The Internet of Things as a catalyst for digital transformation / ICL Services Blog

Data has always been a critical resource, a source of ideas for useful transformation and innovation. The collection methods were gradually improved, allowing you to collect more and more volumes of more complex and better data. The Internet of Things has given new impetus to the development of data collection methods and has opened up exciting opportunities for transforming and growing a business.

Currently, IT-oriented projects remain the main items of expenditure in the field of the Internet of things, including data center management, video surveillance and security monitoring. According to 451 Research, various applications of the Internet of things will become more widespread in organizations as they become more familiar with these technologies.

This will be facilitated by recent advances related to key technologies that have helped build capacity and make the Internet of things more practical from a practical point of view, as well as become a catalyst for digital transformation in enterprises.

If you analyze the ecosystem and the driving forces of the Internet of things, you will understand what unprecedented opportunities for business growth they open up.

Growth and beyond IT

A report on an IoT study published by analysts from 451 Research said that 65% of decision-makers regarding IT and the Internet of things plan to increase spending on the Internet of things in the next 12 months, with an average cost increase of almost 18%.

Currently, most of the practical applications of these technologies lie in the IT field, but it is expected that the Internet of Things will be increasingly used in industry. Major industrial enterprises, including GE, Siemens and Schneider, are already making billions in investments in their IoT platforms.

Products and services of a technical nature, in particular, are vulnerable to the so-called “digital vortex”due to rapid changes in the market. The ability to scale, quickly implement and adapt new technologies will depend on how durable these technologies will be.

Improving Technologies

The PricewaterhouseCoopers report lists several factors that enhance the practical benefits of the Internet of Things and ultimately contribute to its wider adoption:

• Искусственный интеллект. Данные стали самым ценным активом для организаций, но это справедливо только в том случае, если они приносят практическую пользу. Искусственный интеллект привносит практический аспект в данные, стимулируя расширенное применение Интернета вещей, что, в свою очередь, делает возможной прогностическую, предписывающую и адаптивную аналитику. Искусственный интеллект по-прежнему будет повышать продуктивность и расширять возможности для бизнеса, помогая достигать результатов, которые ранее казались недостижимыми.
• Widespread distribution of connected devices. According to IDC forecasts, by 2025, the number of devices connected to the Internet will reach 80 billion. These devices will generate 180 zettabytes of data per year (for comparison, in 2013 this figure was 4.3 zettabytes, and by 2020 it should reach the level of 44 zettabytes).
• Cloud / fog computing. Cloud computing has paved the way for the Internet of things, and today foggy and peripheral computing is contributing to its wider distribution, the advantages of clouds have become closer to connected devices, simplifying the task of ensuring the interaction between computing systems, data warehousing and network services of end devices, cloud data centers.
• Integration of IT and OT. With the convergence of information and operational technologies, huge volumes of previously inaccessible data begin to be generated and collected. The integration of these historically disparate areas contributes to the adoption of more informed decisions, reducing operating costs and optimizing production processes in the manufacturing industry.

Drivers of Digital Transformation

The IoT ecosystem and its underlying technologies are becoming catalysts for digital transformation that fosters growth by optimizing existing business models and creating new offers, services and products.

The Internet of things will be used in enterprises within the areas supporting digital transformation, including:

• Discovering new business opportunities. By collecting and analyzing large amounts of data generated by devices as part of the Internet of things, companies will gain a more accurate and complete picture of the options for using their products and services, as well as the preferences of their customers. Previously inaccessible information and ideas regarding their proposals will turn into new products, services and ways to create value for consumers. These ideas will also help to actively empower existing products and services through access to real-time data.
• Improving the quality of consumer experience. Modern consumers expect maximum simplicity and around-the-clock availability. Analyzing the large amounts of data generated and collected through the Internet of Things can help companies create a more effective platform, tool, or strategy that improves the quality of their consumer experience across multiple points of contact. A comprehensive analysis and full understanding of their customers will help companies personalize their marketing activities in order to offer the most suitable products and services for each client. In terms of service, real-time access to comprehensive data will enable companies to streamline their workflows and respond more efficiently to urgent issues.
• Increased efficiency and lower costs. One of the main advantages of the IoT is that its use helps reduce costs and increase productivity through automation and process integration. Data analysis and the use of systems with integrated sensors allow companies to improve their operations in several areas, including inventory and personnel management, security, energy management and labor protection.
• Increased flexibility. As organizations get rid of slow IT systems, they can become more agile and respond more quickly to current market trends and demands. This frees up resources and personnel, allowing the company to focus on solving strategic problems and innovations.

Taking advantage of the Internet of things

Obviously, digital transformation is not only useful, but also inevitable if companies want to stay competitive. Such a transformation requires a deep understanding of the driving forces underlying it. The main driving force is the Internet of things, which is capable of creating unprecedented high value as companies transform their businesses. As a result of the integration of the Internet of things in their business models, companies achieve improved operational efficiency, significant cost savings and increased customer engagement, strengthen their competitive advantages, etc.