Will excitement about IoT help telematics shine?

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Telematics is a term originally coined to describe the coming together of telecommunication and informatics. In its widest sense, it is about the use of telecommunications technology to receive information and then affect other ‘things’ remotely. More often, however, it is used in a narrower sense. It represents the combination of telecoms and informatics in vehicles, a use that purists would call vehicle telematics.

Telematics and IoT

You may be thinking that this sounds like the Internet of Things (IoT). And yes, the two are closely related. Telematics has been around since the late 1970s, so you could see it as the grandfather of the IoT, with machine-to-machine (M2M) as the generation in between.  This may sound like splitting hairs, and perhaps it is, but the three are slightly different.

Telematics also has similarities with radio-frequency identification (RFID) technology. My colleague Brad Hathaway noted recently that RFID technology is eminently compatible with the IoT, and there is no reason at all why telematics and the IoT should not co-exist for some time either. One does not need to replace the other. Instead, the two may be more useful together. And just like RFID, perhaps the IoT will provide new ways for telematics to shine.

It is likely that in-car entertainment will be where telematics is most likely to be useful, with the whole purpose of cars being reinvented. There is, however, a warning note: safety campaigners are not yet convinced of the benefits. It may be, in fact, that in-car entertainment is a sideline, and that telematics will be most useful together with IoT technology to provide additional safety features, such as in-car monitoring, predictive maintenance, and fault-finding. Insurance companies are also dipping their toes in the water, with ‘black boxes’ to monitor drivers. The incentive for users is lower premiums for better or safer drivers, and this has fuelled the rise of usage-based insurance.

It is worth noting, however, that early successes in telematics came by starting small. Volvo’s use of telematics really took off when the company enabled drivers to turn on the car heater by phone from a distance. The huge convenience of having your car ready to go on your arrival, without having to warm it up, was a clear winner, with drivers readily able to see the advantages of the technology. 543487525

Driving success

Of course not everything will be or has been a success. Throughout the history of telematics, it has been necessary to experiment and try things out many times to find a successful formula. But starting small can build both expertise and confidence, offering the opportunity to expand, adapt or build based on previous experience.

The key to success seems to be providing concrete benefits first to customers, and then the companies involved. Convenience is probably most important, followed by cash, rather than the other way round. There is, however, no question that money talks, or else why would the insurance sector have been in the vanguard?

One development that has been important in many of the more recent successful deployments of telematics and the IoT is analytics. Early telematics deployments, like Volvo’s heater, were very simple. More recently, added complexity has been possible because of the advent of big data analytics. It is now possible to stream huge quantities of data in real time. And this has opened the door to very different telematics usage, such as some of the insurance uses. Ideas for how streaming, analytics and telematics will together drive progress in motoring include the vehicle booking its own maintenance work, having identified a potential problem, although these may still be some way into the future.

Customers matter

Many of these potential developments depend on analytics for new insights, but also rely on moving decisions from man to machine. This may be harder for people to accept.

And customers do matter. Consider the recent fuss over Apple’s move to wireless earbuds. It is not yet clear whether customer dislike of expensive wireless earbuds will turn out to be a problem. Worth noting that few of Apple’s other innovations have failed in the face of overwhelming negative customer opinion.

It is common to cite skills shortages as the main factor holding back IoT (and, by extension, telematics) deployments. But perhaps this may not be accurate. Technology has to serve people, and you can only go as fast as the market will permit. Excitement about telematics and the IoT, however, is certainly showing no signs of slowing down just yet.

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Håkan Carlund

Having lead an organization through a digitalization/analytics journey in my earlier roles, I today see companies taking their first steps choosing different ways. As Analytics Advisor at SAS, I engage in discussions finding the more effective ways. The big changes remain and the great values are often yet to be created. "How?" is the common question. I am passionate in that discussion. Beside this, I spend as much time as possible sailing!

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