We are on the crest of the Fourth Industrial Revolution.
After what seems to be an endless dawn, the Internet of Things has become less related to hype and more about the obvious effect it will have on connected society. The eureka! moment for IoT may never come as every item in the world is gradually connected to the Internet.
The wave of the connected world is coming. And big companies, infrastructure and manufacturing will be the first to benefit the most.
Thousands of developers are already working on the apps, devices and platforms that will form part of what has been referred to as the Fourth Industrial Revolution and there are thousands of companies that know that the future is today.
A recent report from Gartner said that the IoT should be on the radar of every enterprise and business sector. The potential value that the IoT can bring is expected to be worth billions within the next four years. The importance of being IoT-ready today is still a matter of debate, enterprises that embrace the technology now can reap the benefits in the utopian future.
With that in mind, let’s take a deeper dive into five reasons why the IoT is perfect for the enterprise.
1. The IoT And Industry 4.0
At the 2016 World Economic Forum in Davos, delegates said that the technological advances of the last few years would usher in a Fourth Industrial Revolution. Founder and executive chairman of WEF Klaus Schwab said that the digital revolution was responsible for creating a fusion of technologies that is “blurring the lines between the physical, digital and biological spheres.”
“A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the ‘sharing’ or ‘on demand’ economy,” said Schwab. “These technology platforms, rendered easy to use by the smartphone, convene people, assets, and data—thus creating entirely new ways of consuming goods and services in the process.”
The comparison with the transition in the 19th Century manufacturing industry from hand-produced goods to machine-centric production lines is not that much of a stretch. The Industrial Revolution ushered in a new era of trade and technological advancement, speeding up the methods of production and instigating a fledgling consumer-focused marketplace.
The current connected society begun the journey down a similar path, except the physical aspects have been replaced by digital versions. Mobile devices and smart platforms have transformed the way people interact, shop and access information. Modern life is in a distinct period of transition. Businesses must adapt. Enterprises must learn to leverage data and virtual assets while maximizing the interaction between device and end user.
The Internet of Things supports these interactions and will scale to meet demand as required. We should not just think of the IoT as a revolution, rather an industrial evolution that optimizes technology and makes life better.
2. The Internet Of Things Optimizes Toward Value
The continual hype around the Internet of Things has generated more questions than answers about what value will it bring to the private sector.
How we define value depends on what something brings to the party. Value in an enterprise sense relates to how a company or sector takes advantage of the technology available, much of which is related to the effect on revenue and current working practices. The general idea is to optimize processes towards efficiency through the collection and analysis of large data sets. The Internet of Things can be a key component in understanding consumer, employee and machine behavior and to indentify areas for growth.
In 2015, Juniper Research said that the number of connected devices is expected to be around 38.5 billion by 2020. Similar research conducted by Gartner said that 50% of all major businesses and systems would have an Internet of Things-centric element within the same time frame.
Gartner vice president and distinguished analyst W. Roy Schulte said in a press release that the Internet of Things is relevant in every business sector, with impractical use cases replaced by practical enterprise applications.
“There will be no purely ‘IoT applications.’ Rather, there will be many applications that leverage the IoT in some small or large aspect of their work,” said Schulte.
Wearables are a good example.
According to the IDC, around 200 million wearable devices will be shipped by 2019 and more than 20% of all American adults own a device that collects and transmits data. Companies rely on data to track not only their customer base but also how employees are performing.
The cliché that knowledge is power is perfect for the Internet of Things—data and analytics are important for any enterprise that wants to grow while user experience can be streamlined using data gleaned from connected devices.
3. The IoT Can Turn Abstract Principles It Practical Lessons
Remember Google Glass? Google’s augmented reality goggles were a lightning rod of controversy that stemmed from culture clash and the fact that people were basically wearing cameras on their faces. The vast majority of non-users thought it was either creepy or just one more example of invasive technology. Which in hindsight was shortsighted.
