By Michael C. Pelletier, MBA, MSCS
Partner

What if you could predict the future? No, seriously, what if you had the ability to know when a machine was likely to break down in your plant, when the escalator would stop working or when the water flow through a cooling pipe had become insufficient? These are all real capabilities that your business can embrace to reduce cost, increase revenue and edge out your competitors by leveraging the Internet of Things (IoT).


IoT is a term that has made its way into our lexicon over the last few years, yet a recent study conducted by security company AVG finds that 57% of leaders at small- and mid-sized businesses can’t successfully define it. So let’s start there. What is the Internet of Things?

"The Internet of Things, also called the Internet of Everything, is a network of physical objects or “things” embedded with electronics, software, sensors and connectivity to enable objects to collect and exchange data. The Internet of Things allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration between the physical world and computer-based systems, and resulting in improved efficiency, accuracy and economic benefit."
- Wikipedia

 

Think of something like a text message. Imagine that you are at home, open the refrigerator, and see that you are out of milk. You send a text message to your significant other to stop at the grocery store to pick some up on their way home from work. IoT works the exact same way, except, rather than people interacting with one another through a phone; things interact with one another through one of many different protocols.


The previous scenario in an IoT world would have your refrigerator note that the milk level is getting low and, based on your historical milk consumption, would communicate via the Internet to your local grocery store so that a new gallon of milk would be delivered the next day, along with a few other items that your refrigerator predicts you will run out of shortly.


The example of the refrigerator is used because it likely resonates with most of you. While consumer-oriented IoT opportunities will continue to present themselves, the real opportunity is with industry.

There are countless examples like those referenced at the beginning of this article for your business to explore. According to the same AVG research, 89% of those businesses think IoT presents new opportunities, and 33% expect to adopt IoT within the next one to two years. If you’re not developing a strategy to embrace IoT, you should worry, because your competitors are.


So where do you start? The first is to understand what goes into an IoT solution:

  • Sensors and Data Capture
    • Whether it’s a flow meter to track liquid through a pipe or a simple counter of how many times the doors on an elevator open, sensors often provide the input into IoT solutions.
    • The data these sensors generate can be captured and stored on a device directly connected to the sensor and then transferred to a remote location for analysis.
  • Communication Mechanism
    • While the Internet is typically the network used to transfer these data, there are often several protocols and data formats in use. In fact, as you look to integrate with existing building management solutions, for example, the numbers can grow to the hundreds. As such, a defined integration model is critical.
  • Data Storage
    • Although the data storage requirements at the device are typically minimal as the data is buffered before transmission, the requirements for long-term storage are immense. This is where “Big Data” conversations typically begin to heat up.
  • Data Analysis
    • Once the data is stored and accessible it’s time for data scientists to get to work using genetic algorithms and other statistical modeling tools to develop the models that can be used to help predict the occurrence of an event (system failure, service need, purchase, stock outage, etc.)
  • System Integration
    • Finally, with the data captured, stored, analyzed and predicted, the solution needs to be integrated into your Line of Business system so that your system can take action on it. 

While many organizations have already started implementing IoT solutions it is not too late to get started. Start the conversation with your operations, service or production teams to see where IoT makes sense and then work with your internal IT group or a trusted advisor to transition the business opportunity into a working, end-to-end IoT solution!

Litigation Support Services

Advisors | Auditors | Consultants | CPAs – BlumShapiro is one of the premier consulting firms in New England and a Top 100 CPA Firm in the U.S. Our professionals serve companies in Boston (MA), Hartford (CT), Cranston (RI), Shelton (CT) and Quincy (MA) with technology consulting, business valuations, litigation support, project management, process & controls and bankruptcy consulting services. We are a Intacct Partner offering accounting software including Cloud ERP solutions. Learn more about our City of the Future offerings.