How Could the IoT Could Benefit Your Business?
The Internet of Things (IoT) has certainly inspired a few column inches since the term was first coined in 1985, yet for many businesses its impact remains ambiguous. Although clearly defined as “a network of smart, connected products”, the potential scale of the IoT means it remains a fairly nebulous concept. What could the IoT means for your business?
Products as Services
The IoT brings with it significant opportunities. The potential for innovation – to create smart products that offer additional value for your customers and increased insights for your business – is huge.
The IoT isn’t only about new smart connected devices – such as home automation technology like Nest or Hive. It also gives businesses an opportunity to reimagine their existing products and how they are delivered to the customer. For example, digitalisation and the cloud has enabled the success of media subscription services like Netflix to prosper at the expense of DVD and CD sales.
A shift to this type of “as a service” pricing or subscription-based service model is one key change. Particularly as products begin to generate data that consumers will want to control and monitor on an ongoing basis.
As consumers embrace the “as a service” model, traditional manufacturers are being forced to rethink their existing business models in response to change. For example, big players in the automotive industry have launched car sharing apps – Mercedes recently launched Croove in Munich and BMW operates ReachNow in Seattle and Portland.
Extending Product Visibility Beyond the Sale
Traditionally, manufacturers lost sight of their products once they left the store or sales room. With smart connected products, this is no longer the case. Manufacturers of such products will have access to post-sales data which can offer insights into the way the products are being used. This presents opportunities to sell additional services, maintenance services, parts or replacements, based on usage and performance data.
In addition, the insights drawn from this new post-sales data may prompt rethinks about how the product is designed, sold or marketed.
The Role of ERP
Undertaking post-sales analysis will require back-office solutions capable of storing, collating, and analysing such data. Manufacturers have a head start on this as most will have existing business intelligence tools within their ERP software systems.
Integrating post-sales data into the ERP solution for analysis will strengthen product and customer intelligence. It may also offer opportunities to reduce system complexity. It may well be that smart connected products could offer geo-location and other sensory data from their embedded systems, negating the need for additional RFID or barcode tracking systems inside the manufacturing and logistics operations.
Streamlined information systems and post-sales data are just one part of operational improvement. A more predictable revenue stream as a result of increasing “as a service” pricing is another potential benefit.
Reducing Energy Costs
IoT also offers opportunities for businesses of all kinds to monitor their own operations in much greater detail. For example, new opportunities to connect controllers, monitoring devices and sensors with live pricing and any power generation data through cloud-based building automation systems with mobile web-based interfaces will open up new possibilities to monitor and control energy use and control costs. Machine intelligence and machine learning offer new possibilities to remove the human from this equation, lowering costs and driving energy efficiency still further.
Employee Safety and Duty of Care
Smartphones and wearables are vital elements within the IoT ecosystem and are offering businesses new ways to solve perennial challenges in more cost-effective ways. Geo-location data can be communicated from standard cell phone handsets, and cloud software solutions offers tracking and employee safety solutions that can help improve employee safety and enable employers to demonstrate they are fulfilling duty of care obligations without requiring expensive dedicated hardware.
This type of innovation will play another key role in driving operational efficiency. As more innovative software solutions come to market, standard mobile devices will fulfil multiple functional roles to further reduce operational costs.
The Future Already Started
Success in leveraging the opportunities that the IoT brings will require businesses to have an open mind both in terms of the tools used to manage business operations and their own product and service offering. As such, opportunities will open up for businesses that are able to think about their own offers to customers not in terms of products – or even services – but in terms of what value the consumer is deriving from them and rethink that value in the context of what new technology is making possible.
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