By 2025, IoT connections will reach more than 24.9 billion, compared to the estimated human population of 8.1 billion people. This unprecedented rise in connected technologies has enabled a world of opportunities for companies looking to digitally transform any part of their business. This includes improved productivity, safer and more efficient supply chains, as well as remote capabilities across industries like retail, manufacturing and energy.
But what is hype and what is reality?
Solving without a strategy
For years now, the tech industry has been promoting new technologies like the Internet of Things (IoT), Artificial Intelligence (AI) and Machine Learning (ML) as the “silver bullet” that’s going to solve all business problems and bring in new revenue streams. Faced with increased demands, service providers, enterprises and industries are continuously trying to decide which IoT path to take in order to transform and streamline operations. However, the promise of real-time metrics, actionable data and industry wide connectivity has left many companies susceptible to jumping on new technologies early without a tangible, desired business outcome.
For IoT specifically, a common problem that businesses often face is trying to solve an issue without a proper strategy in place. There are two types of scenarios enterprises typically come across; 1.) business outcome-driven IoT solutions and 2.) general adoption of smart IoT solutions. Those that implement solutions to address a real need are often driven by business results that align with corporate goals and objectives. Whereas companies adopting smart solutions for the sake of marketing and sales typically risk invalidating the initial investment and a business’ progress forward.
Take the connected home as an example. Common devices range from a connected coffee maker to a smart fridge. While these products allow for more control and convenience among consumers, more often than not, the allure or concept serves no value and is not worth the price tag. On the other side, the companies behind these products implemented IoT solutions in order to track users’ consumption and supply chains across the country so they can optimize operations. While beneficial at the enterprise level, did it address a real market need or problem?
Even though the need to efficiently connect billions of physical devices around the world rapidly increases, the IoT landscape remains fragmented. While some industries have been quicker in deployments, launching an IoT solution is still a complex process.
The reality is that enterprises should avoid looking for smart solutions, and instead focus on business outcome-driven solutions. And this is where IoT-driven product leaders can serve a purpose, by collaborating with enterprises to validate use cases and solution hypotheses, as well as carefully structure proof of concepts with clear measures that lead to success in the final offering.
Maturation of IoT
While we’re years away from seeing truly connected cities, IoT’s capabilities are becoming more operational thanks to the expansion and rollouts of technologies like 5G. With 5G set to become commercially available in 2020, industries can look forward to more than just faster speeds. The technology’s combination of high-speed connectivity, low latency, ubiquitous coverage and superior data handling will enable enterprises to transform the IoT landscape from one that is passive to one that is more active.
As we know, the purpose of IoT is to monitor, collect and give enterprises the ability to analyze data in real time. As the tool matures, we can expect more reliable connections, flexibility and capacity to carry more data, making performances consistent no matter how many devices are plugged in. This will also expand new business opportunities for companies.
For instance, the process of introducing fully autonomous vehicles will finally be achieved once low latency 5G delivers the bandwidth and resilience for real-time data communication so vehicles can interact with their surrounding environment. The combination of 5G and IoT sensors in this example not only highlights an active case of IoT, but also a real industry need to improve road safety, traffic fluidity and driver comfort.
Therefore, in order to realize the full potential of new technologies, industry professionals need to understand that IoT is an umbrella that is all encompassing. It is not the main driver in expanding a company’s portfolio, but a capability that connects the dots, using other technologies, and enables enterprises to make more informed operational decisions. Understanding and navigating this is essential to maximizing business potential.
Changing needs amid disruption
Every aspect of this industry is constantly evolving, and these changes will allow companies to approach IoT solutions differently. The current COVID-19 outbreak that is causing widespread disruption is an example of a situation where industries can identify real needs and set new standards of approach.
Vulnerabilities that were not always present pre-pandemic were exposed when the virus struck, such as the world’s dependence on a global supply chain model. Companies that relied on the exchange of goods had little to no knowledge into their tier 2 or 3 suppliers leading to disruptions and delays in the chain. Enterprises realized that transparency into manufacturing and operations were not where they should be and many needed more visibility once lockdowns were put into place and alternative solutions were required.
This realization makes a strong case for accelerated investments in automation and in driving transparency. As industries go into reaction mode, they’ll start to evaluate each aspect of their business in order to identify fragilities and proactively prepare for a new way of operating. This includes leveraging new technologies such as IoT, which will play a pivotal role in powering a new transformation and drive transparency and resiliency.
Beyond supply chains, the manufacturing and retail sectors are other industries that show the most promise for IoT. With panic buying on the rise, subsequently generating a shortage of supplies, IoT could change the way retail companies re-stock shelves and manage inventory levels. As for manufacturing, the role of predictive maintence will play will be significant for companies looking to be agile and produce in demand driven situations.
While businesses are largely focused on innovation and the creation of new products, they should also consider how current operations are being fulfilled and what updates could be made to avoid future disruptions. This pandemic has made it clear that addressing needs and vulnerabilities should always be a priority. If used correctly, this transformative tool can fine-tune existing portfolios, make industries more resilient and give companies insight into new opportunities. They just need to connect the dots.