Kathy Gibson reports – Internet of Things (IoT) adoption is increasing fast, with 34% of companies around the world already using the technology.
More than three-quarters (76%) of those say that it is mission-critical to them, and 8% of adopters are entirely reliant on IoT, according to Vodafone’s IoT Barometer 2019.
“Companies are starting to see how IoT can give them competitive advantage; and they are starting to apply it in mission-critical environments,” says Peter Malebye, managing executive of Vodacom Business.
A massive 95% of adopters have already seen measurable benefits from IoT; and over half of those say those benefits are significant.
Among the benefits are reduced operating costs (53% of respondents); better collection of accurate data/insights (48%); improved employee productivity (47%); increased existing revenue streams (42%); reduced fixed costs (41%); improved utilisation or uptime (41%); enhanced customer experience/loyalty (39%); improved brand differentiation (37%); streamlined compliance with regulation (35%); reduced waste (35%); and created new revenue streams (33%).
“One of the industries where we are seeing a lot of investment in IoT is automotive and fleet management,” Malebye adds.
In fact, the automotive industry appears to be going through the same journey as telecommunications has had, and it’s placing a lot of pressure on OEMs to transform their business. The challenge is to stay connected to their customers, and provide a better service.
Customers today want a better experience, and automotive manufacturers are having to improve their services to stay relevant.
Fleet management is more relevant than ever as well, and companies are looking to IoT to help them drive efficiency and reduce costs.
According to the index, 74% of adopters say that within five years companies that haven’t adopted IoT will have fallen behind their competition.
“The good news is that it’s becoming easier,” says Malebye. “So the barrier to deploying use cases in being removed. I can borrow a use case from another country and deploy it here, and the operators are making it easier to do this.”
He adds that the skills set for IoT development is limited, so co-creation is becoming more widespread.
“We are also starting see the adoption of low-power networks, so there is less contention with voice and data. Response times are very important, and you need a solution that last a long time. That adoption is starting to kick in.”
5G will also drive the industry forward, and that is starting to become commercially mainstream now, he adds.
Companies of all sizes are benefiting from IoT: in fact smaller companies are achieving significant benefits.
When it comes to IoT sophistication, organisations are moving up the scale as they increase their investments.
Organisations see positive return on investment (ROI) from IoT: 87% of most sophisticated users report significant benefits, compared to 69% of very sophisticated users, 53% of intermediate users and just 17% of beginners.
As they move up the sophistication scale, organisations see better cost reductions and revenue increases, Malebye adds.
The increase in revenues averages at 19%, but most sophisticated users report 22% increases; an average of 18% in cost reductions becomes 26% for the top band of users.
When it comes to industry adoption, transport and logistics has the highest adoption rate, at 42%. It has also recorded the biggest growth rate since last year, at 15 percentage points.
Indeed, half of transport companies moving people have adopted IoT, and 90% say they’re spending more on IoT now than 12 months ago, while 83% have more live IoT projects. Most of them are using IoT to track the physical security of assets (60%) and the measure occupation (60%).
Logistics companies have an adoption rate of 38%, with 76% using it to track consumption, and 71% using it to track the location of vehicles and cargo.
In financial services, there is an adoption rate of 34%; automotive is at 36%, and manufacturing and industrials have a 39% adoption rate. All of these industries are increasing their investments, as are companies in healthcare and wellness, retail and energy and utilities
IoT is part of a digital transformation strategy, but not the only part, says Malebye. “But the trend is that it is a key enabler,” he adds. The index reveals that 72% of respondents believe that digital transformation is impossible without IoT; and 73% of adopters say IoT is too important to be left to IT alone.
The main reason IoT projects have failed is that they are done in isolation from other environments, Malebye points out. “More and more, it is becoming important to look at integrating data.”
The integration of IoT with business systems is the primary focus for 38% of adopters, with 24% having already achieved integration, 38% highly integrated, and 37% partially integrated.
To ensure IoT success, the index finds that the right connectivity choice is important, taking into account time sensitivity volume of data and cost.
Artificial intelligence (AI) is emerging as a key technology for extracting insights from IoT data. In fact, 100% of the most sophisticated users agree that data from connected assets will be key to decision-making.
The volume of data generated from IoT is leading to a requirement for flexible storage, and 59% of adopters are storing IoT data in the cloud.
This combination of AI and cloud is seen in most adopters: 58% of organisations are using analytics platforms now for the IoT data, with 36% planning to do so. When it comes to cloud storage, 59% of adopters are using it now, and 31% are planning to.
Organisations are looking for ways to speed their IoT implementations, and there is a growing belief that the time is right to get IoT working effectively now.
The research indicates that organisations that haven’t got IoT ingrained into their operations will find themselves at a disadvantage. This ties into the belief by 73% of adopters that believe everything will be connected within five years – and we’ll no longer think about things being offline.
Indicating how important it is, 71% of adopters say companies will soon list their data resources on their balance sheets.
“There is an opportunity now. Many industries are going to be reshaped because of the technology,” Malebye says. “As connectivity costs come down, the barriers to getting into the cloud are being removed; and you can do computing at the edge.”