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Internet of Things: How Finance Should Embrace the Coming Flood to Drive Top-Line Revenue Growth

•  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  

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After attending this event you will be able to:

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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?

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  

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  

Factors Enabling the Revolution

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Low Cost Sensors & Actuators

Cloud Elasticity

Mobile Computing

Industrial IoT

Leveraging IoT

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Services

Revenue Costing & Optimization

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  

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!

!

Polling Question

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CASE STUDIES: Driving New Revenue Streams & Cost/Optimization Management

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

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

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.  

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

Revenue Schedule/Plan

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ü How to schedule/plan for revenue streams

Measurement & Monitoring

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What tools will you need to measure & monitor transactional details?

Margins and Cost Accounting

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ü How will you manage costs for items that are delivered as a service?

Accounting for Inventory

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ü How will you manage inventory?

Cost Accounting

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ü Cost deferrals •  Example

Key Metrics

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ü Understanding the impact to EBITA and Cash Flows

Metrics As Indicators

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ü What Metrics will you use to measure the business?

Pro Tip: Revenue is a lagging indicator

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  

Thank You

Q & A  

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A Few Final Items

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Polling Question