The Internet of Things (IoT) is no longer a technology of the future, but is increasingly finding useful applications in organizations in a wide variety of industries, but also in everyday areas of life. More and more companies in the DACH region are benefiting from IoT, as the study “Internet of things 2019/2020” shows. 51% of the 444 companies surveyed have already implemented IoT projects, 93% of which were rated as satisfactory.
The most important criteria for the success of IoT projects are higher productivity, lower costs and increasing sales. Because step by step, business processes can be designed faster and more efficiently with the help of IoT. Sometimes it's also about doing things new and different. For example, when, like Saubermacher AG, you are developing a completely new business field based on the Internet of Things.
In this article we deal with the essentials about IoT, what the Internet of Things actually is, what you need for it and, above all, which strategic considerations are interesting before you start a digitization project.
What is the Internet of Things?
Internet of Things Definition
The term can be defined as follows: The Internet of Things (IoT) is a system of interconnected devices, mechanical and digital machines, objects, people or animals that are assigned a unique identifier for their identification and are equipped with the ability to exchange data about themselves and their environment within a network without the need for human-to-human or human-to-machine interaction.
Find out more about the iot applications and Industry 4.0
With this in mind, the Internet of Things expands the audience of devices with a connection to the Internet from desktop computers, laptops, smartphones, and tablets to any man-made or natural object you can imagine.
Little by little, the gaps between the real and the digital world will close. Companies are increasingly realizing that services as well as business and production processes can be designed more easily and cost-effectively with IoT, as the necessary “things” are intelligently networked with one another.
IoT is made possible by the favorable combination of three pioneering technologies of our time: wireless communication, microsystem technology and the Internet. As experts have foreseen, IoT has crossed the threshold to new innovative developments and will probably continue to network exponentially more devices and objects via the Internet in the future.
The manufacturing industry (keyword: Industry 4.0), transport and logistics as well as modern agriculture are just a few examples of industries that have already made advanced experience with the application of IoT concepts. In the future, IoT technology will also help determine the progressive conception of the smart city as well as numerous areas of life and work for the individual.
You can read how much more the Internet of Things can do in our article "M2M: Machine-to-Machine Explained Quickly and Easily" on the relationship between machine-to-machine communication and the Internet of Things.
The IoT number check
Impressive numbers are associated with the Internet of Things. Here is a small selection:
Almost 27 billion "things" are now networked with one another via the Internet, while only 0.6% of all machines and devices are connected to the Internet.
Forecasts assume almost 40 billion networked devices worldwide by 2025 and 50 billion by 2030.
The Internet of Things could add up to $ 14.2 trillion in economic value worldwide by 2030.
In the future, IoT should lead to a significant reduction in operational risks (55%) as well as downtimes (44%) and expansion into new markets (40%).
Global technology disbursement on smart city initiatives is anticipated to bigger than double between 2018 and 2023, rising from $ 81 billion in 2018 to $ 189.5 billion in 2023.
Remote maintenance of networked elevators results in 30 percent fewer technicians being deployed.
Strategic considerations before starting with IoT
Before you start the digital transformation of your company, the following considerations are helpful:
1. Start with small projects: The numbers mentioned above are quite overwhelming. But don't focus on revolutionizing your entire business at the beginning. Start with small projects and gain valuable experience. It might be a good start to remotely monitor certain machines to avoid downtime. Or you can equip your fleet with sensors so that you always have control over your vehicles.
2. Make better use of the existing systems: Start by making better use of the existing systems with IoT. IoT components have standardized interfaces with which you can easily integrate data into existing systems. For example, machine data can be automatically included in service reports.
3. Speaking of increasing efficiency: The increase in efficiency has emerged as a so-called “low hanging fruit” in IoT. The remote maintenance of elevators, for example, promises 30% fewer technicians, since defective machine parts can be replaced before the machine comes to a standstill.
4. Support innovations: Although experts advise you to take the first steps in the area of improvements, you should also think about innovations soon. Which assets do you have in your company that can be meaningfully networked with one another - which completely new business models or services would this result?
5. Allow an “agile” approach: “Agile” is more than a trend. A procedure that is not based on a rigid plan is chosen not only for IT projects, but also in marketing and almost all corporate areas.
6. Ongoing monitoring: A great advantage of digitization projects is that you have valuable data available for every step. Collecting and evaluating usually does not generate any additional costs, while ongoing monitoring and optimization can increase success.
7. With data for transformation: Avoid flying blind. Ultimately, the data that you are constantly collecting and evaluating should show you the way to transform your company. The data must show whether, for example, remote maintenance of a machine is profitable.
8. Working with the right partners: IoT projects have many variables. With a professional partner at your side, you benefit from their many years of experience with IoT projects.
Conclusion on the Internet of Things
The IoT idea is not really new. For several years now, companies have been using this pioneering concept to save costs by digitizing machines or other objects and to increase their performance, but also to set up completely new business models. With a strategy and an experienced partner, the way can also be paved for your first IoT project.
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