The ROI of IoT: Does the shoe fit?
The tech industry, these days, is full of buzzwords and jargon that, at first, fascinate, but soon push analysts and business owners to overlook vendors. Here’s why – fancy terms and techy lingo mean nothing without case studies and proof of ROI to give them some weight. If a man on the street told you he was a magician, would you believe him without asking for proof? It’s likely you’ll want to see a bunny come out of his hat or have him pick your card before his claim carries any credibility.
The same goes for proving return on investment. Companies don’t want to make significant financial investments without a clear view of what the payback will be. Presenting an idea without supporting it with evidence of tangible return is like a person claiming they are magic and then just walking away.
At IoT.nxt, we are not magicians nor do we claim to be. What we are is a team of IoT experts offering seamless, technology-agnostic interoperability and interconnectivity, and agile and rapid deployment.
IoT – more than just a buzzword
The Internet of Things is something that is providing unprecedented value to businesses all over the world. A huge part of that value comes from the IoT service provider that companies trust with the implementation of the technology. Companies are looking for seamless integration, agile and rapid deployment with little to no disruption, best-of-breed technology and significant return on investment.
The IoT.nxt platform allows clients to see a single integrated view of their entire business. It also offers near-real-time data reporting, full data visualisation, interconnectivity and interoperability. This is to achieve optimised levels of production and efficiency that bring about change in new ways of doing the same thing, but better.
But how do we know that this evergrowing technology is actually successful? Typically, that can be measured by 2 factors. First, that it actually works and, second, that it provides a financial return. Well, the number of devices connected to the internet has increased by 8 billion since 2015. Furthermore, it is predicted that there will be around 30 billion IoT devices deployed by 2020. Therefore, we think we can safely assume that the technology works.
However, the best way to measure the effectiveness of a technology that serves the purpose of increasing productivity and efficiency to positively impact the bottom line of a company is to look at use cases of how the implementation of IoT did, in fact, positively impact the bottom line of a company.
When it comes to moving forward with the decision to implement IoT into your business, we believe it’s best to first look at the use cases rather than the platform.
The use-case first approach
It is a common argument in the tech world that prospective adopters should make the initial decision based on the IoT platform. The general definition of the IoT platform is that it is the system upon which applications can be built to take advantage of data being collected from different devices. Therefore, by taking the platform-first approach, companies would need to standardise an IoT platform, purchase or develop applications, integrate other enterprise systems, and ingest device data. Then, they can begin to focus on IoT use cases.
Seems like a fairly roundabout way of approaching something that’s straight ahead doesn’t it? Therefore, many organisations opt for the use-case first approach. This is where they focus more on individual business initiatives that drive specific business outcomes. Use case business outcomes include things like improving asset uptime, reducing service and warranty costs, improving safety, complying with government regulations, reducing wastage, adding new revenue-generating services, etc.
Therefore, the use-case first approach tends to offer more clarity in terms of the value of the product. Then, you can make a more educated decision on an appropriate platform that will accommodate all the different use cases across all elements of your company’s value chain. Focusing on use cases that outline different business initiatives also enables a company to further establish their IoT objectives. Then they work to evaluate platforms that can help them meet those objectives.
To simplify this even further, you don’t make your foot fit the shoe you’re buying, you make the shoe fit your foot. That’s exactly what the use-case first approach is all about. Making sure the product and platform are moulded to fit your company.
Furthermore, it has been argued that the use-case first approach could result in different systems being deployed in different parts of the company. However, modern technology now allows for different systems to coexist and even exchange information and leverage multiple sources of data.
But what does all this really mean?
Essentially, like with any investment, the overall objective, after you’ve implemented various other objectives, is to see a return on investment. ROI is defined as the ratio between the net profit and cost of investment. Naturally, the higher the ROI, the better.
