5 Ways IoT is Driving Successful Digital Transformation

The Internet of Things, or IoT, is set to be one of the biggest tech trends of the coming years. Connected items have already found their way into homes and businesses in the form of everything from automatic HVAC monitoring and controls to speak speakers.

According to McKinsey, IoT could generate between $5.5 trillion and $12.6 trillion in value globally by the end of the decade, with around 65% of this coming from B2B applications.

In many cases, IoT will be an integral part of firms' digital transformations, giving them access to a wealth of new information they can use to enhance their operations and drive revenue growth. By making business more hyperconnected, IoT ensures that firms can make the right decisions at the right time.

The need for a data-driven strategy

Digital transformation relies on data. Without this, firms won't have the insight necessary to make the right decisions, while tools like automation and artificial intelligence that are at the heart of many such projects won't be able to function properly.

IoT offers an essential solution to this. As well as sensors that can collect a huge volume and variety of critical information, this can often be combined with edge computing that can conduct processing of this data at the point of creation, rather than sending it back to central servers.

This lets companies respond quicker to the incoming data and improves their agility and greatly increases the number of use cases for IoT, from responsive factory equipment to connected cars.

How IoT helps drive digital success

IoT solutions are often thought of as engineering applications, but in fact, they can be deployed across a wide range of industries. Therefore, no matter what the goal of your digital transformation, there's likely to be a place in it for IoT technologies. Here are just a few of the ways these tools can drive success.

1. Improving efficiency

IoT is essential if you want to embrace automation, and in turn make your operations more efficient. For starters, it can help identify any bottlenecks or delays in your processes, such as supply chains, where things aren't moving as they should. Vehicle sensors, for example, can highlight if drivers aren't taking the most efficient route.

However, when combined with automation, this can offer powerful savings. For example, in logistics, automated scheduling and route planning can not only save time but also cut fuel usage and reduce the risk of any damage or spoilage in transit.

2. Cutting costs

The data provided by IoT sensors allows you to see at a glance where you're losing money and lets you take steps to address the issue. For example, it can show you if you're wasting heat and light on empty rooms - letting you reduce this power usage but then turn it back on automatically when someone enters.

This can be applied to almost any business. For example, one commercial bakery in Ireland was able to reduce its electricity bill by 14% just by using IoT to turn its ovens on at the right times.

3. Reacting quickly

Another essential element of IoT is moving from a reactive mindset to a predictive one. For example, sensors can be used to measure the performance of machinery or other items in minute detail and forecast when they may be likely to fail. This lets you undertake any essential maintenance early before it causes problems, reducing both downtime and inconvenience for users.

Elsewhere, it can also be used in sectors such as retail and finance for use cases such as fraud prevention, using tools like geolocation, biometrics and real-time data gathering to alert firms to unusual activity and make instant decisions on whether to block a transaction.

4. Enhancing customer experience

The use of data gathering from IoT devices is also vital in transforming customer experiences. For example, being able to monitor usage of products lets businesses offer relevant offers or upgrades at the right time, while environmental monitoring can automatically adjust stores' ambience to deliver the most comfortable experience.

Analytics facilitated by IoT platforms help businesses get to know customers on a deeper level by anticipating their needs and addressing their issues before they have to reach out, again helping businesses move from being reactive to taking the initiative.

5. Improving data-driven decisions

Digital transformation isn't just about having more data - it's about ensuring you're looking at the most relevant metrics to improve operations, and IoT is hugely useful in providing this.

For example, in retail, IoT can offer everything from heat maps that show how customers make their way around a store to sensors that alert employees to empty shelves. This lets firms make decisions about things like store layout, where to place certain products on shelves and exactly how often restocking is needed.

Whatever sector you're in, easy access to IoT data makes digital transformation possible by putting the right information in the hands of the right people and will be essential in making the best decisions to help futureproof your business.