outcomes that matter the iot digital economy - driving ... · use iot to drive business outcomes...

Use IoT to Drive Business Outcomes That Matter v1.2 1

Assess-IoT, LLC October 2017

The IoT Digital Economy – Driving Business Outcomes

The Internet of Things (IoT) is a topic of immense technical, social, and economic significance. As an enabling technology, IoT enabled products and services cover a wide array of consumer and business applications. IoT solutions coupled with Cloud Computing (both Public and Private) along with Big Data analytics will touch virtually every aspect of our daily lives and the environment we live in.

Today’s IoT use cases from agriculture to health care, from smart farms to smart cities are enabled by billions of connected devices. These billions of connected devices coupled with cloud computing resources and big data analytics are powering today’s global digital economy - connecting people, improving data and processes and improving profitability for businesses of all sizes. Most important, IoT connected products and services provide customers with richer individual experiences, increased convenience and increased loyalty. The number of connected devices in 2020 is expected to range anywhere from 25-50 billion, with nearly $6 trillion spent on IoT solutions over the next five years alone. Consumers, businesses and government entities will move to IoT solutions that can improve their bottom line by lowering operating costs; increasing productivity; and expanding into new markets or developing new product offerings.

Companies and organizations that leverage IoT connected devices in their internal business and factory operations will experience greater agility. Connected solutions provide greater insights into internal business operations and provide managers with real-time visibility into supply chain management and logistics operations. For companies and organizations that leverage IoT connected devices in the products they deliver to the marketplace they will gain real-time insights into customer-driven data such as how customers use their products and how often they are used. With the increased connectivity of people, products, and processes, the digital IoT economy is set to radically change the way we communicate and do business with one another.

Use IoT to Drive Business Outcomes That Matter

In This Issue: The IoT Digital Economy - Driving Business

Outcomes

The Projected IoT Market Size & Revenue Growth

IoT Market Segments by Volume by Year How Do I Drive Business Value from IoT Why Choose Assess-IoT

“Nearly $6 trillion will be spent on IoT solutions over the next five years alone.”

According to Business Insider 2016



The Projected IoT Market Size & Revenue Growth IoT Market Opportunity Size and Expected Industry Adoption: The metrics provided here for the period 2017 through 2025 show several key IoT economic indices:

In 2017 the IoT industry is comprised of ~3000 companies with nearly 342,000 employees.

Starting in 2017 and through 2020 the year-over-year (YoY) compounded annual growth rate of IoT connected products will be 25%.

In 2021 there will be 279 million smart vehicles on the roadways worldwide.

And by 2025 IoT industry valuation for products and services will be $5.5 – $6.0 trillion with over 200 billion connected devices.

IoT Market Segmentation by Industry by Application

IoT technology is revolutionizing products and services. For example, products that were once composed solely of mechanical and electrical parts have now become complex systems that combine hardware, sensors, data storage, microprocessors, software, and connectivity in countless ways. These “smart connected products and services” are made possible by improvements in processing power and device miniaturization and when coupled with the pervasiveness of internet connectivity everywhere, IoT technology has unleashed a new era of competition throughout the world market. The chart below provides a global perspective on the broad market segmentation by Industry and Application for both Consumer and Business segments.

Internet of Things – Market Segmentation by Industry by Application (According to IoT Analytics)



IoT Market Segments by Volume by Year

Market Segments

Consumer-Facing (IoT2C) Business-Facing (IoT2B)

Consumer Cross-Industry Vertical Specific

Consumer devices are the main driver of IoT technology today and will account for 5.2 billion units in 2017, or 63 percent of the total.

The main types of connected

devices will be: Connected vehicles, smart

TVs, digital set-top boxes, phones, watches, personal care & fitness wearables, laptops, connected home and office appliances, music and entertainment systems, lighting, energy management and security systems.

Analysts still expect the consumer IoT market segment to dominate in 2020 with 12.9 billion units installed.

In 2017, cross-industry devices alone will reach a total of 1.5 billion units.

Cross-industry devices include: City traffic management

systems, smart meters, HVAC controls, and security systems will be the main drivers.

The Cross-Industry business

segment is expected to rise to 4.4 billion units by 2020.

While Vertical-specific business devices will rise from 1.64 billion in 2017

Vertical-specific devices include: Supply chain, logistics and

inventory management devices, process sensors for electrical generating plants, and connected health care devices for out-patient treatment & monitoring

The Vertical-Specific business

segment is expected to rise to 3.2 billion units in 2020.

0.0

5000.0

10000.0

15000.0

20000.0

25000.0

2016 2017 2018 2020

Vertical-Specific Business 1316.6 1635.4 2027.7 3171.0

Cross-Industry Business 1102.1 1501.0 2132.6 4381.4

Consumer 3963.0 5244.3 7036.3 12863.0

IoT Units by Segment(Millions of Units)

Source: Gartner (January 2017)



How Do I Drive Business Value from IoT?

Business leaders are asking how can IoT technology help their companies increase customer satisfaction, improve quality, support new business models, and reduce operational costs. It’s not just Consumer, Healthcare, or Manufacturing who are leading the charge of investing in IoT. All industries in Consumer, Business and Governments are recognizing the benefits of what IoT technology can bring to their processes, products and experiences and they’re wholeheartedly embracing it. There are many business benefits to implementing IoT projects. Below are several excellent examples.

