Digital Transformation: Why the Internet of Things can benefit SMBs
Whether you're running a small business or a medium-sized company, understanding the IoT is becoming increasingly crucial for your success. Although the concept may initially appear challenging - we try to simplify a few core components of the IoT and explain how it can benefit your business.
The World Wide Web is an integral part of our lives, even though it is less than 30 years old. Initially conceived as a platform for human communication, it has now evolved to encompass machines and objects, giving rise to the Internet of Things (IoT) phenomenon.
The Internet of Things (IoT) has gradually become an integral part of our personal lives, enabling us to perform tasks with a simple swipe or voice command that would have been unimaginable a decade ago. From controlling the bedroom light through Alexa to adjusting the heating using the Hive app, we are now connected to inanimate objects in our homes in countless ways.
However, the advancements in IoT technology are not limited to our personal lives. They are also rapidly transforming the business world. Studies show that 60% of businesses believe that those slow to adopt the IoT will fall behind their competitors. While gathering data using IoT devices may seem challenging for small businesses with limited resources, there are opportunities for them to stay ahead.
Internet of Things statistics:
70% of SMEs are already looking at or using IoT platforms to improve current products (BT)
52% see it as a springboard for launching new services (BT)
83% of organisations have improved their efficiency by introducing IoT technology (Aruba Research Report)
IoT solutions have the potential to generate $4-11 trillion in economic value by 2025 (CDN Report)
It’s estimated that the number of active IoT devices will surpass 25.4 billion in 2030 (Dataprot)
Business leaders are increasingly recognising the importance of the Internet of Things (IoT), as new use cases and greater adoption contribute to a more positive perception of this technology. According to GlobalData's Thematic Sentiment Analysis Q4 2021, which surveyed 2,225 senior executives worldwide, approximately 65% of respondents expressed a positive sentiment towards IoT. However, 14% of participants considered IoT to be nothing more than hype without substance.
IoT offers numerous benefits for businesses and serves as a key driver of digital transformation. When combined with other emerging technologies like artificial intelligence (AI), 5G, and cloud computing, it can significantly enhance operational efficiency, reduce costs, facilitate better decision-making, and elevate the overall customer experience.
Operational efficiency can be greatly improved through the use of IoT technology, which leverages connected devices to track, monitor, control, and manage various business operations. This enables the automation of many manual processes, leading to increased efficiency. For instance, the mining industry employs IoT to optimise its operations and drive efficiency by reducing the need for manual labour.
IoT also facilitates better decision-making by generating valuable data through sensors embedded in IoT devices. Analysis of this data can inform the development of optimised business strategies and improve operational processes. Managers empowered with such insights can make well-informed decisions to drive their organisations forward. This enhanced analytical capability has the potential to provide solutions to global challenges like the food crisis.
Moreover, IoT empowers businesses to deliver a better customer experience by leveraging user-specific data. The data collected through smart devices enhance businesses' understanding of customer expectations and behaviours. Analysing this data enables targeted advertising, refined pricing policies, and improved customer service. For example, IoT enables consumers to monitor and manage their health and wellness needs more effectively.
In addition to its business benefits, IoT also plays a crucial role in fostering sustainability. A 2018 analysis conducted by the World Economic Forum in collaboration with IoT Analytics revealed that 84% of existing IoT deployments contribute to or support the United Nations' 17 Sustainable Development Goals. For instance, air-quality monitors leveraging IoT technology can aid in reducing fine particle pollution, while wind turbines embedded with sensors can significantly lower costs in wind farm operations.
Overall, the increasing recognition of IoT's potential, coupled with its ability to drive digital transformation, improve operational efficiency, enhance decision-making, and elevate customer experiences, makes it a vital technology for businesses to adopt. Moreover, its role in promoting sustainability further emphasises the significance of integrating IoT into various industry sectors.
The number of small businesses incorporating IoT technology into their operations is rapidly increasing. Early adopters of this technology gain a competitive advantage over those who are slower to adapt. The IoT is revolutionising the way we conduct business by enabling inanimate objects to interact with the surrounding world. Harvard Business Review highlights this transformation, stating that in a connected world, products are no longer static entities. With over-the-air updates, products can receive new features and functionality regularly. The ability to track products in real time enables businesses to respond to customer behaviour effectively. Furthermore, interconnectivity between products opens up opportunities for advanced analytics and services, facilitating more accurate forecasting, process optimisation, and enhanced customer experiences.
