The Internet of Things, also known as IoT, is a giant network of connected things like cell-phones, headphones, coffee makers, washing machines, lamps, heart monitor implants etc. These IoT devices talk to each other by transferring communicable network data which then, in turn, connects physical objects to the internet, like with mobile applications.
Using connected objects gives devices the power to tell us what is happening in an environment without physically being there. This involves transferring data over a network without requiring human-to-human or human-to-computer interaction.
Apart from providing operational efficiencies, supply chain management and better customer service, IoT enhances business models by tapping into new revenue channels and opportunities. A Forbes Insights survey showed that 7 in 10 executives believe IoT can deliver increased revenues and 45% of them said IoT has helped boost profits by 1-5%.
The Benefits of IoT Impacting Businesses
As you can see, new technology such as IoT is playing a role in how society is evolving, shifting toward more internet-enabled products. Companies are going through digital transformations to improve business processes, optimize operations and enhance productivity in the workforce. By 2020, the number of interconnected devices will reach 13.5 billion and in that same Forbes Insights survey, 63% of executives are delivering new and updated services directly to customers thanks to IoT capabilities.
Operational Efficiency and Workforce Productivity
One of the big impacts the Internet of Things has on businesses is on its operational efficiencies and the greater digitization of processes. Thanks to IoT, workforce and manufacturing productivity are increased, enabling tasks like the remote monitoring and control of operations and receiving notifications like maintenance alerts to eliminate unnecessary and unscheduled equipment maintenance and downtime.
With the help of IoT technology, manufacturers can save on costs, detect bad materials and make sure product specifications are followed, resulting in optimized high-quality commodities. IoT sensors are helpful in production systems, assembly lines, warehouses and vehicles to aid employees and managers in understanding how operations are moving.
Production steps can now also be tracked and recorded into performance management systems where software and sensors can oversee and measure equipment processes, operations and their effectiveness. Real-time data and information can be shared with employees and managers through smart devices like wearable technology, which improves the visibility of what is going on, helping to make faster decisions related to the operations and executing large-scale tasks in an efficient manner with decreased chances of making errors.
A noteworthy example is an independent power producer in India called Atria Power which uses an IoT solution to analyze information received from their equipment, like wind direction and cloud cover. Their wind turbines use sensors to collect data about elements like the speed and angle of the turbine blades as well as information on the conditions of the environment to help understand how much energy will be produced in the next 24 hours so they can avoid using excess power and electricity.
The Internet of Things has also allowed for the creation of technology such as autonomous mining vehicles to help increase productivity by up to 20%. These vehicles can function for longer periods of time and can take more precise routes in comparison to those that are manually driven.
IoT smarter energy management helps to find more effective ways to operate machines where sensors can monitor and improve product performance, gaining insight into the productivity of different systems to show the greater possibilities of growth, improvement and innovation.
Improvements in Supply Chain Management
Improvements in supply chain management and asset tracking is another area where the Internet of Things is affecting businesses for the better. With equipment, devices and products all integrated and connected to the same network using IoT technology, it helps to automatically control, manage and track inventory in real-time which increases the supply chain visibility and facilitates faster deliveries. With the Internet of Things being used as an assistant in asset tracking, it not only helps with the location, health and efficiency of equipment, but it also allows for automatic product upgrades and updates.
In the past, Amazon employees would have to walk through the large fulfilment centres to scan and pick products, but thanks to IoT enabled robots, they can automate these processes to improve warehouse efficiency and reduce operating expenses by 20%. It is predicted that if these robots were installed globally in all of Amazon’s distribution centres, they would save the company $5 billion per year. Amazon isn’t the only company that can benefit from this technology. The Internet of Things can cut costs in other areas like with medical supply chains and bring down their expenses by 25% to save the industry over $1.25 billion a year.
Positive Changes in Customer Experiences
Today, businesses use IoT to track and monitor consumer interactions with their products so they can improve smart device experiences, for instance, smart home appliances notifying customer service systems when they are in need of fixing or replacing.
The Internet of Things is now changing and expanding consumer expectations with people demanding even faster and smarter devices, which calls for the tighter integration of customer care with product performance. In a Forbes study done in 2017, 90% of executives said that improvements to customer experience were one of the most important opportunities for IoT.
This technology is helpful in improving engagements, personalizing experiences and increasing product and commodity value for customers. For instance, the heavy equipment manufacturer Caterpillar, which produces machinery for construction and mining purposes, has created vehicles with IoT solutions which can measure, collect and communicate data to its customers, allowing them to retrieve and analyze the information.
In another example, the Internet of Things can respond quickly to requests and issues immediately as they occur such as with sensors and cameras at airports helping passengers waiting or navigating through the terminals. Problems and inconveniences like filthy washrooms, long lines at security and broken escalators can be fixed by sending out maintenance teams thanks to notifications and alerts sent out by the IoT sensors.
With 56% of companies investing in IoT to build on customer experiences, consumers will be able to appreciate a more intricate view of products and services. Businesses using IoT have more access to data, learning in-depth metrics about their customers and how their behaviours can affect sales and revenues. Interpreting this data and tracking how consumers use their products allows businesses to further discover possibilities and room for improvement, growth and innovation in customer experiences.
Thanks to the digitization of processes and the interconnection of devices, there are more possibilities for businesses to expand and improve their operations and levels of productivity and efficiency. It will be interesting to see how many businesses will adopt IoT technology over the next several years as it becomes more popular and commonplace.