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IoT 2.0: Show Me the Money

During my last blog, I talked about how, as a Gen-x'er, I feel threatened by The Internet of Things (IoT).  As I noted, it is important for everyone to understand that technology exists to help us. Individuals must understand that the world that we live in today is connected. We can look at the connected world as a threat or we can say, "Good" and harness the power and benefits of IoT. 

 

Often, organizations are not sure how IoT would apply to them.  As I stated, IoT should focus on solving a business problem and should not be considered an IT project.  I cannot stress this point enough.  Repeat after me, "IoT is a business centric solution and should not be viewed as Information Technology only."  For the purposes of today's blog, we will focus on a very narrow set of IoT, the world of sensors.

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The World of Sensors

Sensors are all around us.  Some that you see and others that you don’t see.  You may be thinking to yourself, “What is the value of the particular sensor? It collects temperature, humidity, pitch, etc. So what?”  The real question that you should be asking yourself is, “What insights can the data give me to make better decisions?”  Too many organizations look at the data that is being collected and are not sure where to even start.  This is especially true if the organization views the sensors and the data as IT centric.

The benefit of IoT will not be felt by the IT department.  In reality, many IT departments may see an increase in their investment dollars to cover the cost of sensors, networking, and storage.  Organizations may view this as cost-prohibitive; however, they need to consider the return on their investment when considering the cost. Although there may be an investment initially, organizations need to look at the upside of leveraging their resources and reallocating them to other areas of the business or to tasks that are often forgotten because of resource constraints.

The role of IoT is beginning to change how we manage and maintain our maintenance schedules. The data that has been collected from IoT devices enable organizations to learn how equipment is functioning.  The data enable you to learn patterns that enable you to take a proactive approach to maintenance.  Ever wonder what it would be like to live in a world where you aren’t surprised by failures, allowing you to plan accordingly and implement your contingency plans? 

 

When to Consider IoT

You may be asking yourself whether it's worth it based on the possible investment and ROI.  Consider these things when trying to determine if it is worth it or not:

  • What was the total down time of your equipment throughout the year?
  • Did you incur any unexpected overtime hours by the department?
  • Do you have a line item in your budget for Break-Fix?
  • Did you have to pay any additional fees for parts you did not have on hand?
  • Did you lose any revenue last year due to the down time?
  • Did you not have the right resources in place or were they called to come into work when they were sleeping or spending time with family and friends?

Organizations need to consider the full breadth of the costs, e.g Hard and Soft dollars, along with employee satisfaction.  These decisions are not always black and white, but if you answered yes to any of the questions above, it is something that should be investigated further.  As I stated in my previous blog, you often may not see a significant cost reduction up front; however, you need to look at it from a cost of voidance perspective. The cost of voidance of downtime allows you to increase your revenue, because you are not down, and you are not reactionary when it comes to keeping your equipment up and running.  It provides you a competitive advantage, and your customers will value your approach of always delivering on-time.

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