The Irresistible Rise of Internet of Things
Post by Sinan Erzurumlu
The next industrial revolution is knocking at your door. Is your company ready for it? The new industry is spurred by interconnected digital technologies, such as artificial intelligence, sophisticated sensors, the Internet of Things (IoT), data analytics, and mobile devices. IoT in these technologies is poised to bring a level of unprecedented connectivity with the company, its customers, partners and even competitors.
IoT is, very simply put, a network of smart and connected products. These products are positioned to revolutionize the products into complex systems that combine hardware, sensors, data, and software in countless ways. The network benefits of wireless connectivity added to each product unleash numerous ways of problem-solving. IoT surpasses traditional product boundaries. For example, a Tesla vehicle can autonomously call for a software download when it self-diagnoses its need for repairs. Then, it connects the customer with the company to schedule the repairs. Soon, that vehicle will also drive itself to the Tesla facility.
More importantly, IoT is more than smart products. It forces companies to reconsider their strategic choices related to how they solve consumers’ problem, how they utilize continuously growing big data, and how they partner with other companies. IoT transcends traditional industry boundaries too. Think about how Tesla is changing the definition of an auto manufacturer: is it a car company or a software company on wheels? The changing nature of “things” expands capabilities of smart and connected products with the data they generate and dramatically changes the rules of competition.
IoT transformation in your industry is not a matter of “if”, but a matter of “when.” Consider the business that you are in. You need to think about your responses to four fundamental questions: 1) What products are more likely to become smarter and better connected in your industry? 2) How will the move to smart and connected products change the structure of your industry? 3) How will these smart and connected products change your activities to stay competitive? 4) What will you need to change in your company to successfully implement these new types of products?
The trajectory of the network economy powered by IoT has already started changing major industries such as manufacturing, services, mining, and transportation. Your responses will help decide how IoT-fueled capabilities will change your company’s business model and then shape your strategic positioning. What remains to be seen is who can think innovative and act entrepreneurial to benefit from new technological opportunities.
The winners of the new industrial revolution will not necessarily be the adopters of IoT, but will be those who nurture the entrepreneurial mindset for IoT innovations. If you are looking at IoT as a risk to your industry, this will be an uphill battle for your company. If you are open to changes of IoT, you will have a competitive position in the transformation taking place.