16 February 2017
By 2020, there will be 21 billion connected devices such as smartphones, smart watches, wearables and connected cars, analysts at Gartner predict.

This network of connected objects, dubbed 'the Internet of Things' (IoT), represents a unique opportunity for CFOs to gather fresh insights about the mechanics of the organisations they work for and hence better manage them.

An ecosystem of connected objects

Gartner describes the Internet of Things as "the network of dedicated physical objects (things) that contain embedded technology to sense or interact with their internal state or external environment. The IoT comprises an ecosystem that includes things, communication, applications and data analysis."

In other words, IoT creates an environment where objects become smart and communicate with each other. There are a myriad of applications across many sectors; from consumer electronics and wearables, to connected cars, utilities and the industry with smart metering and digital manufacturing.

The new paradigm created by IoT, where every object transmits data that can be captured, is a strategic priority for both governments and corporates in the Middle East. "The substantial industrial refocusing to generate new economic development beyond the oil industry, with deepening smart cities initiatives and adoption of the Internet of Things (IoT), is of utmost importance in this region. We are witnessing priorities for smart city governments in education, transportation, safety and health," says Peter Sondergaard, senior vice president and global head of research at Gartner.

Business intelligence to improve predictability

At the enterprise level, IoT could help finance officers in numerous ways. First, because IoT allows the collection of vast amounts of data through sensors it will give the management access to crucial information about the organisation and the way it is running in real time. Quite a change from the paradigm of the past where finance departments had access to the data they wanted months after they needed it. Not only does IoT offer immediate information about clients, markets, employees, assets etc., it can help organisations identify patterns and behaviours through data analytics and therefore be able to predict them, offering the possibility to plan better. IoT will make managing the supply chain much more predictable, or help utilise their assets in much better ways.
 
A study conducted by Harbor Research, The Internet of Things Journey, showed that nearly all companies that have embarked on a connected-product journey report both financial and customer experience benefits as a result. Out of the 600 product companies in various stages of deployment surveyed, Harbor found that 87% have seen increased revenue as a direct result of connecting a product, and over 90% have seen improvements in business efficiencies and product uptime. 

Practical applications

The sectors most likely to benefit financially from IoT are those involving a complex supply chain, such as healthcare, utilities and construction. In construction for instance, technology like Real-Time Locating Systems (RTLS) with Wi-Fi, Bluetooth, Ultra-Wideband radio technology (UWB), RFID or GPS will provide total asset visibility, optimise personnel and equipment activity monitoring, improve equipment maintenance and reduce downtime between repairs and offer better production tracking.
 
Also, importantly, in an industry where work can be risky, IoT will help improve safety since it can instantly locate personnel and equipment, prevent collisions between workers and machines and contribute to better environmental monitoring by providing information such as temperature and humidity to ensure optimal working conditions and production.

No finance officer doubts the potential of IoT to save costs and improve the efficiency of its ecosystem, yet harnessing the power of connected devices and dealing with the huge amount of data they will generate may seem a daunting task. However, thanks to cloud computing, IoT will help create a 'modern finance' working environment where business leaders have the ability to analyse and visualise data in real time and in a simple way, offering them the possibility to quickly make decisions that could profoundly change the organisation.

© Oracle 2017