identifying all relevant equipment API attributes and then
developing the algorithms that process those attributes and produce
new business insights.
Service developers have a clear opportunity—a near mandate—to
define heuristics for mining discreet attributes from devices and s­ ensors.
Accompanying every heuristic will be a framework for organizing the
28 PEOPLE, PROCESSES, SERVICES, AND THINGS

attributes according to the prevailing best practices for a particular

development community. Defining and mapping device attributes at
an atomic level allows multiple taxonomies to coexist. In turn, different
standards bodies my ratify industry-specific device information maps
based on these attributes to expedite rapid delivery of new products and
applications.
Organizing IoE standards bodies into a tiered structure enables this
mining and mapping to flourish. Attribute mining organizations will
work with chip and system-on-a-chip manufacturers to create standard
guidelines and decision trees for identifying device and interaction
indicators and attributes. Interested product and system manufac-
turers may participate in mapping standards organization events to
illuminate the needs of various industries to the chip and elemental
component manufacturers. This ensures device attribute guidelines
for selecting object features and interactions to expose via APIs are
standardized with the needs of the implementers taken into consid-
eration. Second-tier taxonomy standards bodies identify, group, and
link devices into structured maps relevant to the industry or affinity
group(s) they represent.
IoE services penetration and acceptance rates rise in inverse pro-
portion to the perceived complexity of IoE systems design. IoE services
providers and consultants wholly benefit by forming industry standards
groups to identify and document common device interactions within
and across a variety of industries. Taking advantage of previous repre-
sentation and modeling efforts, these IoE systems standards bodies may
use the Unified Modeling Language (UML) previously standardized by
the Object Management Group. UML provides an industry-accepted
method of organizing the capabilities of IoE systems into structural and
behavioral relationships so that users can easily understand the functions
within an IoE system and how these functions interact to deliver the
desired ­features of the IoE system. More importantly, UML gives IoE
systems architects the ability to clearly define sequence diagrams depict-
ing the actions and reactions exchanged among things to accomplish a
particular task. F
­ igure 5.1 provides an example of UML activity diagram
for consuming media content by detecting the participants, discerning
their choice to possible group viewing.
 SERVICES INNOVATION FOR IoE 29

Offer device
controls on
personal
devices

Initiate media Time sync

conference viewing

Inject context
into relevant
device apps Unify media
viewing
controls
Past views
data stores
Direct input
selection

Data mine Create

past viewer curated
choices content
selection Choose from
combined
Detect active Compile selection
affinity/social currently
Detect groups viewed Begin viewing
viewers content experience

Detect
personal
devices

Figure 5.1 UML activity diagram showing IoE enhancing the media
viewing experience

Transforming Data into Information and Actions

Using Services
IoE service providers fill a crucial gap helping high-volume production
manufacturers decide which attributes—more likely which combinations
of attributes across disparate devices—constitute a trade secret or
patentable idea. The attribute combinations must be protected. Service
providers (SPs) may offer proven methods to secure and protect these
attributes from their vendors. Vendors may poll and assess these attributes
as a part of their as-a-service (aaS) maintenance offerings without
infringing on their clients privacy if their device’s software development
kit (SDK) is sufficiently detailed and discreet.
Once the relevant device attributes are identified, IoE service providers
and consultants may offer the next crucial step along the path to realize
IoE business benefits. This step is device discovery and identification.
Converting legacy systems with unique—often proprietary and many
times orphaned—device addressing schemes onto an IP version 6 (IPv6)
address assignment plan seems straightforward, but identifying the legacy
device’s capability to operate an IPv6 end system software stack and adapt
the IPv6 numbering plan to the designed hierarchy of the legacy system is
a complex exercise. Similarly, a legacy system may have design limitations
that limit its native IPv6 capabilities, so a shim or translation gateway may
30 PEOPLE, PROCESSES, SERVICES, AND THINGS

need to be installed to act as a translator connecting the legacy system to

an IoE network.
Manufacturers, health care delivery organizations, and retailers oper-
ating these legacy systems often do not have the resource time and, in
some cases, the expertise to design and transform the legacy systems
into an IoE device or endpoint. The IoE services consultant or provider
brings along the advantage of the experience of transforming many legacy
systems to IoE as well as the industry best practices for transformation
architecture and project planning, learned from participation and contri-
bution to the standards bodies discussed earlier.

Operationalizing IoE Using Services

Once the legacy device system’s path to IoE communication is clear, IoE
service providers must deliver capabilities to locate and identify all the
devices which should participate in the legacy system within the enter-
prise’s environment. Often, legacy systems are heterogeneous mixes of
units with near identical functionality from several different manufac-
turers. Depending upon age, process criticality, and the overall indus-
try demand for a particular unit, it may be impossible to replace a class
of units with the legacy system. Uncommon device management inter-
faces or the unit’s lack of a traditional computer management interface
compound the problem of integrating the device and system into IoE.
In this case, service providers and consultants must illuminate the limited
capabilities of this device make and model to all their client stakehold-
ers, overcome make and model feature limitation by verifying adaptation
techniques to control, monitor, and manage the legacy device using IoE
applications, and finally, demonstrate how this particular device will be
operated as its containing system is connected to the IoE network.
Locating legacy devices presents several challenges including:

• Ferreting intermittent electrical communication paths to

discern all the operating devices within the device or process.
Legacy devices may operate repetitive tasks properly and be
ignored until they fail. IoE data flows can prevent this using
predictive analysis and live monitoring.
 SERVICES INNOVATION FOR IoE 31

• Undetected component failures that prevent a device from

sending or responding to management systems.
• Lack of bidirectional device communication links—devices
are actuated but legacy systems do not receive or retrieve
device action responses.
• Inaccurate inventory systems omit some number of actual
operating devices or include devices that are physically
missing or destroyed.
• As-built design documents are no longer accurate due to
legacy device moves, adds, and changes throughout the
system’s operating life.

The IoE services provide opportunity to create heuristics, information

gathering techniques, and means of data verification, which uncover all
the devices within a legacy system.
To deliver the insight and responsiveness IoE can bring to process
monitoring and automation, service providers must offer their clients
complete service solutions that begin with the assessment of information
sources and sinks. Using this information usage assessment, a follow-on
service must quantify and illustrate the data availability and reliability
needs between all information sources and sinks. Availability and reliabil-
ity figures across all of the information flows in the IoE network dictate
the architecture and construction methods employed to build the routing
network to move requisite information from IoE sources to sinks.
IPv6 Routing Protocol for Low Power and Lossy Networks (RPL)
addresses many of the needs for moving information between devices or
emitters and consumers or users of information. Services role begins with
the design of the RPL-based network and the bill of materials specifica-
tion but expands to include the integration of new information sources
and the deeper analysis made available by industry-specific statistics and
data representation using these new information streams.
Emerging industry associations, such as the newly formed LoRa
­Alliance—launched at the 2015 Mobile World Congress—seek to e­ stablish
standards and accompanying heuristics that ease the implementation of
mass-scale low power devices. The alliance addresses low power wide area
networks (LPWAN) via device communication classes for transmission
32 PEOPLE, PROCESSES, SERVICES, AND THINGS

and reception, as well as recommendations for ­communication ­topologies

between devices and gateways. Beyond basic communication, the ­alliance
focuses on security for communications within the device-­gateway ­network
and security for device-resident applications communicating with central
network server applications.
Defining the IP network to transit all this information is not enough.
Higher-level services must offer clients guidance for business process inte-
gration and application modification so the marked increase in data flow
from device, process, and system telemetry does not overwhelm existing
job functions and work streams.

Seizing the Opportunity to Define New Services

This section discusses new professional and consulting services to

adapt and launch IoE technologies and practices into enterprises and
service providers. The roll out of IoE also offers new tools, informa-
tion, and contextual analyses to create new business-to-business (B2B),
business-to-consumer (B2C), machine-to-consumer (M2C), and
machine-to-machine (M2M) services. Many of these new services will
be predictive—delivering people and machines the logical next step to
improve and simplify their lives or deliver the exact part just in time to
finish the task. The convergence of searches, enterprise chats, affinity
networks, calendaring applications, and building management systems
to preschedule meeting rooms based on digital conversation cues is an
example of new IoE converged services.
Professional and consulting services organizations have a clear
opportunity to assemble and deliver methodology to identify the need
for new B2B, B2C, M2C, and M2M services and assist corporations
and government entities to assemble the information sources and
associated contextual linkages to deliver these new IoE services. IoE
produces information that may be stored centrally or spread as a dis-
tributed data model delivered by a network. New services are required
to monitor and mine this data into information and analysis using
business activity monitors, complex event processors, and statistical
analysis softwares. Given the variety of new data sources IoE intro-
duces to the most plain-vanilla, homogeneous industries, service
 SERVICES INNOVATION FOR IoE 33

organizations must deliver teams with varied expertise and work expe-
riences to assess the entity, sensor and process data, and discern likely
contextual events and unexpected indicators from unusual and previously
unavailable—or even previously dismissed—data sources.

Services to Wrangle and Direct All the IoE Data

Making more astute decisions by uncovering unexpected causalities and
detecting new information flows typify the core benefits of IoE. But how
does an operator swim through this new churning sea of data w ­ ithout
drowning? Distributing data sources among multiple computation
points in the network provides a scalable solution. Service and consulting
­providers greatly benefit their clients by guiding them through the process
of distributing the computation and analysis functions at first tier device
aggregation points. At these junction points, data is extracted, potentially
stored, and interrogated by algorithms injected from centralized IoE
management systems and local users.
Service teams must consider the following challenges and needs as
they architect and design data management and presentation systems:

• How to account for and catalog all of the data sources emitted
by a particular device or entity complex?
• Within the IoE deployment domain, how does one classify
data as locally or globally significant or both?
• Where are the processors and consumers of the located
relative to the data sources and data stores?
• As data sources emit new data, how often do data processors
and consumers need updates?
• Is the emitted data consistently in the proper format for the
data consumers and processors? If not, is it easier to enhance
the parsing and extracting functions of the data processors
and consumers or insert a multiview data presentation layer
between data sources and data consumers?
• Is the data transient or historically valuable?
• For data with critical and or historical value, how is the
resiliency of the containing data repositories ensured?
34 PEOPLE, PROCESSES, SERVICES, AND THINGS

• Data transport networks are often costly, slow relative to

software application needs and prone to bottlenecks due to
oversubscription. How will the data management architecture
mitigate these transport network issues to meet the needs of
local and remote data processors and consumers?

