IoT Innovation Design Method (Picmet2019 Presentation)

PICMET2019@Portland
Naoshi Uchihira
Japan Advanced Institute of Science and Technology
Innovation Design Method
for the Internet of Things:
Requirements and Perspectives
JAIST
TB-04 Internet of Things (IoT)
Tuesday, 8/27/2019, 10:30 - 12:00 Room: Galleria III

2
Summary and Contribution
What is IoT Innovation Design Method?
Why is IoT Innovation Design Method Required
General Requirements
and Perspectives of
IoT Innovation Design
Method
Proposed IoT
Innovation Design
Method which
consists of 4 steps.
Evaluation
PICMET2016
Refined
Version
New
New

3
Contents
•Background and Purpose
•Literature Review
•5 Requirements and 4 Perspectives
•Proposed IoT Innovation Design Method
•Evaluation
•Summary and Contribution

4
Contents
•Evaluation

5
Background: IoT System
Plants
Social
Infrastructure
Offices
Healthcare
Data Handling
Data Analytics
Decision Making
Control
Sensing
Cyber World
(Cloud)
Physical World
“IoT Systems” in a broad sense are Cyber Physical System.

6
Background and Purpose
•Rapid progress and spread of the Internet of
Things (IoT), cloud computing, and artificial
intelligence are bringing innovative changes.
•Large, medium, and small enterprises, as
well as non-IT enterprises, have various
chances of IoT innovation; however, they
face various difficulties.
Engineering method for systematically
designing “IoT innovation” is required

7
Purpose: IoT Innovation Design Method
The engineering method provides design
viewpoints, charts (frameworks), and a
systematic design procedure without
relying on individual tacit knowledge and
specialists’ skills (e.g. Steve Jobs).
Step 1
Chart 1 Chart 2 Chart 3
Step 2 Step 3 Step 4

8
Expansion of Engineering Design Method
Innovation
Design
Service Design
Product Design
Software Design
• Structured Design
• OOD/OOA
• UML
Business Process Design
Dynamically changing
and competitive
environment

9
Why is IoT Innovation Design Required?
Marketing
Planning
Development
Operation
Marketing
Planning
Development
Operation
Old Approach
(Waterfall)
The Same TeamDifferent Teams
New Approach
(Agile)

10
Contents
•Evaluation
•Summary

11
LITERATURE REVIEW
•Business Model Design
•Upstream System Design
•IoT Business System Design

12
Research Activities on Business Model
Source: DaSilva & Trkman [7]
Amit & Zott [8],
Chesbrough [9],
Teece [10],
Zott & Amit [11],
etc

13
Business Model Design
• Business model canvas [5] and business model navigator [13]
• Aceti & Singarayar [15] proposed a business model design method
based on a business model framework.
• Dijkman et al. proposed a business model framework for IoT
applications based on the business model canvas [14].
Dijkman et al.[14]

14
Upstream System Design including Business
• Business process modeling notation (BPMN [17])
• Goal orientation in requirements engineering: B-SCP [12] which has
been proposed as a method to analyze requirements of business
systems by goal orientation.
• Service science and service engineering, design methods:
Service Blueprints [20] and DFACE-SI [21].
BPMN [17]

15
IoT Business System Design
•Glova et al. applied the technique of requirements
engineering to the design of IoT business system based on
e3-value [25].
•Ide et al. proposed a design method for IoT business
system by extended business model canvas and system
model canvas [26].
•We have proposed the IoT service business ecosystem
design PICMET2016 [2] which features ecosystem design
and project risk management. But, it was complicated for
practical use.
•There are no measure for evaluation and comparison for
various IoT business design methods.

16
IoT Business System Design
•This paper shows general requirements
and perspectives that IoT innovation
design method should satisfy.
•This paper proposes a concrete IoT
innovation design method (a revised
version of PICMET2016 [2]) then
evaluate it according to these
requirements and perspectives.

17
Contents
•Evaluation

18
Five Requirements of IoT Innovation Design Method
A) Effectiveness, efficiency, and comprehensiveness
Thinking and discussion in individuals and groups become more effective,
efficient and comprehensive using IoT domain knowledge.
B) Simplicity for continuous PDCA cycle
For reviewing in the continuous PDCA cycle, it is desirable that the design
method be as simple as possible and easy to understand.
C) Standardization and customization
It is necessary to establish the design method as a common language (a
communication tool) between stakeholders.
D) Verification of design output
In order to be an engineering design method, a V&V (Verification &
Validation) method is required.
E) Evaluation of design method
In order to evolve the design method, it is necessary to evaluate the
effectiveness of the proposed design method.

