Beyond the Internet of Things - the birth of Living Services?

Stuart Lauchlan Profile picture for user slauchlan June 16, 2015
Living Services will make up the third age of digital, beyond the Internet of Things, says Accenture Interactive.

Internet of Things

Anyone with an eye on the tech market is going to be aware that no presentation or analyst report these days is complete without the obligatory references to the Internet of Things.

So anything that comes up with a new angle beyond the inevitable intelligent refrigerator or cloud-empowered toothbrush is worth a second glance.

A new report from Accenture Interactive this week caught my eye with its thesis that we’re entering an age of so-called ‘Living Services’, which will tailor themselves in real-time around shifting end user needs and expectations. This, it claims, will be the third wave of digital.

At first sight this doesn’t seem particularly radical thinking. Accenture Interactive acknowedges in its own text that the concept of intelligent services that adapt and change based on consumer preference isn’t new.

But what’s changed, it argues, is that the technology necessary to make this a reality - sensors, cloud computing, smart devices, real time analytics etc - is now mature enough for brands to create and deliver such services at critical scale.

Accenture puts forward three main reasons for coining the Living Services term:

  • Such services will change consumer experiences such as travel booking and shopping in real time around us.
  • They will be driven by things that are very proximate to us such as wearables and nearables.
  • And, at the human level, Living Services will affect our lives in a much deeper and more positive way than mobile and web services have.

In its analysis, Accenture postulates:

Living Services are highly sophisticated and able to constantly learn and evolve, almost as if they are alive. They will transform and improve the way we live, both by removing mundane tasks and offering services that surprise and delight us. By being physically close to us and wrapping themselves around the everyday things we do, Living Services will intuitively learn our habits, likes and dislikes and become tailored to our individual and changing needs. The result is digital services that are contextually aware and able to react in real time to changes in the environment or our patterns of behavior—creating once unimaginable engaging experiences.

This is more than just Internet of Things it adds:

Living Services are a step beyond the limited descriptor ‘Internet of Things.’ In effect, they breathe life into what will become a vast network of connected machines and objects, enabling branded services to flow through and utilize this connected environment. This will also accelerate the “atomization” of services.

Mark Curtis
Mark Curtis

The report - The Era of Living Services - comes from Fjord, which is the design and innovation group within Accenture Interactive. Its Chief Client Officer Mark Curtis states:

The emergence of Living Services is being driven not only by the digitization of everything but also by ‘liquid expectations’. When consumers engage with a brand today, such as an airline or a bank, they compare their experience not only with other airlines or banks but also with any service company, such as ride-sharing providers.

Take the seamless and largely invisible payment systems these providers offer. Now consumers want payment experiences like this in every industry, consciously or subconsciously. We call these expectations that bleed from one industry to another ‘liquid expectations.’ In effect, expectations will rise across every industry as innovation increases in any industry.

Where, when, how?

The argument put foward is that these Living Services will design and brands as well as enabling competitive upheaal in both the private and public sectors. This disruption in turn will require organizations to rethink business models, strucutures and processes. (Which in turn will almost certainly result in a need to consult with third party advisors, such as…)

So where will Living Services first make a noticeable impact? Healthcare, led by quantified self-health tracking devices, is an early adopter cited here:

There is a growing imperative from the top down to revolutionize the way in which healthcare is delivered to citizens. Digital technology has the potential to tackle the gap between our expectations and the affordability of meeting them. With it, the onus shifts towards enabling the public to track and improve their health through simple and engaging tools. In order to make this information meaningful, local medical practices and hospitals must create systems to receive personal health data, distribute it and coordinate necessary action. This has the potential to be incredibly powerful, and existing businesses and innovative startups have the opportunity to claim their place in this space.

Source: Accenture Interactive

In the home, existing IoT silos such as Nest thermostats will start to connect up with other devices:

From efficient energy management, such as switching on light bulbs and heating to coincide with when we get home, to smart alarms that allow us to monitor security from anywhere in the world, Living Services are emerging that make our home lives smoother and easier to manage remotely. And with Living Services likely to influence our entire day, the home could emerge as the source from where our complex digital lives can be unified, helping us to manage an otherwise overwhelming number of devices and data sources from one, all-important hub.

Meanwhile we can apparently expect Living Services at a city-wide scale by 2020, albeit limited at that point to high-profile connected cities in the Middle East and Asia.

In retail Living Services should enable retailers to offer less intrusive experiences, such as overloading shoppers with offers on arrival at a location. The report notes:

As Living Services start to change the dynamic between customers and brands, from one that is based on intrusive marketing and isolated transaction points to one that is more consumer-centric and relationship-based, brands will need to start mapping where they stand with individual consumers.

In finance, livings services wll be able to link peoples’ financial status directly to other areas of their life. For a traveling customer, for example,the bank could proactively negotiate better currency rates fromATM providers and seek and negotiate the best fuel prices as a customer is driving and prepay the bill.

To move to this Living Services model, organizations will need to face up to some key challenges:

(1) Create living operations so that executive regularly ask themselves whether they’re taking the necessary operational steps to drive a Living Service forward, rechecking and revalidating on a weekly and monthly basis, not yearly. Priorities must shift toward sensing versus procedure and having intuition versus needing instruction

(2) Embrace continual design with the business geared to constantly follow and interact with people across every part of their journey or relationship with that service.

(3) Reinvent the organizational structure to refect a growing fusion of the Chief Marketing Officer and Chief Information Officer roles so that services can be designed to adapt, evolve and pivot around customer experience, not brand consistency or product sales.

(4) Understand customers and anticipate their needs, such that the business model is based on idenitifying specific consumer need and designing a solution in an elegant way by producing services that consumers appreciate and begin to find indispensable.

(5) Build trust because Living Services will require brands to get very close to consumers, to the point where they are seamlessly blended into people’s lives.

(6) Tackle complexity because introducing Living Services will add another layer of that complexity and one coming from multiple sources and touchpoints.

(6) Think big and aim for nothing less than transformational services. The report argues:

Living Services sit at the top of the experience economy pyramid. They are, by definition designed to be transformative, opening up opportunities for a vast range of improved experiences in the same way that the arrival of the Internet opened up huge opportunities for enterprising businesses to disrupt and challenge traditional business sectors.

My take

This is a lengthy report from Accenture Interactive, running to more than 100 pages and clearly destined to be a major piece of the firm's thought-leadership pitch for many months to come.

It presents a convincing thesis in the main and while the IoT meme has become somewhat repetitive of late, this throws up some interesting angles that provide food for further discussion.

Worth a deeper look.

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