Today, the world we live in is powered by data. Almost every aspect of our lives gathers data – from smartwatches that record our every step, to smartphones that record our exact location, know what our hobbies are, or understand what we are considering buying – our personal lives, interests and interactions are monitored constantly.
On the positive side, the data collected is helping us all to lead more connected lives and provide us with valuable insights into ourselves and others.
Powering a lot of the data collection is the Internet of Things (IoT). The IoT market continues to grow at an astonishing pace. Mordor Intelligence predicts that the IoT market will be worth USD $1,386 billion by 2026, up from USD $761.4 billion in 2020.
For consumers, the IoT for the most part benefits everyone. The data collected helps us to keep on top of our day-to-day lives and keeps us connected to things and people that matter the most to us.
In business, this is no different. IoT devices monitor, record and transfer data that allows businesses to monitor important business processes, provide valuable insights, boost efficiency, and allow companies to make more informed decisions.
Businesses use the data collected by IoT connected devices and machines in order to make decisions based on what is actually happening in their business rather than what they think is happening. The amount of data that businesses can collect is almost endless and they rely on analytics and artificial intelligence (AI) programmes in order to quickly process the data and return valuable insights that can be actioned.
What is the Internet of Things?
Before we dig into the benefits of the IoT for businesses, we first want to provide a clear definition of the IoT and what it actually is.
According to Matthew Evans, the IoT programme head at TechUK, “Simply, the Internet of Things is made up of devices – from simple sensors to smartphones and wearables – connected together.”
Kevin Ashton, a product manager at Proctor and Gamble is credited with coining the term Internet of Things back in 1999.
“The IoT integrates the interconnectedness of human culture — our ‘things’ — with the interconnectedness of our digital information system — ‘the internet.’ That’s the IoT,” summed up Ashton on ZDNet.
You can read more about the history of the IoT as well as some of the practical applications in our Market Leadership post, What is the Internet of Things (IoT) and how does it work?
How will the Internet of Things impact businesses?
Many people will be familiar with IoT connected devices such as home assistants, smart refrigerators and even smart cars, but the applications for businesses are not as widely publicised.
The IoT offers businesses unprecedented opportunities for gathering data and automating processes that have historically been labour intensive. Businesses are using the data to drive their strategy, helping to develop new products and services. Many industries have already embraced the power of the IoT, from doctors to manufacturers, transport to offices, many businesses are already reaping the benefits of IoT devices and the data that can be collected, analysed and actioned.
Here are some of the benefits of the IoT for businesses:
Greater access to data
We’ve already touched on the benefits from a consumer perspective of the data that can be gathered from our personal devices such as smartwatches, phones and home assistants, however, businesses also benefit from that same data.
IoT devices adapted for businesses are able to collect large amounts of data, both in terms of consumer behaviour but also tracking the efficiency of machinery, tracking and tracing inventory, monitoring patient health and more. Businesses can use this data to inform product development, refine manufacturing processes and streamline business processes.
Improved customer engagement
Data from smart devices in the home allows businesses to improve customer service and engagement by allowing them to monitor the performance of these products and provide proactive support. For example, if a product malfunctions and needs servicing, the data can be sent as a message to the customer service system as well as to the customer and a service job can be logged without the need for the customer to file a report, allowing proactive servicing.
This functionality has already been rolled out in smart cars and other connected devices and we can expect to see the wider rollout of this proactive support service, facilitated by the IoT.
Cost and downtime reductions
Businesses collecting more data, using the power of AI or machine learning to interpret that data quickly, results in a reduction in operational costs and downtime. This is particularly true within the manufacturing industry where the failure of a critical component in the manufacturing process could lead to hours or even days of downtime while the fault is identified and fixed. IoT is helping to solve these issues by creating what is known as digital twins – a digital model of a physical asset built from real-time data.
This digital twin tell engineers that a component will fail, where it is located and how to fix it, well in advance of the actual failure. Maintenance can be planned and carried out, reducing downtime and saving cost and potentially reputation.
Laing O’Rourke is already using digital twin technology to build a smarter business. Read the case study here.
In the shipping and logistics industry, businesses are deploying IoT sensors on vehicles and packages to maximise the visibility of supply chains. These sensors detect changes in temperature, light and other attributes relevant to the supply chain, helping to mitigate against delays, disruption and even theft.
Real-time alerts allow the relevant people to be in the right place at the right time and with the right equipment to accept delivery. As well as collecting data in real-time, the historic data collected can also help to improve control over future transportation operations.
You can read more about the sensors used in IoT in our post, What is sensory technology in IoT?
Shorter buying cycles
IoT is helping marketing departments understand more about customer requirements. This data allows them to carry out more targeted advertising, speeding up the buyer’s decision-making process, leading to a shortened buying cycle. Home Assistants such as Google Home or Amazon Echo allow people to place orders simply by using their voice and smart refrigerators take the ordering process out of your hands by placing automated orders when items are running low.
As a result, businesses need to invest in smart technology in order to keep up with consumer demands.
The Industrial Internet of Things (IIoT)
The Industrial Internet of Things (IIoT) is a major trend that is driving the next stage of the manufacturing industry known as Industry 4.0. The IIoT is a rapidly growing sector, with investment in the sector set to grow to USD $123.9 billion in 2021.
Among the biggest benefactors are the areas of manufacturing, supply chain management and logistics where IIoT applications can help with the following:
- Allow inventory to be tracked in real-time
- Tracking yields
- Monitoring downtime
Being able to monitor inventory, check on machinery and predict maintenance issues before they happen has enabled remote working to become a reality, with people only required to be on-premise when issues occur.
Predictive maintenance analysis, as well as helping businesses to identify potential issues before they occur can also be useful to homeowners, providing information about damages and leaks. This can help homeowners to avoid expensive repairs by identifying and addressing issues before they develop.
The IoT is changing the entire landscape for businesses. Those that have been early adopters are already reaping the benefits, especially during the COVID-19 pandemic where many businesses have no option but to work remotely.
As we move forward, we will continue to see further investment in IoT technology by businesses looking to create a competitive advantage, reduce operational costs and deliver an improved level of customer service.