19
Value
Design
System
Design
Strategy
Design
Project
Design
Innovation Design
Value Proposition
Intelligent Processing
Architecture
Competitive &
Cooperative Strategy
Risk Management
Four Perspectives of IoT Innovation Design Method

20
Four Perspectives of IoT Innovation Design Method
A) Value Design: Value Proposition
It is important to clarify what value you would like to
propose to whom. In bad cases, IoT itself become purpose.
B) System Design: Intelligent Processing Architecture
It is necessary to clarify how to derive proposed values
from IoT sensor data by using AI in system design.
C) Strategy Design: Competitive & Cooperative Strategy
It is necessary to consider both competitive strategy and
cooperative strategy in business ecosystem.
D) Project Design: Risk Management in IoT transformation
The task of identifying specific risks in advance and taking
countermeasures is extremely important.

21
Contents
•Evaluation

22
Proposed IoT Innovation Design Method
Step1: Clarification of customers and
proposed value
Step2: Relationship among data and
proposed values
Step3: Design Open & Closed
Strategy
Step4: Risk Management for IoT
Innovation Project
Value Proposition
Canvas
SCAI Graph
Open&Closed
Canvas
Project
FMEA
Business Model
Canvas
Procedure Charts
Value Design
System Design
Strategy Design
Project Design
Transformation Project

23
Step 1: Clarification of customers and proposed values
Value Proposition Customer Profile
Fit
Oversight of
Abnormalities
Increased burden
of caregivers
Autonomy of
Elderly Person
Family Relief
Abnormality
Detection
Decreasing burden
of caregivers by
remote monitoring
Autonomy Promotion by
Smart Speaker Interaction
Remote
Monitoring by
Family
Customer
Job
Customer Pain
Customer Gain
Product
&Service
Pain Reliever
Gain Creator
Watching &
Interaction
Service
Autonomy
Promotion Service
Optimal
Scheduling of
Visiting Care
Visiting
Care
Service
ラベルラベル
ラベルラベル
label label
label label
KP VP
KR
KA CR CS
CH
CS RS
Visiting Care
Service
Company
(End User:
Elderly
Person)
Watching &
Interaction
Service
Autonomy
Promotion
Service
Remote
Monitoring
and
Visualization
Information
Sharing
Know-how of
Watching &
Interaction
System
Development
Manufacturer of
Watching
Device
Data Scientist
Watching & Interaction Service Fee
System Development & Operation Cost
Consulting
Consulting Fee
Behavior Model
DevelopmentManufacturer of
Smart Speaker
Connection with
Care Service
Company
Consultant Employment Cost
Device Procurement Cost
Ideation Method
(KJ Method)
Value Proposition
CanvasBusiness Model Canvas
Step1:Value Design
Step2: System Design
Step3: Strategy Design
Step4:Project Design
• Ideate using the KJ method.
• Clarify customers and proposed values using value
proposition canvas and business model canvas.

24
Step 2: Relationship among data and proposed values
The relationship between sensor data and
proposed value is clarified using SCAI graph.
SCAI Graph
Step1:Value Design
Value
Proposition
Analytics&
Intelligent
processing
Connection
Sensing
Watching
Service
Autonomy
Promotion
Home
Appliances
Controller
Smart Speaker
Visiting
Care
Schedule
Elderly
People
Profile
Home
Appliances
Operation
Elderly
People
Interaction
Anomaly
Detection Behavior
Analysis
Optimal
Scheduling of
Visiting Care
Visiting
Care
Record
Optimization
Visualization of
Daily Rhythm
Communication
with Family
Human Input

25
Patterns of Analytics & Intelligent Processing
Pattern Explanation
Visualization Visualize huge data as forms in which human
can easily recognize. Human makes final
decisions based on visualized data.
Identification by
Monitoring and
Searching
Identify some data that satisfy specific
conditions among huge data by automatic
monitoring and searching.
Estimation and
Prediction based on
the Model
Estimate and predict some situation based on
the models which are constructed by stochastic
methods and/or machine learning methods
from huge data.
Optimization Make optimal decisions and plans using
optimization techniques from information
derived from “Identification by Monitoring and
Searching” and/or “Estimation and Prediction
based on Model”.

