Internet of Things: Hype or Reality?
Nearly 15 years ago, RFID technology pioneer Kevin Ashton coined the term Internet of Things (IoT). He believed that this idea had the potential to change the world “if we had computers that knew everything there was to know about things.”
That is as powerful a statement today as it was when it was first used. It was a vision for the future that is now becoming a business reality. However, the meaning behind “Internet of Things” is still somewhat a mystery even though it’s a phrase being used more and more.
The discussion around it typically has been about the possibilities — the big “what ifs,” particularly as it relates to consumers. There are many interesting ideas that will offer new conveniences and life-changing applications. We talk about “what if” we could connect the Internet to the things in our everyday life. At the 2013 International CES last week, we heard a lot about Internet-connected crockpots, washing machines and other home appliances. In a nutshell, it’s about using data to make objects smarter and more responsive to our needs.
But I also see Internet of Things as a way to address important business challenges and critical global issues. “What if” we could connect the Internet to the things in a hospital — such as medication and expensive, critical equipment — to improve patient safety and ensure the right tools are available when doctors needs them. Or, to the things we eat, ensuring we can track food from the farm to the shelf to the home or restaurant, dramatically changing the outcome of food recalls.
These are big ideas. But are they really possible? Yes, they are, and we are already making strides to address big issues like patient safety and food traceability through IoT solutions.
Let’s unravel some of the mystery that remains around this term: How do companies define Internet of Things, are they implementing or thinking about implementing related technologies and what benefits and challenges do they see in such solutions?
First, based on the definition shared in the survey “Building Value from Visibility: 2012 Enterprise Internet of Things Adoption Outlook,” 85 percent of organizations surveyed agree that Internet of Things solutions are made up of smart interconnected devices that provide more visibility into the organization’s operational events.
With the premise that all devices connect to each other and trade info without human interaction, what does that mean for business?
If we look at what is happening today, organizations across the globe are striving to do more with less and to be more nimble and efficient. To do so, organizations need more visibility into operations in order to make smarter business decisions and unlock potential within the value chain.
Every day, events occur in a business: Assets are used, transactions take place and employees move about. Events constantly happen and those events constantly create data. What if you could harness this information and form new insights to solve a business challenge or drive innovation? The Internet of Things technologies will make this possible. Consider the following business challenges IoT could solve:
- The CDC estimated hundreds of thousands of vaccine doses are thrown out each year because of poor refrigeration at clinics, hospitals and doctors’ offices. With barcodes, RFID and sensors, real-time temperature monitoring could be made automatic and save billions.
- Or, think about the possibilities of addressing recalled items, including food, drugs and parts. Lot numbers used to provide a broad idea of recalled items. With real-time locating solutions, organizations can hone in on very specific items that may be at issue, and potentially send automatic mobile alerts to organizations and consumers, reducing inventory loss, saving money and helping quickly redeem consumer or business trust.
Whether you are gaining deeper insight into existing events and transactions or discovering new information about things you never knew were taking place, that knowledge, that illumination, can fuel big transformations like a new way to drive customer loyalty or a new line of business. For example, an automotive manufacturer placing sensors in their products could help generate data that helps identify new services offerings, such as proactive maintenance. The opportunities are endless.
Path to Adoption
While I sometimes hear or read that the Internet of Things is hype, the reality is, it’s real. In fact, we are at the tipping point for broader IoT adoption with 53 percent of organizations planning to implement an IoT solution in the next 24 months. Organizations in Asia Pacific and Latin America are more aggressive with 69 and 60 percent, respectively, planning to implement over the same time period, according to “Building Value from Visibility.”
The market for Internet of Things is said to be in the billions of dollars, and that estimate largely looks at just the technology needed to enable an IoT solution.
How did we get here? It’s been an evolution that started with barcodes, telling you what it is. Then, with technologies such as GPS and real-time locating solutions, we can now know where it is. For example, on the floor of an aerospace manufacturing plant, such technologies can, in real time, pinpoint the precise location of an expensive and critical tool. And finally, with sensors, we can know how it is. Consider a truck full of produce that is about to spoil. With sensors monitoring the temperature of the fruits and vegetables, the food distributor can get real-time alerts about the condition and re-route the truck to a different location if needed.
Benefits and Challenges
Global enterprise decision-makers are familiar with the Internet of Things term and most have a positive perception of it, according to “Building Value from Visibility.” Also in the study, global IT decision makers noted big benefits: Supply chain optimization, cost efficiencies and improved customer experience in the next one to two years.
While momentum and interest is strong for IoT adoption, as with any new technology implementation, it’s not without its challenges. IT decision makers note there are a number of technical challenges including system integration and data analytics. Additionally, they face internal challenges, such as facilitating stakeholder adoption of new solutions and implementation complexity.
It’s important for organizations to prioritize implementations within their organizations. They should identify areas of the business where they can see a quick return on their investment from IoT solutions. For example, some organizations are breaking the supply chain into sub-segments to illuminate operations in one part vs. the entire supply chain. There isn’t an offering today that provides end-to-end visibility. By providing complete visibility into a portion of the business, there is immediate ROI today that can eventually translate to an entire business as technology continues to evolve.
Additionally, it’s important to identify solutions providers and the right solutions that help the business make smarter business decisions for that part of the supply chain.
A Vision That’s Becoming Reality
The vision Kevin Ashton had almost 15 years ago — having the ability to know everything there was to know about things — is very real today. Enterprises positively view a more interconnected world, with some already using IoT technologies and many more with short- and long-term plans to implement solutions.
While we need to consider some of the more practical aspects of IoT, including technical and internal challenges, let’s try not to lose the possibilities the Internet of Things will bring to business. This week at CES, technology leaders announced an Internet of Things Consortium to foster and support the growth of Internet-connected devices for consumers. While the focus may be different from tracking tools in a supply chain, these types of initiatives are important to encourage dialogue and collaboration and spur new ideas. By talking about “what if,” we can keep our focus on the innovation, and I can’t even imagine what other business and societal problems we might solve. The sky’s the limit.
Anders Gustafsson is CEO of Zebra Technologies, a global company, which offers technologies that give a virtual voice to an organization’s assets, people and transactions. Joining Zebra in 2007, Gustafsson is evolving the company from a trusted, reliable manufacturer of barcode printers to one that offers technologies that enable smart operations and supply chain management. “Building Value from Visibility: 2012 Enterprise Internet of Things Adoption Outlook” is a commissioned study conducted by Forrester Consulting on behalf of Zebra Technologies.