How to Profit from the Internet of Things

By Glenn Johnson

Costs are a major consideration, but from better engaging with your customers to improving regulatory compliance, IoT technologies offer a wide range of business benefits.

  • TAGS

The Internet of Things may be the next big money-maker, but industry leaders are still debating how to unlock its potential value. In fact, while most companies say that the IoT will likely boost their sales and efficiency, few of them have a clear implementation strategy in place.

While the IoT may be regarded as a new trend, several systems based on radio frequency identification, machine controls, and sensors, which form the foundation of the IoT, have already been implemented. With the rapid growth in the number of networked devices and sensors, as well as the potential openness and integration of many networks, there are numerous opportunities for businesses to profit from the IoT.

Enhance Customer Experience
IoT-enabled technologies deliver improved, next generation customer service—with enormous benefits to consumers—and multiple advantages to manufacturers, retailers, telecommunications firms and other service providers. Businesses equipped with the large quantities of data collected via the IoT are better able to understand their customers, leading to more personalized product offerings and more efficient service organizations.

Beacons, sensors, machines and mobile devices can all work together to improve customer experiences. More than half of the top 20 newspapers in the United States currently use IoT systems to enable robots to place regional ad inserts in local editions.

Imagine a rental car with a locator beacon. Can’t find your rental car? Don’t even remember what color it is? No problem. Activate the rental car company app, press “locate,” and the app will walk you to your car.

Improve Operational Efficiency
The Internet of Things has helped improve industrial output. IoT systems have been used to create production dashboards that utilize real-time data from the factory floor and then integrate this information with enterprise systems, enabling managers to continuously improve manufacturing efficiency.

Health care has embraced the IoT to turn data-sharing between medical devices (via Internet, Intranet or RFID) into a lifesaving operation. Information is transmitted between different devices to support everything from relieving minor illnesses to hospital inventory management, to correcting life-threatening conditions.

For example, an IoT system is currently being used to automate the retrieval of medical supplies for placement on surgical trays. The IoT system knows whether the surgeon is right- or left–handed, and the robotic system retrieves parts in the proper order, even taking into account the preferences of individual physicians. The solution increases the efficient use of the hospital’s extremely busy surgery staff.

Enhance Compliance Processes
The Internet of Things can enhance compliance processes by sensing a wide variety of conditions: temperature, humidity, air pressure, smoke, proximity, light, radiation, toxic gases, weight, speed, momentum, orientation, electromagnetism, vibration, sonic levels, speech and much more. As conditions move dangerously close to non-compliance, automated remedies, alerts, alarms and escalations can be triggered, while the events are logged for later reference. We are seeing compliance-focused IoT applications in everything from agriculture to transportation.

At a modern slaughterhouse, an IoT application for food traceability tracks the entire supply chain so that any individual cut of meat can be traced to the source animal.

Greyhound, as an example, is loading every bus with new technology, including adaptive cruise control and sensors on brakes, so it can assess drivers’ safety compliance.

Reduce Risk
The Internet of Things can also reduce risk across a wide variety of business processes. Applications for perimeter access control, avalanche early-warning systems, fire detection, pollutant monitoring, leak detection, tampering detection, and many other risk reduction and avoidance systems are using IoT technologies.

For example, an IoT application currently controls backstage access to hundreds of sporting and entertainment venues across the United States through a network of pass readers and access-control devices.

The ROI of the IoT
Although there are ample opportunities to leverage IoT technologies, before a company calculates a return on investment (ROI), there are several other pieces that need to be in place. Millions of micro-transactions per second—involving vast networks of sensors, controllers, beacons, smartphones, tablets and other devices—will require systems that can handle large volumes of data using in-memory computing approaches. You will also need integration platforms to enable data sharing between customer relationship management (CRM), enterprise resource planning (ERP), and back-end financial and manufacturing systems.

However, the benefits far outweigh the costs. Consider, for example, all of the increased efficiencies that can be experienced by the automotive industry. Traffic-management systems can provide more accurate instructions to avoid traffic jams and accidents based on real-time data collected from connected cars. Automotive parts manufacturers can benefit from data revealing wear and tear, prompting them to pre-order replacement parts and notify drivers before equipment failures occur. Car-sharing apps can use real-time location information to encourage car pools. There are even proposals for insurance systems that would adjust their rates based on vehicles’ geolocation and driving behavior.

The Internet of Things can streamline manufacturing processes as well. After all of the sensors and information-sharing systems are in place, businesses can generate a significant return on investment to make a profit from the IoT.

Glenn Johnson is the senior VP of Magic Software Enterprises Americas. He has presented his views on the Internet of Things at dozens of industry meetings and conferences, and his interviews about software industry issues have been aired on NBC’s Today Show, as well as E! News and Discovery.