Eight Benefits of IoT that Create Value and Strengthen Your Business

What is IoT?

To understand how and why IoT can create value in your business, it is important to start at the beginning and understand what IoT actually is. Perhaps you are already well-versed in IoT, in which case you can skip this section. If not, here is a brief introduction to the concept.

In short, IoT is the act of connecting a physical object to the internet, so that data can be collected from this object. This data can be transformed into relevant insights through analysis, which your business can leverage for everything from process optimization to developing better products or providing more accurate and effective customer service. 

In this context, physical "things" should be understood to mean anything that has the potential to generate data. This could range from a garbage can that can alert when it is full, to the level of minerals and moisture in your fields, or the way your customers move around your store. "Things" are thus not just what you can physically touch, but can also include trends and patterns. Once you have set up your IoT device (your "thing"), collected your data, and transformed it into relevant insights, you can use these to strengthen your business. And it is precisely the way in which you use these insights that can create the benefits for your company that we will discuss in the rest of this post. 

You have now been given the very brief version of what IoT actually is. If you want the detailed explanation of the definition of IoT and its history, you should instead start by reading our post: "What is IoT? An introduction to one of todays most revolutionary technologies”.

What are the benefits of implementing IoT in your business model?

As you have probably already figured out, there are nearly endless possibilities for how IoT can create value for an organization. It entirely depends on the individual organization and the way in which you choose to collect, analyze, and leverage your data. However, there are eight benefits that we hear our customers request again and again, and which our customers often experience after their IoT implementation. These are:

1. Insights into usage data 
2. Upselling 
3. Consulting
4. Enhanced product development
5. Service management 
6. Predictive maintenance and operation reliability
7. Fleet management
8. Usage-based billing 

You can read more about each of these eight major benefits below. 

1) Insights into usage data

It is not by chance that insights into usage data is the first benefit we mention here. It is precisely this type of insight that many of our projects focus on. This is due, among other things, to the fact that insights into usage data have the potential to positively impact many aspects of your business.

But what is usage data, exactly? The easiest way to give an example. 

The above example is not unusual, and in fact, we often see precisely this type of problem with our customers. Fortunately, IoT can be the solution to this problem. Machines can almost always be equipped with an IoT device that collects data about the use of the machine, and machines are just one example among many. The common denominator, however, is that usage data can give you insight into how your customers use the object they have bought or rented from you.  

2) Upselling

There are excellent opportunities for upselling when you invest in IoT. Take the example of the machine manufacturer. The data collected by the IoT devices (the machines) is not just relevant for the company that produces the machines but can also be relevant for those who have bought them - for example, if your company rents out concrete breakers. Here, an IoT solution from the manufacturer can help monitor how your rental products are being used. This can, for example, help with complaints.

Another example could be a coffee machine that orders coffee beans itself. As a user, it is easy for you to use the machine because you always have fresh coffee in stock when the machine runs out. For the company that sold the machine and the coffee beans, it ensures upselling by ensuring that the user will continue to do business with you because their machine automatically places future orders.

3) Consulting

Consulting or customer service involves using data from the devices that your customers buy or rent from you to provide the best possible advice on the use of their products. Taking the example of machine rental, data can reveal whether the machines are even suitable for the work being performed. 

For example, if you can see that a machine lifts much heavier loads than it is designed for, you can advise your customers to rent another, more suitable machine before they end up damaging the first one. This is both a good service for your customers, and it creates a greater level of trust between you, as customers feel thoroughly guided - and as an extra bonus, there is another potential for upselling here.

4) Enhanced product development

This point is related to the first point about usage data. Usage data can be used for much more than just seeing how your customers use the products they have bought or rented from you. 

When you have insight into how your products are used every day by customers and where they most often experience product failures, it provides an opportunity to optimize and further develop your products.  

5) Service management

A benefit that many manufacturers experience when implementing an IoT project is the ability to only perform service when it is actually needed. Take, for example, a company that rents out trash cans to commercial buildings. The company empties the trash cans once a week, which results in some of the company's customers having half-empty trash cans emptied weekly, while others may have to go 2-3 days with overflowing trash cans while waiting for the weekly emptying. Neither of these scenarios is optimal. 

