The Internet of Things as a catalyst for digital transformation

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



Currently, the main items of expenditure in the field of Internet of Things are IT-oriented projects, including data center management, video surveillance and security monitoring. According to forecasts of 451 Research, various options for the application of the Internet of Things will be becoming more widespread in organizations as they become more familiar with these technologies.



This will be facilitated by recent advances in key technologies that have helped build capacity and make the Internet of Things more practical from a practical point of view, and have also 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 the unprecedented opportunities for business growth they offer.

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Growing and moving beyond IT

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



Currently, most examples of the practical application of these technologies lie in the IT plane, but it is expected that the Internet of Things will be increasingly used in industry. The largest industrial enterprises, including GE, Siemens and Schneider, are already making billions of investments in their platforms for the Internet of Things.



Products and services of a technical nature, in particular, are vulnerable to the so-called “digital vortex” due to rapid changes in the market. From the possibility of scaling, the rapid introduction and adaptation of new technologies will depend on how durable these technologies will be.

Improving technologies

The report from PricewaterhouseCoopers lists several factors that increase the practical benefits of the Internet of Things and ultimately contribute to its ever wider distribution:

• Artificial Intelligence. Data has become the most valuable asset for organizations, but this is true only if they bring practical benefits. Artificial intelligence brings a practical aspect to the data, stimulating the expanded use of the Internet of things, which in turn makes predictive, prescriptive, and adaptive analytics possible. Artificial intelligence will continue to increase productivity and expand business opportunities, helping to achieve results that previously seemed unattainable.
• 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 zettabyte of data per year (for comparison, in 2013 this figure was 4.3 zettabyte, and by 2020 should reach the level of 44 zettabyte).
• Cloud / fog computing. Cloud computing has paved the way for the Internet of Things, and today foggy and peripheral computing is making it increasingly popular, the benefits of clouds have become closer to connected devices, simplifying the task of interoperability between computing systems, data warehouses and network services of end devices, cloud data centers.
• IT and OT integration. As information and operational technologies converge, huge amounts of previously inaccessible data are 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.

Digital Transformation Drivers

The Internet of Things ecosystem and its underlying technologies are becoming catalysts for digital transformation, contributing to growth by optimizing existing business models and creating new offers, services and products.



The Internet of Things will be used in enterprises in areas that support digital transformation, including:

• Discovering new business opportunities. By collecting and analyzing the large amounts of data generated by devices in the Internet of Things, companies will get a more accurate and complete picture of the options for using their products and services, as well as the preferences of their customers. Information and ideas previously unavailable regarding their proposals will be transformed into new products, services and ways of creating value for consumers. These ideas will also contribute to actively expanding the capabilities of existing products and services through access to real-time data.
• Improving the quality of consumer experience. Modern consumers expect maximum simplicity and round-the-clock availability. Analyzing the large amounts of data generated and collected through the Internet of Things can help companies create a more efficient platform, tool, or strategy that will improve the quality of customer experience across a wide range of points of contact. Comprehensive analysis and a thorough understanding of their customers will help companies personalize their marketing activities to offer the most appropriate products and services for each customer. In terms of service, access to comprehensive real-time data will allow companies to optimize their work processes and respond more effectively to urgent problems. This optimization will free up additional resources for closer interaction with customers and better forecasting of their needs in order to increase satisfaction and involvement.
• Increase efficiency and reduce costs. One of the main advantages of the Internet of Things is that its use helps reduce costs and increase productivity by automating and integrating processes. Data analysis and application of systems with integrated sensors allow companies to improve their operations in several areas, including inventory and personnel management, security, energy management and occupational safety.
• Increased flexibility. As organizations get rid of slower IT systems, they can become more maneuverable and respond faster to current market trends and inquiries. In this way, resources and personnel are released, allowing the company to concentrate on solving strategic tasks and innovations.

Take advantage of the Internet of Things

Obviously, digital transformation is not only useful, but also inevitable, if companies want to remain competitive. Such a transformation requires a deep understanding of the underlying forces. The main driving force is the Internet of Things, which is capable of creating unprecedented high value as companies transform their business. As a result of the integration of the Internet of Things in their business models, companies are improving operational efficiency, significant savings and increasing customer engagement, strengthening their competitive advantages, etc.