IoT is on the path to rapid growth. This is especially true in the enterprise world, where research estimates that B2B spending on IoT technologies, apps and solutions will reach $267 billion by 2020. With billions of dollars’ worth of investments at stake, it’s critical that enterprise leaders pause and consider how to measure the full impact and ROI of their IoT investments.
Naturally, dollars saved is a top priority. A recent study we did found that 94 percent of C-suite leaders believe that investing in IoT, data, and connectivity will save their company more than $50 million over the next five years. Nearly 40 percent believe the savings could even total $100-$250 million.
However, the potential rewards of IoT investments can – and should – go beyond dollars saved. To paint the most accurate picture of ROI success, companies should also consider, and potentially even prioritize, efficiency gains and improved customer service, as well as the potential impact of IoT on an organization’s security by asking the following questions.
What areas are most ripe for efficiency gains, and how can IoT help?
Our study found that 58 percent of respondents felt that increased operational efficiency was the greatest benefit of investments in IoT, data, and connectivity. This is likely because IoT has enormous potential to increase outputs while lowering inputs across multiple departments and industries. For example, IoT-connected manufacturing equipment can help manage the physical production line, avoid interruptions, and increase output. IoT can also help companies monitor inventory in real time, helping to control costs and lower prices.
At the same time, IoT can reduce energy usage by monitoring things like lighting, temperature, and energy usage, cutting energy expenditure dramatically, especially when coupled with AI systems that analyze the data collected by smart devices.
To increase ROI on IoT investments, leaders must closely examine which areas of their business stand to gain the most when it comes to efficiency. This will likely differ not only industry to industry, but company to company.
How can I leverage IoT to iron out existing flaws in my company’s customer service and user experience?
Most companies are lagging when it comes to delivering better customer experience in the digital age. Getting customer experience right is paramount – especially for a customer base increasingly comprised of millennials, a generation that has come to expect a customized, seamless customer experience at all touchpoints. IoT has the ability to make strides in customer service quality, yet nearly half of respondents (46 percent) believe innovation of products and services is a major beneficiary of investments in IoT, data, and connectivity.
To drive customer service and experience-related ROI, companies can implement IoT to streamline customer service and iron out painpoints in several ways – the most significant of which being the ability to collect data continuously and in real time. When customers interact with an IoT-connected product, the item gathers detailed information, allowing companies to deliver highly customized and seamless customer service and eliminate previously unseen experience-related issues.
How can investments in IoT actually drive improvements to my company’s security defenses?
Many leaders are optimistic that IoT has the potential to improve a company’s security. In fact, 58 percent of respondents from multinational tech companies see security and safety as one of the top areas benefitting from IoT, data, and connectivity. For example, sensors and cameras, on a manufacturing floor or oil rig, can be deployed with real-time analytics and intelligent access control throughout the site. These IoT systems can prevent a security breach, such as entrance of unauthorized personnel, or a safety incident from occurring, by preventing someone from entering a hazardous zone. Alerts to the relevant administrative personnel for appropriate action can even be an automated aspect of the solution.
Additionally, understanding potential security risks ahead of investments in IoT can help companies prepare for possible attacks and lower the costs associated with the aftermath of an unforeseen attack.
Experts already know that IoT may amplify the power of distributed denial of service attacks, which can make service unavailable by overwhelming the network with traffic from multiple sources. Attackers may also be able to deny companies’ access to data or hack a system to provide false information, leading to defective products, inaccurate insights, and much more. Preempting such attacks may require companies to spend more on defense investments, but will ultimately save money by avoiding damage costs and preserving the valuable data collected by IoT devices.
As companies strive to compete in an increasingly digital world, investments in IoT, data, and connectivity are the key to exceptional customer experience, streamlined operations, and self-innovation. While 80 percent of survey respondents noted that data and connectivity is a top strategic priority – surpassing both product service innovation and geographical expansion – companies considering major investments in IoT technology need to think not only in terms of dollars saved, but also in terms of efficiency gains, improved customer experience, and security risks versus improvements.
About the author: Jayraj Nair is global head of IoT at Wipro Digital (www.wiprodigital.com).
Edited by Ken Briodagh