Prepare to Change Minds in the Organization

September 8, 2015

Enterprise IoT is fundamentally a disruptive process. It presents not only significant opportunities to improve and enhance operational performance through remote management and predictive routines but it also enables a new and much wider range of services and business models. These services and business models will generate both new revenue opportunities and structures for the business but also fundamentally change many of the established working structures and business processes within an enterprise. To enable this change to happen, mind-sets within enterprises will have to change.

The Enterprise IoT Transformation That is Underway – A Case Study

Take a company like Yankee Candle. Founded in 1969, Yankee Candle has grown from humble beginnings to a global fragrance business, producing the world’s largest selection of scented candles, home fragrances and accessories such as car scents. Go into most household retail outlets, and you will find Yankee Candle products on their shelves. Yankee Candle has become a recognized brand for home fragrance products. The business model has been a successful one: customers enter the shops or order online, buy the fragrance products, and Yankee Candle builds a relationship with the customer through the quality of the product. While successful the business model has had its limitations. Specifically, Yankee Candle has historically had very limited information about customers and no ongoing or continuous interactions, and have enjoyed limited market penetration to a significantly greater enterprise market opportunity. And most significantly, Yankee Candle have not benefited from an underlying business model that supports recurring revenues. Enter Enterprise IoT, and the benefits and opportunities from connected devices. To grow the business further, a change of mind-set had to take place.

Fragrance as a Service

In a highly innovative and excellent example of an enterprise making the most of Enterprise IoT, Yankee Candle began to explore what the business could achieve within potential fragrance markets with connected devices. One such opportunity had always been to develop e.g. scented retail or gaming venue environments. Such scented environments allow for various ambiences such as of those luxury or relaxation to be created, or for behaviors to be indirectly encouraged and stimulated. Fundamentally, the challenge in larger venues such as hotels, restaurants, retail shops, and gaming venues was to ensure a consistent impression. Fragrances diminish over time naturally and minor changes in the environment can hasten that process. To achieve the desired results from such a solution, the quality levels had to be monitored constantly and fragrance concentrations released at the correct times in a cost efficient manner.

With Enterprise IoT, Yankee Candle was suddenly able to transform their own business but also the industry. Having connected fragrance diffusers at an industrial scale with associated sensors, and the ability to quickly analyze the data and take immediate action, Yankee Candle have developed a completely new solution for scented environments, enabling the delivery of a consistent impression (customer experience) which may have the potential to become linked with for example the brand of a particular clothing retailer, or a hotel chain, or a gaming venue. In developing this new ‘fragrance-as-a-service’ business model, Yankee Candle has fundamentally changed something that previously operated as a licensing system, and now delivers scented environments as a service to its customers, monitored and measured in quality terms by Yankee Candle. This has provided not only a new, recurring and sustainable revenue stream for Yankee Candle but also a new path of continuous engagement with customers and the potential to develop new and more exciting services.

Sharing Some Tips from Yankee Candle

The Enterprise IoT journey by Yankee Candle had been underway for a number of years. First, executives at Yankee Candle recognized a potential early on, and changed minds and secured acceptance within the enterprise by exploring the benefits of connected devices through a joint venture, creating an incubation space for such ideas, and getting a number of employees on board with the new approach. This was not an easy task given the already clear success of the Yankee Candle product lines but to grow the business into enterprise markets, Yankee Candle had to evolve from being a product industry.

Second, Yankee Candle took the big step of providing the joint venture with a greater degree of freedom from traditional IT approval processes and management information systems, allowing it to explore partnerships with suitable technology vendors such as ThingWorx. This significantly reduced the development process times, and within 5 days of development effort, 80% of the final feature set was already in place. Another significant change for the enterprise.

Third, Yankee Candle kept a focus on developing the actual service and the business model. The business worked closely with ThingWorx to deliver the technology but key to the success of this new Enterprise IoT initiative was the ability to keep that important focus on the service itself and not on the enabling technology.

If there is a key learning lesson, it is that preparing an enterprise for Enterprise IoT and achieving the associated benefits is not just about introducing smart, connected devices but changing minds to discover the great, new services that can be offered to customers and also ensuring that the supporting IT infrastructure is sufficiently flexible and fit for purpose to support emerging IoT solutions.

This blog has been based on an interview with Todd Becker, COO of Yankee Candle® Scent Systems