The global IoT market is on pace to surpass $2.4 trillion annually by 2027, and more than 41 billion devices will be connected to the internet by 2027. IoT offers many benefits to businesses, including decreased operating costs, new consumer insights and opportunities to optimize business operations. It's not always a positive situation, though. Some businesses might only see the disadvantages of IoT devices and be hesitant to use them.
What are the advantages of IoT in business?
1. Lower operating costs
A fleet of IoT devices can be cost-effective because it helps businesses optimize their workflows and lower operating costs by providing real-time information. Devices can proactively advise of their status so staff can schedule the maintenance before it can affect production. They can be integrated into larger systems to optimize operational efficiency and help reduce costs. For example, smart building systems can track, monitor and control HVAC systems to monitor building usage and adjust them to take advantage of lower time-of-use costs, which saves money.
2. Increased productivity and workplace safety
IoT devices can manage, monitor and alert staff of changes in processes or productivity, helping them make smarter decisions about work. Automaker Ford is using specialized IoT technology and body tracking sensor technology to protect workers from excessive physical stress and to optimize their work. Engineers and ergonomists use the data to optimize each workstation to enable more efficient movement and help workers avoid injuries. Through this novel implementation of IoT in Ford's employee safety program, it's been able to reduce assembly line injury rates by 70%.
3. Better customer experiences
IoT devices help businesses track, monitor, uncover and analyze customer data faster than before. Businesses can predict shifts or trends in customer behavior before they happen. Advanced IoT technology can enhance the customer experience by personalizing it based on past experiences. Think of the location trackers on shipping vehicles or personalized coupons offered through a mobile app on customers' smart devices when they enter a store or business. IoT devices can help businesses gather, transmit and analyze the personal data they have on customers, helping create a superior customer experience that engages them at a deeper level and increases customer loyalty.
4. More business insights
IoT devices help organizations gather data to identify insights about their business, both internally and externally. Retail stores use beacon technology and other IoT devices to redesign their stores based on real-time traffic patterns. Logistics firms can use internet-connected IoT devices to align delivery locations and schedules that make the most efficient use of vehicles and employees.
Businesses that use IoT to drive modernization throughout their organization reduce their time to market for new products or services and amplify their ROI. They'll add value to the business faster and more efficiently because more actionable data from the devices is easily accessible.
What are the disadvantages of IoT in business?
1. Security and privacy
Keeping the data gathered and transmitted by IoT devices safe is challenging, as they evolve and expand in use. Although cybersecurity is a high priority, IoT devices aren't always included in the strategy. Devices must be protected from physical tampering, internet-based software attacks, network-based attacks and hardware-based attacks.
Data privacy is another concern, especially because IoT devices are being used in more sensitive industries, such as healthcare and finance. Information privacy laws are coming into effect globally, too, meaning that not only does it make good business sense to protect data, but businesses are legally required to do so.
Integrating encryption and security protocols with IoT devices can be difficult with a large fleet of devices. The cost in time, effort and money to do it on all devices might be prohibitive, so some businesses might use inadequate platforms because they're cheap or forego it altogether. All it takes is one breach for a business to learn a tough lesson.
2. Technical complexity
Though it might seem like IoT devices are performing simple tasks, such as counting entry swipes at a secure door, there's a lot of complex technology involved in creating them. Plus, if they're providing essential data to another workflow or system, they could negatively affect everything connected to it. Miscounting the number of swipes at the door isn't a big deal, but if another device confuses temperature data with entry swipe data, it can be catastrophic. And the error isn't always easy to fix.
There can be a big learning curve in deploying IoT devices. It makes sense to develop a strategy on how and why to deploy them before purchasing them. That way, you can be assured they're working as intended, and you can support them.
3. Connectivity and power dependence
Many devices have a dependency on the internet and continuous power to function properly. When either goes down, so does the device and anything connected to it. Given how intertwined IoT devices are with today's businesses, everything can grind to a halt when they're down.
Businesses must understand how outages will affect their devices to plan proactively for outages -- because an outage will happen at some point. Troubleshooting and incident management processes can help alleviate that, as can ensuring employees know what to do when devices are down.
There's currently no consensus regarding IoT protocols and standards, so devices produced by different manufacturers might not work with existing technology. Each one might require different configurations and hardware connections, making it hard to deploy efficiently.
The business must understand network needs to prepare for any required customization. That also means planning for extra time with device deployments to handle any troubleshooting or related tasks that might arise.
5. Higher costs (time and money)
Deploying IoT devices often comes with high time and money investment requirements. There's the number of devices to be purchased and configured, staff to install them, others to integrate them into the network and support calls to the manufacturer for help. If they're all going into a single location, businesses can make up that investment quickly. If the business is spreading them out, expect the cost to rise exponentially.
By planning the deployment budget and strategy before buying, organizations can eliminate many potential obstacles they would otherwise encounter.
Summary of advantages and disadvantages of IoT
IoT devices can be useful to businesses today but only if they know what they're getting into. And these are just some of the benefits and disadvantages. With a little planning, businesses will have a better idea of what they need and how IoT devices can help.