The document discusses how finance departments should embrace the rise of the Internet of Things (IoT) to drive new revenue streams. It provides examples of companies that have successfully monetized IoT services and data. The implications for finance include understanding how IoT will impact revenue recognition, cost accounting, inventory management, and key metrics. Finance must also be prepared to communicate changing business models to stakeholders and evaluate performance under new models.

1. Sponsor

2. 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

3. • 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
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6. 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

7. 7
Ready to Generate New
Revenue from IoT?

8. Internet of Things (IoT)
8
What
is
it?
Marketplace
Impact
Mone=za=on
&
Cos=ng
of
IoT
Financial
&
Accoun=ng
Implica=ons
Internet
of
Things

9. What is the Internet of Things?
9
• Machines, devices,
structure, living things, &
physical environments
• Physical world beginning
to “talk to us”
Talk
Act
Listen

10. Factors Enabling the Revolution
10
Low Cost Sensors &
Actuators
Cloud
Elasticity
Mobile
Computing
Industrial IoT

11. Leveraging IoT
11
Services
Revenue
Costing &
Optimization

12. Monetizing IoT
12
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

13. 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!
!

14. Polling Question

15. 15
CASE STUDIES: Driving New
Revenue Streams & Cost/
Optimization Management

16. Hemisphere
16
• 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

17. International Assets Systems
17
• 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

18. Polling Question

19. 19
Implications of IoT services
for Finance

20. 20
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.

21. Revenue Implications
21
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

22. Revenue Schedule/Plan
22
ü How to schedule/plan for
revenue streams

23. Measurement & Monitoring
23
What tools will you need to measure &
monitor transactional details?

24. Margins and Cost Accounting
24
ü How will you manage
costs for items that are
delivered as a service?

25. Accounting for Inventory
25
ü How will you manage
inventory?

26. Cost Accounting
26
ü Cost deferrals
• Example

27. Key Metrics
27
ü Understanding the impact
to EBITA and Cash Flows

28. Metrics As Indicators
28
ü What Metrics will you use to measure the business?
Pro Tip: Revenue is a lagging indicator

29. Changing Business Models
29
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

30. Thank You

31. Q & A

32. • Thanks to our speakers
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A Few Final Items

33. Sponsor

34. Polling Question