B2B, not B2C will lead Internet of Things adoption

21 Apr B2B, not B2C will lead Internet of Things adoption

Let’s face it – the concept connecting a device to a network or another device has been around for at least 30 years. Connected devices like ATMs, Kindle eReaders, Home Security Systems have been mainstream for a long time. Why the hype now? Not just because IoT represents a BIG opportunity (exceeding $ 9 Trillion by 2020 by some estimates). The hype is primarily because of IoT’s transformative power – on how we will exist, live, transact and communicate in the future.
IoT or Internet of Things can be thought of as a networking of physical objects through the use of embedded sensors and actuators that collect information about the objects themselves and their surroundings and communicate the same to other objects, linked through wired or wireless networks. The data amassed in the process is available for analysis, leading to responses, automation and control. Though the number varies depending on which report you refer to, we can safely say the number of connected devices in the world today far outstrips the global human population.
IoT is revolutionizing traditional value chains. A connected product is now a participant in its own value chain. It can communicate with its makers. It can convey how well a product or a service is being received by the consumer, accurately and in real time. In some sense, this THING with the embedded sensor is the new sensor in the relationship with the customer. The Voice of the Customer still rules but that voice is no longer enabled exclusively through surveys and call-centers. The THING can tell the marketer about the customer’s sentiments and needs (how does he like the product? when will he need a replacement?). This is fundamentally changing how products are going to be created, marketed, sold and serviced.
Welcome to the Internet of Everything
IoT’s evolution has always been closely linked to the evolution of the Internet and mobile communication. What started as the movement of taking on the world and taking it online, evolved to taking control of devices and making objects speak to one another. Now it is focused on making things intelligent. In the process, IoT has morphed to IoE (Internet of Everything) where anything may be connected anytime, anywhere, using any path and may be part of any service, accessible to anybody.
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In addition to disrupting existing business models, this hyper-connected mesh is paving the way for new use cases everyday. Businesses are no longer debating the question “what will IoT do to my business?” The question has transformed itself into “what business will I really be in, in the IoT age?”New use cases, every dayIoT has opened up limitless possibilities for businesses and brands as they seek to build novel connections to their customers and the outcome is mind-boggling. Take for example the curious case of Sparked, a Dutch start-up that has devised a system to track the health of cattle by attaching sensors to the cows’ ears. The Economist has called these networked cows “part of an exciting technological trend”. One thing is for sure – we haven’t yet seen even the tip of this iceberg.B2C Struggles, B2B ProgressWhile Business-to-Consumer (B2C) use cases seem to corner most of the attention, mass adoption of IoT in the B2C arena has run into its own set of challenges. Affordability is a concern. Connectivity and communication doesn’t come cheap! Security flaws and regulatory compliance are also concerns. Applications have struggled in their effort to reinvent consumer behaviors in the process of adoption. Consumers prefer those sensor-enabled experiences that are intuitive and incremental. Google’s Nest e.g. didn’t need anyone to rethink home energy in a completely different way, while providing an easier, connected way of controlling one’s physical surroundings. Other notable successes in the B2C arena have come through the likes of the Smart TV, Fitbit, Connected Cars etc.B2B use cases on the other hand, are already popular and growing more so by the day. Companies are using IoT to connect to their customers, suppliers and vendors in a big way. Robotics has exploded. Robots are used as security guards and in warehouses. Drones are making deliveries simpler and bringing aid to remote areas. Unlike many B2C use cases, these are not proofs of concepts, these are large-scale implementations. This leads to the belief that IoT may first change the game, at scale, in industries and businesses.What’s the real business opportunity?

The THINGS themselves create only a small portion of the overall value. Most of the value comes from connecting these THINGS to the Internet and by collecting and analyzing the data that these THINGS generate. In simpler terms, the bulk of the commercial opportunities around the IoT lies in the technical infrastructure (including software) that run these connected THINGS, in making sense of the data generated and most importantly, in using these THINGS to create truly differentiated experiences for the connected consumer.

Business adoption of IoT is not about connecting machines to people to processes. It is actually a key step in the overall Digital Transformation journey. Many progressive businesses have already made Customers and Experience center-stage to their existence. IoT will have a key role in achieving that customer and/or experience centricity. In some cases, it may be through the connections themselves. In other cases it may be through the data – collected, analyzed and (insights) fed back into the experience creation loop.

Which businesses are likely to adopt first and at scale?

IoT will be key to ensuring superior consumer engagement and enhanced quality of life, whether it is in Retail, Utilities, Healthcare or in the Government. It will help drive revenue up through targeted marketing and better customer service. IoT will also play a significant role in manufacturing and supply chain industries by driving costs down, improving safety of operations and quality of output. It will help eliminate human error to a large extent and provide for better execution of supply chains. Industries that have already taken big strides towards adoption of IoT include Manufacturing, Oil & Gas, Aerospace, Utilities and Transportation.

Despite all the hype and the futuristic use cases, IoT is still maturing. Businesses looking to adopt IoT do run the risk of false starts and possible unintentional consequences. Keeping the use cases simple yet incremental and developing the right internal capabilities will be key to success. The biggest risk however is in doing nothing. In that case, the risk will translate to increased competition and loss of market share. Every business will need to guard against that.

Source: The Economic Times

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