Discovering the Internet of Things (IoT): technology and business process management, inside and outside the innovative firms

Citation

Del Giudice, M. (2016), "Discovering the Internet of Things (IoT): technology and business process management, inside and outside the innovative firms", Business Process Management Journal, Vol. 22 No. 2. https://doi.org/10.1108/BPMJ-02-2016-0029

Discovering the Internet of Things (IoT): technology and business process management, inside and outside the innovative firms

Article Type: Guest editorial From: Business Process Management Journal, Volume 22, Issue 2.

The IoT is a disruptive technology increasingly influencing the daily life, the business world and even the global economy. In a nutshell, the IoT can be considered a family of technologies whose purpose is to make any type of object, even without a digital “nature”, a device connected to the internet, likely to take advantage of all the features owned by the objects born to use the network, like the functionality for monitoring and control. Then, monitoring means that the objects can behave as sensors, likely to produce information about themselves or the surrounding environment. Control, means that the objects can be controlled remotely without particular technologies but simply through the internet. In the industrial field, the IoT is generally associated with the concept of Industry 4.0, which sees the IoT application in a context of intelligent machines, interconnected devices and people. Within this development, modern enterprises become progressively more intelligent as the components of the production lines grow more interconnected, thus opening the way to new forms of business. The development of IoT, likely to generate higher economic value, goes actually through two types of opportunities: first, the opportunities related to the transformation processes, such as the use of resources or predictive maintenance; and then, the opportunities related to new business models or services, such as the use of goods or services on consumption, rather than their acquisition as fixed capital. The value of these opportunities can be easily estimated at over ten billion euros in 2015. The contexts of application of IoT technologies are currently various. Those who conceivably generate greater economic activity and value are the so-called “places for repetitive tasks”, such as cities and logistics. Other fields, can be recognized in the health and safety sectors, areas that become a domain of major economic and social interest. Beyond the attention the IoT applications are receiving for consumers and end users (such as the monitoring of personal health, fitness devices or automation), it is reasonable to expect that most of the value materializes in B2B, especially in the manufacture, distribution, infrastructure management and resources. Finally it results in new consumer products and services available to citizens, but the justification of investment in IoT are found mainly in the industrial environment.

This special issue took inspiration from the observation of this scenario. Its primary research goal has been to investigate both the impact and the role of the IoT on the business process management in terms of promotion of knowledge flow, innovation and competitiveness. Furthermore, the papers selected for this volume aimed at understanding how the IoT fosters innovation within organizations and which implication this phenomenon can have on the competitiveness of the firms and on its business process management. Several research questions stemmed out from the articles selected and we may hardly summarize them. Submitted papers consisted of theoretical and applied research in topics including IoT and firm performance, impact of IoT on business process assessment, intelligent management processes and business-related activities, strategic planning, technology management and policies for IoT support. This special issue presented original research findings aiming at contributing, at a practical level, new knowledge for both researchers and managers interested in the use of the IoT for business process management purposes. The selected papers witnesses research collaborations between scholars from different nations as well as include contributions from Italy, UK, Brazil, France, Indonesia and discuss empirical findings across multiple levels of analysis in a wide range of sectors. The research methodologies used for gathering empirical data vary from quantitative surveys to exploratory case studies based on qualitative data. Several rounds of blind peer review resulted in the final form of this volume for publication here. We aimed at selecting papers reporting on the application of innovative methods to real world problems. We searched for research studies containing both some form of novel innovation as well as a documented application. We looked for contributions, which should widely focus on the application of innovative methods to practical problems of the modern enterprise. Nevertheless, all the selected articles demonstrated documented applications coming from the IoT aimed at discovering this phenomenon in the business process management. Readers of this special issue should be technically savvy, scientifically demanding and drawn to practically relevant phenomena.

This volume opens with a literature review paper by Manlio Del Giudice, titled “Discovering the IoT within the business process management: a literature review on technological revitalization”. A new approach to accommodate management propensity to the innovation is technological revitalization by which established firms create completely new technological products, but without making significant changes to the technical features of old products. The paper presents the main studies in the managerial literature on the IoT by linking them to the practical evidence of the technological revitalization. As well as it discusses the main implications and effects of this approach for innovativeness and the achievement of performance in mature industries (Al-Mashari and Zairi, 1999, 2000). The rising number of technical contributions using IoT shows that technologies are evolving and there is a learning and application process supported by standardization efforts. Easy installation, standardization, stoutness, configuration and servicing are essential to keep IoT systems operational and hence offering value for the business process management within every industry. The article's main conclusion is that the value creation from the application of IoT to technological revitalization is likely to be pivotal from a business process management point of view (Al-Mashari et al., 2001, 2003).

