The pace of innovation is soaring more than ever before and its advancements directly impact Australia’s economy. Technological progress has spawned wave after wave of opportunities for numerous companies and not a week passes by without the launch of a new app or news of a technology company expanding its footprint into another market.
Having been in the technology industry long enough, there’s a saying that rings true – “all that glitters is not gold”.
From the Apple Newton in the 90s to the more recent Google Buzz, – it seems that according to the media, every new product or service promises to be the ‘Next Big Thing’. Chances are however, that it’s not.
Getting excited about the latest ‘game changing’ piece of technology that results in total failure may not be such a dire mistake to make in the world of consumer technology.
In the realm of enterprise technology however, investing in the wrong technology can put the entire company at risk. So, how can enterprises avoid becoming caught up in the hype of the latest, greatest glittery thing?
The answer lies in fully understanding the benefits the new technology will generate, in both the short and long term. This is imperative so as to avoid making bad decisions.
The business benefits of Internet of Things?
Undeniably, the Internet of Things (IoT) is one of those technologies caught up in the hype machine at the moment. In Gartner’s Hype Cycle for Emerging Technologies report, it’s apparent that the IoT has moved past ‘Big Data’ to become a vibrant part of the business and IT landscape.
If you hadn’t received the memo, most companies are at least thinking about investing in IoT projects to fundamentally change the way they do business. The technology effects everything in an organisation from people to data to process. It enables businesses to do more than ever possible previously and the benefits are tangible and numerous. A “thing” in the IoT can be a person, animal or object with a unique identifier that has the ability to transfer data using technology.
For example, IoT can be included in our everyday lives in things such as employee ID badges so as to track who has entered or left the office premise in case of emergencies. Additionally, the technology can also be implemented in car transponders to allow insurance companies to understand driving habits and thus provide a discount on premiums for drivers that take more precaution.
According to a Gartner report, the economic value-add (which represents the aggregate benefits that businesses derive through the sale and usage of IoT technology) is forecast to be $US1.9 trillion across sectors in 2020.
But what are the benefits of the IoT h? And how can business leaders be certain that this isn’t just a fad?
The benefits of the IoT can be categorised into the following five key segments:
Operational efficiency: IoT can refine, integrate, optimise and automate business processes across an organisation. In a large enterprise, with functions dispersed globally, IoT can combine those business processes by providing and sharing information in real-time, allowing for quick decision-making and better process efficiency. In Australia, the IoT holds enormous promise for key sectors such as mining, agriculture and logistics to cut costs and improve efficiencies.
New Business Models: IoT promotes innovation and new product development, enabling businesses to move to a serviced-based proposition, generating reoccurring revenues and service new markets initiating new revenue streams. By providing large amounts of data about current processes, customers, products and services, IoT is enabling businesses to create new diverse revenue streams. Take a vending machine company for example, with the new data gleaned via the IoT, they could start offering an inventory management service to the companies that supply their machines with goods.
Customer Relationship Management (CRM): IoT greatly increases a company’s number of customer touch points, allowing businesses to strengthen their relationships with the end-user. Taking cars as an example, historically buying a new car would be the only time an automaker was able to interact with the customer. With connected cars, applications are allowing car manufacturers to track the customer daily. This tremendous amount of data allows companies to understand their customers better and the constant monitoring enables them to respond when needed, as quickly as possible. This level of response to individual customers will create a “market of one”, driving customer loyalty to new heights.
Safety and Security: IoT helps businesses keep their staff and customers safe by monitoring things like fire alarm functionality and escape route access. Smart buildings ensure premises are both safe and compliant and greatly limit the chance of something tragic happening. The intel gleaned from the IoT allows businesses to be proactive in their security efforts, preventing theft, assault and large events that could potentially wipe out a company. Customer propositions involving a high value asset, such as a car or consumer electronic device can also be tracked and recovered if stolen reducing costs of replacement and insurance.
Asset Relationship Management: Just as IoT creates more touch points with the customer, it does the same with company assets. IoT allows businesses to monitor assets’ performance and output in real-time, ensuring they are performing to maximum ability. It also makes problem detection and life cycle management far more accurate.
Competition within the global business landscape is fierce when it comes to all aspects related to IoT. Any organisation implementing a new technology however, must first understand how and in what capacity it benefits their business.
The IoT is changing every industry around the world for the better. Its potential to benefit a company is clear and it is here to stay. In my opinion, it’s safe to say that IoT more than glitters.
Marc Diffey is CIO of Xchanging Australia.