Google Glass may just have been ahead of its time. Smart glasses are a practical way for enterprises to give employees access to data or essential job-related information without the need for a smartphone or tablet. A recent study by Juniper Research said that there would be more than 12 million shipments of smart glasses by 2020, with Microsoft’s HoloLens predicted to be an enterprise game changer, GeekWire reported.
Intel CEO Brian Krzanich showed off a smart hard helmet for utility workers at the CES 2016 keynote in Las Vegas. The idea of projecting digital images with data onto real world objects holds incredible power.
People such as engineers that need to keep their hands free to work would benefit from having computer-generated technical information in front of their eyes. Boeing has been testing smart glasses for over a year and there are reports out of Mountain View that Google has learned from its mistakes and is building an enterprise-specific version of Google Glass.
A study by the MPI Group said that 76% of manufacturers would increase the use of smart devices in their working practices within the next two years. The study said companies believe that the Internet of Things will improve customer satisfaction (76%), increase productivity (75%) and ensure that the quality of goods was higher (72%).
On the flip side, only 10% of 350 manufacturers interviewed had internal networks capable of integrating the IoT, while 24% of companies had no real understanding of what the IoT was or the value it could bring. Fully 44% of people said that identifying the benefits was the biggest challenge, with 37% of enterprises reluctant to commit budget or resources to the IoT.
4. Automation And Optimizing Efficiency In The Workplace
Developers working in the Internet of Things already know that smart devices are, well, smart. A report by McKinsey in 2015 said that the Internet of Things could have an economic impact of between $4 trillion and $11 trillion a year by 2025—a chunk of change that would equate to around 11% of the world economy.
If we think back to the comparison with the first Industrial Revolution, manufacturing processes were changed by the introduction of machines and production lines. The Internet of Things is simply another stage in the process. Automation is used on a daily basis globally to produce goods and services that people take for granted and optimizing the technology with specific data or analytics can improve working practices.
Business Insider Intelligence reported that there would be 11.2 billion IoT-ready devices installed by businesses within four years, many of which will help enterprises improve internal working practices. Smart devices can reduce energy waste, monitor productivity, track environmental metrics in remote locations and provide enterprises with information that is pertinent to their business sector.
Physical objects can be enhanced to increase user experience, while constant connection with a workforce can optimize all the hours of the working day. Smart devices can predict where a system might fail and react accordingly, reducing the requirement for workers to shut down that system for maintenance. In addition, connected devices can provide enterprises with a continual stream of centralized data, all of which can be used to make the nuts and bolts of a business work better.
5. Eventually IoT Will Transcend The Hype Cycle
In August 2015, Gartner released its annual Hype Cycle for Emerging Technologies. The Internet of Things is still some way off from reaching the Plateau of Productivity. Gartner forecasts that the Internet of Things could be another five to 10 years before the notion of the connected world fully matures. Which seems about right, given the iterative progression of the IoT. As enterprises expand upon digital boundaries, the ability to the proper technologies at the correct times will be a distinct key to success.
The data that can be gathered from enterprise-specific IoT-ready devices tells companies what they want and when they want it. How many times in history could companies know exactly the right time, place and activity to achieve desired outcomes? Decision making on this scale is unprecedented.
The Internet of Things is a key component of understanding customer behavior and can unlock potential revenue streams. Smart connections—sensors and beacons, for example—will become vital for enterprises, especially when it is time to convert that data into actionable and contextual information.
The conundrum that enterprises face is that collecting data is pointless unless value can be derived from that data. To put it another way, if the Internet of Things is generating industry-specific data, that information must be understood and then optimized by that enterprise in order to move forward.
Public enthusiasm for the Internet of Things has been muted to date, but enterprises can take advantage of the gap and use it to enhance their own digital capabilities. Provided that enterprises understand the ever-changing environment that the IoT generates, then it could be a perfect fit.
Lead image: The Daqri Smart Helmet.