How to turn the IoT from concept to money-making machine

From construction to the public sector, insurance to retail, virtually every organisation is looking hard at the Internet of Things (IoT) to assess opportunities to improve efficiency, reduce costs and enhance customer experience.

These connected devices must be continuously available to drive real-time operations, from preventative maintenance to proactive customer communications. In addition to the investment in devices and networks, where is the infrastructure to store and analyse the data and then immediately deliver it back to operational systems?

With many organisations yet to determine exactly where IoT will deliver financial returns, and how much, the challenge of interlinking so many complex components with no proven business case is a potential stumbling block.

> See also: 4 unexpected implications arising from the Internet of Things

Yet there are serious benefits to be attained, with the right approach.

Perfect storm

The widespread deployment of high bandwidth mobile networks in tandem with the creation of a vast array of low cost sensor devices has created a perfect storm: the IoT is now both viable and affordable.

But while organisations are flocking to device vendors in a bid to get involved, there are two major stumbling blocks: defining the business outcome and creating the business case.

The business outcome is, of course, easier to define in some markets than others. Within the construction industry, for example, downtime due to equipment failure can have very significant consequences, especially given the use of penalties for late completion.

With projects run on very tight timelines, the failure of one piece of equipment can knock out the whole schedule.

The chance to leverage IoT data to embrace proactive maintenance is, therefore, compelling. With real time information from sensors measuring temperature, vibration and current, for example, an organisation can track variances to identify likely problems and undertake preventative equipment maintenance.

To realise this vision requires an investment not only in multiple sensors but also a secure wireless mesh network, database to store the information and an analytics tool that can identify trends in temperature variation and flag up those pieces of equipment at risk before they fail.

In this case, replacing the traditional break/fix model with a proactive approach significantly reduces the likelihood of downtime, producing immediate savings that can make the IoT business case.

Questions questions

In other markets, however, the business case is less clear cut and will demand rigorous analysis of data collected from sensors to reveal potential opportunities. How much, for example, will customers pay to sign up for a parking service that leverages IoT to both identify available parking spaces and allocate them to individuals on the fly? Is the model workable and will the demand justify the up-front investment in sensors, networks and cloud based data storage and analytics?

The insurance industry is also massively interested in the data that could be collected via IoT – most notably the wearable technologies that track everything from an individual’s blood pressure to daily activity.

The potential of this information has actuaries salivating – but issues of personal data protection and data security are a concern. Again, would individuals be willing to sign up?

Given the somewhat nebulous nature of many potential business cases, organisations are questioning how best to embrace IoT without incurring massive up-front costs. While individual device price is low, many IoT deployments will require hundreds if not thousands of devices.

Add in the costs associated with the network infrastructure, which will require more than one network to ensure resilient 24×7 operations, plus the need for massive storage and excellent analytics to make sense of the data, and this is no simple deployment.

End to end

There are growing alliances between technology vendors and a strong move to develop IoT standards. However, the majority of organisations just want a simple, single vendor model; an approach that enables them to embrace the IoT concept without huge upheaval or investment.

End to end IoT integrators will have an increasing role to play in enabling organisations to realise their IoT visions; but organisations need to make sure that this new generation of service providers can offer all the critical elements of the IoT solution – not just devices and network transport.

And this is key because once the end to end IoT deployment is in place, organisations have a wealth of data that can be used to drive incremental business value. Within construction, for example, while the preventative maintenance value justifies the initial IoT deployment, the data also enables a company to gain far more insight into the overall performance of equipment within different construction environments, supporting better long term planning.

> See also: How the Internet of Things is changing business models

Performance information can also be consolidated into Key Performance Indicator (KPI) dashboards; to ensure everyone from maintenance experts to site managers have real time access.

A concrete example is temperature sensor data collection while concrete is being poured – in order to prevent cracking, the temperature of concrete has to remain within certain ranges during the pouring process.

By measuring this and producing a report, a construction company can mitigate against future liability. In addition, this information can be securely shared with relevant third parties, such as insurers, risk assessors, academics, equipment design and manufacturers, building management companies, and used by the customer services team to undertake proactive communications programmes.

Given the potential business benefits on offer, IoT is the hottest tech ticket around right now for good reason. But organisations need to be aware that while data is a critical part of the solution it is just a part.

Without every component of the solution in place and a trusted end to end provider, organisations will struggle to make any sense of this data storm and fail to make a compelling business case.

Sourced from Nick Sacke, head of IoT and Products, Comms365

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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