- The Ivey Academy
- Jul 18, 2018
The term “the Internet of Things” was first coined by Kevin Ashton in 1999. He used the term to describe how devices connected to the internet were improving the efficiency of Procter & Gamble’s supply chain. Commonly referred to as “IoT,” the Internet of Things is a term used to describe any device that can connect to the internet and send information. Cellphones, refrigerators, washing machines, coffee makers, thermostats, home security, drones, automobiles, and wearable devices all have IoT applicability. While the individual consumer’s adoption of connected household appliances generate the most media buzz, the potential for business usage is much greater. The operational efficiencies and superior market reach IoT provides will create substantial value in many industries.
How does the Internet of Things work?
The Internet of Things is a network of internet-connected devices able to collect and exchange data. These devices have sensors that can not only send data across the internet, but in many cases, can communicate with each other. Huge volumes of data are produced by these devices and then sent to computers for analysis. The data IoT provides helps organizations to better understand complex problems and respond to them more efficiently. Many IoT systems operate largely without human intervention.
Why does the Internet of Things matter?
While the technology was in its infancy when Kevin Ashton coined the term, IoT has been gaining momentum due to technological advances and consumer adaptation. With the cost of technology decreasing and smartphone use sky-rocketing, forecasts estimate between 25 and 50 billion devices will be connected to the internet by 2020. Anything that can be connected, will be connected.
While it might seem unnecessary to have a smart golf club, internet-enabled cookware, or a yoga mat equipped with sensors, consumers are beginning to expect these features in the products they buy. IoT has the potential to impact not only how we live, but also how we work.
How will the Internet of Things impact business?
To make the Internet of Things more relevant and understandable, media coverage has focused on consumer applications. IoT has now gone beyond the consumer realm and is being applied to solve business problems. As IoT technology evolves, so does the potential for greater insights, better business decisions, and competitive advantage. McKinsey & Company’s research estimates that business-to-business applications will account for nearly 70 per cent of the value generated by IoT over the next 10 years.
IoT use in business and beyond
Almost every organization has inefficiencies that can be optimized, or ways to improve customer service. Here are some examples of the different ways IoT technology has been utilized to provide solutions to problems:
The United States Postal Service uses IoT technology to monitor weather conditions and traffic patterns, enabling real-time decision making to ensure the safety of its drivers and delivery trucks.
Aircraft manufacturers are building planes with IoT sensors that send continuous data on component wear and tear, allowing for preventative maintenance. The data gleaned from IoT technology significantly reduces unscheduled aircraft downtime in an industry with traditionally tight profit margins.
Oil and gas
Valued at $103 billion in the U.S., the oil and gas industry is also one of the earliest adopters of the Internet of Things. Oil and gas companies are using IoT to reduce costs, minimize environmental impact, and ensure the safety of employees.
A single oil well failure can cost upwards of $300,000 per day in lost productivity. Oil well monitoring using IoT technology can predict when equipment requires service, reducing both well inactivity and maintenance costs while maximizing production hours.
In 2017, U.S.-based energy companies expensed more than $300 million in cleanup costs as a direct result of pipeline leaks. IoT sensors placed in pipelines are able to remotely monitor the integrity of pipeline structures and pinpoint the exact location of a leak should one occur. The real-time data provided by remote IoT sensors is able to prevent not only significant environmental damage, but also the reputational damage of pipeline companies.
With the help of IoT, farmers are able to improve their yield with sensors in farm equipment and soil. IoT sensors monitor nutrients, soil temperature, and moisture. This allows just-in-time targeted application of fertilizer and water to only the areas of the field that need it. This significantly reducing waste and maximizes output.
By equipping all in-store freezers with IoT devices, grocers are able to monitor and adjust temperature in response to real-time conditions, such as higher customer traffic and humidity. The data produced by IoT sensors is used to prevent freezer burn and ice crystallization in ice cream. Using predictive analytics, the data produced by IoT sensors can be used to predict when freezers require maintenance before they fail – preventing substantial loss of spoiled product.
IoT sensors in cars assist insurance providers in underwriting premiums based on mileage instead of driving history.
Microsoft constantly collects data regarding which features are most popular in its products. It then uses this data to remove the seldom-used features and accentuates the most popular ones.
IoT devices make it much easier to be environmentally friendly. Kitchen appliances, heating and cooling systems, laundry, and light fixtures can all have IoT connectivity. By optimizing energy consumption using IoT-enabled products at home, you’ll be reducing your carbon footprint as well as your energy bill.
IoT sensors embedded in cameras can be used to monitor traffic patterns, allowing traffic lights to adjust in real-time changes in traffic flow.
Emergency services benefit from IoT technology as well. When roads are congested, it results in delayed response time of ambulances and emergency teams. A city in Andhra Pradesh, India, installed IoT devices in their ambulances that communicate with IoT devices connected to traffic signals. Traffic lights are able to respond to the location of each emergency vehicle, allowing them to quickly navigate through the city.
The Internet of Things represents a significant shift in the way we view the world. Smart, connected devices raise a new set of strategic decisions about how value is created and how companies can secure competitive advantage as new capabilities reshape industry boundaries.
In partnership with professional services firm Accenture, The Ivey Academy is offering a three day program to help you understand how technologies like IoT will impact your organization. In the Using AI and IoT for Creative Problem Solving program, you will gain the knowledge and tools needed to fundamentally understand advanced analytics, machine learning, and the Internet of Things. Most importantly, you’ll learn and how they can help your organization create business opportunities and solve problems.
The Ivey Academy is ranked as one of the top Executive Education providers globally by Financial Times. The Open-Enrolment portfolio comprises 19 programs focused on core leadership, business acumen, and industry-specific skills. Open programs are typically three days to three weeks in length, and are held at both our Toronto and London campuses. Our Custom Academy business unit works with corporations, governments, and other NGOs and non-profits to design and execute development and training programs tailored to the client’s specific needs. Custom Academy programs are typically multi-cohort, multi-year endeavours, supporting executive, HR and L&D objectives, and run either at our Toronto and London campuses or globally based on client preference. All Ivey Academy programs are deeply experiential in nature, concentrating as much on behaviour change as knowledge transfer.