Adoption of the Internet of Things (IoT) is accelerating. Many of our everyday gadgets will someday have sensors embedded in them to create sets of networked data to help individuals make more insightful personal and business decisions; easing life and impacting our organization’s operations.
In June 2015, the IDC released figures putting IoT sales worldwide at $660 billion. Numbers are forecasted to soar to $1.7 trillion by 2020.
A recent eMarketer survey showed that 43% of IT and business executives had delivered digital marketing initiatives using IoT-enabled solutions. They had been successful meeting their customer engagement and generation goals.
IBM announced it would invest $3 billion in a new IoT unit over a four year-period to deliver a series of unique end-to-end solutions.
IoT solutions are expected to optimize the predictability of outcomes, and improve an organization’s ability to deliver real evidence-led decisions that achieve large amounts of incremental value.
Key opportunities will come in the form of solutions for B2B markets. These include sensors in airplanes, drones, fields, factories and buildings. In addition to adding sensors and tags to equipment, products or constructions, the data from IoT devices will help inform decision-makers, optimizing savings, output levels and productivity improvements. By defining new propositions for targeted customer segments, the IoT will transform the value chain and reduce resource requirements, creating innovative business models that change market dynamics and sources of competitive advantage.
Insurance companies, for example, would be able to utilize IoT devices to transform the tracking of physical assets into real time digital movements, and by combining the data sourced from these devices, deliver a more actionable set of analyses. This will give a company the ability to provide the next level of dynamic pricing, innovative preventative measures and claims advancements.
There are many implications for senior leaders across this horizon of change. In what follows, we identify three sets of opportunities: expanding pools of value in global B2B markets, new levers of operational excellence, and possibilities for innovative business models. In parallel, executives will need to deal with three sets of challenges: organizational misalignment, technological interoperability and analytics hurdles, and heightened cybersecurity risks.