Internet of Things, or as the new IoT abbreviation is starting to take precedence, is sweeping the business world. It is all around us – from CES technology shows to business columns, but what is IoT? And more importantly how will the Internet of Things affect small business? Before I get into the influences, it would be beneficial to outline the definition of IoT, and according to Wikipedia this is what defines IoT:
the interconnection of uniquely identifiable embedded computing devices within the existing Internet infrastructure. Typically, IoT is expected to offer advanced connectivity of devices, systems, and services that goes beyond machine-to-machine communications (M2M) and covers a variety of protocols, domains, and applications. The interconnection of these embedded devices (including smart objects), is expected to usher in automation in nearly all fields, while also enabling advanced applications like a Smart Grid.
In other words, it will allow us to automate a number of manual tasks by using the already existing internet infrastructure. Instead of counting your own fitness exercise gains a smart bracelet will do it for you, or without looking in the refrigerator our smart-fridge will give us a list of groceries we need to purchase. But how does this relate to business?
In a number of ways, product and service providers of all sorts will be able to tap into this IoT potential to not only provide services to the customer but directly personalize messages on an individual level. Organizations will now be closer to people more than ever.
Here is our take on the influences IoT will have:
Improved and Catered Services
Early adapters of IoT will set customer expectations; if you cannot provide real-time solutions to those customers who seek it your business will need to catch-up, fast. While this sounds like a competitive issue, it could actually be a healthy competitive feature. Competitors pushing each other to provide the best possible service will result in improvements and advancements that customers will surely enjoy.
Similarly, catering to each and every individual will be a big part of small business operations. The emergence of big data and IoT will ensure that each business has access to a plethora of information to create custom interactions with potential and current customers.
Increased Need for Data Security
The recent Sony hack and data breach fiasco was all over the news. Why? Because a group of hackers were able to penetrate the security of what we thought was an unpenetrable organization while publicly releasing confidential information. This is just one of many everyday breaches which occur on the world wide web.
Small businesses offering wireless services or communication will need to ensure that their data is highly secure. With consumers relying heavily on personal mobile devices (often unprotected), the responsibility of security will fall to the service provider.
Although the idea behind IoT is a more immersed technological infrastructure, the communication in the end will be between individuals. People will require to provide a high level of personal information which organizations will be able to allocate for personal communication. As opposed to “mass emailing” or “Dear Sir” messages, the interactions will include actual names and facts. Won’t be long until a personal bracelet will be sending us voice SMS messages informing us that we need to burn 200 more calories to meet our daily exercise goal.
Much like it won’t be long before a partnership between the developers of the fitness bracelet and a nutritional supplements provider is formed to directly serve messages of matching supplements needed after each work out including where to get them, for how much and the amount needed based on exercise intensity.
Take the earlier example of a smart-fride telling the home owner that it is time to replenish some of the supplies in the fridge. Now imagine that a grocery store chain developed an app or service which allows them to read this information, combine it with that families buying habits (loyalty member data perhaps) and deliver specials or promotions right when they are needed. Ideal isn’t it? While we are not fully at this stage yet, IoT will allow organizations to tap into the principle of “perfect timing” and allow messaging which is in tune with real-time customer needs.
Scary? A little. Convenient? Absolutely. After all who doesn’t hate pouring a bowl of cereal only to find out that there is no milk in the fridge.
Bigger Digital Budgets
Implementing such services for a small business will surely require a bigger allocation of the budget to go towards digital communications or IoT technology/servers/services. It is safe to assume that over time the costs for these offerings will decrease but those organizations looking to be the early adapters will have to invest a higher amount in order to establish an effective service.
Complex Privacy Legislation
While our individual digital privacy has been a hot legal debate topic lately, the introduction of IoT devices and interactions will set forth an even more complex discussion of privacy laws for both consumers and organizations. People willing to integrate into a SmartGrid will have to sacrifice some privacy to enjoy the benefits. However, privacy legislation will be very particular as to what data small business organizations are eligible to tap into – making it complicated to offer the best services possible while simultaneously respecting privacy boundaries.
As much as the IoT can offer to make lives better, we are all still entitled to a certain level of privacy and no amount of convenience will trump that…at least for some individuals.