Are you ready to bring more awareness to your brand? Consider becoming a sponsor for The AI Impact Tour. Learn more about the opportunities here.
The Internet of Things (IoT) is still caught in a tug-of-war between robust demand and the continuing chip crisis. Despite semiconductor shortages and other headwinds, such as supply chain issues, political rumblings and regular COVID-19 flare-ups, the number of connected IoT devices is predicted to reach 14.4 billion this year and 27 billion in 2025.
The fact that soon every possible thing will be able to connect to every other thing, and to every person with an online device, will lead to profound changes in behavior. At 97 percent ownership, mobile phone coverage in the United States is nearly universal. 85 percent of Americans own a smartphone, 77 percent have a computer of some kind, and more than 50 percent use a tablet. 31 percent of Americans are “constantly online.” More U.S. homes are using automation solutions, from smart security and lighting systems to cleaning robots, water sensors and even egg counters. This hyper-connectedness is driving new lifestyles, expectations, attitudes, and behaviors among American consumers.
An overwhelming move to transacting online
62 percent of Americans shop online regularly, that is, more than once a month. But even in-store shoppers prefer to evaluate products and prices online before they purchase. COVID-19 created a dramatic, lasting increase in online sales in some segments, the best example being grocery sales. It further strengthened the adoption of digital payments, as even offline shoppers shifted to contactless methods in the interest of health and safety.
Engagement immersed in digital
Intelligent devices are not just enabling people to engage with the IoT, they are transforming the way people do it. According to estimates, roughly one in three Americans uses voice commands to search the internet or make a purchase. There is also a steady growth in using touchless sensing and gesture recognition to interact with devices for diverse purposes — from controlling automobile interfaces to operating medical devices. Mixed reality devices are allowing surgeons in different locations to collaborate, employers to onboard and train employees, and players to immerse themselves in fantastic games. As an expanding IoT spurs the growth of the metaverse, other categories of engagement will also become immersive.
The AI Impact Tour
Connect with the enterprise AI community at VentureBeat’s AI Impact Tour coming to a city near you!
Consumer expectations going sky-high
The rapid adoption of IoT is creating unlimited opportunities for businesses. But it’s also piling on the pressure. Consumers are willing to connect and engage more, but on their own terms: They will remain loyal to a provider as long as it responds immediately; they expect consistent service and seamless information flow across physical and digital channels; they expect contextualized experiences and hyper-personalization; and they are more concerned than ever about data safety and privacy.
IoT helps disintermediation by connecting enterprises to end consumers directly. This means that while there is huge potential for success in the IoT, it is by no means guaranteed. Enterprises must meet their customers’ expectations of experience and engagement, while addressing their IoT-related concerns. They will need to consider various aspects, from operating model and technology platform to organizational change, talent resources and appropriate use cases, to respond to new consumer behaviors and capture value from the IoT.
Building an organization that’s ready for IoT
Enterprise must organize itself to drive digital strategy in its business through IoT at the core. Since IoT sprawls across business, functional and hierarchical lines in an enterprise, it can be difficult to say who owns it. If an organization does not clearly assign ownership of the IoT, it is unlikely to derive good outcomes. In order to prevent fragmented decision-making, duplication of effort and investment, and vulnerability to breach, it is imperative to identify the person or persons in the organization who will be responsible for facilitating, managing and governing the use of IoT.
This means the organization must have the right people for the job. Apart from recruiting data scientists and other IoT technical talent, enterprises need to put together a mix of business, cybersecurity and risk management teams who can translate consumer expectations into seamless, secure experiences. Beyond human resourcing, IoT-readiness may call for several changes to the organization, just like any business transformation program. For example, it may require the company’s operating model, workflows or key processes to be redesigned to work in and with the IoT.
Scaling IoT to unlock business value
The odd deployment is not sufficient for scaling value from the IoT. Rather, enterprises should use the technology as a strategic tool to strengthen various business capabilities. These range from using sensors and connected equipment for optimizing service operations, to designing and delivering new products and services, to enhancing visibility into manufacturing and supply chain operations, to inspiring new business models.
IoT already impacting specific areas
Manufacturing is no stranger to automation; however, the IoT is enabling even the most advanced production systems to elevate their performance. By deploying sensors throughout their operations, manufacturers can get their production systems to function cohesively, respond faster or even remedy themselves in case of a malfunction. Enterprises could even make their manufacturing systems accessible to authorized external entities, such as suppliers, for improving inventory operations, or equipment vendors, for enabling remote monitoring and maintenance. Manufacturing has brownfields with existing assets and investments. Maximizing these investments while driving the transformation should be one of the key focus areas.
One universally applicable — and just as underexploited — opportunity from IoT is data monetization. As billions of devices join the IoT every year, they bring with them a wealth of information. Enterprises need to seriously think about unlocking this value. The most obvious way is to build a marketplace, assemble an ecosystem of partners and leverage the data flows to enrich the business proposition. Data can be shared with both internal and external stakeholders using trusted blockchain.
Amazon, unsurprisingly, is an outstanding example: The company takes data from Alexa to sell products to customers; it also charges third-party providers and developers for the privilege of building and launching services on its platform. Another example is the electric vehicle digital marketplace, which monetizes its data by offering it to related businesses. For example, it provides customer and market data to charging station operators, who use those insights in their pricing strategy. Enterprises can provide “as-a-service” models based on insights from their product usage.
Technology that’s scalable and secure
Handling the connections and data of the IoT will likely call for some changes to an enterprise’s operating model. The hardware must be able to generate and process data, which, along with data from external devices, must be converted into insights, and integrated within business processes and workflows. The challenge with IoT can be volume of data, some of it not relevant. Hence a hybrid edge and cloud architecture would be needed while embracing IoT.
Since the IoT is not one homogenous entity, enterprises will encounter fragmented ecosystems, impacting their ability to deploy and scale IoT initiatives. Hence, they should specify interoperability as a criterion when procuring IoT solutions. Companies that are able to integrate these disparate ecosystems and innovate with emerging technologies such as blockchain, AR/VR, and so on, will be able to drive value from IoT.
Eventually, a corporate network will have millions of IoT end points, making it very challenging to secure the organization and its customers and partners from cybercrime. Customers know this and are concerned. Unfortunately, studies show that despite acknowledging the criticality of cybersecurity, enterprises have not prioritized it. That must change. Enterprises should focus on holistic security that covers privacy, data sovereignty, regulatory compliance and traceability.
Leaders must think of security in strategic terms, considering their business model, industry specifics, and even monetization opportunities. Product manufacturers should build security into their production life cycle. And even as they go about making security “everyone’s business,” enterprises need to assign clear responsibility and accountability for IoT security inside the organization and also within extended networks, such as supply chains. Specifically in manufacturing, where IT-OT integration is opening up the production network to the internet, having a zero-trust security design is very critical.
IoT’s potential value is unfathomable, but estimates say it could add between $5.5 trillion and $12.5 trillion by 2030. Consumers are adopting IoT at speed and changing in the process. Enterprises, which have not quite succeeded in capturing value from the IoT, should make sure to factor the IoT consumer’s behaviors and expectations in their plans. This will likely call for initiatives at organizational, business and technological levels.
Gopikrishnan “Gopi” Konnanath is SVP and global head of engineering services and blockchain at Infosys
Welcome to the VentureBeat community!
DataDecisionMakers is where experts, including the technical people doing data work, can share data-related insights and innovation.
If you want to read about cutting-edge ideas and up-to-date information, best practices, and the future of data and data tech, join us at DataDecisionMakers.
You might even consider contributing an article of your own!