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The age of the Internet is in full force. This has led to a new phenomenon called the Internet of Things (IoT), which has the capacity to influence the global economy by between $2.7 trillion and $6.2 trillion by 2025, according to respected institutions such as the McKinsey Global Institute.
What Most Small Business Owners Think about IoT
For a better understanding of what the phenomenon is all about, one only has to look at the number of devices, cloud infrastructure, sensors, tools used in determining business intelligence and data that are available in today’s world. However, owners of small businesses must evaluate how these devices and data will affect them on a personal, rather than a global, level.
Merely running a business is no longer an option for serious business owners. The focus is now on running a thriving business. More than two-thirds of small businesses surveyed in the US believe that IoT will present them with more opportunities going forward.
However, the survey also indicated that more than 50 percent of all small business owners in the US do not fully understand what IoT means. The vast majority of the business owners believe that IoT simply refers to the ability to connect various devices and use them to communicate while running a business. The truth is that IoT is more than connecting devices to share data.
Before small businesses are convinced to embrace IoT, they need an assurance regarding the security of the whole process. Many small business owners are convinced that IoT will expose their operations to hacking and other security breaches, which will not bode well for their businesses.
More importantly, it is worth noting that IoT endeavors to direct small business owners to the innumerable opportunities they have to enjoy access to more customers. Marketing is also a very big beneficiary of the IoT.
The Potential for Small Business
- Creation of Fresh Business Models: IoT will create fresh business models. Customers will benefit from the new value streams that come out of the new models. Companies will also be enabled to create processes that reduce the time needed to market a product. Triaging market performance and rapid response to consumer needs, will be the hallmarks of the new models.
- Capturing More Data in Real-Time: Through IoT, organizations are now capable of capturing more data, which they can then use to develop fresh revenue streams, boost efficiency at the operational level, and improve customer loyalty.
- Spread Revenue Streams: Companies no longer have to rely on the traditional revenue streams. They can spread the pool from which they obtain their revenue using IoT.
- Increased Worldwide Visibility: While it is true that the onset of e-commerce has enabled worldwide visibility for almost all businesses, the truth is that many of them are restricted by location. However, IoT rectifies this in that it enables small businesses to enjoy more visibility across the world.
- Running Operations Efficiently and Intelligently: The modern small business has to find a way of operating in an efficient and intelligent manner, if it is to thrive in the face of stiff competition. Without accurate information to help with pricing, sales, logistics, and deployment of adequate support, operating in an efficient and intelligent manner would be impossible.
Factors That Might Hinder the Success of IoT
As much as small businesses understand the importance of IoT, they are a bit hesitant to embrace it fully for a variety of reasons as listed below.
- Security Breaches: Currently, many small business owners are worried about the security breaches that will come because of IoT. In the US, 51 percent of small businesses do not think IoT is secure.
- Cost: The perception that implementing IoT fully is very costly cannot be downplayed. Around 48 percent of all small businesses believe that this is yet another costly venture, and one that they cannot afford.
- Government Interference: Lately, there has been a lot of concern regarding government interference on the Internet in the form of monitoring and surveillance. Close to 27 percent of all small business owners believe that IoT will lead to increased government monitoring.
How to Use IoT
The best way of reassuring small businesses that IoT will benefit them is through the creation of more secure applications. The applications must be able to provide tangible, visible and very effective solutions to the problems encountered by small businesses. Some of the solutions that IoT should address include:
- Preventing losses
- Tracking all inventory
- Minimizing downtime
- Sustainable and optimal use of energy
- Evaluating the effectiveness and performance of each device
- Analyzing the network performance
- Optimizing price and load balancing
What Improvements are needed- Mobile “Things” and Actionable Analytics?
It is worth noting that 18 percent of all connected devices found in all small businesses are mobile. The number is expected to grow to 27 percent by 2020. However, small businesses are not making proper use of analytics to collect larger amounts of data and increase profits. Currently, small businesses are suffering from analytic immaturity, at a time when the predictive and prescriptive nature of analytics should be more helpful to them.
Internet of Things has already started
The conclusion is that IoT is not a thing of the future. It is here now and here to stay. Small businesses must now shift their focus from the current ways of running business to embrace IoT. Yes, IoT tackles the connectivity of several devices, but this is only one aspect. At the heart of the “Internet of Things”, is the improvement of business operations and the potential for increased revenues when used effectively.