Last updated: 30 September 2015
What springs to mind when you think of McDonalds? Happy meals? Brightly colored fast-food chains? Sponsorship of the 2012 Olympics? Vegetarian-only restaurants in India?
How about Machine-2-Machinecommunication? Surprised? McDonalds has pioneered a key business concept – extended enterprise – which is going to be the cornerstone of future M2M Communications.
What is an extended enterprise? In the last few decades, organizations have adopted a leaner and more agile approach to their business. Outsourcing various functions to create a supply or value chain. McDonalds is a prime example of an extended enterprise in action.
Early on during its expansion, McDonalds saw the benefits of outsourcing several aspects of its operations. Starting from restaurant operations to franchisees, food sourcing (which is done by local food co-operatives set up in each country) and happy meal toy manufacturers, McDonalds has recognized that its core competency lies in its brand and its recipes. Outsourcing all other aspects of its operation has allowed it to focus on the development of its brand and recipes to become the global phenomenon that it is today.
The concept of the extended enterprise can be applied to several trends in our industry: Fabless manufacturing; business process outsourcing; and cloud IT systems are all prime examples. Cloud IT systems in particular have seen phenomenal growth in recent times. Research shows that growth of On-Demand CRM systems have outpaced growth of classical CRM systems in the past few years. However, security concerns among CIOs mean that mass adoption of cloud systems hasn’t yet happened.
These concerns can be addressed, though, as our work with ISIS and Amazon demonstrates, showcasing our experience in enabling secure, business-focused cloud solutions. So, how are extended enterprises relevant to the M2M space?
Well, the power of M2M has already been recognized, with proven ROI and government regulations helping to generate a steady growth in M2M activity over the past several years. Having said that, I have to admit – M2M is hard! A M2M project usually starts with an asset in the field which needs connecting to control systems to bring monitoring, diagnostic and control automation to the business processes. To do this, an organization must first bring some form of connectivity to the asset – quite often using a Wireless Module and a Machine Identification Module (MIM). Then several levels of software features need to be implemented on both the asset and a server, while ensuring that the entire chain is 100% secure from start to finish.
Notably, none of the above features lie within the enterprise’s core competencies. Several enterprises have understood that and outsource all of these features to a cloud-based M2M solution. This allows organizations to focus on their core competencies – their brand and their recipes. Remember McDonalds? A wise man once said – ‘Focus on your best, outsource the rest.’