5 ways the Internet of Things is transforming businesses today

how IoT is transforming businesses

As Internet of Things (IoT) adoption continues to accelerate, Andrew Hobbs explores the key ways it is shaking up the business world.

Internet of Business says

Almost every aspect of our lives now generates data. Smart watches track each step we take and sense each beat of our heart. The smartphones in our pockets know our location at any moment, our hobbies, where we’re going on holiday, and what we’re considering buying.

Some of these insights benefit the customer, and some the product maker. Ultimately, we are all emerging into an Internet of Things (IoT) world that, for the most part, benefits everyone – aiding our day-to-day lives and keeping us connected to the things and people that are important to us.

The use of such technology in the business world is no different. IoT devices record and transfer data to monitor important processes, give us new insights, boost efficiency, and allow companies to make more informed decisions.

They tell organisations what’s really happening, rather than what they assume or hope is happening. And the reams of data they gather are grist to the mill for analytics and AI systems, which can identify patterns of use or behaviour that were previously hidden.

The IoT market – which includes hardware, software, systems integration, and data and telecoms services – is expected to grow to $520 billion by 2021. That figure represents a more than 100 percent rise on the $235 billion spent in 2017.

More companies are running proof of concept trials than two years ago. And the number of enterprise customers considering exploring new use cases is up to 60 percent in 2018, compared with less than 40 percent in 2016.

Meanwhile, the Industrial Internet of Things (IIoT) market is forecast to surpass $176 billon by 2022, according to a new report by analysts at Market Research Engine.

If you’re considering how IoT technology could be used at your company or organisation, it’s vital to understand how it is currently transforming strategy and operations elsewhere.

Here are five key ways that the IoT is enabling successful digital transformation today.

1 Improved business insights & customer experience

Connected equipment in manufacturing, aviation, the supply chain, agriculture, healthcare, and many other industries, is creating more data streams and analytics potential, meaning that companies are gaining much greater insights into their business operations and how their customers use their products or services.

In many cases, this has been enabled by cloud platforms provided by the likes of Microsoft Azure, AWS, IBM, and Google (alongside hundreds of more specialised vendors), but there is also now a shift towards edge computing in some industries, in an effort to reduce the latency (and other drawbacks) introduced by relying on remote, third-party data centres.

When a company understands how its customers use its products they can better fulfil their needs and improve the customer experience.

In many ways, the retail industry is at the forefront of technology-driven change in this area – with the need for change reflected in the widely reported fall of many household names. Meanwhile, the likes of Ocado and Amazon have thrived on a data-driven strategy.

The future of retail lies in connecting with the customer and reducing friction for them. The ‘need it now’ mentality of today’s shoppers sees convenience take precedence over brand loyalty, with many customers favouring online shopping.

Those with a stake in physical stores must innovate too. Predictive recommendations and smart fitting rooms are now a reality – with AR, the IoT, and AI set to transform the industry further.

The link between IoT technology and an improved customer experience can be witnessed most readily, perhaps, in retail settings.

In a shopping environment, IoT is all about reducing friction in the buying experience and helping customers to interact with products, often in a virtual or augmented reality environment, pre-purchase. For some solutions the experience is still a little clunky, but the message is that the IoT can give high street and main street stores a much-needed boost at a time when conventional online retailing is undermining it.

And as with many customer-facing types of IoT implementation, there are other benefits too: improved stock/inventory control and supply chain management, for example, as reams of data is gathered about popular products and up- or cross-selling opportunities.

When it comes to eliminating friction points in the shopping experience, UK-based Sainsbury’s has turned to scan, pay and go technology via shoppers’ own smartphones to enable them to avoid queuing at the checkout. The Co-op has trialled similar technology.

This shift has seen other traditional retailers, such as M&S, look to retrain their workforces to empower them to better employ data analytics.

In the US, Amazon is employing a more advanced solution for its own physical Amazon Go store: its system detects products that have been moved, places them in a virtual cart, and knows once customers have left the premises.

US startup Zippin is exploring the use of a whole range of technologies to provide a similarly seamless experience – not only helping the customer, but also the retailer in terms of reduced costs and improved inventory management, by tracking which goods are most popular in what settings.

This enhancement of the user experience coupled with new data streams and insights is a common benefit across all IoT applications. For all types of organisations, this has enormous strategic and operational potential.

2 Cost & downtime reductions

One of the benefits of these new insights is often a reduction in operational expenditure and downtime.

For example, the rapid emergence of digital twin technology – digital models of physical assets built from real-time data, either in pure data form or as explodable 3D representations – is a key competitive differentiator in industrial IoT applications.

Allied with other technologies, such as big data analytics, enterprise asset management, smart supply chains, augmented reality, and artificial intelligence, digital twins promise an emerging world of predictive maintenance and proactive operations.

Imagine the failure of one small, but critical component in an industrial installation causing hours or days of downtime while the fault was traced and fixed. Now imagine every part of that installation being stored and represented in a digital twin, which told engineers that the component was going to fail weeks in advance of it doing so – and exactly where it was and how to replace it. As a result, brief scheduled maintenance saw the replacement part made to order and fitted.

This type of technology could help slash both operational costs and system downtime in factories and other industrial installations, while helping workers to learn on the job about how machines work and/or can be broken apart for maintenance and upgrade – perhaps via tablets, AR headsets, or smart goggles.

Construction giant Laing O’Rourke is using digital twin technology to begin solving problems that many people face in their daily lives: unreliable railways.

