Internet of Things (IoT) is not a new solution nor a trendy buzzword. In fact, IoT has been around for decades. From oil and gas pipelines to manufacturing lines to hydroelectric dams, we have billions of sensors around the world generating petabytes of data.
But most of the data available to us through IoT is not collected, and even less is analyzed and monetized to make timely business decisions. This is like constructing a luxurious ski resort but not building any roads to get people there. What was the point of building the ski resort in the first place if we cannot monetize the investment?
Why aren’t more companies monetizing the data coming from their IoT sensors?
Digital transformation has been a persistent theme in technology for many years. As words like artificial intelligence (AI), machine learning, and “smart” become common vernacular, senior executives hear that their firms must undergo a digital transformation to remain competitive.
But the truth is, big bang digital transformations can be costly, time-consuming, and risky. In contrast, high volume process improvements often provide a greater ROI in much less time and with less risk. Here lies the opportunity for IoT.
IoT can drive a continuous innovation cycle of process improvement. Sensors generate data, then we collect and analyze this data to help make better business decisions and create operational efficiency. This innovation cycle can be quick, and the resulting business benefits very impactful. Would you rather have a 20% chance of getting $2 million in two years or a 90% chance of getting $100,000 a month for the next four years? The choice is obvious.
The key to monetizing IoT
The key to monetizing IoT is to consider it an integral part of the entire enterprise and not a standalone technology pillar.
IoT is a high-value technology solution. But it needs to be evaluated and integrated into the business and technology fabric of your organization, including enterprise systems such as finance, sales, human resources, and supply chain. Highlighting what we believe is the importance of connecting IoT with the rest of your organization. Gartner notes, “By 2020 more than 75% of IoT platforms will be purchased in conjunction with IoT-centric business applications.” (Gartner Application Strategies & Solutions Summit, “Learn from Real World IoT Implementations,” Benoit Lheureux, November 27, 2018.)
When teams pursue IoT continuous innovation and process improvements, connecting this cycle to key enterprise applications across the organization, teams will achieve significant ROI in less time and with less risk. This will catalyze a sustained competitive advantage that will propel the organization into a leadership position.
We have billions of IoT sensors, and just like with the luxurious ski resort ready for its grand opening, let’s work together to build the roads to generate the significant business value for years to come.
The relentless pace of today’s advances can seem daunting for many, but for technology enthusiasts it’s exciting! To stay up to speed, join us for our global virtual event SAP Leonardo Now Online. We’ll go beyond the hype of IoT, AI, and blockchain and show you how they actually work, explained in a way you can understand.