“If you think that the internet has changed your life, think again.The Internet of Things is about to change it all over again!”– Brendan O’Brien
Traditionally, manufacturing initiatives are measured by hard ROI – increasing efficiency and reducing costs. Nowadays, ROI can be so much more than cost-savings. The Internet of Things (IoT) enables companies to collect so much data and in so many ways that cost reduction may become a secondary objective. Customer experience, brand differentiation, and product design will be the drivers of revenue increase and margin improvements.
In fact, IoT already impacts the global economy heavily. IDC estimates the IoT spending to be USD 772 billion in 2018 , and McKinsey expects growth of up to USD 11 trillion by 2025 .
Using smart IoT technologies, companies may enhance their services, extract insights, build new services, add value, and consequently, gain market share. The reason why this happens is that smart, IoT connected products expand the relationship with the customer – every business’s most valuable asset. Companies have direct access to how the customer interacts with the product. This data can then be unleashed across the organization to impact core business functions, like product design and communication strategy, to drive market penetration.
In fact, manufacturing companies that use IoT connected products could improve most business functions; including operations (asset management), sales (real-time upsells and cross-sells), product (personalization), and customer-service (remote diagnostics). The value-creation potential is almost immeasurable and it’s there for the taking.
The ultimate goal is to offer a world-class service. Smart products can play a key role in achieving this objective. Of course, harnessing the maximum value available in IoT connected products is no simple task. The effort goes way beyond just adding “smart things” inside a product. Manufacturing companies need to re-think the relationship of products, processes, and profits and re-frame their business to accommodate Industry 4.0 adoption. The first step in this is building the digital capabilities to maintain and analyze IoT data effectively.