*This article is part of our series covering Gartner’s top 10 technology trends.
The Internet of Things (IoT) is creating a wide variety of business opportunities. However, many businesses are still uncertain as to how it could apply to their business. Further confusing the matter is a diverse base of trials that may not seem applicable to businesses when, in fact, they can be.
A recycling company or vending machine operator, for example, may not find any applicability for the Internet of Things when reviewing how a hospital is connecting its patient-monitoring equipment to the Internet of Things. However, on closer inspection, these companies will discover that the reason the hospital has connected its equipment is to cut costs on nurses’ rounds to monitor patients,â explained Hung LeHong, vice president and Gartner Fellow. Any company operating remote devices has opportunities to use this same model. Remote assets that require manual rounds for the purposes of emptying or replenishment, such as recycling bins or vending machines, can benefit from the same approach the hospital took. The underlying commonality is the business case to reduce the costs from doing the rounds, by connecting assets to monitor status.â
Gartner makes the case that there are four basic usage models for IoT – Manage, Monetize, Operate and Extend. Each of these models has its own application.
This model is predicated on the ability of an asset to communicate statuses. For example, is a room being used? Or is a bin full? Or is an engine failing? By using the status of an asset, the system around maintaining that asset can be refined and its use optimized.
Your turn: What assets in your organization require significant labor to monitor or control? Would the ability to instantaneously know the status of an asset reduce costs?
Expensive capital assets are highly risky and, if not put to good use, overly costly.Â By accurately measuring usage of an asset and then charging for it on an incremental basis, capital expenditure can become operating expenditure.Â Taking it a further step, attaching additional data â such as location, speed and time â can help organizations more accurately assess risk and applicable charges.
Your turn: What capital assets are being under-utlized in your firm? Could you optimize their usage by charging for its usage? Or more accurately measuring risk?
Perhaps one of the more common applications, this model takes the previously established model of managing equipment and processes with manufacturing plants and extends it to remote devices that may not have been within an isolated infrastructure.Â Using mainstream technology, software and architectures, operations can now monitor and control increasingly complex devices remotely.
Your turn: Are there any assets in your organization that could be operated more efficiently remotely?
The extend model demonstrates how supply chains are now extending. In the past, once a physical product was in the hands of a customer, the supply chain ended with further customer contact often initiated by the customer. Now, products can continue to be connected to the supply chain through digital assets, adding additional digital delivery nodes to the supply chain.
Your turn: What products do you deliver that could be extended by offering digital services?
Organizations can benefit continuing to watch IoT trials and boiling each use case down to the basics. In doing so, opportunities for your organization can emerge.