The Internet of Things consists of the burgeoning army of sensors in smart devices that measure and report on conditions in the physical world - but where is this data going - and how can you monetise it?
Key to understanding and achieving payback from the IoT is to consider how business decisions are made. Despite best efforts to gather as much data as possible, decisions always involve incomplete information, resulting in unscientific guesswork or estimation. Adding real-world data from IoT sensors helps reduce the amount of guesswork in your decision-making.
Benefits and challenges
So on the face of it, the IoT is a no-brainer. Of course, there are challenges. They include the need for upfront investments in both skills and front and back-end infrastructure, as well as the management of additional complexity - plus of course security.
These hurdles are surmountable. Challenges like security will be familiar - in broad terms at least - and cloud service provision is most likely to be the first place to look for an IoT infrastructure in order to lit the burden of upfront costs and allow experimentation. A service provider will also be able to provide monitoring and management systems along with the network performance analytics to ensure that real-time data suffers as little latency as possible.
Examples of boosts to the bottom line through IoT technology abound, driven by reduction in costs, increases in sales through more effective marketing or increased efficiency of business processes.
The deployment of sensors has probably been longest established in industrial applications, where knowledge about the progress of production processes and the condition of machinery is vital to the smooth running of manufacturing products. Even here, where understandable resistance to change has tended to be the rule, IoT techniques such as predictive maintenance, are appearing.
Enhanced safety - which also contributes to the ROI - resulting from predictive maintenance is a key driver elsewhere too, with sensor-laden aircraft engines that can call in-flight for maintenance at their destination being probably the best-known example. Train operators and leasing companies are also among those making use of predictive maintenance, as modern rail vehicles carry increasing numbers of monitoring devices.
Saving costs, boosting sales
Just a handful of other examples include retailers remotely monitoring the temperature of perishable goods and so reducing spoilage. Sales can be increased by counting the numbers of customers who pause by a particular shelf, so providing actionable information about the positioning and branding of individual products. Vending machines can monitor their contents and call for a top-up only when required, rather than on a fixed schedule, saving unnecessary visits.
More generally, reductions in energy consumption, not just in manufacturing but in any smart building, can deliver a quick ROI as a consequence of sensor providing data on a range of factors, including the location of individuals, and ambient and internal temperatures and humidity levels. Together with other smart building components, such as windows that darken or lighten depending on the intensity of external light, and building energy management systems, resulting energy savings have been estimated to reach 20% or more.
So an ROI on IoT devices is achievable, and the technology just keeps getting smaller, more energy-efficient and cheaper. What will be required - as always - is a tight rein on deployment and management costs, along with an infrastructure, both hardware and applications, capable of handling the additional data loads.
Then look forward to using all that information to strip your decision-making of guesswork.