In Israel, connected cows give four times the milk of the average bovine. In Northern Canada, mines run safer and save millions on energy due to sensors tracking both employees and environmental conditions.
The value people and businesses can derive from Internet-connected things and the data being driven from those things is already everywhere. And it’s only going to scale up from here.
Earlier this year, the McKinsey Global Institute looked at 150 specific applications of the Internet of Things (IoT) that are either already commonplace or likely will be within ten years, and decided that by 2025, those IoT applications will drive at least $3.9 trillion a year in incremental economic impact, at the very least. Want to take the glass-half-full view? Try a whopping $11.1 trillion in additional value created.
The ability to cheaply put sensors and processing in just about anything, and connect any point of data to those who need to know that information in real time, has the potential to introduce unprecedented changes in the way we do business and the way we live our lives. From the home to the city, from agriculture to transportation, every sector of industry and every thing in each of our lives can be transformed, some in ways we can’t even begin to imagine today.
To make the most of the opportunity, every company will have to realize that it’s a data and analytics company. The most important benefits of pursuing an IoT strategy come from the ability to collect and analyze data within the enterprise, and to act quickly on that data. This means new challenges for both IT and business leaders.
IoT is about much more than IT, but there’s no doubt that IT plays an important role in any IoT strategy. IT will be tasked with making the connections between sensors and central decision-making systems, and as a result, the bailiwick of IT expands well beyond the familiar data centre and wiring closet. IT will have to become more embedded into virtually all aspects of the business, and forge particularly strong connections with operations, as much of the value of IoT is located at the intersection of technology and business processes.
Companies will have to embrace the idea of sharing data. Today, the most valuable data is centralized at the fingertips of the C-suite. But when that data is being collected and disseminated in real time to influence business-shaping decisions on the fly, that data will have to be more readily available to the people, and systems that will make the decisions. The executive crowd will have to get used to the idea that sometimes, they have to cede decision-making authority to the machine which can analyze data and trends so much faster than any human. At the same time, timely human oversight is still a very real necessity – even the best autopilot system still needs highly-trained pilots on the flight deck to ensure it’s not making incorrect conclusions or acting on misleading data.
With data becoming the “crown jewels” of an organization, companies will need to rethink how they handle securing that data, and the impacts of privacy and other data governance requirements on how data is handled, acted upon, and stored for later review.
Businesses will have to be willing to challenge themselves, and accept that the IoT journey is perhaps one of those journeys without a final destination. Every advantage gained from a new way of using a point of data can lead to myriad more by using that new data point with others in new and novel ways. Businesses must be willing to challenge themselves to find new and novel data points to collect, and to rapidly change their business processes to take advantage of newly-gained insights from that data.
The power of interconnecting everything in many ways we haven’t even thought of next could be one of the biggest transformations businesses have faced since industrialization, and the economic value created by connecting things and processes has the potential to dwarf the economic value created by the Internet in connecting people.