This is the Impact of Internet of Things on Businesses We tell you how several sectors will benefit from the IoT revolution
By Tasneem Muchhala •
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The Internet has been around for a while but it's only been the product of people – all the images, graphics, videos, data, games, and more were created by the people, for the people, and about the people. Compare the Internet to a well-knit fabric – woven all into us, this internet of people changed the norms of connectivity at that point of time. Well, there is another and more advanced internet, emerging to take the world by storm – it's about connecting things, it's called the "Internet of Things' (IoT). IoT – a term that around 77% people in the world haven't heard, and those who have – don't know the true meaning or rather the power of the platform to change major aspects of everyone's personal and professional lives.
IoT merges the physical world of atoms and digital world of bytes. In simpler terms, all electronic devices are connected to each other in a local area forming a system which is further connected to other similar systems forming a much larger network. According to the analyst firm Gartner, by 2020 there will be over 26 billion connected devices. That's a lot of connections (some even estimate this number to be much higher, over 100 billion). So far only humans have been the connection between these two worlds, now things have the senses to communicate and touch – making the internet, people, and things intersect. Bicycles, supermarkets, sneakers, warehouses, hotel kitchens, coffee makers, washing machines, headphones, lamps, wearable devices, and many more will be connected to the internet and share experiences with each other and people. Take an example of your fitness band – it knows how many steps you have taken, what your heart rate is, notifies you to exercise, communicates on a network, sends data to the cloud, and a lot of other tasks.
On a broader scale, the IoT can be applied to areas like transportation networks – "smart cities' that can reduce waste and improve energy efficiency to help us understand and improve how we work and live. The question that arises here is that if the IoT affects business and its models, how are companies supposed to prepare and respond?
Several sectors will benefit from the IoT revolution – manufacturing, transportation, banks, agriculture, retail, logistics, utilities, oil and gas, defense, healthcare, to name a few. It is also believed that the IoT will give the highest number of business opportunities in the coming years. Market drivers such as expanded and low cost internet connectivity, high mobile adoption, low cost sensors, and large investments are catalysts for the quick adoption and growth of IoT.
Data has always been key for any business making Big Data another growing phenomenon that aids the IoT storm. Big Data integrates digital capabilities to secure business growth and provides capabilities to understand complex data patterns for any business, supplemented by the IoT, enabling businesses to turn this data into insights.
The IoT will impact businesses at a fundamental level:
Allow companies to make smarter products
Consumers are already demanding products that connect and sync seamlessly – from their homes, monitoring medical records, better personal safety, wearables, to using the environment's resources better. Netflix, a company that provides online video streaming services, never showed interest in IoT. They recently delivered a smart solution for their users called "The Switch' – a wireless button, powered by a microcontroller and an infrared transmitter, that can sync with connected devices like television, smartphone, and Philips Hue wireless lighting system. Oh, and it can even order food to power users through their Netflix marathon. This illustrates how important the adoption for IoT has become.
Only time will tell which products will stay in the market but owing to IoT, businesses need to make smarter products if they want to survive in the long term.
Business Operations and Decisions are Made Smarter
Everything is connected to the internet and everything is connected to you, hence working remotely is a high possibility making the decision process faster and more efficient. Take an example of a manufacturing industry, once the goods are reaching replenishment stage, a device sends a trigger to the cloud and notifies you – one can even set to re-order automatically without human intervention. Once these mundane tasks are automated through IoT – there is more time for businesses to concentrate on their core strategy.
Change in Business Model
Investing in IoT facilitates rapid expansions and building new and recurring revenue streams at a relatively low operating cost. Businesses can improve operations, as they gain data insight to streamline and achieve higher automation. This reflects on greater productivity with more time to venture into new product offerings as well as business diversification.
For any advancement, if there are market drivers, there are some barriers too and the IoT is no different. There are increasing security and privacy concerns for IoT, in addition to problems with first-hand implementations and technological fragmentations. Consumers today are smart enough to understand that more the advancement in the IoT, more the vulnerability of the acquired data to be hacked. In a survey conducted by KPMG, 74% of Millennials said they would use more IoT devices if they had more confidence that the devices were secure. Among the other age groups, around 50% of Generation Xers and Baby Boomers have the same view. Companies entrusted with data need to realize that cybersecurity is no longer an internal IT risk, rather a huge strategic business risk.
It's of utmost importance to businesses to bear in mind that digitally charged products allow for survival, growth, and many expansion possibilities along with gigantic strategic values for developer communities. Working together is the need of the hour, more than ever – producers and service providers need to collaborate.The key is to keep experimenting in short and iterative cycles and focus on straightforward solutions rather that complex ones which need a strong foundation to fall back on.
When an IoT-enabled solution is built, it creates a relationship between the business, the product, and its customer. It is an ongoing cycle which improves customer engagement and awareness – something that every company seeks. The benefits of IoT for businesses are endless – they must watch, feel, and listen as the devices out there are doing exactly that, ceaselessly!
Allow companies to make smarter products
Business operations and decisions are made smarter
Change in business model
