How SMEs can integrate IoT technology to optimize operations

The Internet of Things (IoT) is a fundamental trend that is underpinning the digital transformation of enterprises the world over.

IoT refers to the network of physical devices that are connected via the internet, allowing them to share and collect data in real-time. It can be found in many objects, from household devices to industrial machines. The smartwatch you’re wearing on your wrist, the tracking of your latest Amazon purchase, that’s IoT. 

Latest developments in IoT technology

According to recent estimates, the number of IoT devices is expected to reach around 30 billion by 2025. This number is a direct result of its powerful combination with other recent technological advancements.

• IoT powered by 5G:

5G-powered IoT allows for un-interrupted connectivity and greater data usage, which increases the stability and performance of IoT devices. The improvements to IoT include lower data latency, more extensive coverage, and real-time data processing, which in effect, makes IoT’s reach limitless.

• IoT driven by Artificial Intelligence (AI):

The addition of AI is transforming IoT’s extensive real-time data collection and processing to the next level by activating machine learning and actual decision-making capabilities without human intervention. This powerful combination is helping create intelligent machines that can automate processes and facilitate predictive maintenance, resulting in increased productivity and reduced operating costs and downtime.

• Edge Computing and IoT:

The emergence of edge computing in IoT is providing faster and greater volumes of data to be processed and resulting in more actionable solutions in real-time. Besides providing scalability and flexibility in IoT deployments, the movement of data processing and analytics closer to IoT devices, also increases data privacy and security. 

Large enterprises have been stepping up and becoming pioneers in the IoT revolution, taking full advantage of this innovative technology and its capacity to profitably reshape their business. However, small and medium-sized enterprises (SMEs) which represent about 90% of global business, have been slower to incorporate effectively IoT technology and systems due to lack of resources and expertise.

Practical applications of IoT for small businesses

SMEs that have managed to make the investment and deploy IoT into their daily processes run more efficiently and are seeing long-term cost savings and greater business growth.  Therefore, it is essential that more SMEs leverage IoT to improve existing business practices and stay competitive.

While implementing IoT can be a significant initial investment for an SME, the ROI is quick on improving operational capacity, reducing costs, managing resources better, and enhancing customer service and experiences. SMEs can benefit from this continuously evolving and innovative technology in the following ways.

• Process Automation:

IoT implementation can streamline processes by automating tasks that can benefit a number of business areas, from logistics to manufacturing to operations, resulting in increased efficiency, agility and cost savings. Here are some examples:

• Inventory Management: Whether in-store merchandise stock or raw materials in manufacturing, IoT can alert when stock is running out, enable loss prevention, and even predict stock replacement needs automatically. It can also generate action alerts to restock, as well as reduce production. This helps SMEs optimize their inventory, reduce waste and contribute to cost effectiveness through better resource management.
  
• Supply Chain: From production to distribution, IoT’s real-time tracking and monitoring optimizes supply chain management. The enhanced visibility of products and materials throughout the manufacturing process, shipping, and delivery streamlines resource allocation and increases the productivity and performance of assets, such as vehicles, equipment, and machinery. Additionally, IoT can detect down-times and predict parts replacements reducing maintenance costs, as well as optimize transportation routes and safety.
  
• Operational and Workplace Productivity: IoT facilitates monitoring and managing operations and projects remotely, allowing to better control workflows, bottlenecks, even employees, and delivering overall greater flexibility and efficiency. Increased automation and interconnectivity have improved the workplace, productivity and collaboration, freeing up employees to focus on more complex tasks, as well as enabling greater remote “workplace” opportunities and experiences.
  
• More and Better Data:

IoT devices generate a large amount of data in real-time, which can be analyzed to gain insights into the business. This can help SMEs identify trends, optimize processes, and make better-informed decisions, such as:

• Using data from sensors to monitor and track your business and production processes in real-time, helping identify inefficiencies in operations, improve performance, and even give guidance on training staff. Enabling higher efficiency
• Delivering information on consumer behaviours and preferences to identify trends and create new products and services to meet customer needs.
• Collecting real-time data on employees’ workflows, needs and preferences to build “smarter” workspaces, improved meeting environments, and increased collaboration amongst employees and across departments.

• Customer Satisfaction:

The data flowing in from IoT customer touchpoints and the products or services they use can provide a multi-dimensional view of their experiences and satisfaction levels not possible before. This opportunity to measure and analyse consumer behaviour can also take the guesswork out of marketing strategy. Further, with IoT data in real-time, companies can respond quickly to issues and requests as they arise. Besides helping meet a consumer’s changing needs, IoT can improve their experiences and increase brand loyalty and retention which can drive long-term business growth. Here's some examples how:

• Real-time data collection and analysis of on-site customers, from the number of people present in a store to the direction of their movement, or whether they have or use the company’s app, allows businesses to respond promptly to a customer, such as proposing individualized offers through their device. It also can give insights on product preferences, merchandising and store layouts to maximize sales.
• IoT sensors can instantly track on-site inventory levels for customers enabling them to order out of stock products online from the store. Customers can also monitor their online orders and track their delivery in real time. 
• Brands can learn of any product or service problems their customers have instantly, and in some cases, even in advance. IOT interconnectivity also allows for alerts to customers on automatic product updates and upgrades, as well as to proactively inform them of the right time to change a product part, elevating customer service to new heights. And additional apps can provide companies with extra customer information based on preferences that facilitate the creation of more personalized product offerings.

• Sustainability:

Approximately 84% of current IoT deployments “are addressing or have the potential to address” the UN’s Sustainable Development Goals. SMEs can use IoT to implement sustainability measures, such as waste reduction and optimizing operations to reduce energy consumption. Here’s some examples how:

• By identifying the presence of pollutants, monitoring dangerous materials, and tracking temperatures through IoT-connected devices embedded in equipment and spaces, workspaces can be protected, helping keep them safe, clean and efficient, while also allowing compliance with environmental standards.
  
• From factories to corporate offices to retail stores, IoT sensors can reduce power consumption, enhance safety and security and lower maintenance costs.

Final Thoughts

In summary, the adoption of IoT technologies is no longer limited to large enterprises, presenting numerous opportunities for SMEs to improve their efficiency, cut costs, enhance customer relationships, and increase their competitivity and overall profitability. While implementing IoT solutions requires an initial investment, the ROI can be substantial and quick and therefore far outweigh the costs.

Due to limited resources, many SMEs choose to partner with specialized third-party companies to accelerate IoT solution development. Other SMEs opt for stable & secure IoT platforms to access IoT technology that is both scalable and customizable.

Need guidance on how to start your SME’s IoT journey to reap the benefits this advanced technology can offer? Reach out to our Knowledge Exchange experts for the latest technological insights and advice.