Which enterprises will be first to leap through the IoT looking glass?
Enterprise IoT will be a value creation engine
Another, even bigger, opportunity lies in IoT’s capacity to serve a diverse range of vertical industries and enterprises. When we want to describe the potential impact of the Internet of Things in enterprise, “transformational” is probably the best word for qualifying its promise. IoT provides companies with new means for optimizing and renewing products, services, and processes. As such, the IoT is a potential game changer for almost any single player in private and public sectors, like manufacturing, logistics, automotive, utilities, cities, agriculture, healthcare, retail, and IT.
A term that is often used for grouping the broad range of non-consumer IoT applications is “Industrial IoT” (IIoT) or “Industry 4.0.” Traditionally – if I may use this expression for such a recent development – IIoT has targeted the automation and streamlining of industrial systems and processes in areas like manufacturing, supply chain, and inventory management. Very often, industrial IoT solutions consist of existing mechanical equipment enriched with electronic sensors and M2M communication modules; a technology combination sometimes referred to as “mechatronics.” In essence, the add-on components provide and communicate useful data to help monitor and control the industrial assets and processes, e.g. by real time asset tracking or on-demand status reporting.
But, just as many M2M-based telemetry deployments have evolved into more comprehensive applications – in which (big) data-analytics are playing an ever more prominent role – so too IIoT is transforming into something bigger and richer. The result of this metamorphosis will provide enterprises with a different kind of value. The Industrial Internet of Things is evolving into the Enterprise Internet of Things – from IIoT to EIoT. Where the IIoT was mainly internally focused and driven by cost savings and process optimization, the emerging EIoT will enable growth, product innovation, new business models, and an enhanced customer experience. It brings new value to old and new (internal) enterprise stakeholders, and (external) partners and customers.
Can you guess who the early adopters are?
So, it should be no surprise that a 2015 survey by Machina Research, “Lessons Learned from Early Adopters of the IoT,” revealed that there is a notable difference in who, within an enterprise, is actually leading the IoT charge. The survey revealed that for adopters the lead department is product management while in non-adopters it’s IT. The sooner that companies start seeing IoT as a catalyst for growth rather than a way for the IT group to trim costs, the faster the EIoT will get off the ground.
Just consider the transformational power of IoT technologies to address changing lifestyle and productivity needs of end-customers through smarter products, with embedded sensors, that are always connected. Or to shape a better customer experience by adding self-measurement and self-management capabilities to products, or by powering marketing, CRM, and service desk interactions with meaningful data. Or to compete with new disruptive players (remember what Uber and Airbnb did to their respective industries) through platform-based solutions and a servitized portfolio.
“Servitization” is a new business model in which a manufacturer provides a holistic experience to the customer, by selling usage based services rather than just engaging in a single transaction through the sale of a physical product. Think for example of a car or a washing machine, that is sold bundled with usage monitoring, proactive maintenance, and energy or fuel consumption optimization. Or even more extreme: what if an end-user would only pay for the kilometers driven, or for the machine-cycles he or she is running...
IoT may also bring unexpected value to other – probably less obvious – parts of an enterprise. Bringing along innovative applications and new ways of working in, for example, finance, facility management, and HR departments, the digital workplace will have a positive impact on company performance, employee experience, and job satisfaction.
When I used to read fairy-tales, I fancied that kind of thing never happened, and now here I am in the middle of one!” – Alice Kingsleigh (in Wonderland)
Like Alice stepped through the mirror, enterprises should also step into what may seem to be the impossible. By moving through the looking glass into the programmable world, they may discover a new way of looking at their business. A universe of connected things that will enable innovation and transformation. And that will deliver great rewards for their stakeholders and their customers.
Share your thoughts on this topic by replying below – or join the Twitter discussion with @nokianetworks using #IoT #programmableworld #DigitalTransformation