Beyond technical consultation services to design a data management

network that addresses these considerations, services delivery organiza-
tions have the opportunity to implement and operate telemetry systems as
cloud services to ensure the data management service functions as desired.
Relevant domain expertise enables services providers to mine the data
requests and resulting computations to determine if the resulting actions
deliver the optimal process or product improvement. Data-driven actions,
which result in discernable process or product improvement, constitute a
premium value-added service in the IoE services providers’ offerings that
are built on the base IoE system design and deployment services. In many
cases, the base IoE design and deployment services will commoditize as
industry standards and best practices emerge for interconnecting dispa-
rate devices and systems.
Human initiated device linkages are only the first step in IoE. Com-
plex event processing within the device will advance from contextual
awareness and choice selection to judgment capabilities and things mak-
ing the next best decision. This technology progression will shift the focus
of the services consultants from alternatives assessment, architecture
specifications, and action plans to desired outcomes and results verifi-
cation because things will naturally form systems delivering outcomes as
expected functions. An example is the video surveillance system in the
local grocery store detecting significant pedestrian traffic in the frozen
food section, which triggers the heating, ventilation and air-conditioning
(HVAC) system to warm the freezer aisle and the freezer itself to increase
the shelf lighting.
 CHAPTER 6

IoE Privacy and Security

If there is any philosophical discussion in IoE, it is around privacy and
security. There is a large amount of information generated and exchanged
among the various entities, devices, or nodes in the Internet of Things
(IoT) or the IoE value chain. As mentioned earlier, regardless of the
industry or vertical market, in the IoT or IoE world, there is a stack of
building blocks that generate information and send it up the stack for
further processing. Consider the following diagram we introduced earlier
in Chapter 1 (Figure 6.1).
Information is continuously being generated and exchanged among
the layers of this life cycle, and in most cases, information crosses many
boundaries, enterprises, clouds, and even the Internet as shown in
Figure 6.2.
Therefore, there is a need for a solid security framework that addresses
all aspects of security and privacy for every element and building block of
the data life cycle or flow.
In the following subsections, we shed light on few areas of IoE
­security and privacy while generating questions and considerations for
your s­ pecific scenario. Security and privacy measures need to be addressed
during the design phase to reap effective results and minimize costs.
­Adding security measures to an IoE system can be very costly and possibly
limit the systems intended performance.

Identifying and Authenticating Sensors or “Things”

As technology advances, the smaller and smaller things will be digitized,
and the embedded memory and computing in these devices will shrink as
well. This is why choosing the right hardware, middleware, and protocol
to achieve all functionality, including security, needs to be a design con-
sideration. As things power up, they need to connect to be identified or
36 PEOPLE, PROCESSES, SERVICES, AND THINGS

Levels

7 Collaboration and Processes

(Involving people and business processes)
Center
6 Application
(Reporting, analytics, control)

5 Data abstraction
(Aggregation and access)

4 Data accumulation
(Storage)

3 Edge computing
(Data element analysis and transformation)

2 Connectivity
(Communication and processing units)

Physical devices and controllers Edge

1 Sensors, devices, machines,
(The Things in IoT)
intelligent edge nodes of all types

Figure 6.1 IoT World Forum reference model emerging markets

Action Data Policy

7 Center

6
Management

5
ity
ur
4 Sec

1 Edge

Figure 6.2 Information flow dictates security boundaries and models

registered by a gateway or an aggregation point of some sort. This simple

process is sensitive and essential. Consider a health monitoring device
worn by or attached to a heart patient, which ensures that the proper
handshake between the health monitoring device and the next layer node
or element is essential not only for identifying and authenticating the
device but also for ensuring the data flow to and from the device for
proper operation, monitoring, and control.
Identifying and authenticating things heavily depend on address-
ing and controlling protocols. IPv6 has scalable addressing space and a
few built-in security features, and it has demonstrated effectiveness in
domains like energy, for example, smart-grid. However, IPv6 may present
 IoE PRIVACY AND SECURITY 37

computing and throughput issues as things have less computing power

and memory. Light-weight protocols such as Constrained Application
Protocol (CoAP), message queue telemetry transport (MQTT), and
others have been used for IoT or IoE applications. These protocols are
not without shortcomings depending on the solution you try to build.
We encourage the reader to further investigate these protocols as they are
beyond the scope of this book.

Situational and Contextual Security

Mass participation from individuals, devices, and things leads to addi-
tional or new privacy concerns. System access and system usage will
become context-aware. It is not only enough to know the identity (who
or what) and the access or participation mechanism (the how), but also
the context in which they access or participate in the system (when,
where, and possibly why).
The fact that someone or something has the required credentials to
access or control a device or a record does not mean that the access needs
to be granted unconditionally and without the proper context. Similarly,
the fact that someone is executing a legitimate control command on a
machine does not mean that the instruction needs to be executed without
looking into the nature or context of the direction. Imagine a scenario
where a specific stress-test command, normally executed during mainte-
nance hours, was being sent to a controller during production hours. This
type of behavior could be destructive, disruptive, or even dangerous to
human operators. With contextual security, we examine where the com-
mand was executed from (e.g., internally or through remote access), we
examine the credentials used to access the controller, we examine the time
of day or the time within the production cycle, and we also attempt to
correlate this change management records to see if this type of command
was related to a particular maintenance cycle. This type of cybersecu-
rity thinking emerged after the Stuxnet incident in the Iranian nuclear
facilities where legitimate controller commands sent centrifuges to spin
beyond their limits.
Now, imagine a physical access scenario where an employee works at a
high-security area and has the required credentials and privileges to access
38 PEOPLE, PROCESSES, SERVICES, AND THINGS

that area. The employee goes to access the area at 7:00 p.m. She shows
uses her credentials and gets access into the area, but it does not stop there.
Behind the scene, some security application or system begins investigat-
ing that employee. The application is trying to build a real-time profile
of the person, for example, match shift-hours with time of access, direct
certain cameras to identify her using face-recognition, and then track
her movement within the high-security area, query the human resources
applications to determine if any recent security or safety incidents have
been reported against her, and query the document management system
(DMS) to determine if she has recently downloaded sensitive documents
to her personal computer. In this case, it turns out that the employee
left her cell phone behind and went back to retrieve it. As you can see
from these examples, context-aware security is extremely important in
this exploding world of data, devices, and things.

Data Sovereignty
As cloud services adoption becomes widespread, especially, by large
and global enterprises, the data sovereignty concerns come into focus.
Data sovereignty is about data residency. It is about regulations or busi-
ness-agreements that require the data belonging to a group of clients
residing in one entity or domain that cannot be stored or moved out-
side the borders of that entity or domain. This is especially important
as data from things or sensors moves to the cloud for additional analysis.
The cloud providers must insure that the data respects privacy regulations
related to established and respected boundaries.

Who Owns the Data?

The issues of data ownership and data repurposing are common news top-
ics. This goes beyond law enforcement agencies requesting or acquiring
personal or private data. For social networking or search-engine compa-
nies, to capture data about search trends or special topics of national or
group interest and selling it to marketing companies is one thing, but
to zoom-in and personalize the data is another and that is where ethical
problems arise.
 IoE PRIVACY AND SECURITY 39

Imagine that you use a very expensive and sensitive machine (call it
Widget-Maker 2000 or WM2000). With widgets being an all-time high
demand, your operations must go without interruption. The WM2000
machine-builder approaches your company about a new service called
predictive maintenance for continuance operations (PMCO). The PMCO
service captures approved data from your operations and from the
WM2000 machine and then moves the data to a cloud-provider for
aggregation, cleansing, and preparation for delivery to an analytics ser-
vice provided by a super-computing company. Your company conducts
a design phase to address all network and security scenarios and then
decides to subscribe to the service, especially, after you have seen firsthand
that the PMCO was able to predict a few maintenance issues or outages
before they occurred. Now, several hundred, of data from your company’s
WM2000 machines is flowing into the cloud and stored or archived by
the machine-builder. The machine-builder now wants to perform addi-
tional analysis (usage, fatigue, stress, etc.) on the WM2000 as a machine
regardless of the customer and type of widget it is making. In essence, he
plans to combine data from your operations with data from all the cus-
tomers that own the WM2000 in order for him to study the behavior of
the WM2000 and improve the product. Now, you have a dilemma. Who
owns the data? You programmed and tuned the WM2000 to produce a
high-quality widget, now your data (your secret sauce, your market dif-
ferentiator) is going to be used in some calculation to improve the life of
the WM2000 machine for you and your competitors. It is not an easy
question to answer.
Requiring your solution provider to expire (no longer retain) your
production WM2000 data immediately after using it for your specific
analysis is one way of dealing with this. Another way would be to try
and clean or sanitize the data locally (at your operations) and remove
process-specific data from it. But that requires a deep-level understanding
of the controllers and control protocols of the machine.
In conclusion, we encourage you to consider the value of the data
produced by the things you digitize, the computing power of your things,
and the entities or groups that need to receive, process, and analyze data
from your things. Taking these three areas into account will direct your
security and privacy design decisions as you construct your IoE systems.
 CHAPTER 7

The Changing World:

Where IoE Is Making the
Biggest Difference
We hope that by now you are able to see how IoE will help you run a
more effective business, predict your customer or client behaviors, and
automate time and people intensive processes, just to name a few. As you
can imagine, this value is realized through a carefully selected and orches-
trated ecosystem of elements that produce data, capture all or relevant
pieces, and manipulate, correlate, and analyze them to deduce action-
able knowledge. The previous sentence is the long way of saying “IoE is
about getting knowledge out of information” and, subsequently, of saying
“knowledge is power.”
The simplified diagram (Figure 7.1) from International Data Cor-
poration (IDC) gives a very good picture of the stages of data workflow
and how data changes from being information created at the process or
­procedure level all the way to becoming actionable knowledge.
This rapidly changing world we live in is (and has been for few years)
experiencing an explosion of information, and now it is the time to cap-
ture and use this information to understand or explain why we did certain
things and what we plan to do about certain other things in the future.
In the next few sections and chapters, we plan to touch on the preceding
statements with real-world examples.

