Ways IoT is Transforming the Businesses Today

The Internet of Things (IoT), adoption is increasing rapidly. Andrew Hobbs examines the key ways that it is changing the business world.

Data is now available for almost every aspect of our daily lives. Smart watches can track every step and measure each heartbeat. Our smartphones keep track of our location, our hobbies, where are we going on holiday and what we are considering buying.

These insights can be beneficial to the customer and the product manufacturer. We are all advancing into an Internet of Things world (IoT), which, in the end, is good for everyone. It helps us live better and keeps us connected to those who are important to our lives.

This technology is used in business every day. IoT devices collect and transmit data to monitor critical processes. This gives us new insights and efficiency boosts and allows companies to make better decisions.

They inform organisations about what is actually occurring, not what they believe or hope to be happening. The data they collect is a gold mine for AI and analytics systems that can uncover patterns of behaviour or use previously unknown.

The IoT market, which includes hardware, software and systems integration, is expected to reach $520 billion by 2021. This figure is more than 100 per cent higher than the $235 billion spent on 2017

Two years ago, there were fewer proof-of-concept trials in companies than now. The number of enterprise customers who are considering new use cases has risen to 60% in 2018 compared to 40% in 2016.

According to Market Research Engine, the Industrial Internet of Things market (IIoT), is expected to exceed $176 billion by 2022 according to a report.

It is important to understand the impact of IoT technology on strategy and operations in order to consider how IoT could be used within your organisation.

5 ways the IoT can enable digital transformation

Let’s discuss here the top ways in which IoT can help the businesses.

Improved business insights & customer experience

The rise of connected equipment in manufacturing, aviation and healthcare is opening up new data streams and analytics opportunities. Companies are now able to gain greater insight into their business operations as well as how customers use their products and services.

This has been possible in many cases thanks to cloud platforms offered by AWS, IBM and Google. However, there is also a shift toward edge computing in certain industries in an attempt to reduce latency (and other drawbacks), which can be caused by relying upon third-party data centers.

Understanding how customers use their products helps companies better serve them and enhance the customer experience.

The retail industry is a leader in technology-driven innovation in this sector. This can be seen in the widespread reports of the fall of household names. Ocado, Amazon and other retailers have prospered thanks to a data-driven strategy.

The future of retail is connecting with customers and reducing friction. Today’s shoppers are influenced by the’want it now’ mentality, which sees convenience as more important than brand loyalty. Many customers prefer online shopping.

People with stakes in physical stores should also innovate. Predictive recommendations, smart fitting room, and AI are all now possible.

Retail settings are perhaps the best example of IoT technology influencing customer experience.

IoT helps customers interact with products in a virtual and augmented reality environment. Although some solutions are still somewhat cumbersome, the message is that IoT can provide a boost to high-street and main street shops at a time where conventional online retailing is deteriorating.

As with many IoT customer-facing implementations, there are also other business benefits of IoT: stock/inventory management and supply chain management can be improved, as well as better stock/inventory control. For example, a lot of data is collected about popular products as well as up- and cross-selling opportunities.

UK-based Sainsbury’s turned to scan and pay technology to eliminate friction points during the shopping experience. This technology was used by shoppers’ smartphones to scan and pay technology, which allows them to skip the queue at the checkout. Similar technology has been tested by the Co-op.

Other traditional retailers like M&S have also seen this shift and are now looking to retrain their employees to be better equipped to use data analytics.

Amazon uses a more advanced solution in the US for its physical Amazon Go store. It detects when products have been moved and places them in virtual carts. The system also knows when customers have left.

The US startup Zippin explores the possibility of using a variety of technologies to offer a similar seamless experience. This will not only benefit the customer but also the retailer by reducing costs and improving inventory management. By tracking which goods are the most popular in which settings, it can help reduce inventory management.

All IoT applications share the same benefit of enhancing user experience and incorporating new data streams and insights. This has huge strategic and operational potential for all types of organizations.

IoT reduce Cost & downtime reductions

These new insights often lead to a reduction of operational expenses and downtime.

Digital twin technology, which is the rapid rise of digital twin technology, a digital model of physical assets that are built from real-time data in either pure data or as explodable, 3D representations, is a competitive advantage in industrial IoT applications.

Digital twins, when combined with other technologies such as big data analytics and enterprise asset management, smart supplies chains, augmented reality and artificial intelligence, promise a new world of proactive maintenance and predictive maintenance.

Imagine a small but crucial component failing in an industrial plant, causing downtime for hours or even days while it was fixed. Imagine every component of the installation being stored in a digital twin. This told engineers exactly where it was located and how to replace it. Shortly scheduled maintenance resulted in the replacement part being made and fitted.

