Deconstructing the Value of IoT. Towards a value-centric and managerial framework for categorizing use-cases

Abstract

The Internet of Things (IoT) is connecting and digitalizing the physical world, requiring the convergence of multiple technologies. However, the field is very broad, crossing 10ths of different industry verticals and there is a lack of an aggregated approach explaining the value of IoT, which is increasing the uncertainty and limiting the understanding of IoT needed for the technology convergence to be realized. Hence, this study aimed to investigate a starting point for an income-based IoT valuation method that could improve on this situation. Through a qualitative cross-sectional study, the value creation and capturing of six different IoT applications was investigated with data from both literature and interviews. The analysis of the results showed that the factor with the most impact on what source of value was the implementor’s role, either integrator or provider, with a focus on value-activities and products/services respectively. Based on this, the authors propose a value-centric framework with four collectively exhaustive categories: process efficiency, resource utilization, legacy product/service innovation and new product/service innovation; creating a foundation for evaluation of IoT use-cases for which no comparable valuations are available. The framework could hence help managers to overcome initial uncertainty and decrease efforts needed for assessing the value of an IoT use-case. In light of the conclusions, the study suggests further research into IoT value for consumers and quantitative case studies in IoT with income-based methods.