Welcome to the connected revolution

Gartner forecasts that the number of physical objects connected to the Internet, otherwise known as the Internet of Things (IoT), is expected to increase to 26 billion by 2020 . The IoT is powered by Machine-to-Machine (M2M) technology, which embeds SIM cards into physical devices to transmit data via a fixed connection or wirelessly via a secure mobile network.

IoT is already opening up new commercial opportunities. By connecting all manner of devices, businesses are able to tap into a goldmine of information, which, when used effectively, can support faster decision-making, help to predict events , enable more automation ,create better experiences for customers and increase efficiency across many business processes.

But before any business can embrace the benefits, it must also acknowledge the challenges. The technology might well be able to unleash unprecedented amounts of customer and operational data, but it takes the right resourcing to extract the most valuable insight. It also takes the right internal processes and policies to govern data collection and ensure customer trust is never compromised.

M2M’s role in the revolution

Vodafone’s global M2M Adoption Barometer, 2013, found that 78 per cent of business executives expect M2M to be at the core of successful businesses in the future . As the costs of M2M technology, connectivity and data storage fall, adoption is likely to accelerate rapidly over the next five years.

A number of industries are already embracing M2M technology. In the automotive sector, manufacturers are gaining competitive advantage by enabling owners and service teams to remotely monitor the condition of cars and identify when an issue, such as a faulty gearbox, might arise. For transport and logistics companies, connecting vehicles with M2M technology means live traffic data can be captured to assign more efficient routes, faults can be remotely diagnosed to assign maintenance check-ups and driving behaviours can be tracked to help train drivers to drive more economically.

In the manufacturing industry, assets can be tracked to improve processes such as inventory management; and components and equipment can be remotely monitored and maintained to keep downtime to a minimum and boost productivity. While energy companies are seeing smart meters support better customer service, enabling companies and customers to accurately monitor energy usage and to eliminate estimated billing.

The benefits can also be environmental. By analysing the data captured through M2M technology, businesses can monitor, control and reduce their consumption of carbon. Imagine, for instance, how much fuel can be saved across a medium sized fleet by improving driver behaviours, ensuring vehicles are properly maintained and avoiding wasted or inefficient journeys.

M2M technology can help SMEs gain insights and scalability that were previously only available to larger enterprises. But the benefits won’t be felt unless the right rules, resources and policies are put in place first.

Paving the path to M2M

Data needs to be examined and understood to be of real value. M2M technology provides vast and potentially overwhelming amounts of raw data, so businesses must ensure they have the right data analysis skills in place to mine and extract meaningful insights.

Data can also create potential security risks for a business. Every time a physical object is connected to the Internet, that object creates a new endpoint that needs to be secured and a fresh source of data that can be compromised. Businesses therefore need expert advice to understand the implications and identify the best possible security measures to protect devices and networks and mitigate the impact of any security breaches.

Finally, businesses must also put the right governance models in place to ensure they act ethically and legally when capturing and analysing data. The technology has the potential to turn manual tasks, such as tracking the performance of a customer’s car or monitoring a patient’s heart rate, into hugely efficient, automated processes. But these can cause risks and destroy trust if the data generated is not managed in a secure and transparent way.

A strategic opportunity

The connected revolution offers huge opportunities to those organisations that best understand how they can harness the value of the technology behind the Internet of Things.

Success will come to those companies that can combine vision and management support with the right partners and commitment. New markets will be created, new revenue streams revealed and competitive advantage secured if this is implemented effectively.

The Internet of Things will become a reality. The winners will be those that can extract meaningful insight from the data and use it to drive new ways of doing business in the connected world.

By Phil Skipper, Head of M2M Business Development at Vodafone

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