As the Internet of Things continues to expand, traditional business practices will become obsolete. However, small businesses are already embracing these changes. For instance, a bike shop in Houston has implemented electronic tags to digitally manage inventory, streamlining their operations and reducing labour costs.
In the short and long term, the IoT will profoundly impact businesses in various ways:
Businesses will have access to an exponentially larger volume of data concerning their products, services, and customer interactions, enabling more informed decision-making.
Inventory and assets:
Enhanced knowledge about inventory and assets allows for improved production, maintenance, and fulfilment processes, leading to greater efficiency.
The introduction of IoT technologies brings automation to offices, customer service, and resource management, influencing the allocation of human resources.
Customers now expect businesses to identify product failures before they do and proactively work on resolving them. Tesla's over-the-air repairs exemplify this trend.
The IoT enables businesses to better connect with their customers, given the widespread use of smartphones. "Connected consumers" expect instant access to information about products and services. By integrating into the IoT, businesses can gain valuable insights into customer needs and desires, offering just-in-time promotions, real-time inventory updates, and specialised tasks through chatbot technology. Additionally, service providers can leverage customer behaviour data to deliver faster and more efficient service, such as a plumbing business tracking driver locations to allocate plumbers promptly.
One core technology fuelling the IoT revolution is Radio-Frequency IDentification (RFID). RFID employs small radio frequency tags to track items, receive data updates, and remotely control them. This technology is behind contactless credit card payments, pet tracking chips, and electronic toll payment systems like E-ZPass. Although RFID may seem like something exclusively for large corporations, it is highly accessible to small businesses. For example, a Wisconsin cranberry farm monitors temperature and humidity using RFID, while a European hotel employs it for laundry management. RFID is empowering small businesses worldwide to leverage the potential of the IoT and drive growth.
Apart from RFID, there are other IoT-connected consumer products available to enhance efficiency in office spaces:
Serving as the central point for energy usage, the Nest thermostat optimises heating and cooling while incorporating advanced security features, such as smoke detection. It integrates seamlessly with smart light bulbs, connected appliances, and more.
Amazon Dash button device:
Designed for Amazon Prime members, the Dash button enables easy reordering of consumables with a simple press. This concept, still in its early stages, may evolve into connected containers that automatically restock items when supplies are low.
Smart light bulbs:
These bulbs provide not only energy efficiency but also a new and customisable experience in the workspace. They can adjust colour, brightness, and power usage based on preferences and can be controlled remotely through mobile apps.
Voice assistants represent another significant aspect of the IoT. Devices connected to the internet now rely on voice interaction as an alternative to traditional input methods. Popular voice assistants like Amazon's Alexa and Apple's Siri have paved the way for this technology's widespread adoption. Voice assistants assist with various tasks, such as navigation, purchasing decisions, and integration with automated homes and vehicles. With Comscore estimating that half of all internet searches will be voice-based by 2020, optimising content for voice search becomes crucial for businesses' SEO and content marketing strategies.
The IoT is reshaping our interaction with the physical world, revolutionising business practices. While it brings new security risks and challenges, embracing the IoT opens up immense opportunities for businesses willing to adapt and innovate.
Furthermore, leveraging the IoT can enhance the efficiency and cost-effectiveness of field agents. By tracking data such as mileage, hours on the road, and the number of stops, businesses can identify areas for productivity improvement and reduce fuel expenditure.
While some SMEs may be hesitant to explore the potential of the IoT, many of their competitors are already embracing this technology in significant ways. Businesses must consider adopting IoT solutions to stay connected, remain competitive, and capitalise on the opportunities presented by the IoT revolution.
Tahmid is the Digital Content Creator here at EuroDNS. He oversees the blog and content strategy as well as writing content across the website. His educational background is in History, which he did his undergraduate in - which works well for his love of research. He ran his own magazine whilst at university and then cut his teeth in advertising and human behaviour, delivering for brands such as Nike, Facebook, Instagram, Google, Miller Coors and Bleacher Report. He has since carved out a career as a seasoned copywriter and strategist within the B2B space.