Easy to Use: IoT Solutions Mean a Great Potential for Manufacturers

This year 9 billion consumer devices will be sold. That’s more than the global population, meaning every person on Earth will, generally speaking, purchase at least one new device. The majority of those won’t be internet-connected electronic devices. But within a few years, because of the democratization of the Internet of Things (IoT), virtually all of those devices will be connected. When you think about what that means, the opportunity to create and monetize new experience is boundless, not to mention the level of disruption that will results from the companies that capture the magic in a bottle quicker than others.

As a manufacturer, if you are not going down this path of innovation, some other company – whether it exists today or emerges tomorrow – surely will. Consider the current list of Fortune 500 companies, many of which didn’t exist 10 years ago. The democratization of the internet itself created a plethora of new business models, and the same thing will happen in the manufacturing industry as IoT proliferates.

 But what’s going to power all of this change? A few months ago, Microsoft launched its Azure Sphere solution, which has three components: a microcontroller chip, a secure operating system that runs on that microcontroller, and a secure cloud (the Azure IoT framework). The easiest way to describe it is a secure-edge IoT solution that is ushering in a new era of IoT in the manufacturing industry.

There are many manufacturers that have already tackled IoT, but for a traditional manufacturer of non-connected, non-digital products, the path to smart devices is now much easier. Previously, everybody rolled out their own IoT solutions, designing everything from the chip to the software on up. Now all that effort has been reduced to an effective and nearly out-of-the-box solution. Microsoft may be the first to launch such a user-friendly solution, but it certainly won’t be the last.

There are two functional areas within manufacturing organizations that will be early adopters or initially interested in tapping into its potential. R&D product managers may think about how to leverage a solution like Azure Sphere to create new features and new consumer experiences. Additionally, operations professionals responsible for the manufacturing process can use IoT and data fed from devices to optimize those processes.

There is a question that serves as a common denominator for both groups. What can I do to gain better business outcomes from IoT? Asking that question will start a chain reaction of other questions that will ultimately help transform the business, such as:

How can I monetize the data, not just gather it?

How can I use IoT to create new user experiences and products that drive new revenue streams, enabling any company to keep pace with changing consumer preferences or, even better, influence those changing tastes?

How can I transmit it back to the customer in interesting ways?

How can I drive down the cost of warranty obligations by drawing data that can predict failures?
How can I monetize those warranties by coming up with more effective offering that provides better customer service by integrating intelligent information about that device into the customer service experience?

How can I improve inventory tracking or optimize the supply chain by taking into account other environmental factors that may impact how we manufacture, such as energy or weather?
While there is so much potential to transform a business, adopting IoT solutions to improve operations or introduce new products to the market is not without its challenges.

Many organizations often overlook the basic step of developing a strategy, and within that plan, the need to choose the right technology enablers. This calls for mapping out the organizational and change management that needs to happen to launch a new product or revise operational processes. Because IoT-enabling products or operations inevitably change how a business functions, it’s imperative to get it right from the start.

For example, manufacturers of appliances and household products are exceptional at developing high-end refrigerators, stoves, coffeemakers, etc. Yet they’re not software companies. However, they become so overnight once they begin developing connected products. How they manage that transformation is critical to their survival.

IoT inevitably leads to an increase in the amount of data running through the business, and this needs to be managed and secured. While headlines often cause alarm with news of data breaches, the good news is that data security in the cloud continues to improve. Borrowing on practices already established in highly regulated industries – such as financial services and healthcare providers that have very secure, critical and confidential data in the cloud – is an easy starting point.

So is incorporating a fully integrated IoT solution like Azure Sphere, which pushes data processing down to the edge and eliminates the opportunities for the information to be breached. Unlike solutions of the past, security in modern IoT devices is turnkey, built into the hardware and extending to the cloud, which eliminates the need for investment in additional infrastructure and staff to secure smart devices. We will likely continue to see consolidation among cloud and IoT platform providers to a few really well trusted organizations that can secure data and devices even better.

While Azure Sphere is the first out-of-the-box IoT solution, no doubt more will come, making it leaps and bounds easier (and cheaper) to integrate into devices and manufacturing processes. This will radically change the industry and the world. But with great change, comes great risk. Integrating IoT successfully comes down to looking at it as a driver of business outcomes. It means building and executing against a strategy that accounts for how the technology not only changes the nature of the product or process, but transforms the business itself into a technology company overnight.