The Key To Gaining ROI From IoT

Daniel Kehrer

On the enterprise technology hype scale, the Internet of Things is a heavyweight champ. There’s only one problem. So far, this “transformative trend” – as Gartner calls it in the firm’s 2016 IoT Hype Cycle report – has remained largely that: Hype.

But that’s about to change. New enabling technologies – including Bluetooth 5, proximity awareness, and others – will speed the path to IoT value creation. The rollout of Bluetooth 5 in early 2017, for example, will quadruple Bluetooth range, double its speed and boost data broadcasting capacity by 800%.

These speed, range, and capacity improvements will open vast new IoT opportunities for companies to build a more accessible and interoperable IoT. This in turn will finally make hypothetical enterprise and industrial IoT use cases a reality.

According to a recent McKinsey Global Institute (MGI) report, the hype surrounding IoT may in fact understate its full potential. McKinsey predicts that if policymakers and businesses get it right, IoT’s linking of physical and digital worlds will generate between $4 trillion (their low estimate) and $11.1 trillion per year in economic value by 2025.

And the bulk of that value – nearly 70% of it, says McKinsey – will come from B2B applications such as construction and manufacturing where IoT technology helps optimize equipment placement and maintenance, improve safety and security, and much more.

Meanwhile, technology suppliers are ramping up IoT-related platforms to help enterprises design, implement, and operate solutions that fill the gap between the ability to collect data and the capacity to capture, analyze, and act on it.

The power of proximity-awareness technology

One of the most powerful tools in helping enterprise organizations gain ROI from IoT is proximity awareness. Smart proximity awareness technology will play a critical role in how enterprise organizations extract value from IoT or, alternatively, IoE – the Internet of Everything.

It’s also IoE because the value-creation chain includes more than just things. It involves people, data streams, locations, equipment, communication systems, and more, all connected to the Internet. Proximity-awareness technology brings these scattered pieces of IoT together into a cohesive, cyber-physical system that organizations can analyze and act on to solve problems, optimize time, and improve productivity. This is increasingly important as connected “things” gain autonomy and begin taking more actions on their own.

Proximity solutions enable organizations to gain greater order, efficiency, automation, and predictability from IoT. They solve for situations where people and things are dispersed haphazardly and sometimes unaccounted for, eliminating guesswork and costly inefficiencies. They enable organizations to see where things are, what’s happening with them, and how to make them more effective and productive.

Smart proximity awareness technology will also enable value creation from enterprise “wearables” – always on, connected computing displays worn on the body for easy, hands-free access to show contextually relevant information – as these devices replace bar code scanners and handheld GPS.

Proximity makes IoT work

Many companies already generate large amounts of data from IoT but only use a fraction of it. That’s because they focus mainly on detecting breakdowns or other anomalies, rather than envisioning new, value-building uses. By deploying smart proximity-awareness technology, companies can realize greater value from IoT by using it to predict and optimize a wide range of activities. As this happens, the old mindset of repair and replace becomes a new mindset of predict and prevent.

Enriching corporate data with proximity awareness pushes several things forward. Knowing where your people, inanimate assets, suppliers, supplies, and customers are – and when their joint movements are actionable – allows automated responses to specific conditions of convergence and divergence.

And by standardizing proximity services in an open platform, enterprises can gather mobile and IoT telemetry, track assets and people in motion, determine when any two or more of them are converging or diverging, and act by triggering prox­imity-aware messages or instructions to both people and things.

As the world becomes increasingly networked with nearly everything linked to everything else, production and supplier networks are expected to grow enormously, meaning manufacturers will need to coordinate more global suppliers. At the same time, boundaries that now separate individual factories and other facilities will be eliminated as IoT and prox­imity awareness connect multiple factories and the people who run them.

According to MGI, “The potential value that could be unlocked with IoT applications in factory settings could be as much as $3.7 trillion in 2025, or about one-third of all potential economic value. Cities are the next largest, with value of up to $1.7 trillion per year.”

Building flexible solutions at scale

But building IoT systems and solutions as vertical silos and operational islands inhibits the ability to gain strategic value. Smart proximity awareness based on a scalable and horizontal technology foundation lowers barriers and makes it easier to integrate all of the pieces into a single whole that is easy to operate, expand, and maintain.

Now is the time to consider the IoT business opportunities at hand, set a vision, establish a plan, and put smart proximity awareness to work as a strategic differentiator. As McKinsey points out, “Businesses that fail to invest in IoT capabilities, culture, and processes, as well as in technology, are likely to fall behind competitors that do.”

About Daniel Kehrer

Daniel Kehrer has 20+ years leadership and hands-on execution experience as a technology, content marketing and digital media entrepreneur and industry thought leader. He has built & scaled multi-channel and global marketing and content creation teams and engines for VC- & PE-backed tech companies leading to acquisitions totaling nearly $1 billion. He is currently Founder & CEO of BizBest Media Corp. and, working with select startup and growth-stage tech companies. He’s written for Forbes, Harvard Business Review, The New York Times and Digitalist Magazine, among many other publications, writes a syndicated weekly column, is the author of seven books and earned his MBA from UCLA Anderson.