The second article, entitled “Internet of Things and Business Processes Redesign in Seaports. The Case of Hamburg”, has been written by Francesco Schiavone and Marco Ferretti. The paper is aiming at contributing to the extant literature about the exploitation of IoT in seaports by illustrating in detail how such IT infrastructures are likely to impact on the redesign of their business processes. The illustrative case study of the German Port of Hamburg, one of the main European seaports, which widely adopted technologies based on IoT over the last few years, is accordingly reported in the paper. Despite scholars in the managerial literature report generically which are the ports operational domains more affected by IoT, there is a lack of studies about the specific implications of the adoption of such technologies on the BPR of seaports. This article certainly fills in this gap.

“Managing adaptive orientation systems for museum visitors from an IoT perspective” is the third article joining this special issue, written by an Italian research group based at the Second University of Naples: Ludovico Solima, Maria Rosaria Della Peruta and Vincenzo Maggioni. Starting from the premises that IoT applications can be used in museums as an aid to visiting systems, the aim of their research is to investigate how recommendation systems can be developed to provide advanced services to museum visitors. The study presents the results of a qualitative exploratory multi-case study and introduces an analytical framework for an evolved adaptive museum orientation system. One of the most important finding of the paper is that implementing the IoT blueprint entails introducing a plethora of new products, services and business models, opening new routes to guide and direct cultural events. Now, more than ever, sustainable development involves an intrinsic balancing act between the pluralism of data and that of customer needs, which is achieved through the elaboration of digital data.

The fourth article in this volume has been authored by Eduardo Zancul, Silvia Takey, Ana Paula Barquet, Leonardo Kuwabara, Paulo Miguel Cauchick and Henrique Rozenfeld and it is titled “Business process support for IoT-based product-service systems (PSS)”. The paper, by considering the IoT technologies available, discusses a real application of the proposed method to the machinery industry. Furthermore, it presents an intriguing application of the Failure Mode and Effects Analysis in order to identify what should be monitored in the product to minimize potential product failures. Likewise the authors investigate which Configurator of PSS proposal can be applied in order to assist the company in deciding which PSS strategy to be followed. The results derived focus on how to define the IoT architecture and the business process design supported by the selected IoT technologies. An interesting article which can be certainly considered by companies willing to increase product-service revenues based on IoT technologies.

The research perspective completely changes with the fifth article, as it presents one of the first studies in the literature about the IoT applications in the banking sector “Bank of Things”. Francesco Campanella, Manlio Del Giudice and Luca Dezi have authored it and it is titled “The Bank of Things: an empirical investigation on the profitability of the financial services of the future”. The paper presents the quantitative results of a large empirical research aimed at studying the existing relationship between the products offered by the “Banks of Things” and the relative Return on Equity (ROE). The research was conducted on a sample of 3,692 banks that, in 2013, were located in 28 European countries. The empirical analysis shows that the following features express a high ROE for banks: banks offer IoT retail services to customers; banks offer IoT corporate services to customers; banks offer customers a large number of home banking services; and finally, banks offer customers a large number of traditional investment services.

“Evaluating the innovation of the Internet of things: empirical evidence from the Intellectual Capital assessment” is the sixth article selected for this special issue and it has been authored by a cross-national research group: Alan Murray, Armando Papa, Benedetta Cuozzo and Giuseppe Russo. The main research goal of the paper is to investigate the effects of IoT on the companies' value, with specific reference to the Intellectual Capital value, which gives to the paper an original angle of view with respect to other studies in the managerial literature on this topic. The authors used a quali-quantitative methodology aiming at analysing whether and how the introduction of the IoT innovations influences the value of the Intellectual Capital owned by “Cisco Systems Inc.” company. As the IoT can guarantee efficiency, social and individual benefits, the effects of the IoT on company performance and, particularly, on intangible corporate dimension have been properly analysed by the authors. Hence, the paper is well fitting in filling the literature gap on the analysis and evaluation of the IoT impact on Intellectual Capital owned by high intensity cognitive companies.

