Businesses need to become more than just efficient and profitable. They need to find new ways to enhance their business processes and improve how they do business by innovating. And IoT is an important enabler for these types of innovations that can be applied to numerous business areas, including supply chain, manufacturing, customer service, marketing, and sales.
With the IoT revolution in full swing, the need for innovation has never been greater. Innovation has become an important aspect of business success, but we must understand what it means and how it can be achieved. It is also important to understand how businesses can effectively apply innovation to remain competitive in a rapidly changing world. Our present systems are unsustainable in themselves. Take the global financial crisis, for example — this was an effect of a lack of sustainable financial infrastructures.
From inception, businesses have been adapting their operations to meet their customers' needs, but with each passing year, the pace of change seems to increase. That's where innovation comes in as the key to success in any business venture and can be driven by different factors — including technology.
The term "innovation" has been used widely in the business landscape over the years. In our current context, it is widely associated with developing new products or services that have high potential in gaining market share and value creation. This definition is very different from what was previously meant by innovation. In the past, innovation was associated with incremental changes made to existing products or processes rather than radical changes which may not necessarily be market-driven.
In the quest for innovation, businesses need to constantly look for technologies that will help them gain a competitive edge or pave the way for success in the long run. Internet of Things (IoT) can offer such an opportunity. IoT is an exciting innovation in business that has led to a host of new applications, devices, products, and services. It represents a new way of doing things, leading to improved efficiency, profitability, and even novel ways of thinking about business models. In other words, it's about business innovation.
For example, optimising IoT-enabled smart grids contributes to research and development, accelerates innovation, reduces costs, and helps companies quickly bring new products to market. Also, with connected healthcare devices, sensors, mobile applications, wearables, and other technologies, IoT is a key enabler for medical innovation in hospitals.
On the industrial side, manufacturing industries whose operational processes are enhanced through connectivity can increase productivity, use resources more efficiently, improve the quality of their products, and enhance sustainability by reducing their carbon footprint while increasing energy efficiency.
IoT is a whole new way of thinking about monitoring, managing, and controlling our business processes and assets. Anything that can be connected can be integrated into an IoT environment. And anything that can be integrated will change the way businesses operate by providing new levels of efficiency, predictive analytics, improved resource management, and streamlined business processes.
Business innovation can be achieved by doing three things: connecting assets together, collecting data from them, and then using the collected data. But innovation with IoT begins with examining the current state of the business and then defining what it is that management expects to achieve through its IoT investment. This includes defining:
Once your business objectives, measurement criteria, value drivers, and process changes are identified and clearly defined, you need to look at how these changes will affect your core business processes. Some processes may not need to change, but others may need to be completely redesigned.
There are tangible and intangible innovation benefits to be gained from leveraging IoT in your business. However, it is essential to weigh the possible risks and opportunities before deciding to use IoT to drive innovation within your business. While the potential for innovation and operational improvements through IoT-based applications and systems is clear, there are many hurdles along the way, including resistance to change, cost, scalability, integration, and security.
Additionally, there is a lack of understanding of what an IoT initiative should look like from a business perspective. The challenge lies in creating business value while mitigating risk through the project planning and implementation process. Suppose you decide to go ahead with IoT to accelerate business innovation. In that case, you must consider how best to introduce this new technology into your business. It is also important that you understand the process changes within your business due to adopting and adapting to IoT.
Incorporating IoT within your processes is paramount to driving business innovation. As we move forward into a more connected world, you can no longer afford to stick to traditional business practices. IoT can address business innovation challenges head-on and help you reap its benefits. Moreover, businesses that adopt IoT can easily transform their business models and become composable businesses. That allows them to better engage with more complex and changing market dynamics while meeting their customers' growing expectations and addressing their own shifting needs.
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