Paul Smits, the Director of Finance and Information Management (CFO) of the Port of Rotterdam Authority, was invited by IoT Journaal to write a guest blog about the Internet of Things (IoT). According to Smits, the key is to focus on value for the client – and you shouldn’t be afraid to share data and to experiment.
“In 2000 I was working for a telecommunications company. At that point, mobile internet access was ‘the next big thing’. We spent a fortune on UMTS licences. Everyone knows how that turned out. Today, 16 years later, there’s a lot of hype about the Internet of Things (IoT). On the famous Gartner Hype Cycle, IoT is nearing the apex of the ‘peak of inflated expectations’. They even made a separate Hype Cycle for IoT. Where will we be going from here?
We know we’re hyping IoT. And yet we keep doing it. Why? I recently found out the answer: FOMO. This stands for the ‘Fear Of Missing Out’. A deep-seated psychological phenomenon that can be traced all the way back to our teenage years, or even earlier. I have a few teenagers myself, and I can observe this phenomenon up close. Teenagers want to stay on top of every single ‘important’ thing. And, let’s be honest: so do you and I.
IoT is a solution. A fantastic solution: just as amazing as the Internet and 3G (which is how my kids refer to mobile Internet access). You can do all sorts of things with this technology. Most of the IoT enthusiasts whom I talk with tell me the most amazing stories about everything that becomes possible. The sky’s the limit!
But which problems does IoT actually solve? Once you reach this point in your line of thought, the next logical step is to go ask your clients. Which issues do you run up against that could be solved with IoT? You tend to get one of these two reactions. Some people tell you they don’t have any problems. Everything’s fine the way it is. Those are the same people who didn’t miss the mobile phone when it wasn’t around yet. Steve Jobs was right when he said ‘customers don’t know what they want until we’ve shown them’. The second reaction is the big vista: ‘I’d like to know the exact location of every single container at any given moment’. Or ‘I would like to know the precise depth of every part of the port basin at all times, as well as the local currents and wind force’. An inspiring idea, but too expensive, and it will still take a long time before it becomes reality.
At any rate, 'What do you require?' is a far better question than 'What are all the things you could do with this technology?' The question that I find most useful myself is 'Where’s the value?' If you can guarantee 10 centimetres more depth, a ship can load dozens of tonnes more cargo. And substantially increase its profit in the process. If the ship handling process can be cut by an hour, this saves tens of thousands of euros. And when you know that your container will be ready for pick-up in five hours, you can make a far smarter planning – which allows you to save on transport costs and environmental levies and achieve shorter lead times.
“Parties that don’t innovate will ultimately be left by the wayside.”
— Paul Smits, Port of Rotterdam Authority
And that, basically, is the value offered to us by IoT. Or is it? Because sometimes, what it boils down to is combining existing data. Technology is hardly ever the bottleneck in this process. The big issue is being prepared to share data with third parties and to experiment. There are also parties that make money off the system’s inefficiencies. And that’s the heart of the matter: IoT means that parties that don’t innovate will ultimately be left by the wayside. You don’t want to share information about a container? Then someone else will simply stick a tag on that container. You’re not prepared to share real-time data on ship movements? Then someone else will compile an overview based on all the available data.
In the end, we will have a port where the vessels themselves calculate the optimal shipping routes and flag unsafe situations. Where quay walls, mooring buoys and bollards indicate that they require maintenance themselves, and when they have become available. Where cargo shipments report when they will be reaching a specific location. And where port basins and navigation channels communicate local water depths and currents. This will all be as perfectly normal as 3G is for my teenagers today. We literally can’t miss the boat on this one. But the big question is: how do we get there? And this doesn’t start with technology, but with creating value for the client.”