Download - Internet of Things: How Finance Should Embrace the Coming Flood to Drive Top-Line Revenue Growth
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Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Internet of Things: How Finance Should Embrace the Coming Flood to Drive Top-Line Revenue Growth
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• Recognize the opportunity IoT will present in the short and near-‐term
• Recognize companies driving new revenue streams for their businesses
• Understand implica=ons of mone=zing IoT services on the finance department
• List ques=ons finance professionals need to ask if IoT is a possibility for their business
Learning Objectives
After attending this event you will be able to:
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Proformative Event Notes
• The slides are available under “Handouts.”
• We will send you links via email to the presentation and the recording within 24 hrs.
• For CPE: Answer all polling questions and remain for the duration. CPE Credits awarded in 24 hours. – Questions on CPE? Email [email protected].
• We want to hear from you! Ask questions for the Q&A session at the end of the event.
• Please take the short survey at the end of the webinar.
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Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Internet of Things: How Finance Should Embrace the Coming Flood to Drive Top-Line Revenue Growth Mike Beamer, President, goTransverse Mike Murphy, CPA, Chief Business Officer, goTransverse
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Ready to Generate New Revenue from IoT?
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Internet of Things (IoT)
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What is it? Marketplace Impact
Mone=za=on & Cos=ng of IoT
Financial & Accoun=ng Implica=ons
Internet of Things
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What is the Internet of Things?
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• Machines, devices, structure, living things, & physical environments
• Physical world beginning to “talk to us”
Talk
Act Listen
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Factors Enabling the Revolution
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Low Cost Sensors & Actuators
Cloud Elasticity
Mobile Computing
Industrial IoT
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Leveraging IoT
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Services
Revenue Costing & Optimization
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Monetizing IoT
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Service Subscrip9on Usage Maximize Revenue
$-‐
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Usage Revenue
Subscrip=on Revenue
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Future IoT Impact
99% of physical objects will eventually become part of a connected network and IoT
has the potential to generate 19 trillion in value!
- Cisco Systems!
IoT products/service suppliers with generate incremental revenues exceeding $300 Billion by 2020. !
- Gartner!
The IoT Market, valued at $655.8 Billion in 2014, is set to grow at a compound annual rate of 16.9%. !
- International Data Corp!
IoT-ready Businesses Must:!!Ø React quickly to the market!Ø Launch new business models!Ø Package/price for maximum revenue!Ø Forge new distribution channels!Ø Recognize Revenue, esp with
consumption-based offers!
!
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Polling Question
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CASE STUDIES: Driving New Revenue Streams & Cost/Optimization Management
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Hemisphere
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• Featured on GPS World: Hemisphere Debuts Atlas GNSS Correction Service
• Reinvented a storied brand with “disruptive” new product
• Expanded dealer channel offerings – Provided more oppty for selling to
and supporting customers
• Compatible with existing hardware – No need to push upgrades – Sell into competitor’s install base
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International Assets Systems
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• IAS is a cloud-based transportation solution • Featured on Reuters: Top Logistics IT Provider for 3rd Consecutive Year • Dynamic logistics technology segment, volatile pace of change • Using mobile devices to improve timeliness and accuracy of data • Leveraging IoT to keep pace and even anticipate customer ever-evolving
requirements
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Polling Question
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Implications of IoT services for Finance
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Implica=ons of mone=zing IoT services on the
finance department
It will have implica=ons, you will need to look at
bundling
Look at cost of hardware
component over life=me, etc.
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Revenue Implications
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Understand what elements you are selling
ü Impacts on contracts, invoicing, timing, etc
ü Different sources of data (or revenue triggers) impacting revenue & how to capture, measure
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Revenue Schedule/Plan
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ü How to schedule/plan for revenue streams
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Measurement & Monitoring
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What tools will you need to measure & monitor transactional details?
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Margins and Cost Accounting
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ü How will you manage costs for items that are delivered as a service?
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Accounting for Inventory
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ü How will you manage inventory?
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Cost Accounting
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ü Cost deferrals • Example
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Key Metrics
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ü Understanding the impact to EBITA and Cash Flows
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Metrics As Indicators
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ü What Metrics will you use to measure the business?
Pro Tip: Revenue is a lagging indicator
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Changing Business Models
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How to effec9vely communicate a Changing Business Model?
Iden9fy key stakeholders and ensure they understand change taking place
Transi9on and Proforma Results
How to compare Historical Business to Migrated “new” Business
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Thank You
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Q & A
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• Thanks to our speakers
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A Few Final Items
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Sponsor
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Polling Question