Probably you have heard the words ‘Internet of Things’ (IoT) as much as ‘artificial intelligence’, ‘blockchain’ and ‘Bitcoin’ by now. IoT is buzzing and although it is widely described and explained in blogs, papers and video posts, its potential remains quite tough to grasp. Looking beyond that handy app that lets you peek into your smart fridge to see if you still have enough milk for your Sunday morning pancakes, what is the added business value of IoT?
IoT is believed to drive businesses to the next level as network connected devices carry out automated tasks based on insights distilled from data, collected by sensors. In many occasions, IoT is associated with industry 4.0 and improving efficiency as smart objects and machines generate insights to optimize processes. Besides its business value, IoT will have a tremendous societal value as it can be a great driver for sustainability.
The impact of IoT on our daily lives
IoT devices and ecosystems allow us to optimize processes, predict maintenance, improve safety and optimize product life cycles, just to name a few things. To understand how IoT impacts our daily lives, let’s have a closer look at a daily commute to work in an IoT world.
It’s 07:00 am: you wake up using your smart assistant, which activates the coffee machine and pre-programs your car navigation to drive you to your first appointment. During your autonomous ride to work, you receive a push notification telling you the left wheel is vibrating beyond its normal level and an appointment can be scheduled to swap your subscription-based car to prevent breakdowns. You drive past farms that use self-driving tractors, drones and sensors to optimize the yield and minimize the use of resources. On your way back home, the package you ordered is dropped off at a pick-up point on your route, preventing unnecessary de-tours and transportation. In the meantime, your groceries are delivered to your fridge as you remotely grant the delivery guy access to your smart door and smart fridge. At the same time, your smart kitchen appliances received a wireless product (software)update, increasing safety and lowering energy consumption. Does this all sound like science fiction to you? It is already closer than you might think. Imagine how IoT saves you resources and time, decreases pollution and makes your life more comfortable and sustainable.
Business value versus sustainability
Optimizing business value goes hand in hand with increasing sustainability. IoT enables us to shift from a linear economy, in which products are bought, used and disposed, towards a circular economy. In a circular economy, products are designed for a long life-cycle and can be easily reused and refurbished. IoT enabled or smart products can be kept up to date through wireless updates sent over the air by product manufacturers. Insights gathered from the smart products serve as input for product improvements and predictive maintenance. The latter provides opportunities for organizations; instead of selling a product once, they can offer their customers an additional subscription-based service platform that provides data and insights for product and business optimization. Vestas, one of the leading wind turbine manufacturers, offers blade inspection data and analysis to its customers, enabling their customers to better manage their fleet, reduce costs, increase safety and enable predictive maintenance. This provides benefits for all parties involved. Each party can focus on their core capabilities, while optimizing the product life-cycle.
Analyze business processes and investigate opportunities
So, how do you leverage the IoT potential? For organizations aiming to increase sustainability and explore the possibilities of IoT, the main advice would be to analyze the value proposition and underlying business processes. What value do you currently offer to your customer? Can you move to a product-as-a-service business model? Investigate how data (collected from products and devices) can provide additional insights and value for you and your customers. In developing and deploying IoT solutions, the hardest part isn’t retrieving the data, it’s about interpreting and taking (predictive) action based upon that data that provides the most value. Differentiate from the competition by leveraging insights generated by IoT solutions to drive profitability, reliability, efficiency and foremost, sustainability.