A Shift Toward Insight-Driven Operations

As we bring together all the pieces needed to deliver the highest value
from IoE, we must consume and process massive amounts of data from
42 PEOPLE, PROCESSES, SERVICES, AND THINGS

Data creation Data acquisition Info processing Business process

Producers Architects/engineers Analysts/scientists End users

Shared nothing Data exploration Access-anywhere

scale-out storage + SSD
Volume Velocity Variety
Machine and analytics services
sensors On-demand
Converged Contextualized data
infrastructure Context-aware
Geolocation Deep insights business applications
MPP + In-memory
Modeling/scenarios

Value
Transaction and compute
usage logs Alert and
Hadoop respond
Forecasting
Mobile apps data Push
Location-based
Non-relational services
DWH
Email and Real-time events
messaging Stream processing
Hi-Speed/-
Workflow and
Relationships and resiliency
interaction
social influence networking
Cloud automation
Embedded Smart devices
Event management
and systems

Systems integration Objectives Delivery models

Figure 7.1 Data workflow

Source: IDC Big Data Predictions 2014

an exponentially growing number of data sources. Often the desired IoE

analytics come from secondary and tertiary systems, which require the
IoE operator to capture, store, and deliver data to a data ­management
system that manipulates it and makes it available (transmit it) to other
systems for further processing, correlation, and analysis. In this case,
data manipulation defines data to be processed and presented in a ­certain
way depending on the systems that will perform the final analysis and,
subsequently, display results (aka visualization tools). Alongside data
manipulation, please note that we also mentioned data capture and
data transmission. In the emerging world of IoE, these two concepts are
­proving to be the most challenging and will be the focus of innovation
and research. A simple data capture and transmission scenario is shown
in Figure 7.2.
Regardless of the market segment or vertical, capturing data related
to a particular process or transaction, in most times, may require cap-
turing data related to several other processes and transactions, storing
it, and then transmitting it to the data processing engines location for
further analysis. Aside from the complexity and expense associated with
data transmission, it is inefficient and consumes significant network and
computing resources.
 The Changing World 43

Applications, analytics,
business intelligence

Data center network

Enterprise

Action
WAN

Data
Local network

Examples:
- Consumer behavior
- Manufacturing process
- Financial/Trading data Data

Figure 7.2 Simple data capture and transmission scenario

Putting Insight into Action

Imagine that we capture data from a drilling operation of an oil rig with
only satellite connectivity. We are talking about hundreds of sensors gen-
erating gigabytes of data to be analyzed at the same time. We have to rely
on data collected by conventional procedures from pumps, valves, tem-
perature gauges, and the drill-bit itself, stored into historian-type data-
bases, and transmitted to the company’s data center for further analysis.
What we see is the emergence of technologies that facilitate the capture
of only the data we need from the process or transaction of interest and
then transmitting it to the data center for further analysis. This is only a
fraction of the data mentioned in the previous example.
In the example, we capture historical data from various sources and
send it to a central place for analysis. The data is processed as a batch and
the results are possibly presented as a day’s, a week’s, or a month’s oper-
ation activities. In the second example or method, the data is collected
and processed in real time and as close as possible to the source. A deeper
understanding of the business process, the data needed, and the results
44 PEOPLE, PROCESSES, SERVICES, AND THINGS

will help you in architecting your data management and analytics build-
ing block (e.g., storage, computing, relational or nonrelational databases,
etc.). See Figure 7.3 for an example of data shared outside the boundaries
of the enterprise.
Now that we have examined the data capture types and requirements,
let us give some thought to data transmission. Capturing data from vari-
ous levels of operations and transmitting it to a centralized place for pro-
cessing is not as easy as it sounds. As you probably deduced from our
previous satellite transmission example, there are a few important things
that need to be considered beyond just the transmission medium. Con-
sider, for example, data security. We have been speaking generically so
far, but consider the example of a financial institution or a health care
provider capturing customer data or consumer behavior data and trans-
mitting it to a service provider network with a high-performance com-
puting cluster provided by a cloud service in order to be analyzed. Also,
consider an example of capturing manufacturing data from your manu-
facturing floor (or shop floor) where you have your production control
systems. This type of environment is usually isolated and controlled even
to employees of the same company whose jobs directly relate to manu-
facturing process. Manufacturers hesitate to allow open communication

Data
Cloud Analytics,
Enterprise provider business
applications Action intelligence
Analytics services provided
by cloud provider or a third
party
Enterprise network

Enterprise
WAN
Action
Data

Local network

Examples:
- Consumer behavior
- Manufacturing process
- Financial/Trading data Data

Figure 7.3 Example of data shared outside the boundaries of the

enterprise
 The Changing World 45

in their control systems, as any security breach will have data safety and
security consequences.
The next chapter focuses on IoE use cases where early adopters in
manufacturing and retail spaces partnered with device makers, IT
hardware or software providers, and leading consulting firms to improve
business insights and results using IoE enabling technologies.
 CHAPTER 8

IoE Use Cases

Scenarios and Use Cases
IoE promises industries a higher degree of efficiency and profitability
using insights obtained from data about our customers or simply from our
operations. New data acquisitions and analysis technologies are making it
easier for a large number of industries to adopt the IoE implementations
to improve operations. The IoE concepts—whether they are called IoE or
not—have already made a difference in various vertical or industries. The
list is long, but we have attempted to briefly highlight six main categories.

Discrete Manufacturing

The manufacturing sector is expected to hugely benefit from the IoE tech-
nology adoption. There are several types of manufacturing categories and
it is probably not fair to group them all into a single category, but we will
generalize this time for the purpose of our discussion. The adoption of IoE
promises significant benefits related to improving efficiency, productivity,
availability, and reducing energy consumption. In addition, as the various
processes get interconnected, the ability to capture process-specific data in
realtime (or close to it) will help manufacturers to better react to market
conditions including customer demand and supply chain issues.We will
give manufacturing an in-depth focus in the next chapter.

Oil and Gas

Similar to manufacturing, oil and gas (O&G) industries will benefit from
IoE technology adoption. O&G companies are one of these types:

• Upstream companies, which are concerned with exploration

and extraction of crude oil and natural gas.
48 PEOPLE, PROCESSES, SERVICES, AND THINGS

• Downstream company includes companies that refine and

distribute processed products. Marathon Oil is an example of
this category.
• Midstream company is not a common category since it is
sometimes included with downstream, but it mainly involves
storing and transporting crude oil or natural gas.
• Fully integrated, or as one of our clients describes his
company, from the well to the wheel. Exxon Mobile,
Shell Oil, Chevron, and British Petroleum are common
examples.

As you can imagine, when we talk about O&G adoption of IoE tech-
nologies and processes, we deal with oil rigs, refineries, pipelines, tankers,
gas stations, and so on. For each of these, there is a lot to be gained from
connecting, correlating, and automating the various processes. In recent
projects, we have seen our customers deploy new connectivity models to
improve the communication infrastructure and then subsequently move
toward advanced remote monitoring and operations for effective field
collaboration. With the availability of information comes the next step
of gleaning insights and business intelligence using advanced analytics
technologies.

Health Care

Like O&G, the health care sector has many categories and subsectors,
but we will quickly cover the main challenges experienced by all health
care categories.
Health care executives are encountering new challenges in pro-
viding quality health care, innovative technology solutions, energy
savings, and a magnitude of regulations and reporting standards.
In addition to these is the excitement around wearable technologies
and how they will change the world of health care. You can then imag-
ine the challenges that health care executives face today. The wearable
devices provide new markets for proactive personal health care as well
as extended care monitoring. But they also come with major privacy
and security challenges.
 IoE USE CASES 49

Transportation

IoE’s benefits to transportation are of no exception. Transportation is a

vast world covering multiple areas—fleet management, connected vehicle
programs, and positive train control (PTC) to name a few. PTC is a set
of functionalities for monitoring and controlling trains in an attempt to
increase safety. As you can imagine, a number of sensors (speed, location,
safety parameters, etc.) will be providing information to a centralized
control system that issues commands to the equipment on the train to
ensure that the train is traveling safely. Fleet management technologies
have been in action for quite some time now providing companies with
safety, efficiency, locations, and maintenance information.