Speaking at this year’s Internet of Manufacturing event in London, Dr Graham Herries, Laing O’ Rourke’s director of Digital Technologies, explained how the construction company is using its Optimised digital twin platform to rework the operations of the West Coast Mainline – one of the UK’s busiest and most important rail corridors, currently operating as Virgin West Coast.

Herries said that Laing O’Rourke’s digital twin of the network is able to model the movement of its trains, and coordinate when they need to return to depot for maintenance.

With each train needing to be serviced at least every 20,000 miles, it’s a complex logistical challenge to ensure that each train finishes where it needs to each day, is serviced regularly – and, critically for passengers, keeps running to the network’s timetable.

Carried out by a human being, this scheduling work typically takes three hours a day and can only plan one day ahead. This tends to result in trains being over-serviced.

By modelling the network as a digital twin and using a heuristic maintenance scheduling algorithm, Herries said that the process can be reduced to just 19 seconds in Microsoft Azure – though, at present, it then undergoes 30 mins of precautionary human validation.

Using digital twins, Herries said that it’s possible to forward-plan for up to 23 days, significantly reducing over-maintenance. Rolling stock usage is also balanced across the fleet to ensure that certain trains aren’t subjected to more journeys than others.

The result, claimed Herries, should be a more reliable network, with fewer last-minute cancellations or platform swaps, reduced maintenance costs, and more balanced train usage.

Digital twins can provide similar benefits across many industries, from oil, gas and other energy sources, to manufacturing and the supply chain.

3 Efficiency & productivity gains

By connecting a business’s key processes, leaders can more easily identify ways to boost efficiency and productivity. Thanks to these gains, businesses expect the Industrial IoT to boost revenues by $154 million, according to a recent Inmarsat report.

Employees at Ford’s Valencia Engine Assembly Plant in Spain are using a special suit equipped with body-tracking technology. The pilot system, created by Ford and the Instituto Biomecánica de Valencia, has involved 70 employees in 21 work areas.

The technology is similar to the motion-tracking systems that record how athletes sprint or turn, or actors move and speak. Ford has been using the same type of technology to design less physically stressful workstations to enhance its manufacturing processes.

By accurately tracking its workers’ movements, Ford is enabling data-driven changes to its vehicle production processes, making them safer and more efficient.

The same principles can be applied to machines to identify bottlenecks or problems in production lines, however small.

4 Asset tracking & waste reduction

Closely linked to efficiency and productivity is the drive to reduce waste, to which IoT tracking is integral.

In our recent interview with Werner Reuss of Orange Business Services on how the IoT will transform manufacturing, he shared an anecdote that speaks to the huge value of IoT when it comes to eliminating waste and inefficiencies in supply chains:-

“We did some work with a European car manufacturer. The company had a complex supply chain that included tens of thousands of boxes, which contained materials for production. Each of these boxes had a value of 400 euros and, all in all, the company was haemorrhaging tens of millions of euros due to boxes getting lost in the supply chain.

“We came up with a solution to track each one of the boxes with a device that updated the location twice a day. Yes, it helped catch the odd stray box that went missing along the way, but more importantly, they were also able to triangulate the precise location of one box and, by doing so, they found an entire stash of boxes that had been misdirected. As a result, they were able to reduce the number of boxes that went missing and also address the huge costs associated with it.

“We’ve also recently joined forces with Siemens to drive adoption of the IoT in the industrial sector. The initial focus will be to develop solutions around asset tracking and monitoring, to optimise the supply chain and improve efficiencies, as well as to develop digitally enhanced products to increase customer satisfaction and create new business models.”

Typically, the more components there are in a business operation, the more it stands to benefit from IoT implementation. This has seen the supply chain industry become the biggest adopter of the IoT to date.

5 New business models

While the most obvious use cases for the IoT revolve around efficiency, productivity, and process monitoring, we’re increasingly seeing companies recognise the scope for it to provide them with information about their customers and how they use their products.

In our 10-step guide to building a business case for IoT programmes, we explained how Internet-connected cars, coffee machines, trains, and all manner of other smart things can feed usage data back to their manufacturers and operators, informing the services they build around those products.

Few of these things were originally designed to be connected, but the IoT can add new value to them, and help improve their future design via the reams of data gathered about their real-world usage.

Companies that successfully integrate the IoT into their products in a way that benefits both the customer and their own internal processes stand to reap huge benefits.

The IoT also allows organisations to move away from conventional business models to new revenue streams. The data acquired often holds value in itself, but, more significantly, customers can be offered subscription-based services that draw on the connected nature of the company’s products, often offsetting the initial cost of entry.

As Amazon has proved in the consumer world, products that provide businesses with valuable data can enable them to offer the same products at reduced costs, opening up new markets by replacing revenue from customers’ capital expenditure (capex) with operational expenditure (opex), via subscriptions.

Beyond IoT

These are just some of the gains to be had from implementing IoT technology as part of a wider digital transformation strategy. When combined with other emerging technology, such as AI, VR, AR, robotics, and blockchain (in terms of smart contracts and supply chains), businesses are able to unlock previously untapped revenue, gain new competitive advantages, create new training methods, and produce higher quality products and services.

Additional reporting: Chris Middleton.


To learn more about implementing IoT solutions visit IoTBuild, London, on 13-14 November 2018

IoTBuild network to edge

The post 5 ways the Internet of Things is transforming businesses today appeared first on Internet of Business.

Go to Source
Author: Andrew Hobbs