Internet of Things (IoT): All you need to know to lead the Wave of Change
Of the internet and devices, today we are all surrounded with technology. Time and again, from industrial revolution to dot com revolution, developments across industries have changed the way we live, do business, communicate and survive.
The latest buzz slated to change the world is the Internet of Things (IoT).
What is IoT?
With proliferation in the number of devices, increasing penetration of the internet and readily available infrastructure, the concept of IoT is gaining momentum.
The Internet of Things (IoT) refers to machine-to-machine (M2M) technology powered by its key ingredients- network connectivity, security and cloud infrastructure. It is a powerhouse of useful information for people, businesses, and institutions gathered from data collected from multiple sources. In simple words, the Internet of Things is refers to the large network of connected devices bringing people and organizations across the globe together.
What is leading us to the IoT?
At the heart of this concept are devices- sensors present across computers, equipments, wearable devices and more. Today, approx. 4.9 bn. devices are connected to the internet. This is expected to increase 400% to 25 bn. in 2020.
Some factors facilitating the growth of IoT are:
Declining cost of sensors, connectivity, and data processing power– These are all low cost ingredients and make the investment in IoT more appealing as organizations are ought to gain much more than what they will invest. As sensors get smaller and cheaper, they are paving way for a ubiquitous network which is efficient, low cost, and powered wirelessly.
Pressure to invest in technology-As competition turns fierce, and as with industry-wide adoption of latest technology, organizations are under pressure to invest in technology to gain competitive advantage. Th C-suite is constantly tracking tools which are innovative and enablers to beat competition.
Launch of IPv6– Internet-connected devices utilize the communications protocol IPv4. However, with IPv4 addresses running out of their maximum limit of 4.3 bn. in 2011, IPv6 protocol was launched. It can sustain 3.4 x 1038 devices, or 340 Tn. tn.tn. – a seemingly infinite number. This has facilitated development of the IoT.
Growth in machine-to-machine (M2M) connections – As the world is progressing towards a network of interconnected devices, omni-channel interactions are leading to huge chunks of data- largely unused. This presents an opportunity to use them for better decision making and newer business models.
Increased adoption of Smartphones and wearable technology –Smartphone usage has increased by 45% worldwide in the past 2 years. This is estimated to grow threefold over the next 5 years to 6 bn. smartphones in use by 2020. Poised for even greater growth is the wearable technology industry. This covers a plethora of devices- from watches and fitness wristbands to smart glasses and sensor-imbedded socks. From 33 mn. today, wearable are expected to grow fivefold in the next 5 years to over 150 million in 2020. This presents an attractive landscape for the IoT industry.
Despite this development, there still is a gap between aspirations and investments. Poor infrastructure, poor access to capital, lack of demand etc. are a few reasons. Moreover, the C-suite are ready to invest in IoT, however, they don’t have an IoT strategy in place yet.
What are the implications for businesses?
First coined in 1999, IoT is at the heart of our transformation journey to an information based economy. Using IoT, businesses will be able to know more about their customers, clients, employees and other audiences than ever before. IoT will also call for collaboration across the entire organizations to gain competitive advantage.
Opportunities Galore with the IoT
The IoT presents huge opportunities for business across the globe. A few of them are listed as under:
Understanding and Tracking of Consumer Behavior: IoT will enable organizations collect and analyse data like customer traffic flow , purchasing patterns and decisions
Enhanced Productivity: IoT will allow organizations achieve operational excellence. They can align processes to minimize waste and maximize output.
Optimization of resource usage: IoT will facilitate data-driven resource utilization and optimization.
Enhanced security: With greater connectivity and data processing, IoT will lead to better security.
Enhanced decision making: Quality data can be converted into useful information. This can be used making better decisions
New products and services and new revenue streams: Using information about consumer needs and purchasing decisions, organizations can customize/ formulate new offerings to generate new revenue streams
Productive Communications: Targeted communication can be achieved with readily available data about the consumer.
However, it is indispensable to have safeguards in place to such an IoT strategy designed to capture and analyze customer data to protect individual privacy.
Privacy: IoT enables capturing customer data- data from health devices, smartphones, wearable devices and much more. A lot of this data is personal. Applications would be required to strip out consumer-specific information before uploading the data.
Security: With a lot of sensitive data online, networks need to be secured against hackers who may falsify IoT transmissions to disguise a theft.
Data Handling: With growing no. of devices, the amount of data is growing manifold. A significant challenge brought along by IoT is building a database and network infrastructure to accommodate the upsurge in M2M data.
Data Interpretation: IoT will open the gate to flood of data. With everyday data being captured, it will be a challenge to extract useful data sets and interpret them to make intelligent business decisions.
IoT is not just about devices, it is more about human resources. The biggest challenge for organizations adopting IoT will be having the right people in place for using this blooming technology to further the organization’s vision and business goals.
This also has implications for the C-suite:
CEO: Review the business model to adapt it to the digital platforms
COO: Embrace IoT to cut costs and increase Operational efficiency
CFO: Garner revenues and increase margins with technology investments
CTO: Innovate using IoT to differentiate themselves from Competitors
CMO: Utilize customer information to engage better and offer customized solutions
At the same time, this will strengthen position of Legal dept who would drive initiatives to protect customer privacy.
However, all this cannot happen without Collaboration across departments and the C-suite. Hence, IoT will be powered by Collaboration across the organization.