26
Step 3: Design Open & Closed Strategy
ProcurementEngineeringFull-turnkeySolution
TechnologyAssessment
Open Area
Closed Area
Core Resource
Knowledge
Resource
Procurement
Resource
Deployment
Resource
Elderly Person Living in Home
Data Scientist
Researcher of
Elderly person
interface
Application
Developer
Visiting Care
Service Company
Manufacturer of
Watching Device
Manufacturer of
Smart Speaker
Know-how of Watching
& Interaction
Connection with Care
Service Company
Watching & Interaction
Platform
Market
Step1:Value Design
Design open & closed strategy in the business
ecosystem using the open & closed canvas.
Open & Closed Canvas

27
Step 4: Risk Management for IoT Transformation
Type Failure Mode Cause Effect Action
Basic
Tech.
(A)
Elderly don’t
respond much to
smart speaker.
Lack of
understanding of
elderly behavior.
Difficult to realize
watching &
interaction service.
Sufficient investigation
of elderly behavior.
Basic
Tech.
(A)
Behavior model is
not accurate.
Bad accuracy of
data. Behavior is
too diverse.
Difficult to realize
optimal scheduling
care plan.
Focus on visiting care
records.
Operati
on Tech.
(C)
Nonconformity of
smart speaker
APIs.
Various
applications and
APIs.
Necessity to
develop for many
types of speakers.
Development limited to
a specific smart
speaker.
Market
(D)
Small and limited
number of user
companies.
Limited benefits
for companies.
Difficult to continue
investment as a
business.
Operate within
additional features of
existing service.
Organiz
ation
(F)
No synergy effect
with existing
system.
No merit for
organization of
existing system
Connection with
existing customers
can’t be used
Same person
responsible for new and
existing businesses
Step1:Value Design
Assume risks of the IoT transformation project
and prepare countermeasures with Project FMEA.
Project FMEA (Failure Mode and Effect Analysis)

28
Step 4: Risk Management for IoT Transformation
Step1:Value Design
Using difficulty map, designers can extract possible
risks as “failure mode” by forced association.
Difficulties of
IoT Innovation
The sea of Darwin
Scalability
Computing Resource
Device Management
Device Authorization
Interoperability
Regulation
Security &
Privacy
Career
Portability Many Standards
Market Size
Gaps of
Operators
Data Quality
Charge
Cost of Device
& Communication
Many
Stakeholders
Accountability
Application
Management
Unexpected
Trouble
Distribution
of profit and loss
Analytics
Resistance to
change
Prejudice based
on failure
experience
Mismatch
of Evaluation
Lack of
cooperation
(A) Basic
Technology
(B) Technology
Management
(C) Operation
Management
(D) Market & Customers
Need and Seed Fit
User Experience
Solution
Fragmentation
Social Acceptance
(E) Business Strategy&
Business Ecosystem
Speed&
Agile
(F) Organization
Business Synergies
Service Continuity
Data Utilization
in Field
Cost and Return Balance
Difficulty Map of IoT Transformation

29
Contents
•Evaluation

30
Evaluation (1) : Five Requirements
Requirement The Proposed Method
(A) Effectiveness,
efficiency, &
comprehensiveness
The method introduces an complementary chart
(SCAI graph) that has domain knowledge
peculiar to IoT innovation in addition to Business
Model Canvas (BMC).
(B) Simplicity The method based on simple and standard
charts (BMC). SCAI graph becomes simple after
refinement of the original SCAI Matrix.
(C) Standardization
and customization
The method based on simple and standard
charts (BMC).
(D) Verification Under construction. The basic concept was
presented in IEEE GCCE 2016 [1]
(E) Evaluation Under construction. Awareness of various
chances and risks using the design method can
be measured by the cognitive approach.

31
Evaluation (2) : Four Perspectives
Design Method Value Design System Design Strategy Design Project Design
Business Model
Canvas (BMC) for
IoT [Dijkman:14]
Value
proposition (VP)
is a main
feature of BMC.
Channel (CH)
slightly suggests
system
structure.
Partner (KP) and
key resource (KR)
slightly suggest a
strategy.
Key activity
(KA) slightly
suggests
project design.
IoT business
modeling based
on e3-value
[Glova: 25]
e3-value model
and profitability
evaluation.
Business
process and
information
system
viewpoint.
No particular
mention.
No particular
mention.
Lean design
methodology [Ide:
26]
XBMC
(eXtended
BMC)
SMC (System
Model Canvas)
No particular
mention.
No particular
mention.
The
proposed
method
BMC and value
proposition
canvas for
value design.
SCAI graph for
identifying
relationship
between data
and value.
Open & closed
canvas to clarify
competitive and
cooperative
strategy in
ecosystem.
Project FMEA
for recognizing
future
chances and
risks.

32
Evaluation in Lectures and Workshops
•More than 160 IoT professionals have joined my lectures
and workshops of IoT Innovation Design Method.

33
Summary and Contribution
What is IoT Innovation Design Method?
Why is IoT Innovation Design Method Required
General Requirements
and Perspectives of
IoT Innovation Design
Method
Proposed IoT
Innovation Design
Method which
consists of 4 steps.
Evaluation
PICMET2016
Refined
Version
New
New
Future Work: Quantitative evaluation of IoT innovation
design method by experimental design workshops.

34
References
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