Energy

When we talk about technological advances and the value of IoE, the
energy sector immediately comes to mind. The past five years showed a
significant advancement in what we call the smartgrid. The main benefit
of the smart grid is the information it provides to utility companies about
the grid itself and about the consumers of its electricity services. It will
also help utility companies in detecting failures and allow self-healing
without human intervention. The information provided by the grid will
also help to predict and adjust various load patterns.
A true IoE implantation is the energy sector in the advanced meter-
ing infrastructure (AMI), which is an integrated system of smart meters,
communications networks, and data management systems that enables
two-way communication between utilities and customers. “Customer
systems include in-home displays, home area networks, energy man-
agement systems, and other customer-side-of-the-meter equipment that
enable smart grid functions in homes, offices, and factories.”*

Retail

With the advancement of communications and e-commerce technologies

and processes, the retail sector has been experiencing several shifts and

* SmartGrid.gov (2015).
50 PEOPLE, PROCESSES, SERVICES, AND THINGS

adjustments. At the same time, retail is benefiting from new technologies

that bring retails closer to their customers by providing them with a shop-
ping experience and improving loyalty. As we discuss retail in more detail
in the following section, we will touch on the major advances in IoE as
related to the retail industry. One might argue that there are significant
differences within the various retail specialties (e.g., apparel versus grocery
chains versus electronics), but at the end of the day the mission is one.
The retailers want more information about their customers to be able to
have the right product in the right place at the right time and nothing
can deliver this better than the frame work and technologies provided by
IoE adoption.
 CHAPTER 9

Use Case in Depth—How

Will Manufacturing Benefit
from IoE
Manufacturing is booming. Economic upturn along with rising consumer
wealth, low energy cost, and consumers’ healthy appetite for big-ticket
items will create a manufacturing boom. The new-order manufacturing
index reported its highest levels since 2004 (August 2014 data). As we
already guessed, the automotive industry has led the pack and is expected
to grow few more percentage points in 2015. In a recent Cisco economic
research data, the manufacturing industry proved to benefit the most
from the adoption of IoE technologies and practices.
The manufacturing sector has been going through a modernization
phase. With modernization, the idea is to bring few necessary
technologies and architectures commonly used in the carpeted space
or nonmanufacturing space onto the shop floor or to the production
environment, without compromising availability and security of
production systems. Technologies and solutions like wireless, video, and
VoIP have been used to improve communication and collaboration and
subsequently improve productivity. Not to forget that manufacturers had
to adopt Internet Protocol (IP) and Ethernet infrastructure topologies
to facilitate communication among various production, control, and
safety systems in the manufacturing environment. The following sections
give the reader additional information about the evolution of the
manufacturing space and the use cases or processes that saw the highest
degree of improvement and efficiency.
52 PEOPLE, PROCESSES, SERVICES, AND THINGS

The Manufacturing Environment

The process (whatever it is we are trying to build) usually dictates how
you design the production environment and how you deploy or use the
various automation technologies. Automation comes with the ability
to improve productivity as well as the ability to collect data from the
­various production steps and use the data to understand the production
process and all factors and parameters that affect it. But for the majority
of cases, the production environments remained isolated from the rest of
the enterprise, and the ability to correlate data among the various man-
ufacturing cells, plants, or both was limited. Therefore, the need to open
up communication arose and subjected the production environments to
security and availability concerns.
A framework to synchronize the vocabulary and design practices
among manufacturers, machine-builders, and the system integrators
(SIs) or main automation contractors (MACs) was necessary. Various
organizations stepped up to provide that framework or reference model.
The International Society of Automation (ISA) was one of the first to
publish a series of recommendations for integrating the control systems
with the business. What ISA attempts to do is not only related to tech-
nology integration but also related to integration of operational and
organizational processes. The ISA approach was to partition or subdi-
vide the manufacturing environment or production environment into
functional categories with various requirements and challenges and
relate them to the upper layers of the hierarchy. The upper layers are
usually the rest of the business, or what we commonly call the enterprise
network.
Figure 9.1 presents a simplification of the ISA95 or the Purdue model.
The purpose of this book is to show the type of systems and data sources
within each of the levels or layers and subsequently show the reasoning
behind the functional area partitioning as well as the network, security,
and application requirements for acquiring the data. The control systems
(shown as levels 0, 1, 2) or, as ISA generically refers to them, Indus-
trial Automation and Control Systems (IACS), are the business-critical
systems that run the manufacturing operations and are normally isolated
from the rest of the network.
 Use Case in Depth 53

Mosty at HQ or data center

Enterprise systems and applications Levels 4 Some functionality may exist at
ERP, CRM, HRM, ... the plant level

Enterprise level trust boundaries

Manufacturing systems and applications Levels 3 Plant level (centralized)

MES, scheduling, dispatching, production monitoring and
analysis, workflow, historians

Process or plant level trust boundaries

Control systems Levels 0, 1, 2 Cell or zone

Multiple cells or zone of
Batch, continuous, or discrete control
similar or different functions
instrumentation, sensors

Figure 9.1 Simplified representation of the ISA95 levels

Due to safety and operational availability, access to the IACS systems

is granted only to personnel directly associated with or directly respon-
sible for them. As you can imagine, a security compromise within this
area not only disrupts productivity but also compromises the safety of the
people and assets on the shop floor.
Depending on the type of operation or final output of the factory, the
control systems layer could be a single zone or cell, or it could be multiple
zones with each zone having multiple cells. What matters here is that the
majority of times, all zones or cells are monitored, managed, or analyzed
by a set of centralized applications with the plant. Scheduling of opera-
tions, recipe servers (e.g., food and beverage manufacturing), dispatches,
historical data logging (data historians), and monitoring are few simple
examples of what takes place at level 3. Security at level 3 is as import-
ant as that for levels 0 to 2, especially, from compromise or malicious
attacks that come from the enterprise side (i.e., level 4), from an infected
CD, from personal computer of a service technician, or simply from an
employee using an infected USB memory stick.
This is why some models are displayed in a demilitarized zone (DMZ)
that sits between levels 3 and 4. Some publications refer to it as level 3.5.
Level 3.5 is mainly a layer of firewalls, intrusion prevention systems (IPSs),
and other security appliances, application, and services that control access
54 PEOPLE, PROCESSES, SERVICES, AND THINGS

and flow of data from and into the manufacturing zones. The DMZ also
houses mirrored manufacturing applications and other services seen in
level 3 of Figure 9.1. A common example is the data historians. No direct
access is granted to the historians in level 3 of Figure 9.1.
Security is not the scope of this book; we just wanted to give you an
idea about the challenges of acquiring data from processes and things
deep within the manufacturing floor. After all, the IoE picture is not
­complete without data, processes, and things.

The Value Chain

Before we take a look at the concerns of manufacturers, it is important to
understand the manufacturers’ value chain and how different items relate
to each other. Of course, the value chain differs from one manufacturer
to another, and it is hard to find a common one that applies to all indus-
tries. Figure 9.2 depicts various components of the value-chain elements
broken down to show the process from engineering a product to building
it, to selling it, and to supporting it in the market place.

Information

Research/
Design Build Distribution
engineering

Process
INFORMATION
Process

Process

Maintain
Support Customer Selling
operations

Information

Figure 9.2 Interdependency of product making and services needed to

bring it to market
 Use Case in Depth 55

The purpose is to demonstrate the processes, to identify how infor-

mation generated within each one could be used to analyze a particular
process, and to find how information flows backward to help improve
a preceding process. Regarding information flow, it is not just within
the enterprise and through its IT managed resources and assets but also
beyond the boundaries of the enterprise and through the networks of
global suppliers, dealers, distributors, and support services organizations.

Manufacturers’ “Top of Mind” and IoE Solutions

A number of issues or scenarios keep manufacturers at their toes. Today,
manufacturers are interested in integrating their IT operations with their
control systems, networks, and applications, increasing the availability
(reducing mean time to repair), increasing overall equipment effectiveness
(OEE), reducing cost, and improving asset utilization. We will briefly dis-
cuss few of them before we discuss how IoE helps or will help to solve them.

Manufacturing Skills Gap and the Adoption of New Technologies

(Training)

It is no secret that the manufacturing industry is one of the top indus-

tries facing a shortage of experienced workers. The wave of retirement
of the skilled manufacturing workforce (mainly from the baby boomer
generation) is creating a shortage in skilled workforce. In addition, the
economic climate is forcing some of these workers to work beyond the
normal retirement age leading to a reduction of available opportunities
for employees with lesser years of experience. Although both issues are top
of mind for the manufacturing industry, the skills gap issue is getting the
most attention.
The adoption of new automation and communication technologies
like the ones mentioned in the following sections had made it easier for
manufacturers to capture knowledge from experienced workers and retain
it for the training of new workers. In addition, bringing collaboration
technologies made it possible for skilled workers to engage with fellow
workers globally on maintenance and repair projects without leaving their
home or their office.
56 PEOPLE, PROCESSES, SERVICES, AND THINGS

Real-Time Visibility (Insights)

One of our clients once said, “Help me connect the executive-floor to

the shop floor.” Of course, few years ago, we were concerned with just
network connectivity and crossing strict security boundaries between the
IT-managed and the OT (operational technology) network. Now that
the type of connectivity exists (for the most part), we want to connect
(or integrate) systems and applications across the enterprise to achieve
the highest degree of visibility in operations, orders, supply chain, human
capital, and so on. For example, manufacturers have been able to opti-
mize operations, reduce cost, and manage productions and inventories
through the integration of manufacturing execution systems (MES),
material requirements planning (MRP), and enterprise resource planning
(ERP) systems.
Looking back at our modified value-chain block diagram (Figure 7.3),
you can immediately recognize the benefit of how having all information
(critical or otherwise) from every process in the chain could help you
manage operations to meet any condition. The examples are many, but
imagine reacting to market conditions, scaling operations, and changes
you need to make along the chain. Better yet, imagine having the possi-
bility of having the ability to simulate market conditions where manufac-
turers have real-time data from all processes correlated with historical data
or trends; they then use simulation to model the effect of a certain market
condition on the rest of the operations.
For example, what would happen if demand for this widget increases
by 20 percent, how would the rest of my operations react? How long
would it take me to get a modified product to the market after having an
engineering change mandated by a compliance issue or by a recall? How
will my operations meet demand knowing that one plant is e­ xperiencing
yield, quality issues, shortage of raw material, or even a labor strike?
We know that this is being done today by some manufacturers but at the
spread-sheet level, geographical level, or plant level, but in the coming
years, we expect manufacturers to be able to do this in seconds or minutes
with the help of ERP and MES vendors who are opening their products
to integration (e.g., using APIs), alongside the network and control sys-
tem vendors who are also making it easy to capture process level data off
the wire.
 Use Case in Depth 57

All of these is limited to a single manufacturer not only having visi-

bility into their own operations but also having visibility into their sup-
pliers and partners. Knowing how my operations will react to external
or market conditions is good, but will my suppliers and partners be able
to handle the change as well? This means that the flow of data is needed
horizontally and vertically to be able to have the best visibility into the
future. In summary, insights help us make fast and intelligent decisions
based on real data.

