Projecting the Internet of Things' massive potential impact on business

The 'blurring' of physical and virtual allows new processes, business models, and ultimately new outcomes for the customers, says an analyst.

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Often, when we hear about Internet of Things (IoT), we think of it in terms of consumer-oriented scenarios—home security, switching lights on, fitness bands, and so on.

But in fact, the IoT has room to completely transform business too. Telematics isn't just consumer-oriented.

Gartner analyst Daryl Plummer presented a webinar on digital innovation recently, and in it he provided a synopsis on where he thinks IoT and business is headed.

Flip to digital

Plummer says that the joining of business and the IoT is the next innovation in IT and digital business.

He says e-business is "conducting business electronically," whereas in a digital business you "begin to change the structure and the nature of how your business processes happen." The difference is important, he says.

Digital business is achieved, in part, by "removing the constraints of physicality from your processes."

In other words, the business doesn't necessarily need to have access to real world objects. Plummer uses Uber as an example because it's a company that provides the services once delivered by fleets of owned vehicles without those fleets.

Physical to intangible

The "blurring" of physical and virtual allows new processes, business models, and ultimately new outcomes for the customers, he says.

And the IoT provides one way of doing this. Sensors used in IoT objects pull physical information and allow it to be accessed virtually, for example.

"IoT will bring turmoil to your industry, any industry," he says. Everything can be tracked by sensors, and startups are taking advantage of that.

Unstable processes

Plummer, in his webinar, said the IoT supports unstable processes. And that support is pro-business growth.

Unstable processes are designed to be "super-maneuverable," like a drone delivering a pizza. The device may have to circumvent a new structure that wasn't there when it made a delivery before.

Control software within each connected thing—the drone in this example—allows for agility and flexibility, which has been difficult to achieve in the past.

"Digital business models will rely on unstable business processes designed to shift as customer needs shift," Plummer says. "It's more important to have systems that can change than systems that will last a long time."

Business and Things

Plummer comes up with examples of industrial IoT. Anheuser-Busch InBev, for example, uses internet-connected sensors in beer barrel pumps to simply advise when the barrel requires re-supply.

However, wastage, how much consumers like the product, and other facts can be garnered easily with a set of simple sensors and analytics. He calls this "digital biz-ops."

"It's not the same as analog biz-ops," he says. You need to think of it differently. You wouldn't start a bank today with live tellers, he says, or even ATM's, or even money, he points out.


And by 2017, a "significant disruptive digital business will be launched that was conceived by a computer algorithm entirely," Plummer says.

The machines are getting smart enough to compete with humans and to do things that we never thought they'd be able to do. Soon, smart systems will not just be creating algorithms, but insight too. At that point machines will follow their intuition, he says.

And we have to be "ready for that in redesigning the way we do things," Plummer says.

Copyright © 2015 IDG Communications, Inc.

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