If such a company instead installed IoT sensors in their trash cans, they would suddenly have the opportunity to empty them on-demand. Such a sensor can send signals that the trash can is almost full and needs to be emptied. In the long run, a good understanding of the data may even mean that one can start predicting when a trash can needs to be emptied. 

Here you have an IoT implementation that saves the trash can lessor time and money spent on emptying half-full trash cans, while also providing optimal customer service to those who rent the trash cans. It is service management on a whole new level.

6) Predictive maintenance

Predictive maintenance, also known as predictive management, largely revolves around the same IoT implementation as service management. It is about being able to monitor the work of your products and/or machines in order to predict certain actions, providing the opportunity for much higher reliability. 

Predictive maintenance is relevant in many different industries, but particularly in production companies. Here, Overall Equipment Effectiveness (OEE) is usually used. OEE is a key figure for how well a production process is going, taking the three most common causes of production loss into account: availability, performance, and quality.

Implementing IoT can therefore help increase your OEE. 

If a machine breaks down, the so-called downtime (the time when the machine is not running) can be incredibly expensive for the production company. IoT sensors in the machine can tell you in real-time how the machine is working. This makes it possible to detect and solve any problems before they become so large that the machine has to be turned off or completely breaks down for a longer period of time.

Adding artificial intelligence to an IoT implementation like the above example has an even greater benefit. With such a setup, you can also begin to predict when a machine will need service. This is a huge gain for the company where the machine is located, as such a prediction of the need for service means that time can be calculated for this service in the production plan. Additionally, it is also a huge benefit for the service provider who can only perform service when it is actually necessary (we are therefore dealing with something similar to the example with the trash cans that are only emptied when they are actually full).   

So, there are two major benefits to being able to see how a machine is running in real-time: 1) the ability to predict service needs based on the individual machine and thereby solve problems before they become too extensive and 2) the ability to use the data on the machine's operation to optimize the machine.

7) Fleet management

Fleet management is especially beneficial for companies working with motor vehicles such as cars, trucks, vans, and other types of vehicles. IoT sensors in the vehicle can collect data on everything from location and routes to speed, fuel and oil consumption, heat, tire pressure, and more. Such data has several possible functions. For example, it is possible to use this data to optimize the vehicles' fuel consumption, and over time, the data can be used to detect patterns and optimize route planning.  

If you work with the transportation of cold goods, an IoT sensor can also measure the temperature of the cargo, making it possible to monitor the goods in real-time and ensure they are not damaged during transportation.  

8) Usage-based billing

The last benefit we will mention concerns usage-based billing. In today's society, we can all relate to paying for things such as electricity and water that we use. If someone asked us to pay a fixed amount per month, most of us would probably decline. But why not apply this concept to other parts of our daily lives?

Instead of paying a fixed daily price for renting machinery, an IoT sensor (such as the rented concrete hammer from point 2, which generates usage data) can record how much and how a machine has been used, and base the rental price on this. This model can be used in many different industries. For example, if you rent out a desk in your co-working space, why not put an IoT sensor on the desk? Then you can suddenly rent out the desk to multiple users and charge based on usage - instead of charging one fixed price every month from a single renter. 

The possibilities for usage-based billing are almost endless with IoT, and even though it is not yet a natural part of our daily lives, there is a lot of evidence suggesting that it will become one in the not-too-distant future. Just look at the rental of electric cars, bikes, and scooters.

One dataset - many different (and valuable) insights

As a company, you don't have to settle for just one of the above benefits. In fact, you can benefit from several advantages from one dataset.

If you have chosen to invest in IoT sensors for collecting consumption data, this data can be used in several ways. While a service manager may need to understand how a machine runs, a development manager is likely to be interested in completely different figures, but both insights come from consumption data. In such a case, it is possible to create two different dashboards with two different types of insights based on the same data. 

What does that mean for you? It means that you don't need to invest in different sensors or systems for different insights. It's all in the processing of the collected data and how they are sent to your dashboards. It's all something we here at Iterator IT are experts in setting up, so the data matches exactly what you need to know about your products.

Would you like to have a conversation about how IoT can create value for you?

Are you interested in learning more about how IoT can create significant benefits and value for your business? Then just give us a call at +45 40 82 00 95 or send an email at esa@iterator-it.dk - and we'd be happy to have a non-binding and completely free conversation about your company's opportunities with IoT.