How IoT Data Can Help Accelerate Digital Transformation
In this article, we look at how IoT can help accelerate digital transformation.
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Every business is dreaming about how digital transformation will push productivity and profits to the max. The buzzword (or rather the phrase) of the last couple of years is known for “driving efficiencies and innovation”. It is the famous digital transformation that will replace the useless manual processes, enhance the company’s productivity, and spare time for the human flight of fancy to search for new strategies and creative approaches. Digital perfection will remove human errors making the business and production processes run smoother.
The utopian idea of digital transformation continues to flourish all over the net, making digital transformation consulting even harder than ever. Why harder? Because consultants have to crash the rose-tinted glasses and “reveal” that chaotic and unreasonable investments in digitalization are time-consuming, expensive, and hence useless.
Yes, you read it right: digitalization is useless if you dive into it without learning the basics. This article is about the core knowledge on digital transformation by means of IoT data. Go on to learn why IoT is great, what it can offer, and how to use it wisely.
Why IoT Can Be of Great Help
With markets and consumers getting more and more demanding day after day, the only way to future-proof a business is digital transformation. The Internet of Things, the wired web of physical objects that “communicate” with each other, is the yellow brick road that can set the grounds for this digital transformation and be a perfect tool to embrace the new and keep up with the world.
The Internet of Things offers data, which is the most valuable asset in the current situation. For example, McKinsey reports that in the tough days of COVID-19, one of the US-based tire suppliers arranged to maintain its day-to-day manufacturing while keeping its managers off-site. The automated manufacturing-execution system provided enough information for the managers to control and efficiently regulate the whole process, thus keeping the company in the market. Litha Ramirez from SPR told that the UX industry in the Coronavirus Era turned to remote, and hence it had to rely on the “fully remote design” based on the data collected from IoT.
IoT data and digital transformation consulting offer a starting point to the digital evolvement of the internal processes and subsequent customer experience. The CIO of Vanguard, John Marcante, perfectly summarized the “why” for IoT: “Technology has driven this shift, and companies that want to succeed must understand how to merge technology with strategy.”
What Are the True Applications of IoT?
While a couple of good IoT data implementations do make a viable point, you still might and should wonder what IoT data can offer to your business (regardless of your field of operation, business size, and revenue). If IoT is as good as they say, then what can you get from it?
New Business Opportunities
Data generated by IoT offers insights into the preferences and needs end-customers have. Using the data, businesses can adjust their existing offer for better customer experience and also introduce new products and services to further engage with potential buyers. Moreover, IoT data offers easier product personalization, thus increasing conversion.
The good-old Industrial Revolution is the perfect example of the digital transformation that boosts business productivity.
IoT data exposes the weak spots of manufacturing processes. By analyzing the raw reports and implementing the changes to the production process, a business can increase its efficiency and cut production costs. Besides, manufacturing businesses can profit from efficiency improvement in security, logistics, and management of resources too.
Lower Operating Costs
Digitalization and automation of any business process eventually lead to lower operational costs. Less manpower engagement in the process helps to focus on talent acquisition and wise resource allocation.
IoT data is frequently collected to monitor energy consumption. The analyzed data shows the system elements which can be automated to reduce waste production and improve utility management. As a result, HVAC, electricity, and water consumption expenses can be reduced to the essential minimum, which lowers overall business operating costs.
Improving Employee Productivity
The best digital transformation consulting companies always pay special attention to HR processes in a company. IoT allows for a smoother implementation of new tools and systems that increase productivity, agility, and overall accessibility of the employees.
3 Steps of Effective Digital Transformation With IoT
By now, you have already grasped the main idea that IoT data is useful and can help you. But recollecting the cost of digital transformation, its complexity, and variety of possible options, you should again get suspicious – how can I understand the IoT and apply it to my specific business? How to make the right decision and pick the right path for transformation?
1. Collect Data
The IoT helps to collect all the data about your employees’ movements, machines’ wear and tear, customers’ interests, environment conditions, etc. Businesses did have all this information before, but it remained neglected. With the IoT, it gets a chance to be collected in one place – and this is the first and very important element of digital transformation.
This data enables an organization to establish the status of its equipment, its vehicles’ location, the conditions of its environment, the execution of its processes, and much more.
2. Analyze the Data
The analysis is the second crucial step in a digital transformation plan. If you have an alphabet written in front of you, it won’t be of any use until you learn how to put letters together into words. The same goes for the IoT data – once it is analyzed and the rules for its implementation are set, the magical changes can begin.
The problem with the data is that there is just too much of it. Human minds are no longer capable of consuming and analyzing such huge chunks of data as CCTV records or movement sensor reports. And this is where another piece of digitalization kicks in – AI. Artificial Intelligence in the business application helps to teach machines to analyze all those terabytes of data and present you with the concise graphs and reports that clearly demonstrate the weak spots, the improvement space, and the hints for your third step.
Rediscover your business model: Yes, IoT data frequently shows that the current business operations are not 100% effective and the change is needed. It can offer a whole new world of PAAS (product-as-a-service) or the effectiveness of a B2C instead of B2B only. New information is a perfect opportunity to rediscover new business priorities, budgets, and goals.
Don’t go over your head: With all the new information the changes might seem overwhelming but do not fall for the temptation to change it all at once. Prioritize the changes and begin to gradually implement them into the daily operations to help employees, processes, and customers adjust to the new model slowly
Safety: Never forget about safety measures for IoT data collection and usage. A business needs to be absolutely sure that no data leak will happen from its servers and also provide the same level of confidence to the stakeholders. Otherwise, huge scandals and the complete opposite of customer loyalty are guaranteed.
IoT data can become the pivotal element of business transformation. It demystifies the previously unknown black spots, sets the new objectives, and helps to build new infrastructures with new technologies. The resulting digital transformation sets new quality standards, boosts business operation efficiency, and opens new horizons to companies.
The intoxicating feeling of the unexplored opportunities might sweep the immature companies off their feet and blow them off the right path. So keep calm, get a digital transformation consulting on your side, and take baby steps on your way to the Emerald City.
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