Few technology trends have captured the imagination of the consumer and corporate sectors to the same extent as the Internet of Things (IoT). The possibilities created by a universe of connected products and services seem infinite, but categorizing the potential benefits for businesses and other institutions will generally fall into four important areas.
A new survey report published by Flexera Software and IDC, titled “The Third Industrial Revolution: Intelligent Devices, Software, and the Internet of Things,” found that device manufacturers are making a concerted effort to fundamentally change their products, business models and revenues streams by creating a new generation of network-enabled and software-driven products and services.
The study found that 30 percent of the device makers surveyed already develop IoT solutions and another 34 percent plan to do so in the next two years. Nearly four out of five (79 percent) of the respondents also reported they are currently or plan to deliver remote monitoring and maintenance for their products and services and two-thirds (66 percent) intend to add business intelligence capabilities. The survey even found that 37 percent of the respondents hope to improve their supply chains with new IoT services.
These findings confirm the four primary tiers of business benefits THINKstrategies believes organization can derive from IoT deployments.
The first tier of IoT benefits is the ability to better react to product or service issues when they arise. A growing number of products include an alert feature that enables them to notify the supplier when a problem occurs and permits the supplier to remotely diagnose the issue and initiate a remedy quickly. This basic IoT functionality can reduce product or service downtime and keep customer dissatisfaction to a minimum.
The second tier of IoT benefits is the ability to embed greater intelligence into the product or service so that it can anticipate an issue before it becomes a real problem that adversely affects the customer. This predictive feature permits the product or service to notify the customer and/or the supplier that a preventative action is necessary when certain symptoms are experienced or a threshold is crossed.
These reactive and predictive benefits are very similar to those that have become relatively common in traditional hardware and software systems that can notify suppliers of a problem or warn them when a potential issue is imminent.
The third tier of IoT benefits is informative capabilities provided by the unprecedented data that can be derived from the new generation of connected products and services. This direct connection can give suppliers more detailed information about how customers actually use their products and services. This information not only enables suppliers to better serve their customers, but also gives them valuable insight into additional products and services their current customers and prospects are inclined to buy. Although this type of insight may seem obvious, it was not possible to obtain the same level of customer-specific information without the connectedness and software intelligence of today’s IoT solutions.
The fourth and truly transformative tier of IoT benefits is realized when the information and insight gathered from the connected products and services helps a company uncover an entirely new business opportunity. For instance, data regarding the driving patterns of a connected car could be supplied to an insurance company to help it better determine appropriate insurance rate plans based on more accurate risk assessments. Harvesting this data and repackaging it into new information services can transform the nature of a company’s business and create new revenue streams.
Based on Flexera and IDC’s latest survey results, it appears that a growing number of companies are beginning to recognize the potential reactive, predictive, informative and transformative benefits they can attain from properly conceiving and deploying IoT initiatives.
Converting this vision into reality will take the right combination of sensors, software, systems and skills.