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3 Reasons Why IoT is the Key to Business Transformation Strategies

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IoT has progressed far beyond the novelty phase. Businesses have grown in confidence and have seized upon inexpensive wireless IoT devices to drive their implementations. Horizontal IoT cloud platforms are evolving quickly to support the rapid acquisition of IoT traffic.

IoT began with many heralding the age of connectedness. Such simplistic thinking became a natural outgrowth of IT-centric mindsets that sought to graft revolutionary technology into a conventional, existing framework. The bias of many in the industry just assumed that IoT would become a mere cog in their well-traveled IT vision.

IoT means so much more than simply establishing connections between devices and systems. IoT revolves around Operational Technology (OT). The distinction between OT and IT, means everything to today’s business transformation. IT-centric thinking supports existing business structures and processes; OT-centric thinking creates new business opportunities.

Those that appreciate this distinction will recognize IoT for its transformative power. Those that fail to appreciate this significance will fall victim to competitive forces already on their doorstep.

Below, we examine three ways IoT drives business transformation today.

Hardware to Services

History provides too many examples of organizations that failed to adapt or recognize the coming shifts in the market. The pitfalls of hardware-centric thinking continue to this day, with many enterprises unable to escape this trap of narrow thinking.

Many companies have been founded on product manufacturing in delivering critical devices and systems. Consider, for example, the entire ecosystem of vendors that deliver HVAC equipment (e.g., chillers, cooling towers, RTUs, AHUs), lighting equipment, Building Automation System (BAS), etc. that form the infrastructure within buildings. Established business lines built on delivering these hardware products have existed for decades.

IoT ServicesIoT is not a respecter of business traditions. IoT provides the tools to pivot product strategies to keep up with rapidly changing market demands.

For product companies, IoT creates new business lines by enabling ongoing services that monitor performance of those products. If manufacturers are content to merely ship products, then they will cede future subscription revenue opportunities to third-party service providers that are all to eager to meet the demand for advanced analytics (e.g., predictive maintenance) to maintain optimal product performance.

With inexpensive microcontroller (MCU) devices, IoT extracts real-time operational data from existing equipment in a building, seamlessly transports the data to the cloud, and launches a host of new real-time service opportunities. Hardware manufacturers that do not currently deliver real-time data from their products into the cloud risk immediate obsolescence.

History is not on their side.

They face a daunting task in developing IoT technology outside of their core expertise.

Customers Demand Visibility

Manufacturers may recognize the need for real-time services, yet grudgingly acknowledge the accelerating pace of business transformation. Those comfortably in the lead will often only recognize the problem when new competitors pass them by. Nobody believes they will be known as the Blockbuster of their time in dismissing the competition until far too late.

Real-time service expectationsDo you listen to your customers? They’ve changed. Patience is not their virtue. Customers increasingly expect real-time services with anytime, anywhere access. Equipment manufactures that fail to deliver real-time visibility (e.g., cloud dashboards) of their products in the field, have lost a tremendous opportunity of driving and expanding on their customers' User Experience (UX). "User experience" encompasses all aspects of the end-user's interaction with the company, its services, and its products.

“The first requirement for an exemplary user experience is to meet the exact needs of the customer, without fuss or bother. Next comes simplicity and elegance that produce products that are a joy to own, a joy to use.”

Product manufacturers that confine their interaction to product delivery and repairs have sown the seeds of failure. IoT enables today’s transforming companies to leverage real-time data to deliver a continual series of customer touch points that drive a comprehensive UX.

If that isn’t your business, then look over your shoulder now. It may already be too late. 

He who controls the UX, will control the customer.

Enterprise Efficiency

Don’t conflate a customer’s desire for a fulfilling UX as something born in the mere vanity of a User Interface (UI). Enterprises are hard-wired today to search out greater efficiencies. They know instinctively that the absence of visibility into their underlying processes saddles them with flawed operations and processes. They understand the root of the issue.

IoT is valued not for its name, but for the value it delivers in securing real-time data resources for the enterprise. Digitization of assets and processes drives agile decision making to identify systemic problems, to make needed adjustments, and to continuously monitor system performance. Cost reductions through elimination of obvious waste will unquestionably follow.

Energy efficiency is too obvious, but still in its infancy. Can you monitor your building’s energy consumption in real-time? Do you know the sources of waste and inefficiency? The industry recognizes the simple next step that IoT-enabled real-time sub-metering provides much needed visibility into the consumption profile of a building and its subsystems. You can't manage what you can't measure.

Don’t stop there, however. IoT is driving smart building trends that continually threaten to unseat market incumbents. New market players will rapidly enter the competitive arena with agile IoT tools that will easily outpace the glacial efforts by incumbents to modify and upgrade legacy systems.

Conclusion
IoT has grown far beyond a market niche. Dismiss its potential at your own risk. The uncomfortable question most companies wrestle with today is this: "How fast will change descend upon us." IoT will transform, ensuring that only the paranoid will survive.

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