The Impact of the Internet of Things (IoT) on Business: Benefits and Drawbacks

Imagine a world where your coffee maker preheats as your alarm goes off, your office chair adjusts to your perfect posture when you sit down, and your delivery drone lands with a pizza just as the movie credits roll. This isn’t science fiction – it’s the beginning of the Internet of Things (IoT)

IoT is quickly becoming a part of our daily lives, and businesses are no exception. IoT can optimize manufacturing processes, streamline supply chains, and personalize customer experiences like never before. For example, GE Aviation uses IoT sensors to monitor jet engine performance in real-time, preventing costly breakdowns and making engines last longer. 

But like any powerful tool, the IoT comes with its own set of challenges. People are concerned about how their data is being shared. I mean, how can ethical considerations not arise when everything from our refrigerators to our cars is collecting and transmitting data about us?

Image by Gerd Altmann from Pixabay

In this blog post, we’ll discuss how the IoT is transforming businesses. We’ll also discuss its benefits, from increased efficiency to enhanced customer experiences. But we won’t shy away from the setbacks, examining the security concerns and ethical considerations that come with connecting everything to the internet.

What is IoT in Business?

Starting from the basics, the Internet of Things (IoT) was made to connect physical objects and devices through the Internet, allowing them to exchange information and communicate with each other.

Here are some IoT devices on the market.

• Smart home appliances (e.g., thermostats, lighting).
• Medical devices (e.g., pacemakers, insulin pumps).
• Systems, security cameras).
• Industrial sensors (e.g., temperature sensors).
• Wearables (e.g., fitness trackers, smartwatches).

IoT technology allows automated data collection and limits manual interventions that are vulnerable to errors. With this, businesses can get extraordinary control over their processes with tighter integration of network devices. 

The current count of IoT devices is over 14 billion. Yeah, I know it’s mind-blowing. But what’s even more shocking is that, with the help of 5G and other technologies, this number is expected to nearly double, reaching over 29 billion IoT devices by 2030, according to Statista. 

In an IoT-based supply chain, various devices such as temperature and humidity sensors, GPS trackers, and more, gather real-time information about the company’s stored or transported goods. This allows for monitoring of inventory levels, tracking shipment statuses, and assessing environmental conditions in warehouses and vehicles. The data collected enhances visibility and control throughout the supply chain, promoting efficient logistics management and ensuring the quality and safety of products during storage and transportation.

In case there are any issues, the system will initiate the necessary reaction. For instance, If the sensor notices the temperature isn’t right, the app will send a command to the system to fix it and will notify the people in charge of the supply chain.

At the core of any IoT-based system is a server handling communication between devices. For instance, if you’re using the MQTT messaging protocol, this server is called an MQTT broker.

So, You might be wondering what an MQTT broker is. In simple terms, it’s like a central hub where all the interconnected devices communicate, allowing them to send and receive messages. 

There are so many other things businesses can use IoT for. This technology can track the good’s movements, monitor the performance of machines in a factory, or collect information about customer behavior in a retail environment. With this, companies can make data-driven decisions and analyze information more efficiently.

The Impact of IoT on Businesses

IoT has the potential to transform businesses in so many different ways from streamlining operations to increasing productivity and enhancing customer experiences. Because of its rapid growth, so many people and businesses have either started connecting devices or enabled their entire existing systems to the IoT. However, like any technology improvement, IoT also comes with its fair share of drawbacks and challenges that businesses must consider.

Let’s take a look at these benefits and drawbacks, so you can decide for yourself what is right for you.

Benefits of Iot in Business

Cost Reduction

IoT helps businesses in reducing costs and also optimize their internal processes. The system helps in maintaining and monitoring information on energy consumption. For instance, IoT devices can prove to be helpful to those in the maintenance department by issuing proactive notifications about their status. With this, they can quickly schedule maintenance before a problem arises. IoT can significantly enhance operational efficiency and reduce costs associated with breakdowns, bottlenecks and system damages. 

Enhanced Data Collection

IoT systems can easily process, store, analyze and manage an extensive amount of information. Once the systems are interconnected and configured properly, they can gather information from the physical world and exchange the collected data among themselves. They can store the collected data on the cloud which can also be updated frequently in real-time and in a classified format for easy access later on. The system automatically generates reports on device conditions, allowing employees to streamline their work, save time, and reduce manual intervention. 

Sustainable and Eco-Friendly Practices

IoT can monitor and control energy consumption, increasing sustainability efforts and promoting eco-friendly practices within a company. With this businesses can minimize their environmental impact. For instance, IoT devices can reduce energy waste by automatically adjusting heating and lighting systems based on occupancy. Likewise, they can also conserve valuable resources such as water by optimizing water usage and detecting any form of leakage. Resource management has become an important factor these days. By adopting sustainable practices, businesses can attract environmentally conscious customers, improve their reputation, and also contribute to a greener future.

