Speeding up Enterprise Digital Transformation with IoT
24 July 2017
“Without digital transformation, enterprises will fail, and without IoT, digitization never happens!”
Internet of Things (IoT) is critical for successful enterprise digital transformation, though many organizations do not specifically mention the term IoT.
However, IoT is not just about devices
IoT ushers in a new Digital Age with optimized manufacturing production and supply chain networks, and interconnectivity of disparate systems through sensors. IoT and cloud-based GPS solutions improve the visibility of goods in transit by tracking their exact location, temperature, humidity etc. Though the devices generate valuable data, IoT is not limited to devices. IoT in digital transformation encompasses the intelligence that is infused in the assets to consume and analyze the data to develop actionable insights.
Digital Transformation and IoT- the Inseparables
Internet of Things (IoT) brings the paradigm of connectivity into business and furthers digital transformation by uniting people, processes, and devices under one umbrella. This integration empowers industries by helping them gather valuable business insights. IoT, regardless of any industry, refers to connecting physical devices to a common network so that they can collect and exchange data easily.
Many industries, especially manufacturing companies, are traditionally known for investing more in operational technology (OT) and less in information technology (IT). This is probably due to the asset-intensive nature of those companies. As new digital technologies evolve, many of these industries are hamstrung by decades-old legacy systems and processes. Digital transformation demands the integration of OT and IT that will help enterprises unlock opportunities and make their products and services more valuable and efficient.
When IoT meets Digital Transformation
IoT merges both digital and physical worlds. The massive amount of data collected by the connected devices can help in formulating new business models and fundamentally change enterprise operations. So what happens when IoT and digital transformation converge?
- Explosion of data– By 2020, there will be 50 billion connected devices These devices- smart appliances, meters, connected machineries, automobiles, and more- produce massive amount of data.
- Cloud will drive business– Cloud offers the agility and flexibility with which businesses are able to respond to the changing market needs. Cloud platforms are cost-effective, fast, and connect to people and devices across the globe.
- Boosts business and customer engagement– The invasion of mobile and social media networks gives decision-making power to people as they are equipped with real-time information. This integration brings up novel ways to engage businesses and its customers.
When the devices are allowed to communicate, it brings multiple benefits to enterprises including improved decision making, dynamic response to product/ service demands, increased productivity, and real-time availability of actionable insights. IoT is not just limited to these organizational advantages, it can contribute to asset management through predictive maintenance and statistical evaluation that help increase reliability.
Next steps to IoT success?
Most of the established companies have digital assets, but they don’t know how to truly monetize those assets in the emerging digital world. IoT projects should create scalable software distribution systems, third-party ecosystems, and billing solutions to create new revenue streams that are flexible and ever-expanding.
To taste success in the digital sphere, IoT projects must undergo these six steps:
- How to design and deploy the devices?
- Connecting the device to a cloud platform (this will improve connectivity)
- Secure software distribution (with minimal user intervention)
- Create a vibrant third-party ecosystem to stay relevant in the market
- Find the right marketplace to promote and sell solutions
- Securely bill the apps globally and manage revenue flows (monetization)
The digital transformation journey is complex and application of IoT will bring brand new use cases in the coming years. The bottom line of IoT in enterprise digital transformation is best summarized in the words of Juha Pankakoski, EVP of Konecranes, who says, “The industrial Internet brings machinery alive”. Break-up the words of Juha, and you get the essence of what he means:
- IoT provides real-time insight into any device so that the data collected by the asset is available for processing. This enormously influences decision making in enterprises.
- Embedding IoT into product establishes a real-time connection with customer. This opens up new horizons to build customer relationship and experience by fostering personalization.
Delight your customer with IoT driven Digital Transformation
In earlier days, the only connection between brand and consumer was the often discarded warranty cards. Today, as soon as the user turns on an IoT device, the manufacturer is immediately connected to the user. When it comes to customer experience, IoT is also a “data capturing tool” that empowers companies with information on their customers and followers. The IoT-powered data can be leveraged to personalize online content, transform online marketing and run analytics. The connection of physical and digital world established by IoT increases the opportunity to co-create with customers. IoT makes enterprises understand the significance of the digital customer interface and improves the scope for personalization.
For the enterprises, it would mean reduction in operational cost, smarter decision making, enhanced customer service and improved customer engagement. Supporting IoT initiatives might require a hefty investment initially, but IoT is perceived as the key to unlocking the doors of digital transformation. And, that’s what big brands like Philips, Mercedes, Walmart and others are doing.
To paraphrase William Gibson, “The future is here. It’s just not widely distributed yet.”
Innovation is imperative for businesses and IoT will open the gates for innovation in the coming years.