IT at Work1.1 Zipcar and Other Connected Products More objects are being embedded with sensors and gaining the ability to communicate with the Internet. This communication improves business processes while reducing costs and risks. For example, sensors and network connections can be embedded in rental cars. Zipcar has pioneered the car rental by the hour business model. See Figure 1.14. Cars are leased for short time spans to registered members, making retail rental centers unnecessary. Traditional car rental agencies are starting to experiment with sensors so that each car's use can be optimized to increase revenue. When devices or products are embedded with sensors, companies can track their movements or monitor interactions with them. Business models can be adjusted to take advantage of what is learned from this behavioral data. For example, an insurance company offers to install location sensors in customers' cars. By doing so, the company develops the ability to price the drivers' policies on how a car is driven and where it travels. Pricing is customized to match the actual risks of operating a vehicle rather than based on general proxies—driver's age, gender, or location of residence. Opportunities for Improvement Other applications of embedded physical things are: · In the oil and gas industry, exploration and development rely on extensive sensor networks placed in the earth's crust. The sensors produce accurate readings of the location, structure, and dimensions of potential fields. The payoff is lower development costs and improved oil flows. · In the health-care industry, sensors and data links can monitor patients' behavior and symptoms in real time and at low cost. This allows physicians to more precisely diagnose disease and prescribe treatment regimens. For example, sensors embedded in patients with heart disease or chronic illnesses can be monitored continuously as they go about their daily activities. Sensors placed on congestive heart patients monitor many of these signs remotely and continuously, giving doctors early warning of risky conditions. Better management of congestive heart failure alone could reduce hospitalization and treatment costs by $1 billion per year in the U.S. · In the retail industry, sensors can capture shoppers' pro- file data stored in their membership cards to help close purchases by providing additional information or offering discounts at the point of sale. · Farm equipment with ground sensors can take into account crop and field conditions, and adjust the amount of fertilizer that is spread on areas that need more nutrients. · Billboards in Japan scan people passing by, assessing how they fit consumer profiles, and instantly change the displayed messages based on those assessments. · The automobile industry is developing systems that can detect imminent collisions and take evasive action. Certain basic applications, such as automatic braking systems, are available in high-end autos. The potential accident reduction savings resulting from wider deploy- ment of these sensor systems could exceed $100 billion annually. Turban, Efraim, Linda Volonino, Gregory Wood. Information Technology for Management: Digital Strategies for Insight, Action, and Sustainable Performance, 10th Edition. Wiley, 2014-12-15. VitalBook file. TASK 1 (WEEK 1) IT at Work 1.1 - Zipcar and Other Connected Products (Chapter 1, p14) 1. Research Zipcar. How does this company's business model differ from traditional car rental companies, such as Hertz or Avis? 2. Think of two physical things in your home or office that, if they were embedded with sensors and linked to a network, would improve the quality of your work or personal life. Describe these two scenarios. 3. What might the privacy concerns be?