How can Businesses Benefit from the Internet of Things?

Our era is characterised by the emergence and the rise of the Internet of Things (IoT) computing paradigm, which is propelled by the proliferating number of internet connected devices. With tens of billions of devices connecting to the Internet, enterprises are offered with unprecedented opportunities for deriving and processing information from the physical world, but also for controlling, automating and optimising physical processes using digital systems. Early IoT deployments in industrial settings have proven the merits of this new computing paradigm. This is for example the case for IoT-based predictive maintenance and quality management applications in settings like factories, energy plants and oil refineries. Such applications benefit from the collection of large amounts of data and the deployment of IoT devices at scale.

IoT is not however a game for large industrial organisations only. Small Medium Businesses (SMBs) can also take advantage of sensors and internet connected devices in order to increase the automation, the quality and the cost-effectiveness of their businesses processes. Nevertheless, IoT deployments for SMBs tend to be more challenging than for larger organisations, given that smaller enterprises lack in most cases the equity capital and know-how needed to adopt, deploy and fully leverage IoT technologies.

IoT Applications for SMBs

The most prominent IoT applications for SMBs include:

• Optimization of Supply Chain Management Processes: A large number of SMBs deploy IoT infrastructures for tracking and tracing products and processes across the supply chain. As a prominent example, SMB retailers leverage RFID (Radio Frequency Identification Technology) in order to automate procedures like reception of goods, shipment of orders and inventory processes.
• Maintenance and Repair Activities: SMBs seek innovative and intelligent ways for managing industrial assets, such as expensive tools and equipment. IoT technology enables them to predict and anticipate failures, as a means of planning maintenance operation proactively and avoiding costly downtimes. To this end, they can leverage Big Data analytics over IoT data collected from sensing systems like vibration, temperature, power consumption, thermal imaging, acoustic and ultrasonic sensors, among other devices.
• Asset Management and Tracking: Similar to the way IoT can be used to track products, it is also possible to use it for tracking enterprise assets and providing full information about who accessed every asset, when and for what purposes.
• Wearable Products and Services: SMBs in different industries take advantage of wearables devices in order to offer innovative pervasive services. This is for example the case with several SMBs in the healthcare sector, which deploy wearables like smart textiles and fitbit devices in order to offer innovative disease management services.

Beyond these examples, SMBs leverage IoT devices in order to implement new ideas and business processes, which yield IoT technologies an innovation vehicle for their growth.

Challenges and Adoption Barriers

Contrary to large enterprises, SMBs face many challenges in their IoT adoption journeys, including:

• Cost of devices: The deployment of IoT systems at scale is likely to require the acquisition of many IoT devices, which implies the need for significant capital investments. This does not only hold for applications that leverage expensive devices (e.g., smart objects and cyber-physical systems), but also for applications utilizing large number of cheap sensors and RFID tags.
• Business Models: Large enterprises have still problems monetizing IoT applications. Monetization is a significant challenge for SMBs, which lack validated business models for applications that capture and use IoT data.
• Lack of know-how and expertise: The vast majority of SMBs lack expertise on IoT technologies such as device technologies and Big Data systems over IoT data. Therefore, SMBs can have hard times when it comes to understanding, exploring and validating IoT technologies.
• Scalability: In many cases SMBs deploy and validate successfully proof of concept IoT applications, yet they cannot easily scale them up. The latter can be due to lack of financial resources and technical expertise.

IoT Adoption Catalysts

In view of these challenges, SMBs had better adhere to the following best practices and recommendations for IoT adoption:

• Deploy IoT in the Cloud: In order to scale their IoT deployments in a cost-effective way, SMBs can nowadays benefit from IoT Cloud platforms. The latter provide elasticity and utility-based functionalities to SMBs. Hence, SMBs can pay for their IoT infrastructures as they grow i.e. proportionally to the number of sensors and devices that they integrate with the cloud.
• Integrate IoT with Big Data & AI technologies: IoT systems provide a wealth of data about physical objects and processes. In most cases however, the business value of an IoT application stems for the effective processing of these data based on advanced Big Data analytics and Artificial Intelligence (AI) technologies. Hence, SMBs have to explore the integration of their IoT systems and applications with state-of-the-art Big Data technologies.
• Explore and Validate Novel Business Models: SMBs must be creative and pragmatic when defining novel IoT-based business models. An effective business model can help SMBs maximizing their benefits and profitability on their IoT data.
• Training and Education: SMBs can invest in training programs, as a means of closing the proclaimed knowledge gaps in IoT technologies. In general training is an important complementary asset where SMBs have to invest in order to effectively deploy IoT systems and technologies.
• Partnering with proper Consultants: SMBs should carefully select their technology partners and consultants. Such partnerships can help them benefit from the experience and know-how of the consultant, while at the same time reducing implementation risks.

During the last ten years, we have witnessed a proliferating number of IoT deployments, with large enterprises in the leading edge of adoption. However, SMBs can also benefit from IoT technologies in specific vertical applications, such as retail, healthcare and industry. To this end, they need to overcome several adoption barriers, including barriers associated with cost, business and knowledge factors. Recent developments on ICT technologies (e.g., such as the integration of IoT devices within cloud platforms) provide an essential boost to SMBs that seek to benefit from the pervasiveness and data richness of IoT applications. Likewise, SMBs could benefits from investments in complementary assets like training and business modelling. IoT is here to stay and SMBs cannot afford to ignore its potential.