5 Benefits of the Internet of Things (IoT) for SMBs
The benefits of the Internet of Things (IoT) have changed how small and midsize businesses use devices in the workplace. In today’s digital landscape, devices, machines, and objects of all sizes can automatically transfer data through a network, effectively “talking” with each other in real time.
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Top five advantages of the IoT:
The Internet of Things represents a type of industrial revolution for small businesses, with 83% of organizations having improved their efficiency by implementing IoT technology.
For SMBs, this surge of technology provides not only opportunities to expand their digital capabilities, but also a chance to use IoT technology to better their operations and become more productive, more protected, and more profitable.
See our animated explainer video on the Internet of things (IoT) and its benefits:
What Does IoT Mean?
IoT, or Internet of things, is an interconnected network of computing and digital devices. These devices can operate any number of functions, from sensors in thermostats and factory machines to printers, TVs, our mobile phones, and even refrigerators.
From Amazon’s Echo Dot to specialized apps for logistics, the applications of IoT in both business and personal settings are varied.
IoT adoption has increased significantly in recent years as consumers and organizations take advantage of its benefits, which we’ll go over below.
By 2025, the number of connected IoT devices in the world is expected to reach 16.44 billion, up from 7.74 billion in 2019.
User Advantages of IoT
Let’s examine the benefits that IoT technology has for a business, particularly with regard to business processes and efficiency.
Before we dive into that, it must also be stressed that Internet of Things tech has significant benefits for end users that should not be underestimated.
Consider the mobility that the IoT brings to workplaces—especially for employees who have to spend time outside the office such a salespeople or technicians.
IoT is a boon for businesses operating with employees in areas like these, and employees are the first to reap the benefits. One study found that IoT implementation at scale helped contribute to improved levels of engagement from employees, leading to:
- Improved productivity
- Improved job satisfaction
- Improved performance and better serviced customers
Since IoT is the increased connectivity of devices, the communication between these devices can help anticipate and fulfill the needs of users.
Benefits of IoT for Businesses
Let’s look at several ways SMBs can leverage the future of the Internet of Things and its cutting-edge technology to improve critical aspects of business.
1. Reduced Costs
The more businesses use IoT devices to streamline operations and increase profitability, the more Internet of Things technologies will be tailored to help those businesses succeed.
From cybersecurity to workplace efficiency, IoT devices are already making an impact on companies’ bottom lines.
Maintenance costs can be positively impacted when IoT devices are used with sensors to keep business equipment running at peak efficiency. On-the-fly troubleshooting of office equipment catches problems before they impact staff and employees, saving the hassle and costs of large repairs.
This minimizes costly extended downtime for repairs—just one of the benefits the Internet of Things brings to your operations and maintenance workflow.
As you can imagine, this technology is extremely useful to businesses in the manufacturing, logistics, and food and beverage sectors to name a few.
There are also numerous ways to use IoT technology to favorably impact your bottom line through streamlining common working processes, a top driver of IoT investment for many companies.
What the Stats Say About Cost Reduction
Cost reduction as a result of Internet of Things implementation is most prevalent in certain industries, particularly manufacturing.
For instance, predictive maintenance (PdM) can reduce the time required to plan maintenance by 20 to 50%, increase equipment uptime and availability by 10 to 20%, and reduce overall maintenance costs by 5 to 10%, a study by Deloitte found.
Naturally, for a manufacturer, cutting costs in this manner is exceptionally beneficial, and while these types of industries are benefitting the most from IoT adoption, there are also clear benefits for the vast majority of SMBs, regardless of industry.
This is often the case when it comes to reducing labor costs by improving process efficiencies. 83% of organizations that have introduced IoT technology have improved their efficiency by doing so, reducing their expenditures and bettering output from employees.
Activity monitoring can improve productivity by 10 to 12%, essentially meaning more bang for the business’ buck, according to McKinsey.
2. Higher Efficiency and Productivity
Efficiency is the basis for the kind of improved productivity that boosts revenue for SMBs.
One way to leverage the power of IoT to increase company efficiency is to use it to cut down on repetitive or time-consuming tasks. An example IoT function for this strategy would be an automated PDF conversion and creation tool that removes the obstacles to PDF editing and archiving, increasing communication and documentation speeds.
These IoT tools increase internal and external office communication, resulting in better productivity. In fact, 58% of companies are seeing increased collaboration through the use of IoT devices, according to a survey conducted by Harvard Business Review.
In the work environment, IoT can be used to optimize an office floor plan and mobilize company resources—like copiers, printers, and WiFi bandwidth—for a better workflow and a more streamlined and effective approach to management.
Finally, using big data analytics through IoT can provide an overview of employee productivity and help determine what tasks are improving the function of your business—and which are impairing it.
Big data can also be instrumental in tracking efficiency for manufacturing supply chains. You can follow delivery systems and monitor products and inventory to stay ahead of demand.
Related Post: Supply Chain Disruption: Mitigating Threats Effectively with Analysis
Additionally, you ensure that your hardware and software connections are adequately running in order to provide timely service to employees and customers.
