We’ve all seen the stats: By 2020, there will be 50 billion Internet-connected devices; 200 billion connected “things,” from processors to utility meters to cars; and approaching $15 trillion in created value related to the Internet of Things (IoT).
But the IoT isn’t six years off. Already, there are more Internet-connected devices than there are people on Earth. Already, forward-looking companies are using IoT sensors to track product components through the supply chain, monitor train wheels and track beds in freight transport, control cranes working near skyscrapers, manage the maintenance of wind turbines, and more.
What actions should organizations be taking to harness the power of the IoT?
From optimization to transformation
In the Optimization phase, organizations should leverage existing devices, invest in foundational technology, and update corporate policies. In the Transformation phase, they need to join the revolution.
Leverage existing devices—The fastest and least disruptive way to take advantage of the IoT is to start using low-cost, already-available sensors and connectivity options. You can apply these at key transaction points in existing processes such as sales, logistics, production, and maintenance.
Look for places you can add IoT technology to your existing physical infrastructure to reduce costs or improve operations. That might include sensors that control HVAC systems to lower operating costs or that measure machine tolerances to enable preventive maintenance.
Or, think about how you can capture real-time at the edge of the network and combine it with existing back-end data. That might involve adding a customer’s location to their transaction history or stated preferences to enable real-time personalized offers.
Invest in foundational technology—The IoT isn’t just about devices. It’s real value lies in the real-time management of large volumes of data, plus the advanced analytics that let you not only understand past actions but also predict future trends. To that end, you should be investing in these technologies:
- Big Data tools—Billions of connected devices will mean a quantum leap in the variety, velocity, and vastness of data—some 40 trillion GB by 2020, according to IDC. To benefit from that data in as close to real time as possible, you’ll need the speed and capacity of in-memory computing.
- Predictive analytics—Data adds more value the better you can analyze it to gain new insights. Increasingly, the IoT will yield up data that can enable you to forecast future trends. Predictive analytics can lower costs and improve operations by anticipating equipment failures, or drive new revenue by foreseeing customer demand.
- Cloud solutions—As IoT data scales, the supporting IT infrastructure will have to scale along with it. Cloud computing can let you avoid the capital expense of building out data centers, while giving you the flexibility to scale rapidly. It also gives you options for disseminating IoT data in real time to the people on the front lines who need it.
Update corporate policies—One impediment to taking full advantage of the IoT is the proliferation of incompatible device, data, and communication standards. Your organization should adopt open standards to ensure effective data interchange and collaboration across silos. Likewise, as you use the IoT to capture and communicate more data, keep in mind privacy regulations and attitudes.
Join the revolution—Over the next five to seven years, the IoT will drive transformation across industries. Instead of adding sensors to products, companies will create products with sensors built in. Instead of adding devices to operations, organizations will design their processes to ensure data capture and communication across silos.
Look for ways you can be part of this transformation. For example, you might use the IoT to capture information on how customers consume your products in order to shorten innovation cycles, better meet current customer needs and emerging desires, and drive higher revenues over time.
Or, you might partner with organizations outside your sector to offer new services and create new revenue models. Imagine this scenario: While driving, your blood sugar drops dangerously low. Your IoT-enabled bracelet informs your car, which alerts your doctor and directs you to the nearest fast-food restaurant, where your e-wallet qualifies you for a special promotion and pays for your order—all automatically.
Read more about how to build a strategy for the Internet of Things in this interactive eBook by David Stephenson.
Want to learn more about harnessing the Internet of Things? Check out the Networked Economy forum at SAPPHIRE NOW, June 3 – 5 in Orlando, FL.