The most exciting innovations in the field of Internet of Things (IoT) can be found on the workfloor. At the same time, companies are reluctant to invest in smart devices. The reason? Uncertainty about the possibilities and returns. That’s what researchers from McKinsey write in an interim publication about a research into IoT in business. The first results show 3 trends that are relevant to any organization that wants something with IoT.
A lot is said and written about Internet of Things. But usually it is about consumer products. Think of the fridge that supplies groceries, a thermostat that knows exactly what time you get home and preheats the house, or lights that automatically turn on when the night falls. Nevertheless, IoT also offers huge opportunities for business. The combination of data gathering sensors and advanced algorithms gives businesses the opportunity to streamline their processes, develop new products and services, and enrich customer care. McKinsey, a United States American consultancy who analyzes strategic issues, was curious about how companies look at these opportunities and how much they embrace.
What does McKinsey look like?
McKinsey asked 350 managers for their views on Internet of Things. 25% of respondents work as executive manager and 75% as senior manager, for example in the field of IT, strategy, product management or sales. The size of the companies varied, but 45% of respondents work with companies with at least 25,000 employees. The industries in which respondents operate are different from gas industry and care for high tech and retail. However, all companies work with IoT solutions.
Interesting interim results
Although McKinsey’s research is still ongoing, researchers in an article published a number of preliminary results. According to the researchers, the answers from the first 50 respondents already provide insight into interesting trends.
1. Internet of Things gets momentum
Although IoT is still relatively new, 98% of respondents indicate that most companies in their industry provide IOT initiatives with strategic plans. For example, to gain insight into their work processes and to improve them, as well as to develop new business models or to stimulate sales. Figure 1 summarizes the strategic opportunities that respondents see.
92% of respondents provide Internet of Things with a positive impact on business within three years. 62% even say that that impact will be huge and lead to complete transformations. In short: IoT gets momentum. According to McKinsey, it seems that in the coming years, much more benefits from IoT than the modest improvements that technology has brought to date.
2. In particular, manufacturers and maintenance companies benefit from IoT
On the question of which companies can benefit most from IoT, respondents respond freely. 40% think that maintenance companies can benefit from IoT. Especially when it comes to diagnostics, preventive maintenance, monitoring and inspections. 30% of respondents think that IoT offers many opportunities for manufacturers, for example, to increase revenue by saving energy, using resources optimally and increasing quality. For example, Boing uses ioT wearables and augmented reality in cabling assembly. The result: 25% increase in productivity.
3. IoT’s business application remains a challenge
Certain results of the McKinsey research give substance to thought. For example, 60% of respondents claim that IoT sensors collect valuable data, such as customer demographics and buying behavior. At the same time, 54% of respondents say companies often do not use 10% of the data collected. McKinsey’s researchers recognize this finding from practice. Thus, they came to a drill platform where managers used only 1% of the data collected by the 30,000 sensors on the platform.
Possible cause is that many companies do not have the right knowledge to analyze the data collected. But in other areas, companies are too short. Thus, 70% of respondents say that IoT solutions are not a fixed part of work processes, so they do not use Internet or Things to improve their daily work. In addition, research shows that companies have difficulty identifying useful applications for IOT.
IoT as a driving force behind organizational change
The provisional research findings favored McKinsey’s researchers positively about IoT’s growth opportunities at the workplace. They conclude that the respondents clearly believe in the power of IoT. Companies endorse that by investing in technology. According to the researchers, it is important to hold this momentum. To this end, managers should more emphatically take place in development programs for the organization and in planning work processes. 2 basic steps, according to the researchers, are now often skipped. Do companies do this well? Then IoT has the opportunity to grow into the driving force behind organizational change.