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Transforming Business through the Internet of Things
By Mark Fortier
facturing, and not just from the hype around futuristic connected homes and self-driving cars. Maciej Kranz, VP of Cisco’s strategic innovations group argues that businesses of any size can increase profits by harness- ing the power of the IoT. According to Kranz, the biggest
T
misconceptions about the IoT are that the IoT is only about connecting devices to the Internet, and intercon- necting devices in the home. In fact, we see most of the applications of IoT in the business environment. Howev- er, down the road, he does expect key innovations to emerge in the con- sumer segment. Today, IoT is about business impacts driven by IoT solu- tions built around connected devices, the data they generate, and their ap- plications. The good news is that adoption of IoT has been broad. “According to my own observa-
he highest returns on IoT in- vestment today are coming from new efficiencies in manu-
tions and research houses like Ovum or McKinsey, IoT has been mostly adopted in manufacturing, logistics, and transportation, but also in retail, healthcare, agriculture, as well as sports and entertainment,” says Kranz. But not all businesses are in-
vesting in IoT. “Some businesses, be- lieve it or not, haven’t heard about IoT, and some are confused by all the technology-centric and future-orient- ed talk they are hearing,” Kranz con- tinues. “But, there are also thou- sands of customers who have started in on the IoT journey. I believe most companies in most industries will benefit from adopting the IoT.” Manufacturing is one of the
first industries to reap huge benefits, and this is because manufacturing is all about quality, efficiency, cost, and uptime. IoT solutions enable manufac-
turers to demonstrate substantial and quick benefits by applying IoT to
their operations. “It is low-hanging fruit,” Kranz says, “Starting with be- ing connected to operations remotely, predictive analytics and preventative maintenance.”
Business Implementation For the small or midsize busi-
ness leader exploring the idea of IoT implementation, Kranz believes the company management should create a big vision of where it wants the or- ganization to be in 10 years. “Identi- fy a small project first. Gather stats and benchmarks in the industry and compare them to your own total cost of ownership. Build your business case for the first project. Get C-suite sponsorship, since the goal is not to only embark on one project but to eventually transform your organiza- tion. Finally, establish a partner ecosystem — you will need them to start with your first project.” IoT has a special place when
called on to solve logistics and ship- ping challenges, Kranz states that lo- gistics is about efficiency, scale and predictability, and IoT helps logistics and shipping companies all the way through the process. The benefits of connected operations include: accel- erating the time from order to the factory or distribution center; accel- erating the time to fulfill the order in the warehouse through automated distribution centers, high-speed au- tomated packaging, etc.; ensuring that trucks don’t break down during delivery with preventative mainte- nance and factoring in weather and traffic conditions; and giving cus- tomers the ability to track their packages easily throughout the process. IoT security measures have
been evolving as well. In the indus- trial world, says Kranz, companies have relied on physical separation of facilities as a primary security mech- anism. “The industry has gone through an initial phase of panic fol- lowing cyber attacks such as Stuxnet, proving that this is no longer as effective.” Increasingly, companies are
now implementing continuous risk- based self-defense built on a compre- hensive approach to cybersecurity, including what to do before a hack (reducing the chances of a hack), dur- ing (how to discover the hack quick- ly), and after (how to identify what data was compromised and mitigate damage). Workplace roles are also chang-
ing. “Think about the transition from horse and buggy to a car. Yes, the role of the buggy driver disappeared, but so many other jobs were created as cars became ubiquitous — from
gas stations to taxi drivers. The same is happening with the IoT transition. Some roles are being impacted. You don’t need to send a person to check the status of a meter that is connect- ed and sending information remote- ly. At the same time, many new jobs
Most companies will benefit from adopting
the IoT, reaping returns in efficiency, cost, and uptime.
are being created from data scien- tists to remote operators and applica- tion developers. In the U.S. and Western Europe there are tens of thousands of jobs that are not filled every year since there are not enough qualified candidates.”
Consumer Market Changes Kranz believes that it is fair to
say that IoT applications in the con- nected home represent one of its more overhyped aspects. “While I do see value in connecting individual devices to the Internet (e.g. software upgrades, troubleshooting, specific purchases, etc.) we are just starting to see some early applications of IoT that require interconnected devices in the home, such as care of the eld- erly or home security. However, the dramatic improvements IoT is bring- ing to the business world are already benefitting consumers, such as en- abling mass customization and per- sonalization, and more efficient and predictable deliveries of goods.” There are hundreds of use-cases
that are being addressed by IoT solu- tions or are being tested, and Kranz is excited about the future. “From en- vironmental issues such as clean wa- ter, better use of water resources and irrigation to reducing air pollution, traffic congestion and the time it takes to find parking in crowded cities, I firmly believe that the IoT will have a profound and positive im-
pact on our businesses and our lives.” Contact: Cisco Systems, Inc.,
170 W Tasman Drive, San Jose, CA 95134 % 1-800-553-6387 Web:
www.cisco.com r
Maciej Kranz leads Cisco’s
group focused on incubating new businesses, accelerating internal in- novation and driving co-innovation with customers and startups through a global network of Cisco Innovation Centers. He has written a book on the topic of IoT entitled, “Building The Internet of Things: Implement New Business Models, Disrupt Com- petitors, and Transform Your Indus- try” published by Wiley.
February, 2017
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