Veronica Scuotto, Alberto Ferraris and Stefano Bresciani authored the seventh article, titled “Internet of Things: Applications and Challenges in Smart Cities. A case study of IBM smart city projects”. The concept of smart city has become quite popular between scholars and practitioners in the era of digital economy. Smart cities make innovation ecosystem, joining together different forces like knowledge�"intensive activities, institutions for cooperation and learning, and web-based applications collective intelligence. An empirical testing on IBM Smart Cities projects was applied by the research group, composed by scholars from UK and Italy as well, so as to demonstrate that the combination between the use of IoT and the implementation of the Open Innovation model within smart cities which has been changed the development of urban areas and effected firms' innovativeness. This research appeared as having an importance and significance to scholars, government, and firms who need to understand the relevance of smart cities in the current economy.

“Strategic Orientation and Information Technological Turbulence: Contingency Perspective in SMEs” is the eight article, by Aluisius Pratono. His study, using quantitative approach with structural equation model, has the intriguing intention to propose the technological turbulence as a primary contingency factor focusing on strategic orientation as main determinant of firm performance. The result is expected to provide considerable suggestion on how to match strategic orientation with various level of technological turbulence. The results show how the technological turbulence influence managerial decision-making processes under an opportunity-based paradigm.

The following article is the ninth one, by Andrea Caputo, Giacomo Marzi and Massimiliano Pellegrini, and it is entitled “The internet of things in manufacturing innovation processes: development and application of a conceptual framework”. The UK-based research group aimed to contribute and enrich the scientific debate about the IoT from a managerial perspective. Through the lenses of management and innovation literature, the authors investigated the main facts that characterize the IoT and developed a conceptual framework to interpret its evolution. In their study, the framework has then been applied to the case of a three-dimensional printing technology used for additive manufacturing. Through consequential steps and by adopting and integrating the Henderson and Clark model, the research explained the cornerstones of the evolutionary impact of the IoT on the manufacturing industry. In selecting this paper we believed that the study offers a clear and simple model to interpret the impacts of the IoT. Such a goal has been obtained by systematizing the disconnected research on the topic and arranging such contributions into solid paradigms of the managerial literature.

A cross-national research group, composed by Raffaele Trequattrini, Riad Shams, Alessandra Lardo and Rosa Lombardi, authored the tenth article, entitled “Risk of an epidemic impact when adopting the Internet of Things: the role of sector-based resistance”. The paper aims at identifying the main sector-based resistances affecting the success of the Internet of Things innovation, with particular reference to the professional football industry as a prime example in the literature of how institutions prevent the IoT use. The main purpose of the research group has been to point out resistances at individual, firm-specific and sector-specific contexts for introducing the IoT in professional sport and the epidemic impact risk related to the general acceptance of the IoT. Sector-based resistances in the football industry can influence other sectors. Through a chain-reaction, general resistances strengthen the sector-based institutions to delay the adoption of IoT instruments, because of lack of resolutions in cultural and economic issues. The article's main findings rely on the evidence that supranational regulations regarding the IoT introduction and governance are important; however, sector-specific self-regulations should not be underestimated, because of an epidemic impact risk of scepticism towards the IoT.

Finally the last but not least article, written by Gandolfo Dominici, Vasja Roblek, Tindara Abbate and Mario Tani, titled “Click and drive: consumer attitude to product development. Towards future transformations of the driving experience”, aims to supply indications that may be useful in the process of development of new products that fully exploit the value potential of IoT technologies in the automotive industry. To this extent the authors investigated how applications of the IoT to smart vehicles are perceived by consumers, thus describing different ways to increase their satisfaction. Author's main findings are that Automotive companies need to consider what is attractive to drivers and what consumers consider to be “driver-friendly”. Using an empirical analysis, the research group highlighted the motivations for developing a smart car to fits the expectation of Italian drivers.

I am taking this occasion to thank all the colleagues who contributed as reviewers to the development of this issue. A special acknowledgement goes to Professor Majed Al-Mashari, Editor in Chief of the Business Process Management Journal, for his insightful suggestions and patient guidance: this issue would have never seen the light without his precious advices, support and if he had not thrilled for the research topics I proposed.

Professor Manlio Del Giudice, Paris Business School, Paris, France

References

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Al-Mashari, M., Al-Mudimigh, A. and Zairi, M. (2003), “Enterprise resource planning: a taxonomy of critical factors”, European Journal of Operational Research, Vol. 146 No. 2, pp. 352-364

Al-Mashari, M., Irani, Z. and Zairi, M. (2001), “Business process reengineering: a survey of international experience”, Business Process Management Journal, Vol. 7 No. 5, pp. 437-455