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The enormous impact of the Internet of Things (IoT) may seem difficult to grasp, and its impact on business is equally challenging to the imagination. Smart devices that can connect to the internet and each other create a network that collects and exchanges data. The Business Insider predicts adoption of the revolutionary concept by the business community before governments or consumers. With the IoT, businesses can decrease operating costs, increase productivity, change market conditions and create customer satisfaction.
Decreasing Operating Costs
Benjamin Franklin reminded thrifty Americans in ‘Poor Richard’s Almanack” that “A penny saved is twopence dear,” an adage that most people accept as “A penny saved is a penny earned.” While pennies may not matter much for their actual value, they represent an essential concept of improving profits by decreasing operating costs.
Inventory management gets easier and more efficient with the ability to track it automatically in an office or a warehouse. Sensors on each item, whether large or small, can inform managers of stock levels or an unexpected depletion that may indicate theft. A significant cost savings may result from using smart devices that keep track of changes to inventory automatically without requiring the attention of a worker. Businesses that involve storage facilities, manufacturing or warehousing typically use barcodes and hand-held scanners to inspect inventory and record changes in quantities. Forbes reports that assigning the legendarily boring task to sensors saves money and improves employee performance in tasks that require more cognitively demanding functions.
An assessment of building security generates operating expenses that the new technology can implement inexpensively. A video system with connectivity to the internet lets business owners observe building access that incorporates badges and fingerprints. Compliance with federal, state and local regulations often requires companies to hire teams of experts to inspect the premises at considerable expense. Sensors can make them unnecessary by measuring and reporting on “air quality, temperature, and other conditions” that matter to business owners.
Smart grid coordination, according to the Huffington Post, can reduce the cost of energy and make machines work more efficiently as well. A reduction in maintenance routines can lower the expense of producing inventory as they become easier to manage. The efficiency of employee time improves when manual inspection of thermostats becomes unnecessary. While the investment to upgrade devices may seem “initially steep,” the eventual payoff can make it worthwhile.
Increasing Productivity through Data
Access to higher levels of productivity may result from the data that a network of connected devices can produce. An investment in the physical equipment and analytic software can offer returns in previously unexplored avenues. Forbes notes that marketers and entrepreneurs appreciate the capability to track and record the patterns of consumer behavior that can result from interconnected devices. Insights that companies obtain from data can point to new product development and targeted advertising by analyzing the consumer buying cycle.
A primary benefit of big data, information that reveals patterns of consumer behavior, is the opportunity to analyze it, a process that requires storage space. An adequate storage capacity for massive amounts of data requires space, and businesses may need to create an in-house data center or choose a more cost-efficient option with cloud hosting. Digital data allows managers to understand more about their businesses, according to the Harvard Business Review, and to use the knowledge to make decisions and improve productivity. Each person who uses a mobile phone, GPS, “instrumented machinery,” social networking or who shops online is a walking data generator.
Technological advancements in the Internet of Things allow businesses to accomplish “large-scale tasks faster,” and they may need fewer staff members or may reassign workers to expand into new areas. Concurrently, companies are sure to open new positions for data analysts to strategically mine the depths of an enormous store of information.
Workers who are already pleased to work remotely can continue to do so but with greater efficiency. For businesses that do not need a physical inventory, the remote staff can get more results with less time by having multiple devices that connect to an office or factory floor.
With IoT technology, businesses can determine the precise location of any tagged items, increasing productivity by avoiding searching for them by walking distances. Managers can access a remote field operation, a construction site or an adjoining office space to find the location of a tool, vehicle or employee. Workers in dangerous jobs can call for assistance in understanding a task, receive alerts about cautions or report an injury.
The loss of time during daily commutes can “negatively impact productivity,” and interconnected devices can improve it. Car manufacturers already include Long Term Evolution (LTE) 4G wireless connectivity functionality that can provide real-time information about traffic conditions. Productivity receives a boost from devices that can help employees get to work or appointments on time. Advances in transportation management can provide solutions for delays on the road as well. Sensors in the street pavement can relay information about traffic patterns to coordinate the operation of lights at intersections and help alleviate time-consuming delays.
Businesses can ensure employee productivity by controlling and managing a network’s mobile devices (MDM) while reducing risks and downtime. Business managers can control remote devices such as smartphones and tablets as well as others that provide the status of work processes.
Adapting to Change in Market Conditions
Cognizant cites a report from M2M Magazine showing that manufacturing, finance and insurance, retail trade, and information services may benefit the most from the IoT. By giving it credit for becoming a “transformational source,” the report cites the changes that may occur and benefits that may result.
In the manufacturing sector, a notable change is a rapid response to variations in demand. Manufacturers can expect to use sensors to maximize efficiency and increase safety. The outcome of the predicted change may make the sector more responsive and flexible. Environmental benefits include a reduction in energy use and a smaller carbon footprint. A significant change to the retail sector incorporates connectivity to “intelligent supply chains” to prevent running out of stock. The benefit to a business is gaining the capacity to predict customer demand by using social media and mobile devices. The transportation sector change relates to real-time driving behavior that traffic diagnostics can produce. Business can benefit by reducing pollution and increasing safety that improves the customer experience and generates new revenue streams.
Creating Customer Satisfaction
With the benefits that businesses enjoy from IoT’s advances in technology comes the obligation to meet customer demand to receive services and products faster as well. Media Post cites a report that contains some of the benefits in billing that can improve dramatically. Accuracy in charges for water or energy can give consumers more confidence through simple verification procedures than they may have experienced previously.
Connectivity can let companies learn about customer dissatisfaction quickly, making it possible to identify what went wrong and make amends. Businesses may no longer need to rely on assumptions about consumer preferences when connectivity provides factual data. By refining the data, companies can avoid targeting advertisements to customers who have no interest in a particular product or service.
Customers’ desire for conveniences can open new markets for businesses. Digital keys can control access to homes or businesses, and sensors can locate lost objects. Connectivity can allow customers to control home appliances, thermostats or security systems without making unnecessary trips to check on them.