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How CIOs Can Influence New Product Innovation

By Kim S. Nash, CIO
September 24, 2010 05:31 PM ET

CIO - We've all heard the hype about a future of data-driven, always-connected devices where everything from cars to game consoles to refrigerators plays a role in the Internet of Things. We envision our household appliances tapped into the power grid, analyzing and fine-tuning electricity use. We expect our parked cars to one day use Wi-Fi to send traffic and weather forecasts to our office computers before we head out on the commute home.

What we haven't heard much about yet is how this Internet of Things could put CIOs at the strategic heart of new business models and strategies-and guide your companies' profitable use of an ever-widening array of smart products.

By combining the capabilities of the Web, cloud computing, analytics and tiny intelligent sensors, CIOs can help create wholly new products and services connected to networks and to each other. For companies that adopt an Internet of Things strategy, "I expect the CIO career trajectory to change," says CIO Dan Speicher of Hughes Telematics.

That's largely because smart products change the predictable pathways of information flow within companies, sometimes dramatically, adds Roger Roberts, a partner in the global IT firm McKinsey and Co.

Communication with customers, for example, won't be limited to that moment when a cashier rings up a sale. Data will flow continuously back and forth. Factory machines, city buildings and pieces of public infrastructure will be talking to the computers monitoring their activities. With careful collection and analysis, all this fresh information can be used to improve how products and services are created, sold and used. CIOs can help a struggling U.S. economy open new vistas, Roberts says. Once we know how often or intensely a product is used, for example, CIOs can create additional saleable options, such as charging usage fees rather than outright selling a product, he notes.

And as this web of connected people and gizmos thickens, the IT group is uniquely qualified to advise product designers and guide engineers toward whichever technologies work best to, say, harvest customer data or improve product performance. IT can also provide the infrastructure to manage and understand data generated by smart products.

But CIOs must jump in now or risk losing this more-strategic business role.

At car maker Mazda, for example, designers have been pondering the future of the car interior. Customization is an up-and-coming trend, allowing car owners to change some features of the vehicle to suit their tastes rather than the manufacturer's, says Jim DiMarzio, CIO of Mazda North American Operations. Product designers asked DiMarzio for his insights on how technology could make that possible.

In one scenario, the dashboard comes not with knobs and dials but a liquid crystal display that uses Bluetooth to share information with the driver's smartphone. It could identify that the wife is driving today by recognizing her iPhone as she gets in, lighting up the dash with her preset preferences, such as a speedometer and a clock-in her favorite colors, of course. When her husband climbs behind the wheel with his BlackBerry, the dashboard hides the clock and shows him the tachometer.

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