This article originally appeared on Forbes by Insights Team.
The Internet of Things (IoT) is more than a technical network of connected devices and systems; it is a potential source for unlimited business value and opportunity. The challenge is being able to identify and act on the information and capabilities that IoT delivers. Only about half of executives in a recent Forbes Insights survey of 700 executives feel they are making progress with their Internet of Things efforts.
Yet organizations that embrace IoT in a big way—integrating IoT-driven data and insights into all aspects of their operations and processes—are seeing great success, and higher corporate revenue. Of the 700 executives surveyed by Forbes Insights, most, if not all, are working with or piloting IoT systems to some degree. About 14% already report having extensive IoT deployments across their enterprises, and it’s these “leaders” who are embracing new approaches and philosophies and working closely with their employees and partners to build IoT success into their corporate culture.
For these leaders, IoT means business growth. They are seven times more likely to see high rates of growth versus the early-stage learners—those organizations that are just starting to explore IoT. Close to three-fourths of the leaders report corporate growth exceeding 10% in the most recent fiscal year, compared with only 12% of the learners. Three-fourths of IoT leaders also credit IoT directly for increased revenue and profitability.
For many enterprises, the value comes from data that is no longer trapped in silos and is thus capable of being shared across the enterprise. Appliance maker Sub-Zero, for example, increased its IoT capabilities to combine multiple factory networks into a unified system that integrates with IT. Sub-Zero deployed the Cisco Connected Factory—a solution built with standards-based Intel technology—and achieved a $2,500 increase in hourly revenue for each of its production lines. In addition, because it now had data from sensors within its products, it also saw a $140,000 reduction in travel and field-testing costs.
Along with enhanced revenue and reductions in cost, companies leading in IoT report a range of benefits, including greatly expanded connectivity, better ability to meet compliance requirements, greater data security with on-site processing, and improved control over operating environments and assets. Here we delve deeper into how these leading organizations are approaching IoT and offer lessons learned.
Lessons From The Leaders
- Each IoT story varies by industry, as well as company.There are many dimensions to IoT, depending upon industry and use cases. The use cases among IoT leaders include enhancing their ability to meet compliance requirements (43%)—very much an industry-specific challenge—as well as employing IoT to increase productivity and open up new markets.
Consider the impact of IoT on advanced manufacturing operations. The emerging factory of the future is highly connected, with intelligent processes, thanks to IoT and the related Industrial IoT (IIoT). “Fueled by the rapid rise of smart technologies, manufacturers are bringing together IIoT, connected machines, robots, sensors, smart devices, generalized compute technologies, and a steady stream of real-time data analytics to automate many of the mundane—and not so mundane—tasks of the factory and the larger manufacturing system,” writes Dr. Irene Petrick, director of industrial innovation at Intel’s Internet-of-Things Group, and Dr. Faith McCreary, principal engineer and researcher. “They are doing more than just increasing industrial automation, they are helping create ‘intelligent’ factories which are marked by autonomous production, hyper-agility, and real-time analytics that provide operational transparency and make data a transformative force for the business.”
At Shimane Fujitsu, which produces business notebooks and tablets, visualizing factory processes with IoT sensor data is helping the company’s operations teams track product location and status, simplify prioritization, and save time and money. The data has helped the company overcome production errors that were inhibiting the expedited shipment of products. As a product enters the rework area, a sensor is attached and scanned to associate it with the product number to track its physical location. Location and status information is then provided to the factory manager through a desktop interface. Next, the system captures and analyzes video images of the inspection process and transmits it through the Intel IoT Gateway to a file server, while metadata, such as transmission time, product number and video file path, is sent to the cloud platform. This data provides the line supervisor with a visual representation of every product, its error and the inspection stats. This helps to reduce the probability of errors during the inspection process, but Shimane Fujitsu also reports decreased lead times and shipping costs.
For organizations such as city governments, IoT takes on a different cast. Streetlights, for example, can be transformed into smart nodes for IoT. The City of San Diego recently deployed 3,200 intelligent nodes and, as a result, achieved a 60% reduction in energy use for its streetlights and $2.8 million savings in annual energy costs. The city’s streetlights now integrate LED lighting, wide-angle cameras and other sensors with preconfigured and local intelligence based on Intel technology. This has cut energy costs even further, since streetlights are dimmed until pedestrians or vehicles are detected, and allowed for the collection of near-real-time traffic data.
Likewise, in Portland, Oregon, sensors have been attached to streetlights to count vehicles and pedestrians and track vehicle speeds, all with the goal of increasing public safety. The real-time data and associated analytics now available to traffic engineers and city officials will help with efforts to improve traffic flow—not only among vehicles, but for pedestrians and bicyclists as well.
- IoT leaders are stepping out of their business models. A company’s business model may have served it well for decades, but with so many digital upstarts and disruptors, it is time to be open to new models. IoT is not only delivering great efficiency for manufacturers such as Shimane Fujitsu but is also opening new doors for just about all the leaders in the Forbes Insights survey. Healthcare organizations, for example, are employing IoT to increase the quality of patient care, as well as improve their customer experience. Municipal governments are using IoT data to manage traffic flow better, or to increase the availability of central-city parking, thereby reducing congestion and energy use. In the Forbes Insights survey, 97% of leading companies report IoT has enabled their organizations to expand or transform themselves into new lines of business. By contrast, most learners in the survey, 71%, have yet to see such advantages.
- Data quality and variety matters. A forward-looking IoT effort requires a variety of data to ensure a complete picture of customers or operations. This data should also be trustworthy, in that it is well vetted and includes humans in the loop for monitoring. Quality of data sources is also a key element in IoT success, and leaders report employing data from a range of sources, including mobile phones, audio devices, cameras and sensors.
- IoT takes customer service and customer experience to the next level. Up until now, a typical business model consisted of shipping a product to a customer or supplier in the middle, while relying on syndicated market research for feedback until the next buy cycle. Now, with IoT, companies connect to their customers 24/7. Leaders in the Forbes Insights survey report they are employing their IoT networks to deliver new or updated services directly to their customers via their IoT networks. Ninety-six percent also report having new IoT-borne services, versus only 29% of laggards. For example, elevator manufacturers are now moving into the service business, providing proactive maintenance packages based on analytic data streaming from installed units.
For organizations still learning or struggling with IoT, there is now tangible proof that this new paradigm delivers impressive business results. The leaders identified in the Forbes Insights survey have taken IoT to the next level by infusing it throughout their businesses and being open to learning all the possibilities it offers.