Business Innovation and Competitive Advantage

Utilizing IoT can foster innovation and unlock new business opportunities. By connecting devices, companies can develop innovative products and services, create new income streams, and enter new markets. For instance, IoT allows the development of wearable technology, smart home devices, and connected cars, opening new doors of possibilities for businesses to capitalize on emerging trends. Moreover, IoT utilization can improve partnerships and collaboration between businesses, allowing them to share resources, data, and expertise. This partnership can lead to the development of advanced innovations and provide a competitive edge in the market.

Better Customer Experiences

IoT devices are capable of analyzing customer data and behavior. With this businesses can gather different data from various channels and make informed decisions accordingly. For instance, a retail store can use IoT data to personalize in-store experiences allowing them to offer tailored promotions or product recommendations based on individual preferences. This level of customization contributes to the growth in the overall customer experience, creating a more engaging and satisfying shopping environment.

Drawbacks of Iot in Business You Should Consider

Security Concerns

As devices become more internet-based, people become more cautious of how their information is being used online. Customers might be afraid of their information getting leaked, which can have a negative impact on businesses. This is one of the biggest issues concerning IoT. To avoid this, devices should be protected from network-based and software attacks, such as hacking

IoT devices can get hacked and they are not secure enough to keep user data secured. So, it’s left to you to limit the type of information you share with it. Only share sensitive and personal data with the connected device when absolutely necessary. The implementation and development should be performed by experienced people, as they can make sure the system is well-protected. Another way to solve this problem is to monitor the data your IoT device transmits, this way you can ensure it aligns with your privacy expectations and identify any suspicious activity.

Technical Complexity

IoT may look like a simple device, especially to customers. They may think that it works in our direction but it actually involves a bunch of technical complexity, especially for businesses with existing legacy systems and infrastructure. Using IoT devices with networks, existing systems, and protocols may require a considerable amount of investments in technology, training, and infrastructure upgrades.

If the IoT device gets into a technical error, it will require a comprehensive upskilling of resources and time to locate and fix the error. This kind of problem especially arises when trying to connect so many devices. A single hiccup can have a negative effect on the entire device. In addition, IoT is a diverse network and having software errors can lead to negative effects.

So, businesses must plan and strategize on how they use their IoT carefully, to ensure seamless integration and maximize the benefits.

Reliability and Downtime Risks

IoT devices rely on the internet and continuous power supply to function properly. So, any disturbances in network connectivity or power outages can affect the performance of the devices and can disrupt business operations.

Since IoT depends on the Internet and power supply, it may not be usable in some situations such as during a power outage, disastrous situations, non-availability of mobile connections in rural areas, data plan capacity, and many more. It requires stable, good, and constant internet connectivity and can’t function effectively without proper connectivity.

To solve this, businesses should understand how outages will affect their business and plan by investing in reliable network infrastructure and a power backup plan in case any issue arises.

Interoperability challenges

Just like any other device, IoT devices also come in a variety. There are various IoT devices on the market that were created by different manufacturers and they all use different communication standards and protocols. So these devices might not work with an existing tech stack since IoT devices need to work as one single system. Each one might require different hardware connections and configurations, which can make efficient deployment difficult.

To solve this, businesses need to spend money on technology platforms and standards that allow seamless communication between devices. Also, they should plan for extra time on device deployments, so they can easily handle any troubleshooting or related tasks that might arise.

Technology Dependability

IoT has a lot of impact on almost every individual in many different ways. There has been a major shift in technological advancement, and both our everyday lives and business are becoming more and more dependent on it. IoT causes people to become inactive because instead of doing physical work themselves, they rely on smart devices, which can have a negative effect on basic human interaction and social skills.

Every day, we rely more and more on smart devices, from kids with their tablets to adults with their automated homes. It’s getting harder to escape, we all have to figure out how much control we want these gadgets to have over our lives.

Conclusion

The impact of IoT is significant. It has the potential to change the way people interact with the world around them. Just like any other innovative advancement, the Internet of Things too has its own benefits and drawbacks. The IoT has already brought a lot of positive changes to personal lives, as well as companies in different industries, such as healthcare and logistics. By saving them money and time, improving quality of life and easing processes. However, there is also a potential risk of losing these benefits.

Technological advancement is unavoidable. Learning how to use this technology can improve your company’s efficiency, assist in making better decisions, and even open up new revenue opportunities.