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The Business Value of the Internet of Things

Monday, 19 March 2012 20:28 Admin CIO2CIO
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While the Internet of Things (IoT) has not yet fulfilled the promise foreseen by the academics that first crystallized the idea at the MIT’s Auto-ID Center in the late 1990s, many IT analysts, commentators and executives believe its potential is about to be unleashed. While many discussions around the IoT center around the technologies that drive and support it, such as RFID, its pervasiveness and usefulness will ultimately depend on its ability to support businesses and other organizations in achieving their objectives. Let us look at 5 ways the IoT can do just that.

Increased process efficiency and effectiveness
The sensor-based networks supporting the IoT enable the provision of more detailed information than ever before on a continuous, real-time basis. This capability is important in a wide range of environments and situations. For example, production processes are dependent on an enormous number of variables including time, temperature, composition, the precise position of a component on a production line and so on. The ability of a sensor-based network to monitor and adjust these variables automatically can deliver significant improvements in product quality consistency. It can also reduce wastage, downtime caused by blockages or tool damage, and the need for manual intervention, as well as lowering or eliminating the associated costs.
Maintenance processes can also be significantly enhanced by sensor-based networks. Fujitsu offers a service in conjunction with Boeing that enables airlines to dramatically reduce the time spent on elements of aircraft maintenance. For example, airlines must continuously check that oxygen generators are maintained and replaced according to a strict expiry schedule. Networking the generators using RFID tags allows their condition to be assessed in eight and a half minutes. If no such system is in place, aircraft must be grounded for up to 13 hours at a time in order for the same checks to be made.

 

Enhanced customer experience
The IoT enables the customer experience to be improved from a variety of different perspectives, particularly in the consumer environment. For example, the networking of supermarket shelves can help reduce the number of out-of-stock incidences by feeding sales and stock information into supply chain processes on a continuous basis. NFC technology can also be used to change the content of in-store electronic advertisements or push particular offers to consumers based on preferences stored on their mobile phones or customer loyalty cards, as soon as they enter a particular part of the store.

 

Reduced resource consumption
Examples include smart metering of energy consumption, the automated deployment of sensor communications technology, and the development of visualization software that enable energy and resource use to be monitored and adjusted dynamically, often in real time. The applications are almost endless. Additional examples include; the automatic adjustment of cooling in datacenters depending on variations in airflow or server workload, the regulation of water and nutrient distribution in fields or greenhouses based on variations in weather or soil conditions and improving the accuracy of traffic flow information and connecting it directly with in-vehicle information systems in real time

 

Innovation enablement
The IoT also enables the evolution of entire business models. For example, in some cities, innovative car sharing services such as BMW’s DriveNow are transforming the short-term car rental business. Rather than customers having to arrive at or travel to a particular location to rent a car, they can use a website to look up the location of cars that have been left by previous users at their chosen destination. The car can then be reserved, opened electronically, driven and parked within the geographical boundaries of the service at the user’s convenience. The vehicle’s new location is updated automatically on the website, ready to be reserved and used by the next customer.

 

Faster, better-informed decision-making
For many organizations, the ability to make decisions based on more complete and accurate information, delivered on a continuous basis, is the ultimate value that the IoT can deliver. For example, in the ultra-competitive retail environment, real-time sensor- and video-based monitoring of customer traffic and behavior can provide live insight into which in-store displays are the most effective and which products are the most popular. The ability to spot patterns can enable retailers to generate accurate of how to change the store layout, product positioning or stock to maximize the profitability of retail space. Alternatively, fast access to the right information and insight could enable the relevant authorities or emergency services to respond more quickly to a potential disaster, either averting it or minimizing its impact.


The possibilities are endless for IT to add real value to the business, but many CIOs in the Middle East are still stuck in deploying core applications (like ERP), others have completed the core deployment but have not yet figured out how to use business analytics to enable decision makers in their organizations to make smart and timely decisions. On the other hands many business leaders continue to be skeptical about the value of IT and hence reluctant to invest and empower their CIOs.



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Last Updated on Monday, 19 March 2012 20:33
 

Comments 

 
0 #3 Jenny Francis 2012-07-09 14:57
That is a very nice angle I agree with you all. It gave me something to think about and an new approach to prioritize what we do in my department. Thanks
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0 #2 Noor Ibrahim 2012-05-11 09:16
As CIOs we have a big job to explain and clarify how the internet of things will affect the business, and this will be very different from one business to another.

One more thing to add to my to do list!
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0 #1 Hafez Awad 2012-03-23 20:41
Conceptually a very nice piece .. each of us needs to figure out what that means in our particular industry; retail, shipping, etc.. and then find a way to sell the business value to the board!
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