Improved Business Agility The constant and unrelenting pressures of the digital economy are driving every company to become an IT company. Big companies in industries from music & entertainment to manufacturing to pharmaceuticals are embracing IoT technology to remain competitive. However, these projects won’t happen without their share of challenges. To compete successfully large complex organizations will be forced to rethink every aspect of their business to keep up with the pace of customers and competitors in the digital economy. The key to achieving business agility in the digital IoT economy will be to understand the “business value” IoT connected factories and products can create. What steps are you taking, as a business executive or line manager, to make your company more agile and data aware? IoT connected solutions that capture data on internal factory processes or directly from customer products combined with big data analytics will enable businesses to see greater market intelligence in real-time. The ability to rapidly capture process-driven or customer-driven IoT data and understand it can boost a company’s ability to adapt quickly to changing internal and external factors.

IoT data on internal business operations – factory processes and supply chain operations - will enable companies to see inside internal operations. Organizations are now able to track production, manage supply chain & logistics operations end-to-end driving down costs while driving up efficiency.

With IoT connected products and services collecting data real-time will enable businesses to gain perspectives and insights on customer use patterns and needs as never before.

Companies now have the business agility (through big data analytics and aggregation) to respond faster to market changes, drive innovative solutions to market in less time, or respond faster to evolving customer requirements.

Powering Business Processes A huge benefit of IoT connected products and services is the ability to connect people to solutions that analyze and measure their effectiveness. A significant IoT opportunity that is poised to greatly enhance supply chain management is – Asset Tracking. With IoT connected asset tracking capabilities, it’s now much easier to pinpoint patterns that indicate inefficiencies or waste. Supply chain and logistics operators and management will have the ability to track products nearly every step of the way from production to final delivery out to the end customer. Additionally, the insights generated by this information can help Sales and Marketing teams establish initial and post-sales customer affinity programs. For information on this please see our Assess-IoT guide: “Improving the Customer Experience – Using IoT to Increase Customer Loyalty”.

“The most challenging hurdle for business agility comes down to one thing… complexity.” According to Digitalist Magazine: “Three Factors Driving Business Agility”

IoT Connected Asset Trackers – The Customs Clearance Use Case

An IoT asset tracker solution can also enable in-transit regulatory compliance reporting. Providing a digital audit trail of compliance reports. Helping expedite products through Customs and enhancing Import/Export logistics operations. The FDA is modernizing its visibility and tracking of producers, shippers and carriers per the Food Safety Modernization Act (FSMA). Now producers and shippers will have the capability of providing the complete shipment history of refrigerated and non-refrigerated assets that will be crucial in determining cases where contamination or cross-contamination may have occurred. Whereas legacy asset tracking devices like barcodes will be gradually phased out and replaced with IoT based smart tags or sensors reporting real-time in-transit status.



Driving Innovation and Business Growth IoT connected products and services combined with big data analytics has the power to transform companies and organizations by enabling customer data to reach the right person at the right time giving decision makers the opportunity to improve products and enable entirely new services. Whether it’s a new product support idea based on an unexpected customer need, or identifying an unintended customer use, the data provided by an IoT connected product provides new insights into innovation. This innovation drives enhanced customer products and services that in turn drive increased revenue streams and business growth.

Why Choose Assess-IoT?

Organizations intending to benefit from IoT require specialized experts with real world business experience to assist them in navigating their path to success. With the Internet of Things driving a universe of connected devices, making the right decisions becomes the real challenge. The business incentives and rewards as to “Why Act Now” are compelling.

Let Assess-IoT help you make sense of the critical decisions needed to improve your business agility, efficiency and bottom line results by integrating IoT technologies into your products or leveraging IoT technology in the day-to-day business operations in innovative ways. We can guide you through this challenging digital transformation. New IoT connected products will provide your business with clear insights on customer buying patterns, product usage and help you gauge and improve customer satisfaction. The insights gained from your customer base will create new revenue opportunities to help your business increase its top-line growth. Assess-IoT can also help your company develop specially tailored customer loyalty programs that enable your sales & marketing teams to establish an affinity with each customer which will increase your post-sales revenue. Assess-IoT’s team of experienced business professionals and technology experts will provide guidance in all aspects of your current or future IoT program by providing a solid framework for key business decisions and recommendations that will generate positive results and increase your company’s bottom line.

IoT Connected Appliances – The Water Softener Use Case

An IoT smart home connected water softener. By integrating IoT technology into their next generation of water softeners not only does the water softener manufacturer meet competitive industry pressures to provide smart appliances in the connected home, they also learn from the IoT data streaming in from their customers. The IoT data is alerting the water softener manufacturer that many of their appliances are being operated at or below minimum levels of salt. The softeners are not effectively performing their intended function – to soften the water. Based on this data, the manufacturer now offers a new service to their end customers that coordinates the delivery of salt by local salt providers. This new service, coordinated by the manufacturer, is driving new revenue streams for them and the local salt providers. The net takeaway is improved system performance of the water softener and greater customer satisfaction and value. The goal is to increase customer satisfaction by providing a richer and more productive customer experience. With the added benefits of a smart appliance, customer satisfaction is enhanced, and the manufacture and local salt providers see additional backend revenue. The smart water softener also provides IoT data on its own operating performance and diagnostics. Proactively alerting the manufacturer and local service providers when it requires maintenance.

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