The IoT is now used in almost all spheres of human life and has become a part of our day-to-day lives whether at home or work. It is one of the most widely used technologies due to its vast application and efficiency at tasks of all nature, sizes, and complexities. According to a report published in IDC, the estimated value of the IoT market in the pandemic-struck 2020 was $742 billion. This article talks about what IoT is, how it works, and some advantages and disadvantages of the technology.
What Is IoT?
IoT or the Internet of Things is a technology system that helps in improving the living and working standards of people by taking control of electronic devices and automating several tasks. The Internet of Things technology is one of the most widely used technologies in businesses and gives them a look into how the entire system works and gives insights about operations, logistics, machines, supply chains and other aspects. Research by McKinsey Digital has revealed that the number of devices hooked to the internet for the first time is 127 per second!
By automating the processes in a company, IoT can help save human labour and prove to be a cost-effective solution to the manufacturers and managers in different sectors and industries. For businesses, IoT does not just reduce costs by automating processes, it also offers transparency in customer purchases and transactions, reduces company wastes, and improves the service delivery. Gigabit has claimed that the total investment by companies in IoT technology is likely to reach $15 trillion by 2025.
How Does IoT Work?
The devices that have built in sensors are connected to an IoT network on a given platform. The data from these devices is then integrated and put through an analytical search to extract the most useful information and share it with the applications connected to this platform for resolving any related issues. The information gathered is used for identifying patterns and possible threats or dysfunctional areas even before a problem occurs.
The IoT technology uses the sensors to attend to your query and goes deep into the available data to present to you with the most ideal components and then aligns this data with the concerned department. With the help of IoT, the information extracted helps in making smart decisions and helps save financial resources, time and effort by providing real-time information.
IoT puts all the information through advanced analytics to help improve the processes and make them more efficient. You can also use IoT technology to automate a set of processes and tasks that are time-consuming and boring by application of smart objects and systems in different settings such as businesses, health sector, home, transportation, urban security and surveillance, energy management systems, and several others. Comparitech has claimed that by the coming year, the global IoT healthcare market is expected to be worth $158.1 billion.
What Are The Benefits Of IoT For Businesses?
Microsoft has proposed that by the end of 2021, 94% of businesses are likely to adopt the IoT technology in some or the other way. Here are some benefits of using the IoT technology:-
1. Improved Operations Management
The interconnection of smart devices on the IoT network improves the operations management by controlling different functions such as inventory management, spare parts management, shipping and order fulfilment, and others. According to reports by PwC, 94% of retailers have agreed that the benefits of implementing the IoT outweigh the drawbacks and risks of the same.
Operations management also improves because rather than functions being carried out independently, they are conducted together to ensure that none of the processes disrupt the smooth completion of the other process. This largely improves the management of the concerned company.
2. Reduced Human Labour And Increased Productivity
Mundane tasks can reduce the productivity of the employees. Furthermore, there may be tasks that require a huge team of employees for completion. But with IoT solutions, such tasks can be performed automatically so that either the employees can be employed on more important tasks or tasks that require full human attention such as sales or if the company wants they can reduce the human labour to save their resources.
Furthermore, since IoT takes care of such tasks, employees are able to utilise their skills and energy in more productive tasks to give better results and increased profits for the company. Aruba Research Report has revealed that 83% of companies that employ IoT to their company systems have reported notable efficiency increases in their business.
3. Better Customer Service And Customer Retention
IoT keeps a close check on all processes and data related to sales and customers through processes like automatic tracking. The customer support can be enhanced drastically by attending to all the issues raised by them and sending them reminders about warranty periods, sharing information about purchased products, etc.
The user-centric data collected through smart devices in an IoT network can be utilised in understanding consumer behaviour and needs and facilitating solutions such as those mentioned above and more according to the analysis of the data. Market Research Engine has estimated that the consumer IoT market would reach a CAGR of 17%, $142 billion by 2026.
4. Cost-effective Operations Solutions
IoT reduces the downtime of your company’s processes remarkably through a number of schedules and automated processes such as maintenance, supply, manufacturing requirements, and much more. This may increase your production rate which may eventually lead to bigger profits and thus provide cost-effective operations solutions.
The operations management is also automated and is facilitated across the entire enterprise as well as individual departments in the enterprise to save on major financial resources of the company. Albany Business Review has revealed that the IoT technology helps companies reduce their costs by an average of 15% by creating an environment that boosts productivity and reduces energy waste.
5. Increased Business Opportunities
The Internet of Things increases the effectiveness of any company by widening the scope of services or products offered and improving the quality. This can help you beat competitors in the long run without any added investments. According to Statista, as of August 2021, there are over 10 billion active IoT devices.
With the application of an effective IoT system, you can perform more difficult tasks without compromising the quality of the task at hand. The smart solutions offered by an IoT can help you improve your rank and secure a higher position than your competitors which can open you to more business opportunities by presenting you as competitive, attractive and productive.
What Are The Drawbacks Of IoT For Businesses?
Forbes has claimed that the annual spending on IoT security is likely to be approximately $631 million by the end of 2021. Here are two major drawbacks of the Internet of Things that you need to consider before adopting it in your home or work place:-
1. Requires A High Skill-Set
To properly apply the IoT technology to avoid future glitches, there is a need for highly skilled professionals who are experienced and under the possibilities of the task. Setting up, changing and maintaining is also the responsibility of such highly qualified individuals who may not always be available or may demand high rewards and remuneration for their services which might not be manageable by all companies.
Furthermore, anyone who wants to work on a system run by IoT technology has to be trained to be able to work with it to not cause any damage to the operations of the connected smart devices which may not always be welcome by the employees and may be another additional cost on the company. Reports by McKinsey have claimed that studies have found that several manual workers are likely to lose their jobs as a result of automation by 2030.
2. Security Threats
One thing that hinders the IoT technology its full potential and development is the insufficient security measures taken towards its proper implementation. There is always a high risk of data leaks and cyber attacks because in truth, the technology actually does take out essential information and places it on an internet-based platform. The NETSCOUT Threat Intelligence Report has revealed that devices added to an IoT network are typically hacked within five minutes of being connected with the internet.
If hacked into it or there is an internal data leak, it can lead to serious consequences for a company such as loss of confidential corporate data, identity thefts, products and equipment damage and sabotage among others. This may be because the IoT solutions may not always comply with the encryption protocols and data protection regulations and standards.
With constant developments and new findings in the technology industry, there is a brighter future in sight for the Internet of Things technology. While there may be some drawbacks of the technology, there are many more benefits and applications in different sectors that give us reason to adopt the IoT technology that can take us a long way on our path to success in our respective fields!