Data enrichment, connectivity, and real-time communication are changing the way businesses work. For leaders, that transformation will extend far beyond the machines in the factory.
For decades, many of the world’s best companies have used their production systems as a source of sustainable competitive advantage, but such a system not only simply gets things right, with fast and efficient manufacturing processes and with consistent high quality. What sets organizations like Danaher or Toyota apart is their ability to continuously improve those operations, at a pace that their competitors struggle to match. That requires a good dose of self-knowledge.
A company must not only know what it wants to achieve but also need to know how to identify the methods, resources and capabilities it will need to get there. Ultimately, a good production system is a single management approach, so that it is difficult for competitors to copy.
Today, even the highest performing companies can further increase that performance. This technology-driven opportunity comes from data, specifically, from the huge volumes of process and performance data generated by new generations of network-connected devices: the Internet of Things (IoT). To capture the opportunity, companies must review and re-evaluate many of the processes and principles that have been so successful in the past.
From food producers to healthcare, cities and communities, the energy and construction industry, to even the insurance industry, they’re leveraging IoT capabilities and skills.
Managers are already aware
According to a Verizon study, 2016 was the year the Internet of Things gained a significant boost in businesses. In 2017, it’s clear there’s no turning back. Companies are focused on IoT as a facilitator of sustainability, security and economic growth, with 73% of company leaders who have said they are researching or implementing IoT solutions.
Gartner expects 8.4 billion connected devices to be in use worldwide in 2017, 31% more than in 2016, and reach 20.4 billion by 2020. Total spending on terminals and services will reach nearly $2 trillion in 2017. This year, simplified end-to-end solutions, low-cost IoT technologies and connectivity solutions, as well as new regulatory requirements around the food, pharmaceutical, energy, and operation of commercial drones, are driving IoT deployments. For example, to comply with the Drug Supply Chain Safety Act (DSCSA), pharmaceutical manufacturers, distributors, and various logistics and transportation providers are taking advantage of IoT solutions to track drugs from production to the patient. Innovation in IoT and network technologies is advancing rapidly, while costs are declining and as a result, companies are deploying more sensors, collecting more data, and tracking more assets and assets.
Barriers to IoT implementation
Companies are reaping the benefits of IoT beyond compliance, saving money, finding new efficiencies, improving customer service, and driving business growth. According to the Verizon survey, customer service (33%), asset management (26%) and production and delivery capabilities (25%) are among the main goals of deploying IoT in their businesses. However, this change is happening at a slower pace than expected, mainly due to a number of barriers. According to the Verizon survey, the absence of Industry-wide IoT standards, along with security, interoperability, and cost considerations, account for more than 50% of managers’ concerns around IoT. Safety is the biggest concern. Rarely does a week go by without headlines breaking the news of a corporate security breach, so it’s no surprise that security tops the list of companies’ concerns about IoT. The deployment of sensors and the enormous volume of data they generate increases the level of risk and can also affect insurance costs, brand reputation, and business and supply chain relationships. In addition, a violation can be financially devastating. But security isn’t the only demand from companies. Businesses also want scalability and simplicity, and across the industry, technology providers are partnering to deliver end-to-end services to meet their demands. Still, these barriers that stood in the way, according to Verizon, have been quickly overtaken by simplified end-to-end solutions and low-cost connectivity and technologies. This is driving new use cases that will allow organizations to move to simpler applications for even greater IoT value.
IoT has taken over all industries
According to the report, the Internet of Things is taking over all industries, starting with food producers who are collecting and leveraging data from tens of thousands of Internet-connected sensors to better manage quality, security and distribution of its products worldwide. Extensive health care complexes are leveraging IoT-enabled tracking and tracking capabilities so that medical personnel can quickly locate critical emergency equipment needed for urgent patient care. IoT is also helping pharmaceutical companies track drug production for patients. Cities and communities are looking for ways to improve citizen engagement, quality of life and security, as well as reducing the digital divide through IoT and infrastructure improvements. They are deploying smart solutions to help manage traffic, maintain public safety, and attract both businesses and citizens. In the energy and construction industries, companies are starting to use IoT-connected drones instead of sending workers to perform inspections, maintenance, and other high-cost tasks. Even the insurance industry is using drones, with 70% of Fortune 500’s owned and accident companies connecting drones to the network for inspections and other claims-related work.
Looking to the future
Manufacturing, transportation and utilities are leading the way in being the industries that are investing the most in IoT in 2017. However, investments in IoT by insurance, consumers, and industries, such as connected vehicles and smart buildings, will record the fastest spending growth.
According to Verizon, in the coming year, IoT platforms will become increasingly transparent and streamline the deployment of IoT applications, which will continue to grow within the enterprise. Secure data collection, analysis, and integration will remain the businesses’ most critical concern.
The goal for both suppliers and businesses is to achieve a perfectly aligned ecosystem. According to Gartner, “total spending on terminals and services will reach nearly $2 trillion in 2017,” which can result in more efficient and effective work to transform data into commercial value.
The potential benefits of the Internet of Things for the company are enormous. That’s why at Verizon they expect IoT to continue to gain traction and at a fast pace.
