The IoT is ready for business, and you?
In the past years, the Internet-of-Things (IoT) has rapidly emerged in the consumer goods market. Wearables and the smart home have seen the light of day and found their way into many of our lives. As the IoT grows and people get used to the idea of “connected things”, also businesses and industries start to see the possibilities the Internet-of-Things has to offer. But don’t be fooled, adopting IoT into your personal life or in a whole company, that’s a whole different thing.
Industrial IoT is here to stay
As probably the first one to mention the term Internet-of-Things, Kevin Ashton stated: “In the real world, things matter more than ideas”1. What he means by that, is what he still understands as what Internet-of-Things stands for: so far the internet was mainly dependent on humans for its information. Humans typed it, put in the collected data, uploaded the picture, etc. The data on the internet was limited to the human capabilities. However, if you let things communicate data directly, (1) the data is more accurate, as the human error is eliminated, and (2) it’s more efficient as it leaves more time for humans to focus their attention on other, more important things1.
This is what started years ago with Machine2Machine (M2M) communication, where equipment was directly connected to the internet to interchange its data towards other machines or human operators. Predominantly the powered assets (the ones with plenty of power supply, like heavy equipment, machines, trucks, cars, etc.) could now be connected to the internet, but the non-powered ones were yet to remain unconnected efficiently. To solve this, most companies in asset-intensive industries implemented some sort of (digital) automation in their processes specifically for those non-powered assets. Think of RFID, barcodes, QR codes or something else. By automating these processes, important efficiency gains were accomplished. However, local infrastructure and/or manual scanning of codes are capital intensive and still prone to human error.
Since recently, the technology is mature enough to connect non-powered assets directly to the internet with minimal infrastructure investments and extremely low maintenance costs over time. Today, sensor electronics have evolved to be installed with ease (as easy as a sticker) and to last for many years without charging. Just as for consumers, convenience is key for businesses too as they want something that’s easy to implement and that can scale fast. Nonetheless, as IoT can be a big investment, it’s important that the numbers add up in the end. Today the technology and lifecycle costs of IoT have proven to be economically sustainable, offering important return on investment (RoI) and interesting business potential for asset-intensive industries.
As the IoT is consolidating and the technologies mature and evolve, also the companies are warming up to the idea of IoT. Gartner forecasts about 7.5 billion industrial objects will be connected to the internet by 20202 and a recent study* conducted by Forbes3 shows that IoT is becoming one of the most important technologies and that companies are very much embracing it. However, they do admit its implementation has its challenges, such as presenting a gripping RoI, keeping the solution secure, and getting different departments to cooperate on it, a.o..3
*survey conducted at companies with over 500 employees
IoT – Getting it right is no piece of cake
The goal of implementing IoT solutions for businesses is of course to create added value by generating new service models and improving internal and external business processes, all of which starts with convenient installation and scalable roll-out of the solution. In other words, Industrial IoT solutions need to be ‘plug-and-play’ for scalable implementation. This not only means that the sensors should be ‘easy to install’ by technical users, but also that the solution itself should be easy to integrate in the existing processes, and that it should easily provide reliable information to all the stakeholders. Sounds awesome, right? It’s important with this to keep in mind that implementing IoT is not always as easy as it sounds and there’s more to it than just “plugging the batteries” and start playing with it. So how do you tackle this?
Our experience leads us to conclude that all different levels of the IoT solution (chip level – firmware – communication – platform – end-application) need to be well-tailored to each other and work seamlessly together to harvest the real benefits of IoT (i.e plug & play, cost-effective, minimal maintenance). In addition, the said solution needs to be able to adapt with the evolving needs and constraints that can be expected in the changing business parameters. Especially for asset management of non-powered assets, the following elements are to be well considered if you’re looking for a solution that fits your current and future needs and that provides the best return on investment over time:
Illustration by Sensolus
1. Flexibility: First and foremost, you need a flexible solution that can adapt according to what you decide with the harvested data. As implementing IoT will most likely provide new insights in your existing business processes, the business parameters will evolve as well. Therefore make sure the IoT solution you adopt has remote configurations enabled. This means it has a certain degree of flexibility and allows you to alter its parameters over time and tweak them to your business’ evolving needs. For example: non-powered assets (such as packaging) may have the need for outdoor and indoor localisation, with even zone-based indoor localisation. Ensure this type of indoor zoning can be applied even in a later stage of the project.
2. End-to-end solution: As your business parameters will evolve over time, it will impact your IoT solution in place, which in turn will alter your operational risk. A single parameter change can impact the complete business ROI as it will impact the life cycle cost of your IoT solution. Having and end-to-end control on the solution is paramount, this includes operational metadata to assess the operational impact and risk related to the change of parameters. As said by BCG, an IoT solution delivers added value only when all layers work seamlessly together4. For example: for non-powered asset monitoring, the required location accuracy at each stage of a process can have a huge impact on the life cycle cost. Localisation can be done very energy efficiently (but much less accurate), or on the other hand, very precise but consuming much more battery.
3. Vertical integration: Vertical integration of IoT within the different departments of a business is crucial. IoT solutions can support specific day to day activities, but the real IoT value kicks in when it is leveraged within the multiple layers of the company. At that moment it not only impacts the daily processes of a single department, but it also impacts the future strategy and decisions of the business as a whole, both for internal as well as for external processes. And again, the IoT solution should be able to adapt to the evolving requirements of each of the departments within the company, which in turn requires flexibility and operational risk assessment of the proposed changes.
The proof of the pudding is in the eating
If you’ve taken into account the above, you’ll see your IoT project is successful when you’re able to act on 4 complementary layers:
1. A day to day improvement of the processes and workflow within your company. For example: for non-powered asset management it often means providing an easy way to locate the assets when your really need them.
2. Providing the analytics and insights, which induce a potential process change (internal of the company). For example: having insights into the effective use and location of all your non-powered assets over time, allows you to improve processes such as capacity planning, logistics, preventive maintenance and even introducing optimised financing schemes based on effective use of the assets.
3. Enabling information sharing in a transparent way towards different external stakeholders (customers, suppliers, 3rd party contractors, insurance, etc.). For example: detection of an unexpected shock during the transport of an asset, can provide all actors a timely indication that inspection, repair or replacement might be required upon arrival at the next destination.
4. Lastly, all of this leads to the possibility to create new business models throughout the chain. For example: application of flexible pricing of leased or rented assets based on effective use of the non-powered asset (pay per use models).
As said, the IoT is making its way into different industries, it’s evolving fast and becomes crucial for companies to keep that competitive edge. Notably in asset-intensive industries, there’s still a lot of potential to discover the advantages of IoT solutions and to harvest the benefits throughout different layers within the business. Today, the success of IoT is no longer technology related, its success depends on how it gets embedded in the existing processes and if it provides both future flexibility and reliability to become an essential key for your future processes. IoT is ready for business, and you?