The global IoT market is on track to outperform $2.4 trillion annually by 2027, and more than 41 billion devices will be connected to the Internet by 2027. IoT offers many benefits to businesses, including reduced operating costs, new consumer insights, and opportunities to streamline business operations. However, it is not always a positive situation. Some companies may only see the downsides of IoT devices and hesitate to use them.
What are the advantages of IoT in business?
1. Lower operating costs
A fleet of IoT devices can be profitable because it helps companies streamline their workflows and reduce operational costs by providing real-time information. Devices can proactively report their status so staff can schedule maintenance before it can affect production. They can be integrated into larger systems to optimize operational efficiency and help reduce costs. For example, smart building systems can track, monitor, and control HVAC systems to monitor building usage and adjust to take advantage of lower time-of-use costs, saving money.
2. Increased productivity and safety in the workplace
IoT devices can manage, monitor and alert staff to changes in processes or productivity, helping them make smarter decisions about work. The car manufacturer Ford is using specialized IoT technology and body tracking sensor technology protect workers from excessive physical stress and optimize their work. Engineers and ergonomists use the data to optimize each workstation to enable more efficient movement and help workers avoid injury. Through this novel implementation of IoT in Ford’s employee safety program, he has been able to reduce assembly line injury rates by 70%.
3. Better customer experiences
IoT devices help businesses track, monitor, discover, and analyze customer data faster than ever before. Companies can predict changes or trends in customer behavior before they happen. Advanced IoT technology can improve the customer experience by personalizing it based on past experiences. Think of location trackers in shipping vehicles or personalized coupons offered through a mobile app on customers’ smart devices when they enter a store or business. IoT devices can help businesses collect, transmit and analyze the personal data they have about customers, helping to create a better Customer experience that engages them on a deeper level and increases customer loyalty.
4. More commercial information
IoT devices help organizations collect data to identify information about their business, both internally and externally. Retail stores use beacon technology and other IoT devices to redesign their stores based on real-time traffic patterns. Logistics companies can use Internet-connected IoT devices to align delivery locations and times that make the most efficient use of vehicles and employees.
Companies that use IoT to drive modernization across their organization reduce time to market for new products or services and increase their ROI. They will add value to the business faster and more efficiently because more actionable data can be easily accessed from devices.
What are the disadvantages of IoT in business?
1. Security and privacy
Keeping the data collected and transmitted by IoT devices secure is challenging as they evolve and expand in use. Although cybersecurity is a high priority, IoT devices are not always included in the strategy. Devices must be protected against physical tampering, internet-based software attacks, network-based attacks, and hardware-based attacks.
Data privacy is another concern, especially as IoT devices are used in more sensitive industries such as healthcare and finance. Information privacy laws are also taking effect globally, meaning it not only makes business sense to protect data, but companies are legally required to do so.
Integrating encryption and security protocols with IoT devices can be difficult with a large fleet of devices. The cost in time, effort, and money to do it across all devices can be prohibitive, so some companies may use the wrong platforms because they’re cheap, or give them up altogether. All it takes is one violation for a company to learn a hard lesson.
2. Technical complexity
Although it may seem like IoT devices are performing simple tasks, like counting knocks on a secure door, there is a lot of complex technology involved in creating them. Also, if they are providing essential data to another workflow or system, they could negatively affect everything that is connected to it. Miscounting the number of knocks on the door isn’t a big deal, but if another device mistakes temperature data for knock data, it can be catastrophic. And the error is not always easy to correct.
There can be a huge learning curve in deploying IoT devices. It makes sense to develop a strategy for how and why to implement them before you buy them. That way, you can be sure they’re working as intended and you can support them.
3. Connectivity and energy dependency
Many devices have a dependency on the Internet and continuous power to function properly. When one of the two fails, so does the device and anything connected to it. Given how intertwined IoT devices are with today’s businesses, everything can come to a halt when they’re down.
Businesses need to understand how outages will affect their devices in order to proactively plan for outages, because an outage will happen at some point. Problem resolution and incident management processes can help alleviate that, as can ensuring that employees know what to do when devices are down.
There is currently no consensus regarding IoT protocols and standards, so devices produced by different manufacturers may not work with existing technology. Each may require different hardware configurations and connections, making it difficult to implement efficiently.
The company must understand the needs of the network to prepare for any required customization. That also means planning extra time with device deployments to handle any troubleshooting or related tasks that might come up.
5. Higher costs (time and money)
The implementation of IoT devices often comes with high investment requirements of time and money. There are the number of devices to be purchased and configured, staff to install them, others to integrate them into the network, and support calls to the manufacturer for help. If everyone goes to one location, businesses can quickly recoup that investment. If the business is distributing them, expect the cost to increase exponentially.
By planning the budget and implementation strategy before they buy, organizations can eliminate many potential roadblocks they might otherwise encounter.
Summary of advantages and disadvantages of IoT
IoT devices can be useful to businesses today, but only if they know what they’re getting into. And these are just some of the benefits and drawbacks. With a little planning, businesses will have a better idea of what they need and how IoT devices can help.