It seems that everywhere you turn these days there's a new prediction being made about the massive growth of the Internet of Things (IoT). IDC predicts that there will be 22 billion connected devices worldwide by 2018, while Gartner predicts 25 billion, and Cisco doubles that to more than 50 billion by 2020. Regardless of who ends up being right, it's undeniable that there are going to be a lot of "things" in our future.
Despite the predictions however, Canadian businesses are sharply divided when it comes to how they view IoT and its potential.
We recently commissioned a study through MARU/VCR&C, which found that 52 per cent of Canadian businesses are embracing IoT (i.e., considering, planning, piloting or deploying an IoT solution). However, the remaining 48 percent have no plans at all to adopt IoT technology, and what I found most shocking was that nearly two-thirds of those believe that there's simply no business need.
While many Canadian businesses aren't recognizing the value in IoT, the organizations that have hands-on experience with the technology have a much different perspective. According to the survey, businesses that have piloted or deployed at least one IoT solution are touting its benefits, with 86 per cent saying that they are seeing value and 83 per cent already planning or implementing additional solutions.
This digital divide is not surprising -- we're still seeing businesses slow to embrace trends like mobile working or Bring Your Own Device (BYOD) despite the well-documented benefits. It is concerning, however. By ignoring IoT, nearly half of Canadian businesses are putting themselves at a significant risk of falling behind their competition (both domestic and global) as their industries innovate around them.
To help understand the impact IoT can have on their industries, here are five questions that every Canadian business should be asking:
1. What are my biggest business challenges?
Before evaluating IoT solutions, identify your biggest challenges to determine where the greatest potential lies. What long-standing issues are vexing you? What areas of your business are the most expensive or resource-intensive? By identifying your most pressing problems, it's easy to determine where IoT can have the most significant impact on your business.
For example, for any business with vehicles on the road, fuel, maintenance and insurance costs are a huge concern. A fleet management solution can optimize routes, improve driver behaviour, provide proactive maintenance updates and even qualify you for discounted insurance premiums. Even with a small fleet, the ROI would be almost immediate.
2. How are others using IoT?
IoT technology is being deployed in almost every industry: healthcare, manufacturing, transportation, retail, oil and gas, financial services, hospitality, utilities, agriculture, construction, waste management and more. By taking a look at the solutions other companies in your industry have implemented, you can quickly gain a better understanding of where IoT could benefit your business, or where your competitors are pulling ahead.
You can turn to other industries for inspiration as well. In some sectors, like transportation and utilities, first-generation IoT technology (often referred to as Machine-to-Machine or M2M) has been in place for more than a decade and the use cases are well documented.
3. What kind of investment do I need?
The short answer is: less than you think. As the IoT market has matured, the cost of hardware has decreased dramatically; and with the "intelligence" of most solutions residing in the cloud, upfront infrastructure costs are falling as well. Additionally, many providers, like us, offer IoT as an end-to-end solution that includes hardware, software and connectivity, neatly packaged as a line item on your monthly statement.
An IoT deployment doesn't need to be a major capital expenditure, it can be an operating expense that scales with your business. When there's minimal upfront cost and huge potential benefits, the compelling business case for an IoT solution quickly becomes clear.
4. What is the risk of doing nothing?
You may be content with your business' status quo, but consider what could happen if your industry is transformed by technology. We need to look no further than taxis to see how an entire industry can be disrupted by a new business model enabled by IoT.
What's going to happen to your grocery store when your competitors develop an automated ordering app for smart fridges? What will happen to your retail business or restaurant when your competitors begin offering driverless deliveries? Even if your industry isn't heading for an Uber-esque disruption, simply consider what will happen when your competitors are able to streamline processes, lower costs and better respond to customer needs. Can your business afford to fall behind?
5. Where do I start?
When billions (literally) of things can be connected, IoT can seem overwhelming at first glance. Embracing IoT doesn't need to be a giant leap of faith; even small changes can have a big impact.
Start with something simple, like remotely tracking vehicles or high-value assets and evolve your IoT strategy and build a larger business case once you better understand the technology and the benefits it can provide. Starting with a small controlled deployment will allow you to "test the waters" before deciding what IoT can and can't do for your business.
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