What the Stats Say About Efficiency and Productivity
As we previously mentioned, many of the benefits IoT implementation create a domino of positive effects—improving your workforce’s productivity means reducing overall labor costs.
For example, 46% of businesses that adopted IoT strategies experienced efficiency gains, despite the fact that only 29% expected such gains in the first place.
While those figures may seem low, it’s worth noting that many of these businesses may not have anticipated the efficiency gains they reported, and their initial intentions for implementation were more aligned with general modernization of their processes rather than a specific focus on improving the efficiency of a particular task.
In other words, the efficiency benefits gained can be unintended consequences of upgrading organizational processes, but are very welcome nonetheless.
78% of companies say the introducing IoT into the workplace has improved the effectiveness of their IT team, and 75% find it has increased profitability.
3. Business opportunities
While many businesses strive to create revenue from their digital services, many lack a cohesive strategy to do so. IoT is a game-changer in this respect, as advanced analytics, artificial intelligence, and smart utility grids make it easy for SMBs to collect actionable data needed to provide the value their customers are seeking.
These analytics provide new insights that are not only being utilized to create new business models, but completely redefining traditional industries.
For example, IoT sensors on automobiles that can track speed and driving habits help insurers optimize rates on automobile insurance. Retailers can use IoT to measure in-store foot traffic to optimize displays for maximum impact based on customer habits.
The use of IoT has so much impact on business systems that 36% of companies are considering new directions in business thanks to their IoT initiatives.
As a result of IoT’s ability to connect products and services as they relate to customer behaviors, more businesses are delivering new or updated products and services to an expanded customer base.
With more data available through IoT devices than ever before on customer preferences and product performance over time, businesses can use this and predict behavior patterns and needs of consumers better than ever.
Related Blog: The Future of the Internet of Things in Retail
What the Stats Say About Business Opportunities
The impact that IoT technology has on business opportunities in SMBs across the world is enormous, particularly in the United States.
94% of businesses in the US have adopted IoT use in some way, while 27% have IoT-specific projects in use, with an average “time-to-use” period of 11 months.
Such are the benefits of using IoT in their operations—particularly in industries like manufacturing, logistics, and distribution, among others—that 78% of businesses have plans to use IoT in more projects by 2023.
Sales enablement is cited as one of the top reasons for IoT investment, with 32% of organizations using Internet of Things technology to improve their products and services for customers and find new opportunities to grow their business.
As IoT becomes a more fundamental aspect of business operations and of the development of projects that serve customer needs, we can expect to see it play an even larger role in the way companies leverage it for new opportunities and advantages over competitors.
4. Improved Customer Experience
While IoT technology has so far mostly influenced back-end processes because of its relatively new presence, today’s IoT has meant that omnichannel strategies have completely upended the way consumers approach their relationships with businesses.
Front-end customer engagement has become a priority for organizations as they look to engage better with their audiences, usually through IoT devices.
The modern customer expects to be able to interact with businesses through their phone, whether that’s using an automated chatbot, a reliable mobile website, or a dedicated app.
40% of consumers do not care whether a chatbot or a real human helps them, as long as they are getting the help they need.
Because of this, forward-thinking businesses are using new technology and combining it with IoT to better serve their customers.
What the Stats Say About Improved Customer Experience
It shouldn’t come as much of a surprise that IoT tech is having a huge impact on customer experience.
Being able to unify any internet-connected device and offer customers an experience through their IoT device of choice is a key selling point of a modern business.
This is the reason so many businesses are investing in custom apps in order to better serve their audience across any device or endpoint.
The rise of new solutions like low code have prompted 90% of IT leaders to feel that the flexibility and speed of these development environments have allowed them to improve customer experience. By making use of IoT devices in virtually every customer’s pocket or backpack, a business is always easily accessible.
It is also important for businesses to recognize that extending key business processes to everyday IoT devices will be pivotal in ensuring their future competitiveness.
As an example of the change in how customers view IoT, 30% of consumers reported feeling completely comfortable with companies using IoT devices to provide proactive customer service, a 10% increase since 2017.
5. Increased Mobility and Agility
The nature of IoT technology means that businesses now can let their employees conduct their work from virtually any location—flexibility that can provide key advantages to SMBs in particular.
Office leases aren’t cheap, and the IoT revolution has allowed a surge in small and mid-sized businesses changing the way they operate—hiring more full-time remote employees in “work from anywhere” positions.
Such is the improvement in agility for SMBs, an estimated 43% of businesses that implement IoT policies into their organizations experience increased business agility by improving the way operational processes are conducted.
Since the pandemic, organizations have had to create remote work policies in order to meet these new demands.
Remote workers will become an integral part of modern workforces, and that appears to be something that is here to stay.
Benefiting from IoT technology across all your devices for communication purposes, as well as using a solid strategy for securing those endpoints, will be primary concerns for initiatives making use of the benefits of the Internet of Things.