Is IoT a ‘wanna-have’ or a must-have? More and more devices are connected to the Internet. Within a household often several devices have a connection: smartphone, tablet, TV, computers and thermostats for instance. This technology phenomenon is called the Internet of Things (IoT). Every day processing becomes more intelligent and every day communication becomes more informative than ever. On the one hand there are devices that can detect better, communicate better and be used for useful applications. On the other hand, small sensors can be added to virtually any object. These developments combined provide real time data that can be turned into useful information in ways we have never imagined before. Is your organisation ready?
In my previous blog I wrote about digital transformation and meeting the necessity to keep up with changing business environments, driven by customer demand and technology developments. A promising facet in this ensemble is the IoT.
The application of pervasive communications, data collecting sensors, and predictive software creates a valuable mesh within an intelligent digital ecosystem. Big data that are derived from this can help organisations create leverage on reliability, enlarge analytics capabilities (decision making), improve communication with target groups and create added value in terms of new sources of revenue and competitive advantage. The IoT is the engine of a dynamic connection between people, processes and things. Organisations should really adopt this technology in the near future.
Data is staggering: from storage to usefulness
The IoT technology brings business intelligence and communication on to a whole new level through connectivity of devices, systems, and services. It will enable any organisation to steer processes in real time. In the past that was only possible in highly structured industrial processes. Imagine the vast improvements in planning, reliability, and communication. Let me take your imagination even one step further: increased customer satisfaction, higher turnover and lower costs. An entrepreneur’s utopia.
Current market circumstances require organisations to rethink business models and find ways to improve decision making. Sensors are cheap and make generating information easy. But how will you be able to access that information in the right way, in a way that it improves customer satisfaction? All the unstructured data that has been collected via sensors, systems and devices need to be stored and arranged in an orderly manner, so it can facilitate the decision making.
According to experts there will be 200 billion devices in the Internet of Things (IoT) by 2020. All of these devices will be collecting and sharing a massive volume of data. To handle this aggregation of data, organisations also need to define requirements when it comes to data storage and set up a strategy that converts all that data into useful information.
Traditional systems that use batch runs to generate management information are not the way forward. Keeping up with the pace of business is crucial but hard when you are often lagging behind events. New big data analytics technologies are essential to keep on providing on spot management information. No matter if organisations integrate big data in the ERP-system or not. If so, the ERP of the future needs to be more flexible and realtime as well.
Examples of real life IoT successes
Predictive maintenance of Siemens
Looking at the energy industry for instance, for now let’s look at wind energy in particular, many advantages can be exploited from IoT. The monitoring equipment that can be connected with practically any machinery, infrastructure or process delivers huge benefits. During my visit at the Gartner ITexpo in Barcelona I had the pleasure of being invited to a few Siemens sessions. Their approach regarding the energy industry provided me with great insights about the implementation of predictive maintenance and the agility derived from that. I believe these kind of developments will determine the future of energy delivery.
The key issue to address here is the definition on how to gather and use information about crucial elements in a way that it smartens processes and avoids any disruption in execution and delivery of services. Predictive maintenance is yet another great example of what can be achieved with the Internet of Things.
Toon of Eneco
Another example of an organisation that has gone through a transition that incorporates the IoT is the Dutch Energy company Eneco with their thermostat ‘Toon’, a smart meter. Their key advantages lie in the insights they gather. Whether these insights are used to improve customer experience or to streamline manual processes (efficiency), it’s clear that the opportunities IoT offers enterprise resource planning are huge.
Where to start
The beauty of IoT and business intelligence is that it’s applicable to any industry. The smart building, manufacturing, healthcare, beer brewing, logistics, transport & mobility industries have already proven that. But the beneficial effects don’t spring to life spontaneously.
IoT provides possibilities. Nonetheless, knowing how to reap the profits only unlocks while changing your business. Creating and managing an IoT network can also create challenges in areas like internet infrastructure, security and IT systems. Capability and impact analyses are key here, thus a primary concern. So, how can you make it a success in your industry?
It’s important for organisations to analyse the impact on the business and its applications first. IoT requires an integrated strategy with an aim to transform the business. Think big, start small and scale fast. This is actually an innovation framework that was originally used in a Mc Donalds strategy years ago. It’s a conceptual framework to achieve innovation and it has been proven effective for many start-ups. It’s about rethinking the bigger picture and start implementing one step at a time. This strategic guidance could be a way to start an organisation’s digital transformation, including the implementation of IoT.
Conclusion
IoT has changed from a ‘wanna-have’ into a must-have in a relatively short period of time. The costs have plummeted; hooking up a device on the internet and processing all the generated data isn’t that unattainable and expensive anymore. The Internet of Things is a real business changer, that has become widely available for any business now.
And remember: digital transformation is a big deal, knowing how it unlocks opportunities and effects your business processes an ever bigger deal. Keep on discovering, start your digital transformation today!
In my next blogpost I will go into some more detail on how organisation can leverage digital transformation, starting by focussing on cloud solutions and business intelligence.
Arjen van Berkum
Arjen van Berkum is a columnist, keynote speaker and motivator, with an eye for business ecosystems, innovation and disruption. In addition to his work as technology and contract management evangelist, he is a visiting lecturer at Delft University of Technology (TU Delft).
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