As the Internet of Things (IoT) develops, connected products and services will create digital data. This data can show how, when, and where consumers use their products – with their consent. This will create a data ecosystem that enables much more insight and personalisation than before.
The Internet of Things is huge. As we saw in our blog a few days ago, new data is being generated at a revolutionary rate. The Internet of Things is leading much of this growth and is set to deliver businesses with behavioural information that hasn’t, until now, been available in this way.
In fact, IHS forecasts that the Internet of Things market will grow from an installed base of 15.4 billion devices in 2015, to 30.7 billion in 2020, growing further to 75.4 billion by 2025. Mckinsey estimates a growth in market share from $900m, to $3.7b in 2020 – a 32.4% growth, with a $6.2T potential economic impact by 2025.
The market growth stems from a broad array of areas – this shows the breadth of scale, and opportunity, the Internet of Things brings. For example, autonomous vehicles are increasing fuel efficiency through intelligence – omitting the need for gear changes, as they drive at a consistent speed. Wildlife is being monitored using connective technology, helping to prevent extinction. Utility consumption is, according to some, decreasing thanks to the introduction of the connected home and sensors detecting, monitoring and managing energy usage. Farming is being enhanced thanks to the collection and analysis of Big Data in agriculture. Smart cities are poised to fuel transport companies with data, also enhancing traffic systems. Wearable’s, such as smartwatches and health monitors are starting to provide health insight on people. And the list could go on.
From connected kettles to connected fridges, the Internet of Things is recorded in many every day areas. Some articulate the benefits, including the positive environmental impact, which we explored in the earlier paragraph, whilst others consider the data feeds to be confusing or out-of-reach as they ponder how they actually use the amount of data it generates.
In addition, how can you manage the data en mass to provide an interpretation of it – which can be valuable for the business, and the customer? If you look at where the Internet of Things has developed, you can start to see some positive outputs of it.
Despite the recorded benefits, the Internet of Things is still confusing for many people, and businesses. Similar to ‘Big ‘Data’, the concept and opportunities for it are huge. This stems from what it can achieve. How viable and how beneficial is an additional data feed? In addition, the breadth of opportunity and the multiple areas it enhances can create a mystifying prospect when basic data mining is already proving a challenge for some. Stripped down to its basic form, the Internet of Things is just another data feed.
However, it presents an opportunity to be even more personalised and even more customer orientated than ever before.
In essence a sensor connected to the internet, but not by a computer – the Internet of Things enables ad-hoc reporting from insight linked from a ‘thing’ that subsequently records interactions. This data feed can be analysed to provide an understanding through behaviour.
For some, this concept can appear complicated and ‘blue sky’ in its thinking.
Think of going to a shopping centre and being directed via your watch to the stores with new items in stock that match your personal tastes. It’s aspirational, today, but so was the ability to order a taxi through an app a few years ago.
Today the growth of almost all organisations is tied to their ability to operate successfully in the new digital landscape. So, where would this ‘Internet of Things’ be without data?
Adding value to data
Data on its own – regardless of source – has no value. It is the insight that is derived from it that gives the value. Businesses should consider the Internet of Things as another data feed. But one of incremental value. It shouldn’t be considered in isolation and the challenge is still around connecting data – internal, external and transactional data. Without some form of connectivity, it can stifle a true view of the customer and obscure a single customer view, creating multiple siloed views. Automation and intelligence will be critical, as will advanced analytics and data orientated strategies, in order to extract the value.
A series of objects, connected to each other across a network, is not automatically ‘intelligent’. The interconnection is merely the starting point for building an intelligent system, and predictive analytics harnesses data to provide that intelligence.
By analysing data flowing across the network and applying machine learning, raw data can be converted into clearly defined outcomes that will allow the network to learn how to govern itself over time. Predictive analytics therefore uses data to enable Artificial Intelligence (AI), as the network will gradually become self-aware, self-regulating, and potentially self-sufficient.
As products themselves create data in an Internet of Things world, brands will be able to understand how a product or service is actually being used. They’ll then be able to deliver a better service experience, using the product as an interface for data-driven support. Faults will be detected and even remedied before the customer notices them, and product upgrades will be automatically delivered.
It’s no secret that the financial services industry have been burdened with legacy systems which has meant adoption of digital has been at a much slower rate than their newer, more agile peers. This new data reinforces the need to move into more agile and responsive platforms that focus on the customer outcome.
The Internet of Things presents a huge opportunity for insurers, banks, utilities, governments, retailers and more – and will likely play a firm part in our future. What we need to understand however, is how the data that connected objects provides is translated into something usable. How it is integrated into current systems and how it can bring value for the customer and the business.
We are on the cusp of seeing some really interesting things develop. This, amongst other data that is generated [which is on the increase with the advent of open banking early next year] needs to be explored and considered at a strategic level. But, before anything is implemented setting up a framework that can rationalise and group data will be advantageous. Being able to pin data together to give a complete picture of an individual, and being able to check it for quality and accuracy will be important. The future is powered by data. But, what does a data powered future look like?