Although only a futurist’s dream just a few years ago, the Internet of Things is now infiltrating every part of business. How can companies take advantage of this new truly connected business landscape and provide value for customers while staying ahead of the competition? Explore our selected insights to find out.
If you were asked to describe in one word the biggest driver of digital change over the last decade, you could do worse than say ‘connectivity’. The coming of age of mobile telephony, the digitisation of content and the explosion of social media have created a connected economy that’s reshaped the worlds of media, publishing, music, film and television. Now, the ‘Internet of Things’ (IoT) - the term used to describe the concept of bringing this age of connectivity to physical products – is becoming a reality. The effects on industry will be profound.
According to technology research firm, Gartner, 4.9 billion connected objects will be in use in 2015 (a 30% jump from 2014). This figure is estimated to reach 25 billion by 2020 – meaning there will be twice as many IoT devices talking to each other as there will be smartphones, tablets and PCs. What was still a futurist’s dream just a few years ago is now infiltrating every part of business.
As our 6th Annual Digital IQ Survey of 1500 companies showed, business is gearing up for a fully connected future. According to the report, 20% of companies are currently investing in IoT sensors, up from 17% in 2014. Today connected sensors are being built into everything from home refrigerators to city refuge bins to vines in ‘smart vineyards’.
Essentially the IoT helps businesses achieve the goal of ‘intelligence at the moment’ – giving them insights and analysis into parts of their physical operations that just wasn’t measurable in the past. That data is transformed into insights, delivered when and where it’s needed to make and implement better strategic and operational decisions – and in many cases, to gain competitive advantage.
Every industry will see their productivity, market intelligence and reporting processes shaped by the IoT. But some sectors are already gaining a distinct advantage in this truly connected working environment - and they’re not the ones that might initially spring to mind. As our recent Digital Pulse highlighted, the 10 sectors leading the IoT charge include financial services, technology, healthcare and automotive - but it’s energy and mining that currently tops the list. In that industry, sensors are dramatically improving safety in mines by monitoring carbon dioxide levels and noxious gasses.
The lesson here is that the advantages that IoT technology brings aren’t always obvious. It will take smart CEOs, COOs, CMOs and CIOs to imagine how a connected business can provide value for its customers and stay ahead of the competition. Central to success will be a keen understanding of how you implement the IoT in product design and how you use the Big Data that the IoT will deliver. As Michael Dell, Chairman and Chief Executive Officer of Dell Inc., made clear in our 18th Annual Global CEO Survey, “The most important opportunity is big data - the data economy, machine-to-machine connections, machine learning, the ability to take data and turn it into knowledge and insights.”
As always, with new opportunities come risks - and a future that involves billions of connected devices is fraught with cyber security headaches. Our recent Global State of Information Security Survey 2015 found that interconnected devices are vulnerable to attack because they lack fundamental security safeguards. However, as strategy+business argues in A Strategist’s Guide to the Internet of Things, the benefits of embracing the growth of IoT outweigh the risks as long as a company treads carefully and methodically.
In the not so distant future, digital technology will connect everyone and everything. Will the internet of things usher in a new era of commerce?