There's a lot of talk right now about the Internet of Things and how it's likely the prime catalyst for the digital transformation of organizations over the next few years. Billions of sensors, and devices with sensors, all generating data in a hyper-connected world where it can be easily shared or transmitted – what could possibly go wrong?

While the Internet of Things holds out promises to revolutionize healthcare, improve energy consumption and more, the area where it will touch most of our lives first is in how we, as consumers, engage with brands.

This is why you need to understand the importance of the Internet of Things beyond the hype. It will change the way you interact with customers in a market that will be differentiated by digital services and unique user experiences.

Millennials, as well as those who embrace digital platforms, have a growing expectation in terms of what they want from an organization. If they provide an organization with information, they expect it to be used to enrich their lives and delight them with the new services or experiences. Of course, they want this with their privacy intact.

I can foresee a world where we need a range of digital services that operate differently based on this broad array of new data that organizations receive, with permission, from their customers. For example, here are three ways you might divide up your services to build out a broad digital experience

1. Triggered Services: A customer is carrying out an activity and you detect that you can take an action. Examples might be a location service detecting when a customer is about to walk by a store and offering them a real-time discount if they went in. Another example could be detecting that someone is running out of credit on their phone and proactively reaching out to them to suggest a way they can top up.
2. Proactive Services: A customer has just carried out an activity and we want to take an action. For example a customer has bought a new product and paid for it with their phone. As a proactive service you could reach out to them with an insurance offer to cover that or an extended warranty for the same item.
3. Reactive Services: A customer is requesting an activity in real-time. An example here might be a loan application or simply a request to check if you have something in your inventory. Here you need to be able to respond almost instantaneously before the person moves on to the next app.

Of course, the third example is not new, although these types of activities will likely move away from PCs and, thanks to mobile, have a significantly greater number of end users. The way the customer wants an answer might also change to channels such as What’s App, Snapchat or some other app that has not yet been invented. The point is that these digital services are already being built now, and the main issues are scale and speed as well as look and feel. The first two are newer areas that require strategic planning.

The hope would be that a customer, who has opted in to proactive services, would turn on on-going automatic sharing of information. You would then get a stream of “activities” from customers that need assessing and responding to almost in real-time, so you can deliver the killer service experience when the right opportunity is detected.

For example, if a customer has bought a product via their cellphone, that data might be shared so you can immediately provide a price quote to insure the new item. What would you need to accomplish that? You need a platform that can handle the receiving of the activities, the processing and analysis of them and a way to make decisions on what action to take and how to take it. Essentially, it requires event stream processing, analytics and decision management. Event stream processing is a core new technology in this new digital direction.

Triggered services are not that different from proactive services, except now you will need to operate on more data and react even more quickly. In addition, there needs to be even more trust built up with the customer, if you want them to share a broader and more constant stream of data with you.

So what do you need to do?

Here are a few of my thoughts:

1. Evaluate every non-digital customer facing service and look for ways to make them digitally accessible and mobile.
2. Identify new digital services that might help to differentiate your organization now, and put into place a plan to work towards delivering them quickly. Be brave!
3. Shift a large proportion of investment from non-digital services to the digital services, and push for the technology investments you need to make them successful.
4. Adopt a mobile first mentality.
5. Think about how you might be able to collaborate with others outside your company to build mashup services that may cover more than what you can cover alone.
6. Consider an Innovation Lab to trial and test services but also to identify where you need to most urgently modernize your enterprise architecture to get rapid and meaningful returns.

Time is not on the side of organizations as this digital disruption gathers pace. I would be interested to hear some of your thoughts too.