The Internet of Everything is predicted to generate more than $14 trillion in value (net profit for companies) over the coming decade. So what are the strategies that companies should be adopting in order to capitalise on this industrial trend?
The Internet of Everything (IoE), which can be defined as the networked connection of people, process, data and things, is predicted to be worth $14.4 trillion in net profit to businesses over the coming decade to 2022. This is one of the findings of the latest ‘white paper’ commissioned and published by networking equipment manufacturing specialist Cisco. The report is based on a survey carried among 7,500 private sector business and IT decision-makers in twelve countries worldwide. At the moment there are several transition technologies in place paving the way towards the IoE, such as the Internet of Things, Cloud Computing and Big Data. However it is nevertheless essential that company management keep their eye on the overall benefits that this trend may potentially have on their firms. Cisco has identified five key areas where applying IoE effectively will create substantial value over the next ten years.
5 key areas for change, 2 opportunities to grasp
Firstly, says the Cisco report, the IoE will enable companies to reduce their selling, general and administrative expenses and the cost of goods sold, by improving business process execution and optimising capital efficiency. Secondly, it will help eliminate waste in the supply chain. Furthermore it will drive improvements in employee productivity and also enable brands to offer their consumers new experiences. Last but not least, the IoE will help increase the return on investment in innovation and crucially reduce time to market for new products. In parallel, the study stresses that there are two ways for companies to realise value from the IoE: by “connecting the unconnected”; and by wresting market share from other firms that are less able to transform and capitalise on the IoE market transition.
Status of the IoE market worldwide
The results of the study suggest that companies in developed markets are currently realising the greatest share of IoE value, with Germany in first place among the countries studied, followed by Japan. This can be explained by the fact that many companies in developed countries have already invested heavily in IT and have extensive experience implementing the types of technology – such as industrial automation, sensors and analytics – that create the foundation for the IoE. Nevertheless emerging countries appear confident in their ability to realise value from the IoE. On a scale of 1 to 10, executives from the emerging-market companies polled came out with an average score of 7.8 on this question, in contrast to a 6.7 optimism score for executives from developed-market firms. By way of conclusion, Cisco points out that while technology infrastructure and tools are essential, it will be the effective application of the technology to people and processes that will make the difference in terms of business success.