We are in the midst of a 20 year business cycle Forrester identifies as the age of the customer. In this era, successful companies will leverage the power of mobility devices, services, applications and big data to transform customer experiences. Internet of Things (IoT) solutions help businesses achieve this transformation using sensors, networks and analytic software to connect objects with computing systems and provide insight and control of the status and activities of assets, products and even people.
Prepare For Emerging Internet Of Things Opportunities
Smart homes, wearables and cool personal gadgets are often hyped in the press. However industrial IoT applications for transportation, logistics and manufacturing have gained initial traction in this emerging market. Examples of IoT use cases are diverse, including:
- The wired farm. Farmers use data from soil monitors, remote irrigation equipment, smart tractors and micro-weather forecasts to determine what to plant, when to plant, when to irrigate, when to fertilize and when to harvest.
- The automated factory floor. Manufacturers monitor industrial assets and equipment as well as enhance factory processes including fabrication, assembly, packaging and warehouse monitoring.
- The monitored healthcare delivery system. Monitoring “cold chain” delivery for suppliers of perishable goods or bio/medical samples is an emerging application. These solutions enable courier services and healthcare logistics providers to monitor the condition of temperature-sensitive samples in real time.
Why should firms deploy IoT solutions? In new research, my colleagues and I maintain that they can achieve three types of business outcomes.
- Optimize utilization of physical and financial assets. These initiatives apply to many industries including remote management of equipment, remote machine diagnostics in manufacturing and healthcare facilities, and improving engine or pump life by running at the correct speed or temperature.
- Differentiate products and services. Firms are integrating smart devices into products to fight commoditization and enhance customer experience. Nestlé’s subsidiary Nespresso provides coffee services to businesses and offers proactive maintenance to ensure the machines are operating properly and have refill cartridges matching customer preferences.
- Transform customer engagement. IoT solutions can change the engagement firms have with customers, shifting from one time product transactions to ongoing service relationships. Rolls-Royce monitors its engines in real time, enabling ground engineers to identify maintenance issues before the plane lands and prepare to make repairs.
Network Availability and Declining Costs Open New Doors
IoT solutions have existed for many years -- so what is fueling current interest in this market? Sensors and microprocessors that one cost hundreds of dollars are now available for as little as the cost of a cup of coffee. Communication costs are also experiencing similar declines, with many wireless operators cutting fees to pennies per month per meter for the cellular link to support smart meters. On the other hand, expanding network availability in mature markets has enabled solution deployment.
IoT solutions can also address regulations to improve energy utilization, manage carbon emissions or improve safety. For example, the United States Rail Safety Improvement Act of 2008 requires railroads to implement positive train control (PTC) systems on heavily travelled routes by 2015. These types of systems prevent train accidents by automatically warning engineers to act or engage the brakes.
Barriers Must Be Addressed to Drive Development Momentum
We are currently in the early stages of IoT solution deployment. But to facilitate additional deployment momentum various issues must be addressed. The most significant barrier to solution adoption is the changes that are necessary to business processes, staffing levels and skill sets. In addition, customers may be concerned with who can access the wealth of information that IoT solutions capture. It will be critical for organizations to ensure that captured data must align with customer preferences, as well as regulatory or compliance requirements.
Title image by Nuno Duarte (Shutterstock)
Editor's Note: Read some tips on how to prepare for the Internet of Things in The Internet of Things: It's Big and It's Here to Stay