As the Internet of Things (IoT) plays a more significant role in modern business, there are many expectations about what it can achieve. But can it really deliver return on investment? The main aim of companies who have adopted IoT is monetizing their technology and data to pay back the initial investment. The last part of our IoT series will address the economic potential of IoT.
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Following on from the previous article on pay-per-use models, we will look at the return on investment (ROI) of IoT. I am a firm believer that IoT brings a solid ROI. Earlier in the series, we looked at ways IoT can streamline core tasks at business in areas such as manufacturing. It stands to reason that these factors will bring a return on investment as a result of more efficient manufacturing and controlling costs with models such as pay-per-use. In the final installment of the series, we will address how IoT pays back the initial expense.
Data Holds the Key to Higher Profitability
It isn’t just the fact that everything is connected that makes your company money; it’s the data these devices generate that will give you what you need to add value to your business. When this information is properly analyzed, companies can form new business models and target new revenue streams. Examples include adopting subscription, pay-per-use, and asset-sharing models. Data can display patterns that show decision-makers potential areas where a new approach would be beneficial. This could be switching to a pay-per-use basis if there is resistance to long-term sign ups. These different types of models may provide a better way of reaching your target market and delivering a service that suits you and your customers, therefore generating more revenue for your company.
Time Equals Money
It’s a commonly used phrase, but in modern business time really does equate to profit, and the IoT frees up considerable working hours. Higher levels of machinery automation, transparency of production and billing processes, improved product quality and predictive maintenance are prime examples of how IoT can streamline core tasks. Utilizing the power of the IoT in these areas means processes require less attention from your staff, such as by extending times between maintenance intervals with predictive maintenance. This enables companies of all sizes to focus on their core business, improve productivity and quality, and potentially take on more business – thus paying back the investment made in IoT technology.
Closer Customer Relationships Build Stronger Economic Foundations
I see solid, continued customer relationships as a vital aspect of business success. Previously, customer relationships would be limited, or even end, at the point of sale.
With IoT-enabled products, organizations receive continuous feedback on how their products are being used and where there are potential issues. This enables adjustments and innovations for the future and live updates to existing products
Constant improvement means consumers are getting what they want and will continue to use your product or service. This ensures more consistent revenue and profit.
Taking the First Steps on the Path to Becoming More Time- and Cost-Efficient
It might take time before you see a return on investment, but IoT presents numerous opportunities for increasing profitability and taking control of how you run your business. Those who do not adopt IoT models will likely be left behind in the current business climate. By gaining transparency over all aspects of your organization, you are in a position to identify areas for optimization in terms of time and costs. Not only will you save money, you will also ensure your business runs smoothly and you always remain competitive.
What about your company?
itelligence’ IoT experts developed a brief check of up to 9 steps for you. It helps you to get a quick understanding of your organization’s digital maturity level and of where you are starting from. The short assessment considers your business model, products and services as well as your processes. The abstract you receive afterwards gives you essential input to identify your organization’s strengths, priorities and weak points, and to define your digital vision.