This technology can help reduce operational costs and downtime in factories and other industrial facilities, and it will also allow workers to learn on-the-job about the machines and/or how they can be disassembled for maintenance and upgrades – possibly via tablets, AR headsets or smart goggles.

Laing O’Rourke, a construction giant, is using digital twin technology in order to solve a problem that many people have every day: unreliable railways.

At this year’s Internet of Manufacturing in London, Dr Graham Herries (Director of Digital Technologies at Laing O’Rke) explained how the construction company uses its Optimised Digital Twin platform to rework operations of the West Coast Mainline, one of the UK’s busiest rail corridors. It is currently operated as Virgin West Coast.

Herries stated that Laing O’Rourke’s digital counterpart of the network can model the movements of its trains and coordinate when they return to the depot for maintenance.

Each train must be serviced every 20,000 miles. It’s a logistical challenge to make sure that trains finish where they need to, are serviced frequently, and that passengers get on the schedule.

This scheduling work is usually done by a person and takes about three hours per day. It can only be planned one day in advance. This can lead to trains being over-serviced.

Herries found that by modeling the network as a digital Twin and using a heuristic maintenance schedule algorithm, Herries was able to reduce the time to 19 seconds in Microsoft Azure. However, the process still requires 30 minutes of human validation.

Herries stated that digital twins make it possible to plan ahead for up to 23 consecutive days. This significantly reduces over-maintenance. To ensure that trains don’t travel more than others, rolling stock usage is balanced across the fleet.

According to Herries, the result should be a more reliable network with fewer cancellations or platform switches, lower maintenance costs, and better train usage.

Many industries can benefit from digital twins, including oil, gas, and other energy sources. They also have the potential to provide similar benefits for manufacturing and the supply chain.

Efficiency & productivity gains

Leaders can identify opportunities to improve productivity and efficiency by connecting their business processes. According to an Inmarsat study, these benefits are expected to increase revenues by $154 millions.

Spanish employees at Ford’s Valencia Engine Assembly Plant are wearing a special suit with body-tracking technology. Ford and the Instituto Biomecanica de Valencia created the pilot system. It involved 70 people in 21 areas.

This technology is similar in concept to motion-tracking systems, which record athletes’ sprints and turns as well as actors’ movements and speech. Ford uses the same technology to create less stressful workstations and improve its manufacturing processes.

Ford’s workers’ movements are accurately tracked by Ford, which allows it to make data-driven improvements to its vehicle production processes. This makes them more safe and efficient.

These same principles can also be applied to machines that identify bottlenecks and problems in production lines.

Asset tracking & waste reduction

Efficiency and productivity are closely linked. Waste reduction is a key goal of IoT tracking.

Our recent interview was with Werner Reuss from Orange Business Services about how the IoT will transform Manufacturing. He shared an anecdote which speaks to the immense value of IoT in eliminating waste and inefficiencies within supply chains.

“We worked with a European car maker. This company had a complicated supply chain, with tens to thousands of boxes that contained production materials. Each box had a price of 400 euros. The company lost tens of millions of euro due to the loss of boxes in its supply chain.

We came up with a way to track every box with a device that updates the location twice daily. It was a great way to catch any stray boxes, but they also managed to triangulate each box’s exact location and found a whole bunch of boxes that were misdirected. They were able reduce the number and cost of the boxes that went missing.

“We have also joined forces recently with Siemens to accelerate the adoption of IoT in industrial sectors. Initial focus will be on developing solutions for asset tracking and monitoring to optimize the supply chain and improve efficiency. We also plan to develop digitally enhanced products that increase customer satisfaction and develop new business models.

IoT implementation is more beneficial for businesses with more components. The supply chain industry has been the largest adopter of IoT.

New business models

The most obvious uses of the IoT are efficiency, productivity and process monitoring. However, companies are increasingly realizing the potential for it to provide information about their customers and how their products are used.

Although these items were not originally intended to be connected, the IoT has the potential to add value and improve their design through the vast amount of data collected about their actual-world use.

Companies that integrate the IoT in their products in a way that both benefits the customer as well as their internal processes will reap enormous benefits.

Organisations can also use the IoT to create new revenue streams and move away from traditional business models. Customers can get subscription-based services that are based on the connected nature and products of companies, which often offsets the initial costs of entry.

Amazon’s success in the consumer market has shown that products that provide valuable data to businesses can allow them to offer similar products at lower costs. This opens up new markets and replaces revenue from customers capital expenditure (capex), with operational expenditure (opex), through subscriptions.

Beyond IoT

These are just a few of the many benefits of using IoT technology in a larger digital transformation strategy. Combining IoT technology with other emerging technologies, like AI, VR, AR robotics and blockchain (in terms smart contracts and supply chain), businesses can unlock previously untapped revenue and gain competitive advantages. They also have the ability to create new training methods and produce better products and services.