The Fuzz Around IoT and How to Deal With It   

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The Internet of Things (IoT) is nothing new. Critical and extremely valuable data has been collected from manufacturing processes, utility facilities and e.g. racing cars for decades. These connections have been either wired or wireless. In other words: The most valuable IoT applications have already been done.

Changes that make IoT attractive

There are a number of significant changes making IoT more attractive. There are new, more affordable and better IoT optimized wireless connectivity technologies. Sigfox, LoRa, BLE and ZigBee are being used in a rapidly growing pace. NB-IoT networks are being deployed and radio modules are being brought to the market. With the new technologies the cost of connectivity is dropping. Readily available modules for sensors with communications capability are becoming available in volumes and in completely new price points.

Also, technology components needed in some implementations, e.g. mesh protocols, gateway and edge computing solutions, are reaching commercial maturity. The battery life of battery-operated sensors and their connectivity is improving fast. Cloud data storage and analysis has created a platform very well suited for creation of IoT applications. New technologies for analyzing and combining data from several sources create opportunities for new value added. Combining multiple data sources and using ML (Machine Learning) and AI (Artificial Intelligence) will create new ways to add value.

With all these advances driving IoT forward, why are we seeing slow take-up of IoT and increasing amount of cynical comments on the future of IoT? There are a number of issues slowing down the take up.

Let us look at a Business case

As already mentioned, the highest value IoT applications have been implemented years ago and they are not even really seen as IoT. The next tier of application areas worth implementing needs to be identified, verified, decided on and implemented.

Technology integration: Although the IoT technology is not ‘rocket science’, it is a system of multiple technology components; Sensors, electronics, batteries, radio technology, protocols, interfaces, cloud, back-end and front-end. Building a system with all pieces together takes a bit of time and quite a bit of effort.

Old habits (and contracts): This is probably the biggest hurdle to overcome. To gain the value of IoT, organizations need to change the way they operate.

An example case – Waste Management

Technically it is relatively easy to have sensors in waste containers to indicate the fill level. This could be used to rationalize the transportation routes of vehicles emptying the containers. Potentially the savings are huge. On the other hand, the value is only unleashed, if the waste collection logistics is completely redesigned based on the new information.

To achieve this, the co-operation between the waste management organization and the transportation companies should be done differently. But the way of working is dictated by multi-year contracts. And the contracts are renewed on open tenders that would need to be restructured to accommodate the new way of operating. Achieving this will take several years at the very least.

My prediction around IoT development

Will this mean the business case is not there, the technology is too complex, and changes needed for IoT benefits to materialize are too big? Will IoT be just hot air and smoke without fire?

My prediction is NO.

The applications worth implementing are being analyzed and verified. With the development in the cost structures of applicable technologies, there will be many application areas worth implementing. Less and less valuable items become worth tracking. Optimization of less and less costly processes becomes worthwhile. The current hinderance is still technology integration and needed changes in operations.

System integration is already speeding up. Full vertical solutions are being developed and offered. Once the technical system and the right ecosystem is created, it is easy and fast to multiply implementations and create global impact.

Changes in operations will happen. They just take some time to go over the typical change resistance and careful change implementation. There may be some applications though that have change hurdles too high to overcome. These may be caused by regulatory requirements and/or e.g. labor union resistance.

To speed up the value creation of IoT, we should not see it as primarily a technology issue. Technology solution and verification are part of the recipe, but the main focus should be in building the right business structure in terms of new ways of working both internally and with the business partners.

As with many technologies we have over-estimated the short-term impact, but there is still a good change we actually under estimate the long-term impact, once we find the right ways to deal with the business and process impact.

Kyösti Melametsä

 

Photo: Unsplash / Clint Adair