Over the past year, I have spoken to a lot of people about their thoughts on the Internet of Things (IoT) — thought leaders, implementation experts, and largely customers.
Conversations with thought leaders reveal the practical work that is happening in this space and where the journey might be headed.
Conversations with implementation experts reveal how this space requires people with diverse skill sets to be able to build impactful applications. They also teach that there is a large void in this space, especially of personnel who can tie together different pieces of IoT to make it a holistic solution.
Dialogue with customers reveals three clear categories:
- Customers who have figured out different applications within IoT that would give them a good return on investment. These are the people who care, currently implementing it for their respective organizations. And these organizations are the probable thought leadership companies in their respective domains.
- Customers who want to understand this space and the advantages
- Customers who don’t believe in IoT
Amid this confusion, the common thread that binds everyone is their curiosity to understand the benefits that IoT could provide to their organization.
The aforementioned conversations motivated me to write articles on what IoT could truly offer. In this article, I have tried to simplify the world of IoT by providing basic information on what it is all about and how it is leading industrial and business transformation.
IoT – Value Proposition
IDC estimates indicate 1.7 trillion dollars generated by IoT in 2020 and the number of devices connected to be 30 billion. But what is IoT? Is it about sensors, cybersecurity, analytics, the Internet, connecting devices, information on fingertips, etc.?
Let’s try and understand this with an example of a manufacturing company. Let’s say that we were original equipment manufacturers of healthcare devices. Traditionally, we ran a lot of business analytics projects like supplier contract management, spare forecasting, customer experience enhancement, etc. Once the device is sold, the only source of information is when it comes back for service or when a customer calls the service center.
Imagine making this device smart by embedding sensors that could relay information from the device when being used by customers. The information in real time has taken businesses closer to their customers by notifying them about device conditions and malfunctions.
IoT – Applications
Now, imagine doing the same business analytics project but with a new source of information that is more real time. This allows you to further optimize inventory and spares, improve supplier contract management, and most of all enhance customer service. Examples could include pushing the right service contracts with lowered risk, calling a customer before the device fails, etc.
IoT, therefore, provides a new digital form of data to drive business analytics and affect the same set of KPIs – risk, operational efficiency, customer experience, etc. The largest benefit of IoT would be new and innovative business models that could impact revenue generation for organizations. In most cases, it would be more customer-centric business models that provide enhanced customer experience and at the same time help reduce cost and risk and improve operational efficiency.
Confluence of Capabilities and Evolution of Business Models
Smart devices as a concept evolved in the 1980s when a group of engineers connected a vending machine that could provide real-time information about the inventory. Although the concept emerged in the 1980s, IoT first appeared in the Gartner hype cycle only early this decade. That is because for any technology, evolution and adoption take time.
It is important to understand that IoT is a confluence of several capabilities –
- Sensors technology
- Device connectivity
- Data transmission
- Processing power
- Data storage
- Analytics (machine learning and AI)
Over the last few years, large strides were made in these areas. All of these areas continue to evolve. They can be categorized into two distinct types:
- Innovation enablers – areas that help provide new solutions (including analytics and sensor technology)
- Technology enablers – those that are essential to implement an IoT solution
Advancement in sensor technology creates avenues to generate new forms of data that were not generated previously. And advancement in analytics platforms helps solve problems in better ways.
A Look Back at the Numbers
As IoT is here to give us a connected future, many of us might ask, “Is the number of connected devices too big?”
The true way of looking at this is not numbers, but in understanding what one can do with this technology. As sensor technology and analytics evolve, we will witness evolution in various forms of data as well as new solutions and optimized strategies.
When Should I Embrace IoT?
IoT brings with it a lot of challenges, the three biggest being –
- Legacy systems and processes
- Lack of skills
There are thoughts leaders in this space who have adopted new business models that would probably aid their profitability and survival. However, today everyone would have to think about the problems that they have traditionally tried to solve and understand if IoT could help them solve those problems in a better way. Thus, from a solution standpoint, it is important for organizations to understand if there could be newer forms of data that could help them resolve problems.
Why the Buzz About Platforms?
With changing times, there will be newer forms of data and more advanced analytics. As this space evolves, it requires a system to enable innovation and collaboration within a company to survive the change and evolve profitably through changing business models. This is the reason why there are several platform companies today.
Platforms offer the ability to:
Manage and monitor data –
- Integrate new forms of data
- Integrate existing business systems
- Quick setup visualization
Enable collaboration –
- Leverage applications and analytics that are built in any part of the organization
- Provide access to newer analytic algorithms that are built in any part of the world
Rapid prototyping –
- Rapidly develop custom applications as proof of concepts
- Enable integration and scaling
Most importantly, they provide the ability to adapt to changing business models and unify skill set requirements.
Looking Ahead for a Connected Future
Although the Internet of Things has broken its infancy cocoon and is bringing in new adopters, a large part of work today remains in the form of POCs. Large-scale applications are still few in number. However, with the rapid ascent of technology, IoT would create newer forms of data and offer solutions to problems that were not solved before aside from making existing solutions more efficient.
It is thus critical for CIOs and CDOs to re-think their investment strategies and run POC projects on what might be beneficial to their organization’s survival and growth.
Watch this video to understand how companies are running business transformation projects and producing digitized products with IoT.
On that note, read more on how you can enable business transformation with IoT analytics.