Turning the Internet of things into the Internet of opportunities

IoT – the Internet of things – is in our households, is optimising production and logistics processes (Industry 4.0), is changing the mechanisms in health care (Smart Health) and is influencing mobility options (Smart Mobility).

The Internet of things is probably the top topic when it comes to current discussion of digital subjects. As enthusiastic as some are about the new networking opportunities, others are equally sceptical about the added value this technology offers. However, there is agreement that the importance of the Internet of things will increase in future. The network of devices, the ‘things’, that are connected with each other or users and exchange data, will grow. Estimates suggest that in just two years’ time, up to 25 billion devices worldwide will be in operation connected with each other. The overarching concept of Industry 4.0 will create intelligent products manufactured in self-controlled production processes. With ‘MAX’, for example Thyssenkrupp Elevator has already developed a cloud-supported maintenance solution that makes predictive service possible and increases the reliability and efficiency of lifts. The machine-learning solution can reduce lift downtime considerably through real-time diagnostics. ‘MAX’ recognises maintenance issues before they occur and service technicians are alerted in good time so they can replace worn-out components and systems.

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The opportunities the IoT (Internet of things) brings

So where are the opportunities for small and medium-sized enterprises (SMEs) to push forward digitalisation in a beneficial way with the Internet of things?

To achieve productivity increases: production processes can be carried out more efficiently, for example, when employees in Production are supplied with data glasses or mobile devices to reduce error rates. Rather than laboriously leafing through instruction manuals for devices and machines, a pair of data glasses worn by the employee provides the required information virtually at a glance.

To meet customer expectations: The Internet of things makes it possible to adjust your own service strategies to suit increased customer expectations. A transformed service model makes it possible to strengthen the connection between service, maintenance and repairs in after-sales and to considerably increase customer loyalty. Xylem, an American company that manufactures water treatment systems and analytical devices, has developed a system solution that combines customer service and customer wishes. Waste water pumps are fitted with a notification system that immediately conveys irregularities that arise to customer service. The company began the strategic development of this ‘product-as-a-service’ solution by asking how customers could benefit from the Internet of things.
The concept is not a new one. As long ago as 1962, Rolls-Royce developed the ‘power by the hour’ concept for its aircraft turbines. In this system, the hours of flying operation of individual engines are invoiced to aircraft manufacturers. The turbines remain the property of the Rolls-Royce company, which also services and maintains them. Revenues are generated through accounting of hours of flight completed.

To generate differentiation from competitors: networking of devices and products provides the opportunity to adapt the conventional, product-oriented earnings model. A new model that delivers results through the combination of products and services creates clear differentiation from the competition and new revenue opportunities. The construction machinery manufacturer Caterpillar has created a platform that combines service documentation and real-time sensor data into augmented-reality experiences and provides field service technicians with relevant instructions.

To find better sales arguments: the sales arguments for a particular product can be demonstrated more effectively with real-time performance data. New ideas for advertising of specific products can also be developed on the basis of the data.

To personalise customer communication: evaluation of data generated by the Internet of things makes it possible to use the right information at the right time to provide customers with customised offers – whether that is about choosing the right moment or providing a specific offer.

To develop new strategies: one of the most important characteristics of an ‘IoT device’ is its ability to record data with smart sensors and transfer it via the Internet. Future success will depend on how sectors and companies handle the information collected by IoT items. The strategy and decisions of every company will be supported by data, for example to inform those responsible for supply chains about gaps in security or inefficient processes within the supply chain. Thanks to more detailed results, companies can gain a better insight into their processes and products than ever before.

What competencies are necessary

Cooperation between separate departments: the Internet of things leads to the marketing department playing a central role in maintaining customer relations. Those responsible can read from the data collected whether customers are responding to the current communication campaign, and any required adjustments to the way customers are addressed can be implemented quickly. The cross-departmental cooperation within the company allows bundling of strengths to achieve a mutual goal. This strengthens the relationship between marketing, IT, customer service and sales.

Revenue pportunities from the Internet of things

There are more opportunities linked to IOT.

Data competency: in order to evaluate the variety of data provided by the Internet of things quickly (in real time if possible), the technical requirements must be in place. However, no particular hardware investments are required in order to, for example, connect measuring devices located far from each other in hard-to-access locations. A simple Raspberry Pi costing around 40 euros, to which several measuring devices can be connected, is used at each location. All other computing and storage resources are cloud-based.
However, the right employee expertise, which is more commonly found in new professional profiles, such as data scientist, is also necessary.

Focus on IT security: functional, promising solutions for use of the Internet of things require comprehensive security solutions. If these are not available within the company, looking for an expert partner is recommended. This is because the increase in access points to the network of an organisation together with a partial existing lack of security standards for IoT devices means gaps in security around companies who have installed such devices. Device manufacturers often use the same initial password for Internet access as an easy-to-decrypt standard setting, and this open the gates to potential attacks by hackers.

Possible partnerships: Industry 4.0 and the Internet of things require know-how that is not available in every company. With this in mind, it makes sense to keep an eye out for partners who handle knowledge transfer, for example, as part of a digitalisation strategy.

Corporate bravery: the enthusiasm for innovation generated within a company is matched by the uncertainty over whether customers will be so quickly won over. In this context, it makes sense to test new strategies by trial and error and to involve users and customers from the start. Although every sector has different challenges in terms of the best way to implement digitalisation, the greatest benefit is available to all: collection of data and its analysis in real time. That creates services that would never have existed without the Internet of things.

 

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