Collaborative Operations (Internal Operations + Partners: B2B)

Plant outages, or loss of productivity, are one of the biggest issues facing
the manufacturing industry. Loss of productivity means loss of profitabil-
ity, especially when the outages are unplanned. The ability for a manu-
facturer to respond to an outage and bring together the proper resources,
skills, and even parts to the location of the outage is directly related to
the length of the outage and the profitability loss. This means that proper
communication and knowledge sharing is of high importance within and
outside the manufacturer’s operational space.
To completely get the benefit of IoE (bringing together people, data,
processes, and things), communication barriers must be reduced or even
eliminated. Furthermore, as we bring higher level of transparency we need
to also keep in mind the skills gap or the workforce shortages, we described
earlier. Combine that with the hiring of younger and less e­xperienced
workers and the need for reliable and instantaneous c­ ommunication that
builds a community of interest that includes issue owners (around an issue,
or device), experts, and decision makers. We frequently hear from our
­clients about the need to fly an expert to handle an outage at a remote
plant, or the need to wait a couple of days for the system ­integrator
to make it to the site to diagnose and repair an issue. By building the
­collaborative environment, expertise or expert opinion is available at the
right time and in the right place without travel or additional expense.
Collaborative operations solutions bring together voice, video, and
data communication technologies into a single environment accessible
by multiple entities regardless of where they are (headquarters, plant, the
field, etc.) and enable them to take informed decisions and to repair an
58 PEOPLE, PROCESSES, SERVICES, AND THINGS

issue without compromising the safety and security of the environment

and the workers.
Collaborative operations do not necessarily mean that we overhaul
the current infrastructure of communication or video surveillance; it
just means that you facilitate the visibility of information available by
­multiple means into a single pane of glass. It also means using this infor-
mation beyond its originally intended purpose. For example, there is so
much information or knowledge available from video surveillance system
beyond just watching people. There is a whole new industry evolving
around video analytics, heat-mapping, or virtual fencing. With a virtual
fence, for example, you can define a logical area on the screen, and if a
person (perceived as intrusion or safety hazard) or a foreign object enters
that virtual area, an alert is produced and other cameras and means of
communication are directed toward collecting data around that event.
Similar technologies are used to capture and alert emergency personnel to
possible slip and fall events. The previous examples do not introduce new
technologies or concepts, but they suggest the potential of more intelli-
gent event analysis or prediction when combined with other communica-
tion technologies and software applications.
In general, with collaborative solutions, manufacturers can facilitate
the engagement of the right resources at the right time, provide training
opportunities, facilitate the capture or recording of mission-critical events
and their resolution, reduce risk, promote safety, improve compliance,
and so on.

Predictive Maintenance

One of the main goals (or challenges) for the manufacturing industry is
to have high yields of high-quality products at low cost. Process optimi-
zation and optimal asset utilization are also key factors in this equation.
Maintaining productivity and quality require developing techniques and
processes to avoid unscheduled downtime or outages. Manufacturers
have always relied on scheduled or preventive maintenance to proactively
repair or replace worn out parts before they fail.
With the use of advanced predictive analytics, manufacturers are
moving beyond preventive maintenance into the use of predictive
 Use Case in Depth 59

maintenance to ensure the health of the equipment, processes, and oper-

ations at every step of the production cycle. Using regularly scheduled
maintenance, manufacturers were able to collect data about the state of
the parts they replaced and record the data for future analysis; however,
by doing that, they were only able to analyze data (mostly historical data)
about a single part or process independently from other parts or processes
in the production cycle. In a way, this is closer to descriptive analytics than
it is to predictive analytics.
The power of predictive analytics is in the ability to capture data from
multiple sources with multiple protocols and formats and correlating it
together using powerful engines and applications to produce actionable
knowledge.
For years, robotics has been a significant component of the indus-
trial automation revolution. The automotive industry was one of the first
industries to deploy robots, and benefited greatly from them. Automotive
manufacturers employ robots for spray painting, spot welding, assembly,
and finishing, in addition to many other manufacturing tasks.
Consider, for example, a manufacturer that uses advanced robots to
perform similar tasks in the production of their product. Any outage or
unplanned downtime would be very costly. Our several clients have con-
ducted cost of downtime studies in an effort to associate a dollar value with
each unit of time of equipment downtime. When looking at the num-
bers, one can quickly realize why manufacturers are sparing no expense
investigating, selecting, and deploying availability and performance solu-
tions like predictive maintenance. With predictive maintenance, manu-
facturers and their contractors, vendors, or machine builders are finding
ways to proactively identify performance or maintenance problems and
take corrective action before outages occur.
For the purpose of our example, a manufacturer actually worked
closely with the robotics vendor to look at ways to rationalize, mine,
and utilize the data produced by the various sensors embedded into the
robotic arms and motors. Initially, data (e.g., usage, torque, thresholds,
etc.) was directly obtained from a robot’s various sensors (by polling or
interrogating the controllers) and placed against known thresholds or
­correlated with intelligence gathered from theoretical and historical data
to predict maintenance issues.
60 PEOPLE, PROCESSES, SERVICES, AND THINGS

Manufacturer

Results, alerts,
portals, or reports
HQ/data center
or plant level

Simple comparative
analysis

Robot controller Collector

(sensor gateway) (aggregator)

Plant level

Local
storage
Robot

Figure 9.3 Simple predictive maintenance analytics

Figure 9.3 is a simple block diagram of the components used to con-

duct the analysis. Although this diagram appears simple, for this example,
it was a powerful tool that saved them from at least two outages (related
to robot joint failure) in a very short time.
However, this solution was an attempt by the manufacturer to inter-
pret robot data based on experience and some proprietary data made
available by the robotics vendor. As you can imagine, more than a few
errors—false-positives—have occurred. In addition, the manufacturer
does not have the capabilities to manage the large data sets coming from
thousands of robots in various plants across different geographies (domes-
tic and global).
The robotic vendor is better equipped to capture the right data from
the right source and to better analyze it for more accurate results. The next
step was for the robotic vendor to analyze the data remotely (at their data
center), where they have very powerful data analytics engines, and where,
they have the ability to centralize the data collection and ­simultaneously
crunch data coming from the several thousand robots used by the
­manufacturer. The manufacturer and the robotic vendor had to work out
few important design issues that are beyond the scope of this book, but
we will mention few of them to complete the picture:
 Use Case in Depth 61

1. Security, security, and security: Both sides are opening their

mission-critical operations for bidirectional data transfer.
2. Whose data is it? Does the raw data belong to the manufacturer so
that its data is only used for calculations related to the manufacturer’s
environment and product specifications? Or can the robotic vendor
employ it to further analyze their robots for fatigue?
3. Data sources: It is simpler when the analysis is being done on the
robotic data. What happens when additional data needs to be col-
lected to complete the analysis? For example, usage and maintenance
logs, robot location, process owners, environmental data (e.g., tem-
perature and humidity levels)
4. Data management: Design backwards. It is highly recommended to
have the end-picture before you start, especially when you have the
possibility of working with different data formats, structured and
unstructured data, and so on.
5. Data acquisition: Polling for the data on demand is simple enough.
What happens if the manufacturer or the robotic vendors decide to
start streaming data from the sensors or robots? Bandwidth, storage,
and security considerations arise.

Now that the data is flowing from the plant and into the robotic
builder’s analytics engines, data is getting analyzed, results and alerts are
being sent back to the manufacturer or hosted by the robotic vendor and
accessible by the manufacturer as shown in Figure 9.4. This has proven to
be very beneficial for both parties but we can do more. There is the idea
of prescriptive analytics where instead of simply alerting the manufacturer
of potential issues, systems take the next step and convert the knowledge
into action as depicted in Figure 9.5.
For our example, the appropriate action we mentioned earlier could
be to order new parts and enter a request for a maintenance window to
replace the parts. Another action would be to adjust operations, but it’s
not an easy idea to sell to manufacturing and control engineers. Right-
fully so, where safety of personnel and assets is at stake, we are not ready
to let machines take over control of operations. Another reason is that for
the majority of manufacturers proximity and line-of-sight are mandatory
before applying changes to a process. Simply put by a control engineer
62 PEOPLE, PROCESSES, SERVICES, AND THINGS

Manufacturing plant Robotics builder/data center

Results, alerts, Results, alerts,

portals, or reports portals, or reports

Advanced
Robot controller Collector analytics
Central collector
(sensor gateway) (aggregator) engine

Local Central
Robot storage storage

Figure 9.4 Services offered by the robotics vendor

Manufacturing plant Robotics builder

Recommendation: Parts ordered and
Decrease value X shipped to robot
by 20% location

Results, alerts, Results, alerts,

portals, or reports portals, or reports

Action Action Action

Local manager

Data Data Advanced

Central collector/ analytics
Controller Local collector manager engine

Local Central
Robot storage storage

Figure 9.5 From information to knowledge to action

we worked with: “If you are not close to the machinery and you’re not
looking directly at it, don’t mess with it.” For that reason, in Figure 9.5,
we have used the term recommendation. The analytics engine, based on
intelligence from historical data, sends a recommendation to a manage-
ment system where a control engineer considers acting upon it.
With this example, we attempted to give you a high-level overview of
this new (and not so new) world of analytics, and how it is used to add
more intelligence to operations. But it does not stop here; there is more.
There is the idea of machine learning. In our preceding example, we left it
up to the control engineer to adjust operations of a single enterprise based
on what she knows about the whole process or procedure. With machine
 Use Case in Depth 63

learning, the human intervention is taken out of the picture. The machine
in this case is the control system process, the application, or the algorithm
that runs the multiple operations of the process, learns from previous
operations and their consequences (more like, learns from its previous
mistakes), and adjusts itself to drive the best outcome possible for the
process. Returning to our example, in the future, it might be possible for
the control system to not only adjust operation and order parts but also to
adjust the whole operation or production cycle (even after the parts have
been installed) to ensure that the operations or robot, or anything related
to the process, would run longer and healthier during the same mainte-
nance cycle. For example, after considering or analyzing all the data from
all the processes, the algorithm determines (calculates, correlates, etc.)
that the part that needed replacement was affected by the m ­ oisture or
temperature levels (even if that part was originally rated for such ­levels),
and by adjusting the process or HVAC systems, it ensures better out-
come and longer life for the process while keeping all other devices and
processes in consideration. In essence, it guarantees that it does not fix
one and break another. What we are describing here is very much similar
to IBM’s Watson computer, and how it won the game show Jeopardy.
Watson was not just doing lightening-speed lookups for answers, it actu-
ally went through a learning process of watching previous Jeopardy shows
or consuming a large number of Jeopardy questions, questions styles, and
answers. We encourage you to watch The Smartest Machine on Earth to get
a flavor of what we are talking about. The short film produced by NOVA
can also be found on YouTube.com*

* https://www.youtube.com/watch?feature=player_embedded&v=tAze
GkuQmUU
 CHAPTER 10

Use Case in Depth—IoE

Solutions for the Retail
Industry
Connecting people, process, data, and things shines the most in the retail
industry. In retail, customers are willing to share a lot of data about them-
selves to get the deal. For instance, they are happy to share information
about their shopping preferences, age, gender, household income range,
and more on a customer loyalty application to get points or discounts.
They are also willing to let retailers capture that information directly from
their behavior and their mobile devices during the shopping experience
(within the store or online) using Wi-Fi access and other means. Retailers
have used loyalty programs for decades to judge customer retention and
the effectiveness of their marketing campaigns, among other things.
Similar to the manufacturing example, there is significant power in
converting customer data into knowledge. With adequate knowledge
about customers, retailers are able to customize and personalize their
­relationship with the customer.
The following few sections discuss a variety of uses for IoE technolo-
gies or frameworks in the retail space, and how they are making a differ-
ence for a good number of retailers, and how some of these technologies
are improving employee productivity, improving customer experience,
and reducing cost.

Queue Management and IoE (Front-Line

Checkout Process)
This is a very interesting field of study for retailers and data analytics
providers. Queue management is extremely important for all retailers.
66 PEOPLE, PROCESSES, SERVICES, AND THINGS

Significant research has been done about customer patience. Patience of

customers vary depending on the queue processing or progress move-
ment. For example, if the queue is progressing, then customers are will-
ing to spend longer time in it. But they are willing to spend a lot less
time in a queue that is not progressing or not moving. Retailers, banks,
and even hospitals (i.e., emergency room) have always kept an eye on
queues lengths and processing time while coming up with various ways
to ­manage them.
In a retail setting and around the area of frontline checkout, research
have shown that customers are not willing to wait for more than two to
three minutes in a queue that is seeing little to no progress. But they will
stay in a queue that is progressing for close to six minutes. Of course, this
does not apply to the queue where the latest Apple iPhone is sold, where
the wait-times were several hours.
Imagine a hypothetical scenario of a famous bakery or bagel shop that
has 500 stores where an average customer spends five dollars between the
hours of 7:00 a.m. and 10:00 a.m. The bakery was noticing that custom-
ers were abandoning the queue in almost all of their stores quite often.
There are many ways to conduct the queue management studies. Queue
management has been the subject of research for a few decades now. This
is how banks and retailers decide on how many teller stations or frontline
checkout registers to open at any time of day. The studies are mostly
manual and require capturing data over a long period of time to improve
accuracy.
With IoE-enabled technologies, we have new ways of performing
real-time queue management, detecting abandonment rates, comparing
them with predetermined thresholds, and alerting store managers to the
need for additional staff to enhance the customer experience.
The bakery decides to use an IoE solution where additional cameras
are installed to monitor the queue and to capture how many customers
are in the queue at any time and how many customers abandon the queue
and after how long of a wait-time. The solution is simple yet very power-
ful. The queue cameras (or possibly new models of existing surveillance
cameras) give every customer a tag (or ID) and a time stamp and monitor
their progress within the queue, when they get serviced, or long before
they abandoned the queue.
 USE CASE IN DEPTH—IoE SOLUTIONS FOR THE RETAIL INDUSTRY 67

They determined that customers were abandoning the queue at a rate

of three per hour when there are around 10 people or more in the queue.
Doing simple math:
3 per-hour × 3 hours per day (7:00 to 10:00 a.m.) × $5 per
customer × 500 Stores = $22,500 per day
Multiply that by 300 days (removing Sundays and few holidays from
the calculations) and we get $6.75 million of lost revenue.
Beyond studying the abandonment rate, the system is subsequently
programmed to alert the store management in real time to the fact that
customers have been in the queue long enough to start seeing aban-
donment and that additional allocation of staff is needed at the service
counter.
Figure 10.1 shows how the camera and the queue-management
­system could color every customer based on how long they have been in

Additional help
after alert Alert to manager about
queue threshold Analytics and
queue
management

Service counter

Video camera
tag and time-
stamp customers
in queue

Digital signage displaying

news or upcoming events

Frequent customers using the

retailer app receive
incentives or immediate
coupons to stay in the queue

Figure 10.1 Queue abandonment scenario

68 PEOPLE, PROCESSES, SERVICES, AND THINGS

the queue. For example, dotted line “…..” could be for customers who
would be serviced in the next two to three minutes, the dashes “------”
for customers in the queue close to six minutes, and the solid line “____”
for customers expected to be in the queue for more than seven minutes.
There are endless possibilities for using the queue data. This data
could be used across all the stores, or across stores in a specific region
to decide on staffing needs, coupons, and incentives, as well as lead to
additional process and operational evaluations, to speed up the processing
of customers.
The hypothetical example used earlier was only to demonstrate the
value of data collected about the customers’ time in the store and con-
necting the data with other applications and systems to suggest to the
store managers ways for addressing the issues. For example, in a large
retailer setting, where there are multiple queues and queue types, the
calculations and thresholds may be different, but the idea is the same.

IoE Solution for “On-Shelf Availability”

As we mentioned earlier, the customer experience is important in main-
taining loyalty. A big part of loyalty is not just having the product in
stock but also on the shelf when the customer is looking for it. Today,
the process of keeping the shelves stocked is a manual process that is
based on time of day or based on visual inspection of shelves. The manual
process has gaps and does not always address the issue quick enough to
reduce lost sales. The use of point of sale (POS) data is a viable measure-
ment method for many store formats. There are a number of companies
that have developed algorithms to estimate out-of-stock from POS data,
and some retailers have developed their own in-house systems. The accu-
racy of estimating out-of-stock using POS data is 85 percent or greater,*
which is equivalent or greater to the accuracy of manual audits (where
human error is present).
Customer’s reaction to out-of-stock varies from buying an alternative
product, not buying an alternative product, to buying at a different store.
Approximately, 31 percent of customers buy the product at a different

* Gruen and Corsten (2008).

 USE CASE IN DEPTH—IoE SOLUTIONS FOR THE RETAIL INDUSTRY 69

store (Guren). On the average, retailers lose four percent of their annual
sales due to out-of-stock issues.* This often translates into long term
­customer loyalty issues.
Our definition of out-of-stock here is focused on what the customer
experiences. It does not matter if we have the product in the back-room.
What matters is that the product is not on the shelf. Various solutions
(that complement POS-based solutions) have been tested and imple-
mented in the retail space to combat this issue. Sensor-based solutions
that alert the store clerks or employees to the missing product have been
proposed and in some cases have been implemented. In this scenario,
the sensor could be an RFID sensor on the merchandise box itself or a
shelf-based sensor measuring the availability and the count of the product
on the shelf. But that system is not fully accurate and cannot completely
solve the issue. A misplaced product is not easily detected by the RFID
scanner if it is outside the range of detection. The shelf capacity scanner
will report availability if anything is on the shelf regardless of the correct
product or not.
The IoE approach to get the highest accuracy on-shelf-availability
measurement is to combine various cost-effective methods and correlate
the data together to ensure success. For example, with the advancement
of video analytics, we will be able to recognize the product in question
by focusing the camera directly on it and analyzing the quantity and
placement (ensure that the right product is in the right place). We have
seen few solutions where retailers use shelf-based sensors to ­monitor shelf
availability. They quickly found out that it was not a very good s­ olution
when their sales associates were putting the wrong products on the wrong
shelf. When the sensors were reporting availability, customers were
­complaining about not finding their favorite cereal box.
A good IoE solution will correlate multiple sources of data to ensure
a near-perfect on-shelf availability. A solution that uses shelf-sensors, an
advanced video-analytics system that determines type, quantity, and posi-
tioning of product, combined with data from the POS system to deter-
mine availability of the product on the shelf or in the storage room. If the

* Vargheese and Dahir (2014).

70 PEOPLE, PROCESSES, SERVICES, AND THINGS

product is in the storage room, then a real-time alert is generated and sent
to the store clerk, manager, or associate to restock the shelf.

Augmented Reality
Augmented reality is gaining a lot of momentum in retail. We believe it
is going to be an important part of the customer experience in the very
near future. It is already making its way into various major retailers and
is making an impact. The concept is not new. More than 12 years ago,
hair designers utilized software applications that would superimpose a
multitude of hair styles and colors on a picture of a client. Clients loved it.
It is not hard to imagine the potential of augmented reality using today’s
hardware and software technologies. Look at the following excerpt from
an IKEA press release:

Catalog App for smartphones and tablets (iOS and Android)—

Download from your app store beginning on July 24. The app gives
users access to extended catalog content by scanning ­designated
pages of the printed catalog. The extended content includes: an
augmented reality “Place in Your Room” feature which allows
users to virtually place and view nearly 300 IKEA products in
their own homes; shareable videos featuring quick DIY tips and
stories behind IKEA products; 360º views that allow users to
look all the way around a whole room; and image galleries. Select
­content will also be available in the digital catalog.*

Using this app, you can visualize (or virtually position) how various
pieces of furniture from the catalog look in your living room or office by
simply pointing at the space where the furniture is needed.
Let us take it a little further: You go to the shoe department of
your favorite department store and the sales associate is busy or not
available. You see a pair of shoes you like and you need to know the price,
availability, color choices, country of manufacture or origin, brand, sales,
coupons, and so on. You pick your smart device, you point it directly at

* IKEA.com (2014; emphasis added).

