McKinsey Quarterly published their March 2010 newsletter today with an Editor's choice article about discovering Internet of things.(link)
This is a delightful article to read not only because it's relevant to IT area, but when I read about "some insurance companies offering to install location sensors in customers’ cars", I was like "yeah baby that's us!".
This is definitely not a commercial that I put up here because I do have my own concerns around this whole "usage based insurance" product. While we are still using a fairly old version of the O/S on work stations for business operation within the company, we start off as one of the pioneers to offer customers this new feature to calculate their premium based on their driving behaviors. I mean, it's always hard to draw a fine line between "innovation" and the old school "follow, don't lead" theory, and there are a lot of factors needed taken in accounts while rolling out the product and evaluating its overall performance.
First of all, when you are trying to add up to a total cost rolling out a new product, you are not only looking at design, test, implementation and support around the product itself. Take this car sensor product for example, I believe its market price is around $50 - $80, depending on the manufacturer. There's a huge tendency that the customer won't send it back after his/her evaluation period ( Oh yes we ask them to return them!), and the percentage of those returned being able to be reused is pretty low as well. Besides, you have to work with a telecom vendor for transmitting the customer driving data via mobile network to our information center. Let's say, the telco charges $1 for every megabyte, and for a 20 mile drive (my home to work), the size of the data that needs to be sent is approx. 512k, then the company will have to spend $1+ on customers like me, each day. Think of how many customers that are currently using or will use this product, and also think of those long distance commuters.
So what I'm getting at is, a comprehensive TCO analysis is very important in cases of evaluating new products. I mean, I'm no expert on TCO and hopefully the company execs are figuring it out. xD
Secondly, back to my own field, there're certain risks and vulnerabilities that need to be addressed before this new thing goes live. For instance, privacy issues. You might hear customers talking about their concerns over what kind of data would be sent out the insurer. "Will you guys share the information with the cops if my data indicates that I'm a terrible driver?" "Would they know that I drove to the club while I was telling my mom I was at a friend's place studying?" (although thinking of this question, it could be a very good idea for parental control purposes xD) Information security and privacy protection is becoming a hotspot for every enterprise, and without necessary controls put in place, business would be exposed at risk in terms of law suits, penalty due to out of compliance status, etc.
As the McK article says, all industries are working towards adopting new technology and innovation to enhance their competitive advantages, and as an auditor, I say, innovation plus due diligency/due care, you are good to go. xD
This is a delightful article to read not only because it's relevant to IT area, but when I read about "some insurance companies offering to install location sensors in customers’ cars", I was like "yeah baby that's us!".
This is definitely not a commercial that I put up here because I do have my own concerns around this whole "usage based insurance" product. While we are still using a fairly old version of the O/S on work stations for business operation within the company, we start off as one of the pioneers to offer customers this new feature to calculate their premium based on their driving behaviors. I mean, it's always hard to draw a fine line between "innovation" and the old school "follow, don't lead" theory, and there are a lot of factors needed taken in accounts while rolling out the product and evaluating its overall performance.
First of all, when you are trying to add up to a total cost rolling out a new product, you are not only looking at design, test, implementation and support around the product itself. Take this car sensor product for example, I believe its market price is around $50 - $80, depending on the manufacturer. There's a huge tendency that the customer won't send it back after his/her evaluation period ( Oh yes we ask them to return them!), and the percentage of those returned being able to be reused is pretty low as well. Besides, you have to work with a telecom vendor for transmitting the customer driving data via mobile network to our information center. Let's say, the telco charges $1 for every megabyte, and for a 20 mile drive (my home to work), the size of the data that needs to be sent is approx. 512k, then the company will have to spend $1+ on customers like me, each day. Think of how many customers that are currently using or will use this product, and also think of those long distance commuters.
So what I'm getting at is, a comprehensive TCO analysis is very important in cases of evaluating new products. I mean, I'm no expert on TCO and hopefully the company execs are figuring it out. xD
Secondly, back to my own field, there're certain risks and vulnerabilities that need to be addressed before this new thing goes live. For instance, privacy issues. You might hear customers talking about their concerns over what kind of data would be sent out the insurer. "Will you guys share the information with the cops if my data indicates that I'm a terrible driver?" "Would they know that I drove to the club while I was telling my mom I was at a friend's place studying?" (although thinking of this question, it could be a very good idea for parental control purposes xD) Information security and privacy protection is becoming a hotspot for every enterprise, and without necessary controls put in place, business would be exposed at risk in terms of law suits, penalty due to out of compliance status, etc.
As the McK article says, all industries are working towards adopting new technology and innovation to enhance their competitive advantages, and as an auditor, I say, innovation plus due diligency/due care, you are good to go. xD
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