Driving 'smart' businesses
with 'smart' things
Driving 'smart' businesses
with 'smart' things
IoT providing tangible benefits to early adopters
Smart connected “things” are important drivers of business transformation. These “things” or IoT (Internet of Things) devices are finding their way into a vast range of industries - from industrial applications to healthcare, environmental monitoring, retail and transportation.
Most of the discussions on IoT tend to centre on the staggering number of devices that are already or will be connected to the internet. Some reports suggest there will be 21 billion IoT devices by 2020. That is several-fold more than the total number of computers and smartphones that are plugged into the internet.
According to IDC, worldwide spending on the Internet of Things (IoT) is forecast to reach US$772.5 billion in 2018, an increase of 14.6% over the US$674 billion that was spent in 2017.
The research agency reported that Asia Pacific, excluding Japan, (APeJ), will lead in IoT spending in 2018 with US$312 billion. This will be followed by North America at US$203 billion and Europe, the Middle East, and Africa (EMEA) at US$171 billion. China will have the largest IoT spending in 2018 (US$209 billion), driven by investments from manufacturing, utilities, and government.
So what do we make of these numbers? Is IoT in the midst of a typical hype cycle that is common in the information technology sector, or is it the real deal? Are companies making money?
It is early days yet but the indications are promising. The Vodafone IoT Barometer 2017/2018 study takes a detailed look at the business transformation that is happening due to the adoption of IoT.
According to it, 95% of adopters say they are achieving tangible benefits. If one were to break down that number further, 28% of those with fewer than 100 devices report a significant return. This goes up to 67% among those with over 50,000 connected devices.
The increase in revenue from adopting IoT averages 19% among all respondents. More than half (51%) say IoT is increasing revenue or opening up new revenue streams.
The report concludes that IoT is driving business transformation with 49% of the adopters using IoT in conjunction with analytics to improve business decision-making. More impressively, 74% agree that digital transformation is impossible without IoT.
According to a piece of research by the Economist Intelligence Unit (EIU), sponsored by IBM and ARM, The Internet of things business index 2017, the industry verticals that have made rapid progress in the use of IoT are the technology sector, financial services, consumer goods and retail.
The infrastructure sector, which includes transport, logistics and telecommunications, takes lead in using IoT to measure and manage internal operations. They are followed by financial services, energy and natural resources and outsourced facilities management.
The EIU study adds that 29% of executives feel that the high investment cost for IoT infrastructure roll-out is a challenge, while 26% of the respondents also feel that security and privacy are major concerns.
An interesting aspect of the buzz around IoT is that it is overwhelmingly device-centric. It is important to note that the real value lies in the data that is generated and not in the devices. Combining this data with other operational data can help to uncover insights and set up predictive models.
However, this is where the challenge lies.
A global study by MIT Sloan Management Review states that analytical capabilities go hand-in-hand with being able to quantify the potential effect of IoT projects. The study also finds that many companies do not have the technical knowledge to manage IoT projects.
While many companies are hiring to improve their IoT talent base, others are engaging consultants or are partnering with other organisations with the necessary skill sets to unlock the full value of IoT.
It is also useful to remember that the 800 lbs. gorilla in the IoT discussion is security.
As mentioned earlier, the value of IoT lies in the data. Companies require an experienced partner to help them protect their data and ensure that their IoT networks are not vulnerable to cyberattacks.
As organisations roll out IoT solutions, a security breach which results in systems going offline or the theft of data could result in costs and reputational damage.
Another factor to consider while selecting partners is that IoT services are highly dependent on network connectivity. Companies that understand and build out these networks, like telecom service providers, can help to roll out innovative services running on efficient networks.
Carefully choosing the right partners is the pathway to success in IoT services.
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