 USE CASE IN DEPTH—IoE SOLUTIONS FOR THE RETAIL INDUSTRY 71

the pair of shoes you like, and you have all your questions answered. You
like what you see and you want to buy it but the desired size is not avail-
able, no problem, the app will tell you if it is available at another store
nearby and will ask you if you want it be put on-hold for you. Instead,
you prefer to buy it from the app and have it shipped directly to your
home.
Similar to all the examples we listed before, this is a true IoE enabled
service. We will say it one more time, people, process, data, and things
are exactly what went into making the services from the given example
possible.
Figure 10.2 is a simplified view of data-flow resulting from interaction
among multiple technologies, applications, and things. For example, a
customer enters the store, his/her smart device associates with the store’s
Wi-Fi system, the customer then uses the store-specific App on a smart
device for various reasons (e.g. coupons, deals, latest fashions), the App
relays information to the backend applications about the customer and

Customer
data
Payment
Inventory system/checkout
system
Linking customer data with various
retail applications will speed up the
decision process, simplify the
purchasing process, and improve
customer loyalty

Business systems and applications

Augmented reality
applications

The ability to locate the customer

within the store is essential in
Location/ Store providing information as well as
positioning Wi-Fi measure dwell and linger times
around specific merchandise

While using the store-specific App on

Smart device, the customer gets real-
time product Information while
providing information about shopping
preference and personal taste

Figure 10.2 Augmented reality in retail

72 PEOPLE, PROCESSES, SERVICES, AND THINGS

his/her most recent interests and product-searches. At this moment, the

retailer knows few things about the customer and is able to “customize”
the shopping experience. The customer now walks around the store and
sees a pair of shoes that he/she likes and would like to find out the price,
available colors, sizes, customer reviews, and few other things. The cus-
tomer picks up the phone, points it at the shoes and immediately sees all
the desired information displayed on the phone’s screen. In addition to
the information, the retailer displays few options like alerting a store clerk
to bring out the appropriate size to be tried out, put the shoes on hold
at another store since they don’t exist at this store, buy using stored cred-
it-card information and ship to the customer’s home, establish an “alert” to
email the customer when price-reductions occur, and many more options
that retailer could display to give the customer a memorable shopping
experience. The above is a result of various technologies and applications
exchanging and correlating information to produce the information the
customer is looking for. Wireless and “Location Services” technologies to
identify and produce a “location” of the customer within the store or in
close proximity of the merchandise, databases for historical customer pur-
chases and interests, Inventory systems to gather data about the desired
product (color, size, ...etc) and its whereabouts (e.g. local store, nearby
store, outside an acceptable driving radius), as well as ­payment s­ ystems to
facilitate the purchase.
In summary, augmented reality is helping a good number of retailers
reach new or existing customer segments, and offer them new shopping
experiences. Augmented reality dressing rooms are showing up at many
high-end retailers and are being accepted by customers as a fun experience
and as an alternative to physically trying on garments. Welcome to the
world of IoE.

Dwell Profile (Time, Video Analytics, and Path

Analysis)
We talked earlier about getting customers to the store. Now they are
here, how much time are they spending at the store? And where are they
spending it? Dwell time is the time customers are spending at the store.
Multiple market research studies have shown that the more time customers
spend at the store, the more money they will spend. Therefore, keeping
 USE CASE IN DEPTH—IoE SOLUTIONS FOR THE RETAIL INDUSTRY 73

the customer in the store and keeping them interested is important for
the bottom line.
We originally thought of writing two independent sections, one about
dwell time and one about path analysis. But, we decided to combine the
two into what we call “Dwell Profile” (time at the store and the path taken
inside the store). From a research point of view, the two may be sepa-
rated, but from an IoE use-case perspective, we wanted to mention them
together and make a case for measuring dwell time, path, heat-maps, and
the use of smart-devices and apps to personalize the shopping experience
and improve loyalty.
Like the queue management, video analytics play a big role in mea-
suring dwell time and performing path analysis, as well as heat map
hot spots, in the store. With the advancement of video and surveillance
technologies, retailers are able to get automated detection of customers
(even their faces) and track their movement, behavior, and the time they
spent at different areas of the store. Same devices and technologies will
be able to provide heat maps of the store and allow retailers to iden-
tify dead-zones or hotspots within the store. This information is very
­valuable for measuring the effectiveness of displays and other in-store
marketing and advertising strategies. We are currently working with
retail clients to help them with the dwell time, path taken, and gender
of customers that actually visit their displays of big-ticket items. Know-
ing this information will allow the retailer to position shelf-displays and
digital-displays for gender-specific items along the path frequently trav-
eled by customers and also measure the return on investment (ROI) for
those displays.
Going back to dwell time for a moment, how could the retailer get
the customer to spend more time at the store? Retailers keep their cus-
tomers occupied and roaming the stores using a number of conventional
methods that include entertainment, live music, and free stuff (free sam-
ples of merchandise and free tastings of food). What additional ways
can the world of IoE offer the retailer in this department? There are two
key technologies that can help here. The smart-devices, smart-displays
(digital signage—the use of interactive displays, in other words, displays
with interactive content) provide customers with additional product
and promotional information and allows them to find the product and
­purchase in a self-service fashion.
74 PEOPLE, PROCESSES, SERVICES, AND THINGS

Cameras and Wi-Fi

for tracking customer
movement and
interests

Example 1: Customer enters Example 2: Customer enters

through Door “A” and targets a through Door “B” and takes specific
specific product in one section. path through store while staying
within a specific section or side.

Figure 10.3 Dwell-time and path analysis example

In big-box stores (warehouse-like speciality stores or super-centers

offering multiple categories of merchandise), dwell-time and path analy-
sis will offer significant advantages. Figure 10.3 depicts a large super store
where multiple technologies collaborate to offer the retailer few pieces
of information about their store setup and about their customers. The
retailer is using Wi-Fi, cameras, and possibly other data-points to pro-
file a particular customer or to measure traffic within specific areas of
the store. It also depicts, as an example, two different customers coming
through different doors and one having a specific target while the other
one roaming the stores through various aisles. Another thing to notice
here is the Pan-Tilt, and Zoom (PTZ) cameras at the perimeter used for
multiple purposes like keeping track of a customer or zoom on a particu-
lar product or shelf to held determine On-Shelf Availability described in
an earlier section.
Smart devices will also play a role in increasing dwell time. Research
shows that 83 percent of adults aged 18 to 29 and 74 percent of adults
aged 30 to 49 have smart phones. In all, 67 percent of cell-phone owners
find themselves checking their phone for messages, alerts, or calls even
 USE CASE IN DEPTH—IoE SOLUTIONS FOR THE RETAIL INDUSTRY 75

when they don’t notice their phone ringing or vibrating.* Loyal customers
with store-related-apps can get the latest promotions and discounts in real
time. But wait, what about the concept of me-tailing? What if a retailer
can customize or personalize the shopping experience? Now that I have
determined the identity of the customer, having found a few historical
facts about him or her, and knowing what isles they have been to and
around what sections they lingered, how about pushing them few person-
alized coupons to help them make a decision in my favor: spending money.
This customized experience is the result of many data sources working
together to help the retailer profile the customer’s interests in real time
based on historical and current information.

Digital Wallets
We could not talk about retail and not mention digital wallets. There are
many digital wallet systems, applications, and devices out there. Whether
they are web-based, smartphone app-based, or NFC (near field com-
munication) based, they serve the same purpose of making it easier for
­customers to conduct financial transactions. For our purposes, we want to
point out that digital wallets tell a lot about their owners and their habits
while also offering a vehicle for loyalty programs for a number of retail-
ers. Digital wallets are a great source of information for payment-system
providers and retailers.

* Pew Research Center.org (2014).

 CHAPTER 11

Conclusions
The accumulation of data and the belief that it can benefit business prof-
itability, customer experience, and society’s general quality of life drive
the IoE. Now, people are revising existing methods and creating new pro-
cesses around a rapidly expanding network of digitized things to optimize
and improve business, government, and societal outcomes.
IoE is the fourth-evolutionary phase of the Internet. It leverages the
digital communication channels established in the networked connectiv-
ity phase, the commerce tools created in the networked economy phase,
and the multiple means of collaboration—including popular social media
platforms—developed and embraced in the networked emerging experi-
ences phase.
In this book, we discussed how the exploding growth of networked,
connected devices forced attention from IT, manufacturing, health care,
and retail groups among others to define and design for IoT. Those net-
worked things also carry embedded sensors and processing capabilities to
orchestrate commands, locally process results, and push data and results
to the designated data storage systems. These new data sources can yield
many new insights; it is the role of the services industry to help its clients
uncover and leverage this new information effectively.
IoE unlocks additional value by uniting people, processes, data and
things. Though the influx of data, much of it unstructured, and the secure
delivery and retrieval of that data are formidable challenges, the increase
in operating efficiency and unearthed value deliver the ROI justification
for the IoE investment. Services organizations have clear roles in scope
definition, process interrogation, legacy migrations, and IoE systems
operation. However, services organizations can make more substantial
impact and ramp client relevance by influencing and driving device or
thing programmability standards and by developing industry heuristics
for process improvement with IoE. The ability to understand the business
process or operations and the information needed to evaluate it is of great
78 PEOPLE, PROCESSES, SERVICES, AND THINGS

