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Making the Business Case for the Internet of Things

Syed Zaeem Hosain, CTO, Aeris Communications

Making the Business Case for the Internet of ThingsSyed Zaeem Hosain, CTO, Aeris Communications

Smart watches that record fitness and health data, home lighting and heating systems that automatically adjust to people’s needs, even interactive fabrics connected to smartphones – these are the gadgets we hear about when “Internet of Things” is in the news. Consumer devices like wearable technology and connected homes are part of this burgeoning industry, but the broader value of the Internet of Things comes from machines talking to machines or M2M communication that can make businesses more efficient and profitable. In fact, the McKinsey Global Institute’s June 2015 report “The Internet of Things: Mapping the ValueBeyond the Hype,” estimates that B2B uses can tap 70 percent of potential value in IoT. B2B applications with IoT connections can streamline processes and analyze Big Data far beyond the scope of consumer apps.

When you’re building a business case for IoT, everything comes down to how well your implementation increase revenues or reduce costs for the organization. IoT systems – and even more crucially, M2M processes – can create profits through either being revenue-drivers or creating efficiencies that lower costs. At Aeris Communications, being an end-to-end IoT and M2M service provider, we’ve helped businesses create valuable returns on investment from their operations in the Internet of Things sphere. With complete solutions from connectivity to application platform, Aeris understands the deeper business needs of industries as diverse as automotive and utilities.

As Aeris’ CTO, I’ve seen how IoT technologies can bring value across the board in B2B applications. For example, the 500,000 long-haul trucks on the Aeris network use customized M2M fleet telemetric solutions for benefits such as enhancing delivery performance, increasing service radius, reducing payroll, and cutting down on idle truck times. In the utilities market, “smart” meters delivering automated readings over IoT/M2M networks like Aeris provides could save an estimated $20 billion worldwide by 2020, versus manual meter readings. These automated meter readings are more accurate as well, resulting in fewer billing enquiries and improved customer care.

Using IoT/M2M to Increase Efficiencies and Save Money

Different concerns may spur businesses to invest in IoT/M2M projects, ranging from new industry requirements, looking for more predictive visibility, and the fast pace of the competitive market itself. But one of the most obvious and yet most powerful applications of IoT/M2M solutions is to increase business efficiency, which, in turn saves money. Predicting necessary maintenance, analyzing usage patterns, streamlining workflows, automating manufacturing, and other activities can be achieved through connected devices and data.

Badger Meter has deployed its water-management system in Santa Fe, New Mexico, to read thousands of meters remotely over Aeris’ IoT/M2M network. These smart meters help the city identify potential leaks and better understand what’s happening in its water system. In addition, customers will have more control of their water usage, and they can adjust their consumption as needed, thereby reducing their own costs. Badger Meter is also working with municipalities in California to install similar systems, which is crucially important as this state is suffering from a long-term drought and the California governor has imposed strict water rationing. Smart meters connected via IoT/M2M networks can assist government and consumers use limited resources more efficiently.

Agriculture may be the world’s oldest industry, but some farms are improving yields and profits, thanks to IoT devices that help guide large-scale farming equipment. Leica GeoSystems connected GPS applications to tractor equipment to expedite planting and harvesting and boost overall productivity. These systems use cellular networks, provided by Aeris Communications, to collect data and reach across diverse rural farm areas. Both Leica’s and agri-business’ efficiencies are increased, along with customer satisfaction.

Cost-savings can be a differentiator in many industries. When customers are looking for the best price on a product, IoT/M2M executions that save money and reduce overall costs are vital. Simply Home designs and installs technology products to promote independent living for aging and disabled populations. By switching to Aeris’ M2M cellular network services over a less-efficient wired system, Simply Home lowered operational costs and reduced installation time from two hours to two minutes. Savings of $50 to $70 per month, on average, were passed along to its customers, making Simply Home more competitive in the assisted-living technology market.

Alongside business gains, governments around the world have begun using IoT/M2M to build efficiency into their processes and save taxpayer money.

IoT systems – and even more crucially, M2M processes – can create profits through either being revenue-drivers or creating efficiencies that lower costs

The United Kingdom has invested over £10 billion in smart meters and a communications infrastructure that will connect up to 53 million electric and gas meters in homes and small businesses by 2020. In a public-private partnership begun in 2013, the London City Airport has used IoT applications to improve passenger flow and customer experience. Sensors around the airport aggregate real-time data that passengers can access via a smart phone app to avoid long lines and easily connect to different modes of transport around the airport.

Since 2010, the U.S. government’s General Services Administration (GSA) has been making its buildings more energy efficient, thus saving money. A key part of this project is IoT-connected sensors in GSA buildings that regulate temperature controls, lighting, and other systems. So far,about 80 federal buildings with a combined area of at least 45 million square feet have these smart sensors installed, and this saves $4 million in energy costs and $12 million in operational costs per year. The government hopes to be a proving ground for the real estate industry in the area of smart buildings and IoT/M2M technology.

Planning for an IoT/M2M Solution

As with any other technology, your organization has to step back and figure out the business case before starting the implementation. IoT/M2M isn’t just a technology concern, it’s a business decision. Businesses exist to make money, and, in essence, they do so by increasing revenue and reducing costs. IoT/M2M applications must affect one or the other to be successful.

Before you jump on the Internet of Things bandwagon, consider the details about your possible deployment. Will all the features the IoT/M2M application you want to implement help increase sales? Or are some of these bells and whistles merely add-ons? Do you have a unique capability to distinguish your IoT product? Does your business have a product reputation that would be enhanced by IoT/M2M? Can you use the IoT/M2M data elsewhere in your business for other purposes?

Exploring the technology-the how you do things -has to come after you understand why you want to do it. What’s the benefit of the IoT/M2M project? Is it really useful? Do the return-on-investment analysis up front. The examples I have cited here may not be as splashy as a gold-plated smart watch, but these businesses have found concrete ways to streamline processes, reduce costs, use data more effectively, and increase profits overall through using IoT/M2M systems.

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