For most of us involved in technology management, the Internet of Things (IoT) has been on the horizon as a buzz word for several years, and recently it’s been popping up more frequently. But what is it and what will it mean to your company? Forbes recently said that the Internet of Things is one of the top 10 strategic issues for CIOs in 2014. On the other hand, in 2013 Gartner had the Internet of Things at the “Peak of Inflated Expectations” in their hype-cycle, and suggest that it will only plateau (mature) as a technology in ten years time. If you are a little behind in incorporating the Internet of Things into your corporate strategy, you are not alone; as only 38% of respondents surveyed admitted that digital transformation was permanently on their CEO’s agenda, as reported by MIT Sloan Management Review and Capgemini Consulting. Digital transformation is a catchall, including IoT, and in this survey was defined as the use of new digital technologies to enable major business improvements such as enhancing customer experience, streamlining operations or creating new business models.
The sheer volume of information on both the Internet of Things and digital transformation is overwhelming, so the purpose of this article is to provide some simple and real examples, as well as suggest some next steps.
Introduction to the Internet of Things
The “Internet of Things” is looming large as yet another technology driven game changer, in the home, in many industries, in retail, in fact, everywhere. The Internet of Things promises even more pervasive changes across our lives, building on changes resulting from the mass commoditization of IT and mobility growth in the past decade.
The IoT is not new, “things” (pcs, phones, modems etc) have been connected to the internet and other communications networks for many years. What is new is the internet connectivity and interoperability of everyday devices and products on a massive scale. This includes the rapid growth of networked control and collaboration between devices, sometimes termed machine to machine (M2M). The vast quantities of data from M2M and social networking are feeding the related technology trend of “Big Data” where companies and governments analyse this data to seek out information that they can use. There are many anticipated areas of application for the IoT, and whilst I will focus on two advanced areas, transport logistics and healthcare, other applications include: building and home automation, energy management, industrial applications and environmental monitoring.
The mass commoditization of IT in the past decade has seen the average office worker acquire more computing power in their personal lives than in their workplace. With the massive growth in personal mobile computing, home broadband and social networking, the way people communicate and collaborate has dramatically changed.
The workplace has changed too, with companies increasingly adopting bring-your-own-devices (BYOD), social networking and work-anywhere practices. Work, once a place to go, is now another activity that we blend with our personal lives, often using the same networked mobile devices for all activities, at any time of the day or night.
Examples of the Internet of Things
There are many practical examples where the IoT is already in place, and the following are a few simple examples that you may already be familiar with;
- in the home, networked “smart devices” that control in-house networked security, heating, lighting and other functions
- in industry, greater asset management efficiency by tagging assets so that their locations are visible on the network, enabling real-time asset management
- in retail, item level inventory control, using unique identifiers such as QR codes to link individual items to customer data through point of sale systems. Improved tracking assists in product quality control, eg. traceability, recalls, and product authentication (see below).
The examples above are illustrative of the concept but fail to demonstrate the potential power of the IoT. The following examples are potentially transformational for supply chain management and healthcare:
- create dynamic supply chains by assigning the tagged product to the end customer whilst the product is in transit, useful for minimising inventory and improving speed of delivery, particularly for global product launches where there is a supply volume intended to be sent initially to a country or region, eg. a new iPhone launch in specific countries
- improved product inventory management across a company’s supply chain to reduce spoilage by redirecting ageing tagged product already somewhere in the supply chain to proceed ahead of fresh product, particularly for expensive items such as pharmaceuticals
- tele-health and tele-care solutions where in-home health monitoring and remote care respectively, are enabled through medical devices connected to the internet commonly via dedicated mobile phones, and in the case of remote care, a dedicated nurse-staffed decision support centre.
The Essence of the Internet of Things
There are typically some common elements to IoT solutions proposed to address specific problems:
- an objective to address a specific problem
- one or more parameters presented from the IoT sensors and platform that can be measured across a network
- a decision support system that takes the parameter measurements as inputs and applies some logic for interpretation
- an application that provides the interpreted information to the user who acts in line with the objective
Consider a hospital asset management system as an illustration. The application provides the user with available assets for allocation, based on the asset management decision support system, and the user can allocate an asset taking the actual asset location (parameter) into account. As a case in point, consider Worcestershire Health ICT Services in England who have some 6,000 items of mobile equipment valued at tens of millions of pounds in use across the three main hospital sites. These range from specialist beds to scanners and defibrillators. Overall inventory is expected to be reduced by 5-10% and rental costs of specialist beds reduced by 20-30% through optimum bed utilisation by the introduction of RFID asset management system as reported by BT, summarising the original article (British Telecommunications plc 2011: BT Case Study: “Worcestershire Health ICT Services: Improved utilisation of assets releases cash for hospitals”, 02/11).