value to all companies with diverse operations and geographies. IoE as a

multilayer ecosystem of hardware and software components will allow
various enterprises to capture its value and maintain their leadership or
competitive edge. More importantly, it will allow them to uncover new
interactions and capabilities that generate new markets and opportunities.
Cloud technologies to store and process data into useful information
are vital components in the IoE architecture. At the same time, IoE is
transforming the cloud by reconfiguring its composition to bring data
processing and analysis closer to the cloud edge in a fog layer to distrib-
ute, assess, and act on the torrents of data streaming from devices, sensors,
and other newly digitized and connected things.These connections would
have never scaled with IP version 4 (IPv4). IP version 6 (IPv6) delivers
128-bit addresses, which yields billions upon billions of possible device
addresses for connecting the previously unconnected. IPv6 is an essential
building block for the IoE.
For IPv6, circuit miniaturization and electronic component cost
reductions enable and ignite IoT and IoE, but the accompanying chal-
lenges are substantial. The scalability, reliability, security, and manageabil-
ity challenges offer many opportunities for technology services industry
to innovate solutions and provide meaningful benefits to their clients.
IoE fosters new services in a variety of areas. Some services assess
the functionality of current systems and identify components to digitize
and connect in a prioritized fashion based on readily accepted measures.
Other services map data sources and devices, their attributes, and inter-
connection points in a taxonomy of digital capabilities, which allows
process owners to identify and fill functional gaps. Also prospecting ser-
vices cross-correlate data sources and uncover nuggets of interrelatedness
among device or thing attributes that spur positive process changes.
Finally, the transition to IoE brings sizeable security challenges due
to the sheer number of new devices connecting to networks, the range
of new system interconnects, and the slate of new protocols needed to
connect and interconnect these devices to the network, with each other,
and to other systems. Organizations benefiting from IoE must consider,
devise, and execute plans for physical security of facilities, processing
lines and devices, tamper-evident device construction, and strong data
cryptography.
 CHAPTER 12

A Service Industry Call to

Action
We hope you will use the perspectives offered in this book to create and
deliver services to your clients or even within your enterprise that enable
new, beneficial insights, efficiencies, capabilities, and outcomes. Here is a
final checklist noting key considerations for the success of IoE.

1. Identify and document the internal and external customers who are
affected and must benefit from any change spurred by IoE.
2. Rank the economic, human, and societal impact of any proposed
new addition or change triggered by moving to IoE.
3. Ascertain the level of un-connectedness in the department, the facility
or geography where the IoE implementation is targeted.
4. Plan end-to-end connectivity paths for all newly connected devices,
and note all other devices and applications that newly connected
devices need to communicate with.
5. Analyze the security needs of the technical and business processes.
Clearly define and evangelize the systems readiness to reliably orches-
trate the intended processes—not just the technical process but also
the business processes like billing remediation—while preventing
malicious intrusion to maintain data confidentiality and integrity.
This ensures that all stakeholders understand the systems’ current
security posture and agree to the actions required to securely deliver
IoE-enabled system enhancements.
6. Determine how device status and telemetry will be secured, extracted,
analyzed, and stored. In addition, determine the relevancy and scope
of the status and telemetry data to other devices and orchestration
layers.
80 PEOPLE, PROCESSES, SERVICES, AND THINGS

7. Perform a cost or benefit analysis of every proposed technical and

business IOE-inspired introduction and change using your client’s
meaningful metrics. Use this analysis to let your client prioritize and
order her IoE transformation.
8. Detect, respect, and support existing organization structures and
communication channels. IoE potentially introduces great change
into an organization’s normal operating procedures—both business
and technical. Environmentally aware messaging within the organi-
zation is key. Delivering overall project summaries, issuing updates,
and congratulations for jobs that are well done should follow and
meet a client’s expectations regarding message author, audience, con-
tent, and timeliness in order for IoE-triggered business and technical
changes to have the best chance of acceptance and ongoing support.
 References
SmartGrid.gov. March 13, 2015. Advanced Metering Infrastructure and
Customer Systems. https://www.smartgrid.gov/recovery_act/deployment_
status/ami_and_customer_systems
Gruen, T.W., and D. Corsten. 2008. A Comprehensive Guide to Retail Out-
of-Stock Reduction in the Fast-Moving Consumer Goods Industry. http://
itsoutofstock.com/wp-content/uploads/2013/04/OOS-Guide-2008-
Revision.pdf
Vargheese, R., and H. Dahir. 2014. “An IoT/IoE Enabled Architecture Framework
for Precision on Shelf Availability: Enhancing Proactive Shopper Experience.”
In 2014 IEEE International Conference on Big Data, pp. 21–26. Washington,
DC: IEEE.
IKEA.com. July 16, 2014. “IKEA Unveils 2015 Catalog Focused on Helping
People Begin and End Every Day in the Best Way Possible.” http://www.ikea.
com/us/en/about_ikea/newsitem/2015-new-IKEA-catalog
Pew Research Center.org. January 2014. “Mobile Technology Fact Sheet.” http://
www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/
Olivarez-Giles, N. 2011. “U.N. Report: Internet Access Is a Human Right.” Los
Angeles Times, June 3. http://documents.latimes.com/un-report-internet-
rights/
World Forum Conference. October 2014. “The Internet of Things: Capturing the
Accelerated Opportunity.” Chicago:IL. https://www.iotwf.com/iotwf2014”
 Index
Advanced metering infrastructure IETF. See Internet Engineering Task
(AMI), 49 Force
AMI. See Advanced metering International data corporation (IDC),
infrastructure 41
Architecture for the IoE Internet
data, 12 fourth-evolutionary phase of, 77
fog computing, 12–13 information revolution, 1
Internet protocol, 13–14 Internet of Everything (IoE), 3
networked connectivity, 2
B2B. See Business-to-business networked economy, 3
B2C. See Business-to-consumer networked emerging experiences, 3
Business drivers, 21–22 phases in evolution, 2–3
Business-to-business (B2B), 32 visualization of, 2
Business-to-consumer (B2C), 32 Internet Engineering Task Force
(IETF), 1
Cloud service, 44 Internet of Everything (IoE)
Cloud technologies, 78 architecture for, 11–14
Collaborative operations, 57–58 augmented reality, 70–72
barriers, 25–26
benefits and challenges of, 15
Data capture, 42, 44
complexity, 17–18
Data manipulation, 42
connection type, 8–9
Data transmission, 42, 44
data integration and reconciliation,
Data workflow, 42
18
Discrete manufacturing, 47
data sovereignty, 38
DMS. See Document management
definition, 1
system
digital wallets, 75
Document management system
dramatic growth, 8
(DMS), 398
drivers, 21–23
Dwell profile, 72–75
Energy, 49 identifying and authenticating
Enterprise resource planning (ERP) sensors, 35–37
systems, 56 vs. Internet of Things (IoT), 10
ERP. See Enterprise resource planning machine-to-machine (M2M), 8–9
systems machine-to-person (M2P), 8–9
Extrinsic barriers, 26 management, 18
manufacturers, 55–63
Fog computing, 12–13 new currency of value, 10–11
on-shelf availability, 68–70
Health care, 48 person-to-person (P2P), 8–9
predictability and reliability, 16–17
IDC. See International Data privacy and security, 35–39
Corporation process and data, 7
84 Index

queue management, 65–68 Networked emerging experiences, 3

security, 19–20 Network effect, 4
service innovation, 27–34 NFC. See Near field communication
situational and contextual security,
37–38 O&G. See Oil and gas
use, 47–50 Oil and gas (O&G), 47–48
user experience, 17
Internet of Things (IoT) PMCO. See Oil and gas Predictive
data-in-motion and data-at-rest, 7 maintenance for continuance
growth of, 4–5 operations
vs. internet of everything (IoE), 10 Predictive maintenance, 58–63
reference architecture, 5–7 Predictive maintenance for
World Forum reference mode, 5–6 continuance operations
Internet protocol, 13–14 (PMCO), 39
Internet Protocol (IP), 1
Intrinsic barriers, 25
Real-time visibility, 56–57
IoE. See Internet of Everything
Retail, 49–50
IoT. See Internet of Things
IP. See Internet protocol
Satellite transmission, 44
IP serves, 13
Scale of service creation, 16
SDK. See Software development kit
Low power wide area networks Service industry call, 79–80
(LPWAN), 31 Service innovation
LPWAN. See Low power wide area navigating IoE size and scope,
networks 27–29
operationalizing, 30–33
Machine-to-consumer (M2C), 32 transforming data, 29–30
Machine-to-machine (M2M), 32 wrangle and direct, 33–34
Manufacturing environment, 52–54 Shift toward insight-driven operation,
Manufacturing execution systems 41–44
(MES), 56 Software development kit (SDK), 29
Manufacturing skills gap, 55
M2C. See Machine-to-consumer Technology drivers, 22–23
MES. See Manufacturing execution Transformation barriers, 25–26
systems Transmission scenario, 43
Metcalf ’s law, 4 Transportation, 49
M2M. See Machine-to-machine
Value chain, 54–55
Near field communication (NFC), 75
Networked connectivity, 2 World Wide Web (WWW), 2
Networked economy, 3 WWW. See World Wide Web
 OTHER TITLES IN OUR SERVICE SYSTEMS AND
INNOVATIONS IN BUSINESS AND SOCIETY COLLECTION
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• Designing Service Processes to Unlock Value by Joy Field
• Business Engineering and Service Design with Applications for Health Care Institutions
by Oscar Barros
• Achieving Service Excellence: Maximizing Enterprise Performance through Innovation and
Technology by Carl M. Chang
• Service Thinking: The Seven Principles to Discover Innovative Opportunities by Hunter
Hastings and Jeff Saperstein
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• Profiting From Services and Solutions: What Product-Centric Firms Need to Know
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Curriculum-oriented, born-
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People, Processes,
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Everything (IoE). IoE offers many benefits to industries and
­
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­ Services, and Things
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world business experience
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The business and technical services need to deliver IoE and
Using Services Innovation
reference materials for
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realize the promised benefits. Discussions include a
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­
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management and leadership
challenges during their
business process insight, strategies to connected things, and
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Everything
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PEOPLE, PROCESSES, SERVICES, AND THINGS

POLICIES BUILT ­organizational ­values, and sensitivities are keys to successful IoE
BY LIBRARIANS transformations.

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Bil Dry
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