Here is how your organization stands to profit from the Internet of Things
Today we are beginning a new series. This time we are focusing on the Internet of Things, a very interesting subject and what some people call the next big internet revolution. In this opening post, we will briefly introduce the concept and then move on to detailing the main business advantages it delivers, with examples. Enjoy the read!
So, to begin with, what is the Internet of Things? Very simply put, the IoT is a network of physical objects whose embedded electronics (sensors, transmitters, software) allow them to gather and exchange data without the need for human intervention. What does this mean for businesses? Well, since the devices that make up this growing ecosystem require no human input in order to carry out their tasks, the Internet of Things essentially eliminates the most common bottleneck found in an enterprise system today – humans.
If you think about it, whether because we’re on holiday, unbriefed, or simply tired, people are usually the slowest component in a world of increasingly automated business processes. As it stands, the IoT has the potential to liberate these processes and let them run as smoothly (i.e. efficiently) as possible. This isn’t to say we’re becoming redundant, there are many areas where a human’s touch is vital, but for others machines do the job exemplarily. Getting back to the point though, the main benefit that organizations can achieve through the IoT is significantly enhanced workforce and operational efficiency that derives from the unsupervised nature of the ecosystem’s activity.
To get a better feel for this, let’s look at some real-world examples. One area where the Internet of Things has been met with considerable enthusiasm is manufacturing. Whether or not due to the already advanced degree of automation found in the industry (think robots, cobots etc.), manufacturers are excited about it and rightfully so. As it stands, they are set to profit enormously from the IoT, mainly via process and supply chain optimization. Envision for instance a train assembly line that is entirely automated. OK, that isn’t hard to do. But now imagine all the supply chain management in the background is being done automatically too. If the system is aware at all times of the stock levels in real time, it can order the exact number of components it needs to keep operations going. This would avoid delays, confusion, or misallocation of money and warehouse space.
Or, think of a scenario where a shipment of aircraft electronic components is being hauled to a plant abroad. Suddenly, the component manufacturer issues a recall leaving another plant with no usable components. The IoT would potentially enable the components going abroad to be notified of the unexpected problem, which would then prompt them to reroute their destination in order to ensure the plant that is out of stock continues production. This saves everyone time, money and potentially image points. And you can easily come up with other scenarios on your own, but the key aspect in all of them is that planning and decisions are made without human consultation.
Moving on, the next important advantage I’m going to mention is improved customer experience. I’ve stated before how CX is shaping up to be the great big differentiator wherever companies are sporting very similar product and service capabilities. Well, I am happy to reiterate that thought. The customer service of the future will be closely integrated, and indeed powered by, product performance and customer usage data. The Internet of Things will be instrumental in enabling this, with the key role being played by the wave of valuable data, which marketing, sales and customer service experts will be able to leverage to offer new and exciting experiences to their audience.
After all, it has long been a business’ ambition to learn what consumers look for in a product or service, how they relate to it, how they use it etc. in order to cater to those needs as closely as possible and get a leg up on the competition. In a world where the IoT has become as ubiquitous as its name implies – which I suspect will happen sooner than you think – the products you buy will be answering all those unknowns. Every gadget you wear, every appliance in your house, everything that could profit from having a bit of electronics added to it and made a part of the ecosystem will gather data and contribute towards the creation of an ever-clearer customer landscape. Of course, this is not going to happen on its own. I suspect many failed initiatives will have to be painfully swallowed before real, solid improvements are visible. Still, isn’t that always the case?
Now let’s say we are already there. If your company sells high-end DSLRs and a customer’s camera is telling you he is travelling to the Alps a few times a year during the cold season, you can design an offer that she might really appreciate. For example, you might offer her a discounted bundle comprising snow protection equipment and a long focal length lens, ideal for capturing mountain sides far off in snowy weather. The chances of success are considerably better, you’ll have to agree, than otherwise simply blasting them with generic messages. In the end, your company increases customer base revenues, while your client feels her needs are understood and she is being treated as an individual. A good deal for both parties involved.
Finally, the last great benefit the IoT is set to bring about is the ability to generate new revenue opportunities and business models. This relies on organizations’ ability to act upon the valuable data generated by their products. A kitchen appliance manufacturer, for instance, might learn that the public use its kitchen blender in an entirely different way than they envisaged. Maybe the company’s marketing program is positioning it as a great help with cooking, but you notice most your clients are using it before 7am – turns out your product is actually a juicing marvel! Great, you now have a new strategy, tagline – basically a whole new vision of how to market it to people. Or, for instance, if you’re a pharmaceutical company and you wish to ensure a patient is taking his pills exactly when they are supposed to, you might use a sensor inside the medicine to determine if they are following the schedule or not. Trials for this are already underway!
That’s about it for today, I hope you found it interesting. Join me again next week when we explore how to design the best possible IoT strategy for your company.