For example, the IoT.nxt platform offers clients rapid bankable ROI in less than six months:
- Vehicle servicing – a 10% increase in the number of cars serviced with payback in 4 months
- Mining – a 6 % increase in business efficiencies with payback in 2 months
- Smart ports – a 19% increase in container turn-around with payback in 4 months
- Telecoms – asset tracking and energy management with payback in 3 months
- Meat processing – a 10% reduction in wastage with payback in 3 months
IoT aims to help companies achieve 2 basic things: save money and make money. When it comes to the Internet of Things, return on investment is built from several different aspects of the business. These include:
- Decreased downtime
- Waste reduction
- Better quality customer service
- Reduced risk
- Increase health and safety
- Increase productivity
- Increased efficiency
- Better security
- Data Visualisation
- Improved performance
- Asset utilisation
IoT allows for new efficiencies to be established through real-time monitoring and data visualisation. Predictive maintenance is a significant benefit here. This is because it uses sensors on equipment and machinery to detect problems before they occur. Essentially, you are able to fix problems before they happen and eliminate any unnecessary downtime. Some people say ‘why fix what’s not broken?’ Well, by fixing things before they break, organisations are able to save significant money. Especially when it comes to maintenance, repairs and downtime expenses.
Some other areas of savings include:
- Inventory management
- Compliance and safety
- Maintenance and repairs
- Utilities and overheads
- Marketing and product strategy
- Order fulfilment
- Payment and tracking usage
- Health monitoring
We know that one of the main goals of IoT is to better the bottom line of a company. Not only is this done by finding ways to save money but it is also achieved by:
Establishing new revenue-generating services
Companies are able to use all the data that flies around the IoT networks to figure out how to build new products and services that will generate more revenue.
Through data visualisation, companies are also able to gain new insights that help decision makers create new business models and transform existing industries. With more insight into things like the way a company operates and the behaviours of its clientele, managers are able to make appropriate adjustments to the business wherever and whenever they are necessary. This improves productivity, customer service, the quality of the product or service, etc. These, in turn, generate revenue.
One massive advantage of the IoT.nxt platform in terms of the use-case first approach is that our platform is completely technology agnostic. Therefore, once you have evaluated use cases and settled on your business objectives, we will work to build a system that fits the current operations of your company and your objectives while causing as little disruption as possible.
The IoT.nxt solution is easily adaptable to different business environments. Having a technology-agnostic solution means we are able to protect legacy infrastructure. Bypassing the usual ‘rip and replace’ that often accompanies the rollout of new technology solutions means implementation is quick and scalable. We facilitate the success of every project by ensuring that the solution fits the unique issue.
This all means that we are able to leverage off existing infrastructure, future-proof digital transformation strategies, offer best-of-breed technology and create immediate business process impact. This is all without causing too much, if any, disruption to productivity.
Therefore, it doesn’t matter what industry you’re in, what system you use or what process you follow. Our IoT solution can quite literally be overlaid onto anything. From food processing to mine management, and from IT operations to livestock tracking.
It’s not uncommon for cases of implementation in a small slice of a business to evolve into larger, more involved ones. The Internet of Things creates new opportunities for businesses. Especially ones that are prepared to make the most of its stream of real-time data. The growth and convergence of processes, data and things on the internet will make networked connections more relevant and valuable than ever before. This growth creates unprecedented opportunities for industries, businesses and people. The 5 main opportunities that IoT creates for businesses include:
- New business models – The Internet of Things helps companies create new value streams for customers, establish processes that speed time to market, prioritise market performance and respond rapidly to customer demands
- Real-time information on mission-critical systems – Organisations have access to more accurate data about their products and operations in a more timely manner to create new revenue streams, improve productivity and increase return business
- Diversification of revenue streams – Companies are able to explore the possibility of new services and products which could lead to new revenue streams
- Global visibility – IoT makes it easier for managers to see across the business regardless of location, including tracking effectiveness and efficacy from one supply chain to the other
- Efficient, intelligent operations – Access to information from autonomous endpoints allow organisations to make on-the-fly decisions on pricing, logistics, sales and support deployment
Another aspect of the ROI with IoT.nxt is that, unlike many of our competitors, the cost of ownership will actually decrease with scaling after the initial purchase. Once you make a purchase anywhere within the IoT.nxt platform, any additional products that you wish to implement will come at a lower cost. This is because the initial set up has been done.
So, if after taking the use-case first approach, you have then found yourself scrolling through IoT.nxt looking for a technology agnostic team that can help make your business objectives a reality, we’ll tell you that you are in the right place. We have helped hundreds of companies achieve their IoT goals and we’re always waiting for our next big thing. Will it be you?