The convergence of the digital and physical worlds, enabled by the Internet of Things (IoT), is creating an explosion of data. By 2020, the world’s data will double every two months, with an expected 34 billion IoT devices connecting everything from toothbrushes to turbines and transmitting data to the cloud.
IoT is transforming the way modern businesses operate. Companies can now use sensors to collect and exchange data and integrate new technologies like machine learning to translate that data. What will set companies apart is the understanding that IoT ultimately is not about ‘things’. It’s about making sense of the sensor data in order to deliver new services and experiences.
Last expert roundup included advice for getting started with IoT. In this expert blog roundup, we spoke with technology thought leaders to find out which industries will be the first to adopt IoT solutions and how businesses should approach defining their strategy.
“At the moment, it’s difficult to say. Insurance is obviously one where there are many possibilities, but whether the products that the industry could devise using IoT are ones that customers want is another question. There may be interesting possible new insurance models, including very granular activity based policies, but another question is whether these policy structures would be profitable. It’s all to play for at the moment.” – Rod Willmott, Chief Wzard, Wzard Innovation
“Opportunities vary by industries, sub-industries and sub-segments of business. Each area of opportunity must be measured and compared in terms of potential value and demand.” – Charles Caldwell, CEO, GEM Analytics
“Logistics could present one of the biggest opportunities when it comes to adopting IoT solutions. It is an enormous industry, comprised of 9% of US GDP or $1.5tn in 2015, that covers many parts of our daily lives – from healthcare to retail. Logistics is in the middle of being re-invented with a wave of new technologies leveraging better sensors, integrated data systems, and machine learning to make it smarter and more agile. Logistics as a whole, and many of its sub-verticals, can essentially be seen as a set of network optimization problems. The better the different parts of the network can interact with each other, the more optimization potential that can be unlocked. Based on what we have seen through our portfolio companies, organizations can see significant productivity gains, often as high as 20-40%, by taking full advantage of IoT technologies. In addition to the productivity increase, they also gain better visibility and operational resiliency.” – Millie Liu, Partner, Procyon Ventures/Organizer, BostonDIG
“I view this slightly differently. The first big industry to be transformed will be manufacturing; manufacturers will transition from selling products to selling products with intelligent services. But then, the downstream implication of connected things transforms every industry. At GE’s Minds & Machines conference last year, one of the examples given was of an Internet connected shower head. For most people, the gut reaction is how ridiculous that sounds. Why would I pay $10 a month to track shower head usage?! But then the punchline: think of a hotel chain that deploys this technology. They can now track the water pressure and temperature of their showers (where the quality of shower in a high-end hotel is one of the key determinants of overall guest satisfaction.) You can also use the time of shower as proxy for when the guest is up and possibly ready to check out, a useful input to coordinating cleaning staff. And lastly, if a customer leaves a shower running, risking a tub overflow, you can track that as well. So, all of a sudden, something as banal as an IoT shower head, starts to make great business sense.” – Ross McKegney, Director of Platform, Box
How Should Organizations Approach Defining/Refining Their IoT Strategy?
“One piece at a time. There is no benefit in creating a long-term, hard-fought, 5-year strategic roadmap in an emerging technology situation.” – Rod Willmott, Chief Wzard, Wzard Innovation
“Build IoT into your current strategic planning process, as with other digital innovation and technologies. Use of customer journeys, value management, architecture and target operating model work should all help. Give it clear executive sponsorship and build roadmaps aligned to other key strategic initiatives (portfolio approach). But do all this with a flexible and agile approach – which for some organizations can be a culture change in itself.” – Ian Kingstone, Digital Transformation Advisor
“Strategy depends on goals – what steps must be undertaken to reach objectives. There is an order. The challenge is that no two situations are the same. There is a best approach to every problem. What is valuable is to get the right insight – the goal is to get things right the first time around.” – Charles Caldwell, CEO, GEM Analytics
Organizations are understandably under pressure to create IoT solutions that transform experiences and improve operational efficiency. According to these IoT thought leaders, it is important to fit your IoT plan into your current strategic plan, start small, and align your strategy to current business goals.