Gartner’s estimates an upsurge of 288% number of IoT devices by 2020 compared to 2016. On one hand, a lot of buzz is going around consumer IoT, as more people are opting for smart homes, wearables etc and on the other hand industries are skeptical about IoT and the ROI associated with it. But do you know that majority of the devices what Gartner mentions emerge from the Industrial Internet of Things?
These large number of devices in Industrial IoT either optimize or grow businesses. I call these opportunities “Digital Business Optimization” and “Digital Business Growth”. For businesses, it is challenging NOT to lag behind their competitors in order to survive the dynamic markets in this era. Seizing the opportunities what IoT promises and innovating constantly, are vital for the future existence of many organizations.
How can your business prosper with IoT in general?
As mentioned in , businesses can explore the opportunities in several ways:
Connect devices, gather and analyze data to optimize operations. For example, increase asset utilization by optimizing downtimes using predictive maintenance and service or decrease energy consumption costs by regulating machine performance and idle times or reroute the traffic in real-time on roads in busy cities to avoid congestions by monitoring and analyzing the collected data from IoT in Smart Cities.
Engage customers to develop long lasting business relations by providing services on individual basis. For example, collecting data from the connected products (say washing machines, cars, kitchen gadgets or industrial machines) give OEMs a way to understand the usage behavior of the consumer and proactively suggest relevant, not so obvious features and also suitable maintenance options. Also, in retail sector, use heat maps generated by IoT in shopping areas combined with individual purchasing behaviors of customers to make them aware of relevant deals.
Integrate with in enterprise ecosystem to exchange data across the value chain and grow collectively. For example, use track and trace applications to exchange information about goods across the supply chain in real-time to take business decisions dynamically. In other words, if a supplier’s truck of food products is on the way to deliver and has got the temperatures inside the container unsuitable for further processing of the food products, this information can be supplied to the processing company, which in turn can adjust the end product delivery schedules.
Innovate new business models to generate more sustainable revenue streams. Many companies have been selling products and the sales cycle ended immediately after the selling of the product. With the IoT technology, it is possible to generate revenue depending on the usage of products rather than selling products. In that case, even the maintenance and service of the products belong to the OEM. This model generates a continuous revenue for the OEM and the customer has no hurdle of large initial investments.
As IoT spans across all industries and sectors in some way or the other, these examples are just the tip of an iceberg of opportunities that IoT enables. Stay tuned for the upcoming blogs from me to learn more about them.
What is holding back the IoT adoption?
Along with the compelling opportunities associated with IoT, there are also challenges slackening the adoption of IoT. Genpact Research Institute explains top challenges faced by the businesses as:
- Data security
- Legacy systems
- Insufficient technology skills of IT staff
- Data quality
- Data privacy and confidentiality
It is not bizarre that every new technology comes up with plenty of opportunities co-existing with challenges which makes it difficult to embrace for early adopters. It is also mentioned in surveys [3,4] that early adopters who succeed to adopt a new technology, end up with a significant competitive advantage over their competitors as they get a chance to be more creative before the technology gets matured and more accepted.
By now, the compelling motive for organizations to adopt IoT might be clear. But why is the adoption still lagging behind? Latest research and surveys explain the reasons as inadequate knowledge and lack of a convincing plan to adopt IoT.
The recent Genpact research  supported by Industrial Internet Consortium states that though a large majority (82 %) of the surveyed businesses believe Industrial IoT is critical for their future success, only 25% of the surveyed industrial businesses call themselves as leaders, who are also the early adopters of the IoT technology. Interestingly, all leaders mentioned that they have an IoT Strategy in place and most of them are happy with their execution. The remaining 75% have not yet defined IoT Strategy for their organization or not planning for one.
How can your business embrace these opportunities despite the challenges IoT poses?
A carefully structured approach, combined with effective teaming between different C-levels (CIO, CTO, CDO, COO, CSO etc.), an extended partner ecosystem and a platform approach increases the chances of success.
“Strategy without tactics is the slowest route to victory, tactics without strategy is the noise before defeat.”
This means having an IoT Strategy for Enterprises is very crucial for their future business success and it is equally important to plan its execution appropriately. Organizations shall identify the most effective and suitable category of opportunities provided by IoT for their business and develop a relevant Enterprise IoT Strategy to fully utilize the potential of IoT and gain a competitive edge over your competitors.
Together with my colleague Jürgen Jakowski, I want to create a larger set of blogs that help customers consider the different aspects of their IoT journey. Jürgen has started a blog series called Characteristics of an Enterprise IoT Strategy with the first blog that kicks-off the journey .
In the upcoming months, we will continue with this series and complementary blogs that dig deeper into specific aspects.
The Internet of Things has the potential to dramatically improve the way your business runs. The stakes are high for not taking advantage of $19trillion [6, 7] value IoT is estimated to generate between 2013 and 2020. It is time for businesses to engage with IoT enablers to elucidate obscure topics, clarify questions, get familiar with the technology and business related options.
There is undeniable need of:
- Transparency on:
- IoT-relevant benefits & challenges
- Relevance to your industry or sector
- An Enterprise IoT Strategy that helps keeping complexity manageable
- A set of methods and structured approaches that support IoT projects
I believe this and upcoming blogs can shed some light into this. Certainly, there is much more to say about this, which is why Jürgen and I have planned to come up with a comprehensive series of blogs in the next months.
If you have any feedback so far or if you want to provide me with your current concerns or ideas for upcoming blogs, please use the comment function below or get directly in touch with me through SCN or Twitter.
References and helpful reads: