M2M: Learn to Listen
In the world of M2M – there is simply too much focus on enabling machines and devices to talk.
In fact, I have always believed that the cell phone has polluted the M2M industry's thinking. Place a communication-enabled device in the hands of a consumer and value is created through the act of making and receiving phone calls – human-to-human communication. The device is just an enabler.
With M2M, talking is important, but not sufficient.
Let's consider an interesting recently launched M2M application: "Pay as You Drive Insurance." The selling feature of this service is simple: Let the insurance company monitor how you drive, and if you are a safe driver, you will save a ton of money on your car insurance. Progressive Insurance, with their Snapshot Discount insurance, is one of the first major companies to offer this type of program. So, let's explore what Progressive needed to do to make the program happen.
From the "traditional" M2M industry point of view, Progressive would need to acquire a cellular enabled M2M device and then get a rate plan. With the device and the rate plan, the relevant pieces would be in place to market and sell the service, right?
Not so fast... getting the bits and bytes collected is the ante. The "real work" happens next. If I were Progressive's program manager, the first thing I would want is to correlate the monitoring device with an insured car and consequently, an insured driver. Once this is accomplished – preferably automatically – I would want to keep track of all of the data associated with that vehicle's trips:
• Average rate of speed
• Locations visited
• Peak speeds (correlated with the posted speed limits)
• Weather conditions under which the vehicle was operating (rain or snow)
• "Unusual" driving behavior (erratic braking or off-road travel)
I am sure that I would want to be notified if something changed dramatically from the agreed upon terms of insurance – such as the vehicle showing up in a non-insured area, like another country. Ultimately, I would want to feed all of that information into my actuarial tables to calculate and adjust rates in real-time.
True listening to M2M devices involves more than information capture. True listening involves the creation of new information by correlating the data you capture with other available sources of information – all in real-time. The aforementioned example requires cross-referencing a vehicle's behavior with at least two different web sources of information, weather and location. Furthermore, that new information is then processed to determine actionable exceptions. AND – I am still not done!
In addition to web sources of information that "listen" to devices, there are also major constituencies affected by this data, and the system needs to address their needs. The field insurance agents and the customer themselves are both impacted by these connected products and cross-referenced information. Because the field agents are responsible for selling and maintaining policies, they need to have access to the information related to their customers in order to better serve them. I would do this through a unique portal where each insurance agent can view and interact with the information from their customers (and only their customers) in order to better service their accounts.
And, finally, the customers themselves should be able to view and interact with the information collected from their vehicles. Perhaps my 16-year-old son is in one of the monitored vehicles. As a customer, I would like to be notified if he travels somewhere he shouldn't or anytime he travels at a high rate of speed. I would also really appreciate it if my carrier advised me on ways to lower my rates by improving my own driving habits.
This program would be difficult enough to do for one vehicle; consider the complexity for 5 million vehicles, 3 million drivers and a field insurance force of 5,000. This would be a beast of a system to develop, operate and maintain.
So, from my perspective, the real magic of M2M is not in enabling devices, machines and products to talk... It is in enabling businesses and consumers to listen! Only through listening to your products can you create value. The real barrier to full-scale adoption of M2M is in listening to information, providing secure access to that information, correlating that information with available sources of information and notifying interested parties when they need to do something. This is the real mission of M2M: To create smart solutions that listen!
Dale Calder is president and CEO of Axeda.