How “Internet of Things” will Change Traditional Business
Posted in Marketing & Strategy Articles, Total Reads: 763
, Published on 01 September 2016
IoT or Internet of Things is the most recent buzzword in almost all the industries. IoT is expected to set a new era of technological prosperity because of its high productive potential. It mainly revolves around the idea that products communicate on customer’s behalf after getting transformed to smart products. Almost all the big companies are struggling their way to fit their traditional model into the world of IoT. As everyone is on the run to get first mover advantage, it is time for us to find out what exactly is Internet of Things and how is it going to change the business from traditional to a whole new experience?
What is IoT/Internet of Things?
Internet of Things is the connection of physical objects embedded with systems such as sensors, mobile devices, software, and hardware and internet connectivity which help these objects in storing and exchanging data. This technology allows the physical objects to be remotely controlled and sensed over the network. Its working is beyond the internet usage in traditional devices like smartphones, laptops, desktop and tablets. It is defined as a wide range of devices which is commonly used in our day to day life which uses embedded systems for communication with the environment via internet connectivity. Its applications are spread over media, manufacturing, medical and healthcare, transportation, energy management, building and home automation, etc. Internet of Things also faces challenges. The major challenge is the security issue. The entire network can be hacked and all information shared can be retrieved by the hacker. The next issue is the privacy. Most of the people will not be ready to share how their product is been used. So these are serious concerns which are still unaddressed.
Value capture and value creation which was defined for the traditional model of business should be transformed to the present context involving Internet of Things. Value creation can be considered to be the center of the traditional business model. In order to bring in value creation companies are continuously competing with each other and every time they try to bring in new innovation. But with the advent of Internet of Things the scenario completely changes as new software updates can be sent to the customers directly through the air. One such example is of Tesla.They released the latest version of their software (Version 7.1) over the air. The software update adds on to the available feature in the previous software. By this way, the competition has become even fiercer. Now the companies can respond much faster to customers’ needs than previously as the features can be updated via air. That is one of the advantages of Internet of Things.
Internet of Things also let us do surveys over the internet and connect to the customer and get to know their needs. Accordingly, the companies can come up with new features. The features never become outdated as it is getting updated. But the previous scenario was never the same.
Value capture, on the other hand, let companies set right price to extract maximum profit from each sale they make. This profit is then invested in their next product. But the companies should look for a continuous revenue stream and should not just depend on the revenue produced by selling their next product. The companies should also analyse the way their competitors are making money.
FIVE Ways IoT will change traditional business
#1.Birth of Smarter Products and Services
With the advent of Internet of Things, almost all the companies are trying to implement IoT in daily life. By doing this, the companies’ feel they can pull in a lot of customers as today everyone looks forward to getting things done in an easy manner. The expectations of people are more nowadays that the companies’ have to come with new innovative smarter products to satisfy the consumers.
#2.It’s all about Data
Internet of Things is revolving around “data”. The physical objects have systems embedded to it which will capture data and send the data across cloud for further analysis. So whoever can properly handle the data after collecting it and using it to solve more complex solutions will tend to lessen the complexity of systems.
#3.Impact of Sensors
Though all the software and hardware is involved in the Internet of Things, the main attraction is always stolen by the tiny innovations-sensors. Be the devices be smart but sensors play a major role. These sensors attached to any physical objects will be able to record and send data to the cloud and also receive the data from the cloud and implement the operation accordingly. This eventually helps companies to modify the product according to the data and feedback obtained. Sensors attached to vehicles can help in fleet management. These sensors collect data and send the collected data to the cloud. This allows the person monitoring the fleet to analyze the data and control the fleet.
#4.Ordinary jobs will disappear
The Internet of Things will automatize and digitize almost all the physical objects around us. This situation makes many people lose their jobs who are currently working in service, agricultural and manufacturing industry. So the jobs which are daily tasks might get replaced. But there are so many other jobs which need intelligence, creativity, and problem-solving skills. So competition might become fierce in these areas.
#5.Find source of energy
The sensors as mentioned already has a major role in Internet of Things. The sensors need energy to continuously monitor as well as send and receive data via the cloud. How will the sensors be able to harvest energy? The sensors should be designed in a way that they will be able to harvest energy from the surroundings. I have come across watches which work based on your hand movements. So a day is yet to come when the physical objects will be able to derive energy from their surroundings.
Are you the one who expects things to get done in an easier manner? Then you will be one among those people who is looking for this technological innovation to take a giant leap. Look around you, the world is changing and before you could even realize, everything will get digitized and automatized. The companies are trying to bring Internet of Things to whatever innovations they are trying to bring forth and also the current business’ are trying to implement IoT in their existing products to get first mover advantage. This is not a dream and for success change is required by exploring new technology. So let’s embrace this change. Will IoT make people lazier? I will leave this question for you people to think.
This article has been authored by Ann Ushus Mathew from IIM Raipur