Internet of Things as an Enabler of Customer Value Creation and New Business Models

Abstract

The rapid development of information and communications technology is fundamentally changing the world around us. The emergence of Internet of Things (IoT) is enabling the integration of physical and virtual worlds via intelligence devices embedded in physical objects and connected to the Internet. While IoT is enabling businesses to create and capture value in whole new ways, the prior academic research has mostly focused on the technological aspect of the phenomenon. However, more and more companies have understood the potential of IoT and started to look for ways to capitalize the opportunity. The purpose of this thesis was to examine what kind of value creation opportunities IoT brings for the case company, and how these opportunities can be turned into new, successful business models.

This thesis was carried out in the form of a constructive single-case study in the context of mining and quarrying industry. The empirical research was conducted by collecting qualitative data through a series of customer interviews. The data was analyzed in order to identify similarities and differences between the insights provided by customers representing four different customer segments. The findings were refined in informal discussions carried out within the case company in order to compose business model designs for the company’s digital services and automatic borehole measurement system.

The findings suggested that even though IoT and digitalization have not been genuinely adopted in the customer companies, there are plenty of opportunities to create value through digital services provided to customers in future. The thesis identified different roles that the case company can adopt in order to create new kind of value by harnessing IoT technologies. These roles differ from each other in terms of which tasks the company chooses to take over from customers while providing new digital services. The findings were used as an input when applying extant conceptual business model frameworks to develop business model designs for the company’s digital services and automatic borehole measurement system. From academic point of view, it was found out that the results from the prior theoretical work on IoT-based business models are useful for capturing the ecosystemic nature of doing business in IoT environment, but they do not provide means for considering all the aspects in an adequate level of details at the company level. Further research is needed to develop appropriate practical tools for designing functional business models for real life IoT applications.