As reported on FourWeekMBA:
Internet of Things is an amalgamation of physical devices connected to each other through the internet. In this way, these physical devices also become data points, able to share information and data. This is achieved by the “things” which are equipped with sensors and software to carry out these tasks.
The IoT ecosystem and what that implies for business
Following the advancement in technologies like 5G, quantum computing, and the like, the trend of an increasing number of devices is observed not only in everyday use but also in the business world. Though it offers high connectivity and an easy and effective flow of communication, it comes with its drawbacks. The biggest concern around this entire concept is the privacy and security of these devices and the uncertainty that exists with the flow of information through unsafe channels.
When it comes to the business world, IoT is bringing about a lot of change. Data is monitored constantly to enhance the efficiencies of the systems and in turn enable companies to make decisions, which will result in favorable outcomes. The increasing reliance on analytics and AI systems makes data easier to read and interpret for better decision making.
IoT enables easy integration of the data that is available to the companies which are then processed through AI and analytical processes. Due to the interconnectivity and fast response time, companies are using this technology to not only make informed decisions but also improve customer experience. In the retail business, innovative technologies are being employed to achieve this goal.
A simple example is the use of smartphone applications, which allow customers to pay directly through their phones instead of having to stay in long queues. This helps retail companies on two fronts. One, customer experience is improved which helps in retention and customer satisfaction. Two, it reduces the time it takes to serve customers and hence more customers can be served in the same amount of time.
Decentralization of data processing
As mentioned previously, data is immensely available to companies in these technological times. With the interaction of different devices hundreds and thousands of miles away, processes can be improved by the data that they share. Edge computing allows data to be processed locally and only the relevant portion to be sent forward.
With this constant communication between the devices or “things”, companies can cut down on costs that were previously incurred due to irregularity of the data and lack of communication. In the railway industry where trains travel hundreds of miles, IoT allows different parts of the trains that need servicing to be analyzed and operated on when needed.
Previously this was done manually which required a lot of time to be consumed and ended up resulting in more servicing charges to remain on the safe side. With proper data and communication between devices, costs can be cut down and processes made smooth.
Different businesses around the world rely on the labor that they have employed. Even in this fast-moving world, labor-oriented businesses do exist and they drive the businesses forward. For these businesses to operate efficiently and effectively, the physical well-being of labor is important.
From a fast-food restaurant chain to big automotive producers, devices with sensors attached are sed by the labor. The data from these IoT devices gets collected in real-time and is constantly monitored by the management to make better decisions. It enables and equips businesses in improving the quality and reliability of the products and services that they offer.
Similarly, tracking devices or even sensors in the retail industry enables businesses to remain on their feet in the sense that it enables them to see which stocks to shelve and can make informed decisions about the demand of certain products with real-time data.
IoT is a tool that will truly revolutionize the business world that stands today. More and more businesses are diverting to the use of these technologies and the trend will increase manifold over time. However, despite its offering of high quality and well-informed decisions, the technology is not all fun and games.
The biggest concern around the entire concept of IoT is the privacy and security that it is threatened with. Unsafe information is not information useful. Access to information in the wrong hands can backfire as entire strategies are built around the real-time data that companies possess.
An increasing trend has been observed in ransomware recently, which further shatters the confidence of business managers to handle data in this manner. It is expected that the global IoT market will increase around five times in half a decade. The opportunities are endless, but the concerns looming over these technologies in terms of data theft and misuse can prove to be hurdles in the way of business progress.
The concerns are not just limited at the end of the business level. With no proper updates and lack of testing, the concerns are further uplifted. Outdated devices will not only be a hurdle in data sharing but are also more prone to being accessed by intruders. Financial businesses are especially more prone to attacks since they deal directly with money and higher stakes.
This makes them vulnerable to hacking attempts and criminal activities. Even in the retail example mentioned above, paying money through smartphones can be intruded with. It saves on time and improves customer experience, but unless it is safe to use it will not become widespread.
The future of IoT is expected to bring changes in every aspect of current human life. Businesses will be able to improve services and be more profitable but at the same time, they are also now more exposed to foreign threats that directly target their practices.
Technology will keep on improving and in the future, it is expected to improve exponentially given the applications that it guarantees. If safety is ensured, the shift will be even quicker than what is observed today. It is not a question of whether IoT will have a much bigger place in businesses in the future, it is only a question of when.
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Author: Gennaro Cuofano
Date: 2021 02 15
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