Going by the buzz around IoT and the impact it is making across industries, it won’t be an exaggeration to say that it is set to be the major driving force for digital transformation of enterprises. It seems quite believable considering the fact that the number IoT devices are predicted to be around 20-50 billion in the next few years. Over the next few years, IoT will provide huge opportunities for companies by opening up new ways of digitizing legacy business systems, irrespective of their present level of technology dependence. By connecting a number of digital tools along with IT infrastructure, IoT offers plenty of scope for gathering intelligence, encouraging better decision-making and improving business agility.
Let us take a look at IoT and its role in enabling digital transformation in the industry.
What is Digital Transformation?
Digital transformation is the use of technology by enterprises to vastly improve their reach, enhance their performance, boost customer relationships and improve core business processes using digital advances including analytics, embedded devices, and social media. The amount of data generated by organizations over the years is enormous and with the right technology and tools in place, this data will be the foundation of the new business models in this digital era. The IoT wave is also changing the way in which organizations work and is driving them to become more agile, intelligent and digitally advanced.
Right from smart manufacturing, smart cities, connected cars, to healthcare, IoT is fundamentally transforming how these enterprises were working.
The key driving force behind IoT adoption
According to BI Intelligence reports, by 2019, IoT device shipments will reach $6.7 billion and revenues from software, devices and services is set to be around $600 billion. In addition, a huge $1.7 trillion value in the form of revenues and cost savings will be added to the economy.
Here are some of the top reasons which are driving the growth of IoT among enterprises
The massive amount of data produced by devices
There is an enormous growth in the number of connected computing devices in the world today. Billions of connected devices are being actively used in smart meters, connected cars, wearable devices, RFID tags and these are generating huge volumes of data surrounding their environment. The cost of interconnected sensors used in IoT devices has also reduced considerably over the years which has made them far more cost effective, and therefore, more widely used.
Increasing adoption of mobiles and smartphones
According to the estimates by The International Telecommunication Union, at present approx. 40% of the global population are connected to the Internet and by 2019, this is set to increase to 57%. This will lead to greater base of individuals who would show keen interest in buying IoT devices. Besides, mobile and social networks are allowing people to work smarter by utilizing real-time information and enabling better decision-making.
The rise of cloud based platforms
Today businesses are able to reciprocate to the dynamic market conditions using cloud solutions which offer greater flexibility and agility than ever before. It’s possible to deploy new solutions quickly and more cost effectively using cloud-based platforms for connecting people and devices globally, which, in turn, has led to the growth of IoT among businesses.
How IoT is driving digital transformation?
Digital transformation forms the core of business strategies for many of the enterprises today as they are able to boost their operational efficiencies, grow their business and improve customer engagement. Besides, IoT is also enabling businesses to create smarter and connected products and services. Enterprises are seeing disruptive business models paving a way for better value creation and greater performance. The use of smart and connected devices is changing the face of traditional business and forcing them to adapt to the digital environment.
IoT also helps to gather huge volume of data which is used for framing business strategies across different industries. The data generated through the devices can then analyzed to create patterns and statistics with the use of reporting tools that can offer interesting consumer insights. For example, With IoT it’s possible to gain insight about buying behavior and habits of the customer that can guide businesses to attract the right target audience.
Apart from this, IoT helps in quick decision-making which makes the business processes much smoother and helps in improving the company’s bottom line.
Impact of IoT on different industries
Manufacturing: According to studies and research, manufacturers would be investing $70 billion in IoT technologies as we approach 2020. Organizations that have already started deploying IoT solutions have observed maintenance costs reduced by 30%, while predictive maintenance has resulted in a reduction of machine related failures by about 70%. The manufacturing sector is also moving towards cloud solutions which is likely to bring down the operational costs, boost customer experience while enabling them to create better products and assist in smarter decision making.
FinTech: The FinTech industry relies heavily on data so it’s hard to imagine IoT not disrupting this segment. Many financial institutions such as retail banks have put in vast amount of resources for developing internal infrastructure as well as boosting their customer facing technology potential. According to IDC Financial Insights, retail banks would be spending more than $16 billion for digital information technology which is set to increase more in the coming years. Retail banks could be relying on sensors to improve their customer experience, just like retailers use sensors across their stores for suggesting discounts on products, recommendations etc via smartphones of the consumers.
Telecom: Telecom industry wants to use the best use of its infrastructure to provide a top-notch experience to its customers. Global telecom operators are relying on digital platforms for integrating data, connectivity, analysis, security, mobile along with cloud applications for supporting businesses. Besides, the network providers are also revising their business models, infrastructure and partnerships to stay ahead of the competition in this digital era. The organizations will need to ensure that a robust cloud infrastructure is in place, which is both agile and flexible to accommodate to the new levels of scalability and deployment required by connected devices.
IoT is undoubtedly starting a new wave of digital transformation and companies need to adapt, be more flexible and respond to the changes of this new environment to survive amidst tough competition.