IoT, or Internet of Things, in many ways, is taking businesses by storm, driving the fourth wave of the industrial revolution. IoT is built around man-to-machine and machine-to-machine communication. The operational visibility that it comes up with helps companies and enterprises make efficient and fast decisions to augment quality and optimize resources, money and time.
A report by McKinsey hits the nail on the head when it forecasts that the IoT’s economic impact will escalate to $11 trillion annually by the year 2025. Over and above, IoT devices are slated to escalate to 20-40 billion by 2020.
Smart connected devices, on the plus side, deliver huge competitive advantage, productivity jump, better product understanding in real time, penetrating data insights, improved data capture, better value creation and predictive business decisions. Data is the engine of value chain. Gone are the days when business decisions were warehouse-based taking light years to extract intelligence out of this centralized data leading to torpid business decision making.
IoT services, however, is a cut above with a number of connected devices generating real time data from diverse pool of data and in a large volume. These devices, thus, can interact with each other in a complex ecosystem. One can record these interactions and analyse via advanced analytics system for the generation of extremely useful insights. What one should look for ideally is to use real-time and digital processes to accelerate and enhance experience, something that is definitely achievable in IoT.
IoT for realizing digital transformation:
Because IoT is smart interconnection of people and things, there is greater reliability, innovative functionality, higher product utilization and enhanced product capabilities. The result is disruption of existing business models and creation of unique opportunities for increased value creation and captures, giving rise to innovative industries.
IoT devices are built to create real-time and deeper connection between supply chains, customers and organizations. There are many success stories in the area of transportation, health care and consumer services how actually an IoT feedback loop in real-time can provide superior customer experience. Another area that IoT seems to disrupt with clinical efficiency and change the playfield is customer or user journey.
There are quite a few challenges that stand in between enterprises going the whole hog in implementing IoT: immature business models, lack of compelling use cases, vulnerable identity and security issues and access management.
The road ahead…
IoT technology opens up new opportunities to innovate existing business models from bottom‐up and deploys new ways to increase efficiency in the value chain. It ultimately boils down to how enterprises use the power of pull, shifting from traditional push-based models that choke from dwindling returns to scalable pull-based business processes that — hitherto never achieved — leverage ways to harness greater returns. The need of the hour, however, is systematically assessing the strategic and economic value of IoT to appreciate its full potential.