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The Internet of Things: prepare your company for new challenges
As almost all futurologists agree, one of the most important trends that will shape business in the coming decade will be the ever more widespread use of the so-called Internet of Things, i.e. the ability of electronic devices to communicate with one another without human intervention. The revolution has already begun - how can your company prepare for it?
According to Gartner, the number of web-enabled devices in 2020 will exceed 26 billion (Cisco, a communications technologies vendor, claims that the number is too low and will be almost twice as high in reality). Seamless communication between so many devices will require operators to set up efficient mobile and fixed networks.
The real influence of the Internet of Things on business is difficult to predict at the moment. However, it is probably a breakthrough innovation that will turn the power structure upside down in many segments of the market and will lead to the emergence of new market champions. The first studies conducted among the CEOs of global corporations give a positive impression about the influence of IoT on global business (From Productivity to Outcomes, Accenture 2015); 87% of CEOs believe that as the new trend will become more popular, leading to the creation of new jobs in a long term, and 57% think that IoT will boost revenues.
Functioning in the new reality will require developing new competencies on the border of IT and mechatronics, such as managing IT systems, programming and development. That in turn will open up new opportunities for companies that are able to effectively manage the flow of information generated by devices and sensors. According to the participants of the above-mentioned study, the potential benefits of adhering to the new trend will be significant. They mentioned increasing employee productivity (46%), better use of the currently owned material resources (46%), reduction of overhead costs (44%), better effectiveness of monitoring and control (44%), better employee safety (42%), closer supervision over an integrated supply chain (32%), better customer experience (26%) and creating a stream of revenues from new products and services (13%).
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How to prepare my organization, its internal processes and IT systems for the challenges related to IoT? What should we do to achieve the expected benefits? Consulting companies claim that adjusting to the new trend will require first and foremost taking action in a few areas, such as company strategy, IT department functioning and structure, organizational culture as well as safety and supervision.
Effective functioning in the world of IoT requires adjustments of the business model and strategy. At the current stage of development, that means a thorough identification of new opportunities created by the innovation and developing pilot projects to evaluate the potential. Until now, such actions have been undertaken by the largest global players, such as Intel , Mitsubishi and Airbus , who are experimenting with IoT possibilities for a better location of their products in production plants and within an integrated supply chain or, like Bosch , are investing in collaboration with universities that are looking into the influence of the new trend on business.
Model of functioning of an IT department
The emergence of a completely new model of communication will lead to changes in the way IT tools are used, and in effect also the organization of the internal IT departments and the entire new technologies market will be affected as well. Preparing the existing infrastructure for the new solutions seems to be the biggest challenge. According to the largest IT analytics companies, within the next five years as much as 90% of data from devices connected to IoT will be processed in professional data centers operated by external suppliers (source:Internet of Things to Revolutionize the IT Department, IDC 2014).
The way of working and organizational structure of companies
Further automation that will change the way companies and their staff function and contribute to a faster business decision-making process will be the basic consequence as IoT becomes more commonly used. Part of the decisions will be made in a fully automated manner, based on pre-defined parameters.
In the near future goods will be manufactured or transported automatically, upon reports from sensors installed in the recipient's warehouse. Smart sensors that send utility consumption data to the customer invoicing systems will bring about a complete transformation of electricity and heating settlement systems.
As Internet of Things becomes more popular, manufacturing process for machines and devices will undergo a revolution as well. Within a few years' time, this trend may lead to the creation of fully automated and cost-efficient manufacturing plants. Their maintenance will be performed almost without human intervention. Thanks to the information sent by sensors (broadband microphones), the need to replace even the smallest parts in a machine can be determined.
Operating such a set of solutions in a plant means that information on virtually any process can be received in real time. All these changes in the ways of working will pose a significant challenge to the organizational culture. Automation is going to eliminate simple works related to supervision and maintenance, which will further disintegrate the chain of command. Employees will not have to perform a big part of the recurring control tasks anymore, which will let them focus on planning further development of the companies, while working in smaller, less formal teams, such as those already present in the creative industries (media, internet, advertising etc.).
Safety and supervision
IoT is a whole new hazard in terms of IT security in companies. More robust security solutions will need to be applied not only to the so-called critical infrastructure, but to all networks in a given company. Security departments and IT companies specializing in cyberprotection will face new challenges related to higher risk of Denial of Service attacks (infrastructure overload through a flood of requests) or hacking intrusions aimed at business applications, made through the systems that supervise the communication between devices.
Intruders taking effective control over a network of sensors or robots of strategic importance may lead to consequences that are hard to imagine. This can be prevented partly by a better protection of VPN networks. A proper physical protection of the devices and sensors that fuel applications with data remains a huge challenge.
IoT is another technology that can turn the power structure upside down on the most important global markets. The scale of potential benefits from using autonomous communication between devices is so extensive that resisting to the changes brought by this innovation is useless. Therefore, we should appropriately prepare for the changes that accompany the new class of solutions, which will require reviewing internal processes and IT infrastructure currently used in companies.