For systems where machine-to-machine feedback control is used, the same four steps apply and additionally, the output from the decision support system provides feedback to a fifth element, an automated controller, that will directly or indirectly vary the measured parameters to achieve the objective.
One example of M2M control is a home heating solution. In one scenario you may be travelling back home so you instruct the thermostat controller to heat your house to a target temperature, using your phone app over the internet/cellular network. Once the instruction (the objective) is sent, the thermostat (automated controller) controls the temperature (the parameter) by adjusting the heating element settings over time to achieve and maintain the preset target temperature.
The Potential of the Internet of Things
The potential of the IoT is to solve increasingly complex problems, with the aid of networked devices and decision support systems. The uptake rate of the IoT will be dictated by the ever-increasing types of sensors and more pervasive networking.
Over the past decade RFID tags which are commonly attached to products and assets for location tracking, have dropped to a few cents each making mass deployment feasible. However RFID tags and other tags and sensors still need further development before there are solutions for hash environmental conditions and some complex logistics handling issues. To assist inter-operability and improved security, standards development is only in the early stages, (e.g. IETF IoT working group, and SG1), however software and hardware platforms from some vendors are currently helping to bridge this gap. One type of sensor, categorised as location and identification centric (e.g. utilising technologies such as RFID, RF, GPS, Bluetooth LE, wi-fi, 4G), provide location information for applications involving way-finding, geo-fencing, inventory control and access management. Other specialist sensor systems include facial recognition, personal vital signs monitoring, temperature and thermostat monitoring and control for uses such as; security applications, healthcare and energy management systems respectively.
Pervasive networking is not yet commonplace with ‘black spots’ in buildings, carparks, building sites, mine sites and many other types of locations where potentially high-value IoT applications exist. Whilst the internet is commonly involved, specific local network technologies are normally also deployed. Newer indoor network technologies such as Apple’s iBeacon which uses Bluetooth LE (low energy) technology, will among other applications, guide you via your phone, through the shopping mall, back to your car, or to your seat in a sports stadium, and enable payments and the sharing of information along the way.
Product and asset tagging are the current focus of many IoT applications, promising reductions in lost product and supply chain inefficiencies. Future applications will also focus on creating new capabilities and value through companies building closer relationships with their suppliers and customers. The IoT certainly offers first mover advantage for providing your customers with new capability or the creation of new marketplaces such as tele-health and tele-care.
With new industry capabilities come new expectations from regulators, and for some companies, embracing the IoT will be a requirement if they are to remain compliant.
Individual product item traceability, authentication and recall are one area where regulators are setting new stringent requirements for certain products and this trend can be expected to grow. Authentication provides increased consumer protection, goods producers with intellectual property and brand protection, and retailers with additional customer information to help meet their customers’ expectations.
One example is the new stringent compliance requirement for traceability and recall recently introduced for the selling of powdered infant milk in China, as reported by the China Daily. Supply chain solutions will be required to enable tracking from cows-to-factory and can-to-end customer. The full extent of the requirements are still emerging, and in regards to the full implementation of traceability and recall, there has been discussion of end customer identification and their role in product authentication, possibly via the internet.
As with any new technologies there are examples of implementation failures. Typically these failures have been the result of unanticipated or novel environments not previously encountered. Be wary of issues such as poor network coverage due to thick building walls, unknown network blackspots or tag failure in specific environmental conditions.
Like any major project, risk assessments are recommended to address all manner of risk that may be relevant including determining technology weaknesses and specific environmental issues, personal data protection and security. One day there will be a greater number of standards and experience in deploying solutions, but until then it is definitely buyer beware.
The potential application of the IoT is massive and many different uses will continue to emerge. The IoT will transform many of today’s businesses, such as supply chain management and will enable entirely new sectors such as tele-health and tele-care.
The supporting network and sensor technologies may not yet be ready to be applied to all situations, however these technologies are maturing and newer technologies are arriving every day.
Now is the time to raise your awareness of the internet of things and establish how and when you can take advantage of this emerging capability in areas of your business. In our next article we will consider the five areas that are holding companies back from deploying the Internet of Things today.