The Internet of Things (IoT) is a hot topic in virtually all sectors—from manufacturing to retail to healthcare—and it’s taking a leading role in enterprise transformation.
Unlocking Valuable Insights
The total number of IoT devices in use around the world has reached 7 billion. This number is forecast to reach around 18 billion by 2022, as most IT decision makers plan to increase their IoT spending, with an average spending increase totaling nearly 18 percent, according to a 451 Research survey report.
For companies, data has always been a critical resource. By connecting billions of previously unconnected physical devices and objects, IoT makes it possible to harvest and exchange large quantities of data. IoT essentially acts as the eyes and ears of companies. It’s up to them to harness its transformative power.
Companies can apply various predictive analytics techniques to the data generated by IoT devices to make predictions about future events and to identify risks and opportunities based on historical facts. The predictive analytics of large IoT data sets has been made possible thanks to the recent advances in artificial intelligence and machine learning, which continue to expand business opportunities beyond anything previously possible.
Another way IoT is driving enterprise transformation is by helping companies improve consumer experiences. Empowered by modern technology, consumers today are willing to pay more for a better experience. The price premium for quality consumer experience is up to 16 percent for products and services, according to a study by PwC based on 15,000 global respondents.
IoT devices allow companies to collect valuable data throughout the entire consumer journey. The collected data can then be analyzed to offer personalized customer experiences that treat each and every customer as an individual with unique needs and desires.
“When you look at the companies doing really well […] it’s because they are the ones who are embracing design, investing in innovation, and working toward perfecting the customer experience,” said David Clarke, global CXO and experience consulting leader at PwC.
Perhaps the greatest value of IoT lies in its ability to boost efficiency, reduce costs, and increase agility in all business areas, from security to inventory and human resource management. For example, Songa Offshore, an international midwater drilling contractor, has been able to reduce unplanned downtime by capturing a whole host of sensor data from many different assets on offshore oil rigs and integrating this data with its operational systems.
The spread of IoT to virtually every sector in every part of the world confirms its role as the leading technology in enterprise transformation, but many challenges that prevent companies from fully harnessing the power of IoT are still present.
Challenges to Overcome
According to a survey of 500 enterprises across the globe by Inmarsat, only about a fifth (21 percent) of respondents have fully deployed IoT-based solutions even though more than four-fifths (82 percent) plan to within two years.
“The research points to clear concerns—namely, security, skills, and connectivity,” commented Paul Gudonis, President of Enterprise Business Unit at Inmarsat. “Developing new technology is complex and draws on many different types of skills. Reliable network service providers that can operate anywhere in the world need to work closely with end-user businesses to make sure they understand their operational needs.”
“On-demand reliable connectivity is essential for today’s global corporations who rely on centralized cloud applications for their business operations, and 4G/LTE offers the flexibility they need. Enterprises have unique needs in terms of reliability and management, and regular local broadband or mobile services simply don’t meet their needs,” said Ivan Landen, CEO of Blue Wireless
Besides connectivity, another barrier that’s been preventing companies from unlocking the insights buried within IoT data sets is the age of their enterprise resource planning (ERP) applications. A survey of 200 IoT decision-makers in North America revealed that IoT data is not integrated with ERP in 84 percent of companies. Because legacy ERP applications are unable to accommodate the amount of data flowing in from IoT devices, the data goes to waste, and its disruptive potential goes to waste as well.
The good news is that off-the-shelf IoT-ready ERP solutions are now readily available, so even small- and medium-sized companies can join the IoT revolution.
Companies in all sectors are experiencing the transformative effects of IoT, which is creating new business models, leading to new opportunities, boosting efficiency and reducing costs, increasing agility, and improving customer experiences, just to give a few examples. The path to enterprise transformation isn’t completely free of obstacles, but new service providers are working tirelessly to overcome them.