Analytics can paint rich portraits of your customers and your business, drawing out hidden patterns of behavior to reveal deep insights—but only if you can harness its power. IBM’s investigation into the Internet of Things (IoT) and analytics, The Economy of Things: Extracting new value from the Internet of Things, examines the broad effects of data on industry, highlighting the Internet of Things’ vital role in disrupting traditional approaches to customer relationships and enterprise management.
Realizing value from big data
Companies that engage with the Internet of Things should carefully consider how to understand the data they gather from IoT sensors, the effects of devices’ and services’ physical locations and the security concerns that naturally accompany any implementation of technology. Because analysts expect big data to realize a value of $48.3 billion by 2018—and expect the total value of the Internet of Things to top $14 trillionby 2022—enterprises must be at the forefront of the IoT revolution.
On average, data-driven companies are 5 percent more productive and 6 percent more profitable than companies that do not tap into analytics for business decisions. However, realizing the benefits of data means exploiting the Internet of Things at a corporate level—and embracing the change that the Internet of Things delivers is no easy task. Though customers are eager to enjoy cost-effective products and services offered through digital marketplaces, companies have been slow to embrace the change offered by the Internet of Things, partly because of the difficulty of managing massive quantities of data.
The infrastructure of the Internet of Things forms another obstacle to companies’ adoption of IoT technology, for the disparate roles of partial-solution providers hamper enterprises’ attempts to secure data solutions that target their unique needs. Your company, however, need not suffer from either of these challenges when plugging into the Internet of Things.
Use your physical assets to their fullest
Many companies already capitalize on some of the data they collect, but as increasing quantities of physical assets become tagged with IoT sensors, the information they collect is growing from a mountain of data into an entire planet’s worth of data. As Chris O’Connor, general manager of the Internet of Things at IBM, notes, “the challenge lies in understanding which data is most valuable and figuring out what do to with it.” Accordingly, IBM explorations into the IoT-driven Economy of Things highlight the benefits that can be gained by instrumenting and digitizing assets in a wide range of industries, illustrating how an understanding of data can benefit the bottom line.
For example, the real estate industry suffers from an inability to manage physical assets to their fullest potential—indeed, only 67 percent of 12 billion square feet of space are in use at any given time. As real estate companies begin entering the connected world, empty conference areas and office spaces can produce revenue through rentals purchased virtually. Thus digital marketplaces can draw value from excess real estate capacity—and indeed, IBM predicts that the entire industry stands to profit to the tune of $128 billion even with only a 50 percent adoption rate.
Make your business model work for you
Transforming revenue, managing assets and garnering new insights—regardless of the number of internal or external data sources—are all integral to comprehending patterns and targeting needs identified through analysis of massive quantities of data. As O’Connor explains, “organizations must consider how to handle unparalleled amounts and variety of data, how to manage the complexities of connecting to a seemingly unlimited number of devices and how to effectively integrate IoT data with data from other sources, such as internal data stores.”
In its IoT study, IBM found that neither the size of a business nor its growth expectations were crucial issues when implementing the Internet of Things or managing data—but that its business model might be. For example, a company might need to modify its business model to be able to compete in an evolving marketplace—and as decision makers master the art of interpreting data, they might judge macro-level restructuring necessary for survival and growth in the ever expanding connected economy.
Strategy and security
O’Connor encourages organizations that are interested in IoT deployments to plan carefully, noting that “the first step is making sure to have a connection and data strategy in place.” Businesses that wish to remain viable must strategize about how to make use of the swelling tsunami of information. When doing so, partnering with IoT-savvy enterprises will save more than merely time and physical resources.
Considering the learning curve involved in implementing IoT technology and garnering useful insights from analytics, your choice of partner can decide whether your enterprise leads the IoT revolution or comes in dead last. Small wonder, then, that industry leaders so often choose IBM, which not only has invested more than $16 billion in analytics, but also boasts a solid track record providing strong technology solutions.
Quantification of risk is a key aspect of the Internet of Things, for ever more devices mean ever more access points, creating the potential for sensitive data to be available in a number of locations. Accordingly, says O’Connor, “IBM’s risk methodology allows the quantification of risk around IoT devices, enabling businesses to choose an acceptable level of risk consider their device types and data sensitivity.”
In particular, ever growing numbers of sensors and IT assets, combined with heightened data collection and aggregation, naturally attracts undesirable attention from cyber criminals. Unfortunately, many companies are taking a “wait and see” approach to this threat, thinking that little can be done about cybersecurity—or can it?
In fact, much can be done. The Internet of Things provides its own solution to the burden of cyber crime in the form of enhanced analysis, which allows exploration and tracking of weaknesses in security management or personnel activities. Similarly, sensors attached to physical assets allow for instantaneous geotracking, and data analysis can reveal paths to securing resources and managing cyber attacks.
Embracing the Internet of Things
Is your enterprise ready to embrace the benefits offered by the Internet of Things? The IBM IoT Foundation platform can help companies take advantage of big data. Backed by a strong knowledge base, it enables effective device management and safe data storage while offering scalable enterprise solutions.
The Internet of Things offers businesses tools that they can use to create value, manage existing assets with clarity, enhance their business model, inform their decision-making and avoid unnecessary risk. Data-driven systems are an integral part of competitiveness in our data-driven age, but enterprise leaders must proactively embrace IoT technologies to reach the competitive edge of the Economy of Things.
Originally published on IBM Big Data & Analytics. Published on October 27, 2015. Author Scott Amyx.