Analysis of Business Framework for Internet of Things

Abstract

Objectives: The development of an IoT business according to suitable business framework is essential for the success of IoT businesses. This paper aims to develop a business model framework especially for IoT-based business. Methods/Statistical Analysis: Literature survey interviews with practitioners have been administered to define factors and their attributes relevant to the business model for IoT-based businesses. The survey was distributed to 150 interviewees in Korea. The survey gathered 108 responses. An exploratory factor analysis was deployed to determine whether unobserved factors are underlying the “blocks” (IoT technology, business strategy and process, cost structure, selected business area). Findings: As the result of this study, several variables are excluded in each factor, because their validity and reliability are not acceptable. For example, the factor “IoT technology” contains only 2 variables, “ICT technology” and “R&D capacity”. The other factors have also same result after factor analysis. In case of the factor “Application area”, the variables, “Supply chain”, “Transport”, “Smart home” are chosen because the interviewees believe that IoT business in these application areas will be promising and profitable. Subsequently, the modified business model framework for the IoT business is illustrated as the result of this paper. The result of this study could be changed according to the interest and knowledge of respondents. The framework suggested in this paper can be a good reference to the business developers, who are interested in planning and creating an Internet of Things business as new business opportunities. Improvements/Applications: This paper shows the orientation about how to construct the IoT business model and may serve as a reference guide on how the IoT business frameworks could be formulated. Keywords: Business Framework, Business Model, Communication Technology, Internet of Things (IoT), Research Model