By 2025, McKinsey forecasts the Internet-of-Things (IoT) will have a potential global economic impact of USD2.7-6.2 trillion. Who will capture this opportunity? At the moment, all the indicators point to big business. According to Forrester, IoT is currently used by 23% of global enterprises, but only 14% of small and medium-size businesses.
Yet, IoT offers important opportunities for almost all businesses – regardless of size.
What is IoT?
IoT is a network of physical objects that contain embedded technology, like sensors, that can communicate with remote computer systems about their status, location or the external environment. The same way a laptop or mobile phone connects to the internet, other things – devices, objects, machines, animals or people – can be connected and interact with each other.
As more and more businesses add sensors to people, places, process and products, they will be able to gather and analyse increasingly insightful information to make better decisions in every area of their organisation.
Why do I care?
The true value of IoT is not in gathering raw data, but in using analytics to understand what the data is telling us. The table below shows increasingly sophisticated (and valuable) IoT applications based on a smart farming use case.
IoT technology stack
People often talk about there being five different parts of IoT technology. These are described and illustrated below:
- Use cases, applications: where insights are surfaced to support (often automated) business processes and human decision making.
- Sense making: where software processes, analyses and identifies insights.
- Platform: where the information collected is stored, often in the cloud.
- Connectivity and communications: where the information collected by sensors is communicated to the software platform.
- Devices and sensors: where information is collected.
How should I use IoT in my business?
Even if you’re not a technology business, IoT devices can make your operations more efficient and successful.
- Improve decision making. You can make data and analytics available to everyone in your organisation, regardless of location, to support data-driven decisions at all levels. For example, data collected from vehicles travelling along motorways for mobility studies can also be shared to predict heavy traffic or traffic jams.
- Increased productivity and efficiency. IoT data will help you to streamline or automate processes and improve productivity. For example, sensors can instruct vents on shipping containers to open and close automatically to regulate the temperature, ensuring produce remains fresh.
- Generate income. Data and insights can themselves become new products and services you can sell to others. Remember: data collected via IoT can be used for more than one purpose. For example New Zealand technology exporter, EROAD, has developed an in-vehicle tracker that enables companies to track their fleets and automatically pay road tolls. EROAD repurposes this anonymised data, selling it to the Government to provide insights on road use. As a result, policy makers can make informed decisions when improving road networks.
- Improve the customer experience. For example, Air New Zealand gives unaccompanied minors smart bands, so parents can track their children as they fly.
- Understand your customers. Smart devices track and record patterns of consumer behaviour. You can use these customer insights to get to know your customers on a more specific, qualitative level, helping you make better decisions at every stage of the buying cycle. For example, retailers can understand the context (time, place and behaviour) of a customer in their store to identify when they need help or require an incentive to purchase.
Where do I start?
Make sure you understand how IoT links to your business strategy and supports value creation. Then use a test and fail approach to get some quick wins, learn and improve your IoT capabilities.
- Identify new and emerging IoT technologies and which business problems these technologies can help you to solve
- Develop a business case
- Use a Proof-of-Concept to test the cost of implementation, the robustness and usability of the IoT technology, and its ability to deliver benefits
- Deploy and trial scalable IoT technologies
- Take the new learnings and rollout this first application of IoT technology to accelerate productivity gains
For example, Beca has been working with New Plymouth District Council to investigate the communication technology options available to support the city’s remote monitoring and control requirements. Applications may include data driven infrastructure maintenance, video analytics for city safety or regulatory compliance evidence.
We are currently working with clients to monitor air quality in cities and ports by deploying IoT sensors and generating insights for the authorities from the data collected. In the next phase, we intend to add new inputs, such as weather information, and develop machine learning algorithms to predict air quality for the next six hours.
So, what now?
Looking into the future, I am excited by the potential for connected vehicles to communicate with each other, with the roads themselves and, in fact, with everything. The next few years are going to be very interesting!
Read more about what we're doing in digital here. And talk to us about how we can help you use IoT to get more out of your service or business.