19 January 2018

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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Why the Internet of Things matters for your business

17 May 2016  |  6124 views  |  0

The Internet of Things (IoT) is changing everything, particularly in the workplace. It represents a significant shift in how businesses develop new services and products, and in terms of how new technologies are distributed amongst your customers. As IoT connectivity increases and rapidly expands, it’s a trend that’s set to transform the way we work and communicate. Today we’re exploring the IoT and why it matters for your business.

What is the Internet of Things?

In it’s simplest form, the IoT is the concept of connecting different devices to the web (and to each other). This can include anything that possesses an on/off switch including a plethora of devices such as washing machines, headphones, coffee makers, smartphones, tablets, wearable devices, garage doors, fridges, light switches, coffee makers and many, many more. The list is practically endless.

But the IoT doesn’t just relate to household devices. It’s also important to consider the IoT in a more industrial context as it can relate to components and machinery such as jet engines and drills for oil rigs. Gartner estimates that by 2020 there will be over 26 billion web connected devices. Some analysts have suggested that 26 billion is a conservative estimate, with the possibility that there could be in excess of 100 billion web connected devices by 2020.

So in essence, the IoT is like an enormous network of devices, both domestic and industrial, connected via the web and connected to one another. In the future, the chances are that anything that is capable of being connected to the web, will be connected in one form or another. This relates to connections between people, connections between people and devices and connections between different device types.

As global broadband penetration increases and becomes more ubiquitous, the cost of connecting to the internet is decreasing. As more and more mobile devices are developed with WiFi connectivity and sensors, technology costs are dropping. Combined with explosive growth in consumer adoption of smartphones, tablets and wearable technology, this is creating what could be considered as a perfect setting for the IoT to rapidly take off.

Why the IoT impacts your business

Between now and 2020 the number of web connected devices are anticipated to skyrocket. The IoT is not a fad or a passing phase, it has genuine and profound ramifications for businesses of all sizes, from startups and SME’s to enterprise companies. This means that people, smartphones, tablets, wearable devices, NFC chips, objects, and even pets will be able to transmit and receive data via the IoT.

In terms of how you operate your business, this explosion in web connected devices has serious consequences. It will alter every aspect of our working lives and smart businesses are already investing heavily in IoT. Imagine being on your way to a meeting and you’re running late. With the help of web connected devices, your car would be able to communicate with your diary, anticipate the problem before it emerges and select the fastest possible route based on your circumstances. If the problem is persistent and your car knows that traffic is too bad, it might automatically message the person you’re meeting to let them know you’re running late.

This is just one example of how the IoT will start to influence our working lives and practices. Imagine a world whereby your fitness tracker senses that you’re awake in the morning and automatically starts boiling your kettle. Imagine working in office where the printers and other office equipment knew intelligently when they were running low on supplies and automatically ordered new stock. Imagine arriving at the office and instead of having to clock-in, the beacon at the front door knows exactly when you’ve entered the building and dynamically adds the data to your time-sheets. This is just the start and the IoT is likely to have a huge impact on how we work.

Smart businesses are investing heavily in the IoT

In 2015 business expenditure on IoT was nearly $700 billion. IDC estimate that by 2019 this number is expected to jump significantly to over $1.3 trillion. In addition, GE predict that the ‘industrial internet’ will contribute $15 trillion to global GDP in the next two decades. In terms of leading vertical sectors for IoT adoption and spending, manufacturing ($166 billion spend) and transportation ($80 billion spend) are currently leading the way. Other prominent sectors include healthcare, insurance and consumer spending. IoT spending is being driven primarily by research and development, but big businesses are already looking at the IoT as a means of reducing costs associated with workplace operations and throughout the manufacturing process.

The IoT will influence everything from connected smart homes to smart offices, buildings and factories. Currently there are billions of dollars being invested in the design, development and construction of smart homes and offices, whereby IoT technology is ‘baked’ into the fabric of each construction at planning phase. Even in 2016, Gartner estimate that smart commercial buildings, factories and offices will account for over 500 million web connected devices. Smart businesses are backing the IoT now as a means of generating new revenue streams and cutting costs.

How to overcome the challenges associated with the IoT

The adoption of new technologies helps to develop and accelerate new markets. But there are challenges associated with the rapid adoption of technologies such as the IoT. In order to mitigate some of these risk factors, it’s important to ensure that your software engineers and IT managers are up to speed with the latest IoT trends and developments. Gartner recently identified the Top 10 Internet of Things Technologies for 2017 and 2018 that your business will need to learn to master. Nick Jones, VP and analyst at Gartner suggested that many businesses are currently ill equipped to deal with the impending challenges associated with the IoT and highlighted specific areas where focus is required.

If you’re running a business, particularly software, you’ll need to think about the IoT in terms of how it will influence your security, analytics, device (thing) management, low-power/short-range networks, low-power/wide-area networks, processors. operating systems, standards and ecosystems. If you’re new to the IoT this can seem pretty daunting, given how rapidly new technologies are being developed and launched.

Gartner also highlights the fact that many emerging IoT technologies and vendors are still immature, which makes managing and deploying IoT related technologies all the more complex and challenging. In the future, this will create a huge demand for IoT app development skills and expertise as the market continues to develop. Gaining access to the right best IoT development expertise will also pose a huge challenge.

The final word on the IoT

As the IoT gathers pace and accelerates it’s liable to have profound implications for all businesses. The IoT will influence how you approach your overall business strategy and the management of commercial and technical risk. Some of the technical ramifications will impact software and systems architecture as well as network design and management.

The IoT will continue to reshape and redefine how you manage your business dealings and operations, whilst providing a platform for delivering new products and services to your customers. Ability to plan, develop and test IoT technologies effectively is critical to the future of your business. You may even require dedicated staff members to cope with demand for the development and implementation of new IoT related initiatives.

 

TagsMobile & onlineRetail banking

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