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How IoT will reduce SME costs

28 February 2017
Research firm IDC forecasts that organisations in the Middle East and Africa will have invested more than U.S.$6.6 billion in Internet of Things (IoT) hardware, software, services, and connectivity in 2016.

For SMEs, this network of connected objects is a prime opportunity to save costs.

An ecosystem of connected objects

IDC defines IoT as "a network of networks of uniquely identifiable end points (or things) that communicate without human interaction using IP connectivity." In other words, machines talking to each other.  

"IoT is a game changer," says the research firm.

For Dr Oliver Loisel, co-founder and managing partner at ATLAS Tech, a full-service provider of IoT to organisations in Europe and the Middle East, investing in IoT is not a matter of choice.

"Those who don't do it simply risk being thrown out of business," he warns, arguing that the organisations that do not start gathering experience of IoT and preparing for smarter ways to do business could lose momentum and eventually won't be able to catch up.

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To him, this movement represents a new and powerful wave of change, just like the Internet did 20 years ago. "IoT will change our lives. Many people don't see that yet, but then many people didn't foresee what the Internet would become," he says.

"In a few years, there will be sensors in so many things we cannot even think of yet. However, IoT should not be seen just as sensors and connected devices - really it is the Fourth Industrial Revolution."

Improved predictability

For SMEs, IoT will offer greater insights about customers and improve their offer. It also provides many operational benefits.

As Wale Babalola, a research analyst for telecommunications, IoT, and digital media at IDC Middle East, Africa, and Turkey, points out: "IoT solution deployments across MEA will continue to see increased adoption rates, both in the public and private sectors, as stakeholders begin to realise an immediate return on their investments."

This is because IoT offers an easy way for SMEs to gain crucial data about the organisation and the way it is running, helping identify soft spots with the added benefit of the information being provided real-time.

In addition, Loisel believes IoT should help SMEs identify patterns and behaviours through data analytics and therefore be able to foresee them, offering the ability to plan better.

"It will make managing the supply chain much more predictable, or help utilise their assets in much better ways."

Increased visibility and better supply-chain management

Loisel cites a practical example in asset-tracking. "Imagine a large construction firm with 100 building machines worth anything from U.S.$5,000, and which are moved from one site or one warehouse to another constantly. It is hard to determine how many of them have been in use over the last year, or whether the warranty has worn out because the service schedule was not properly recorded."

If these machines were connected, with smart GPS and RFID technology, this would offer a lot more visibility on their location, their usage, which parts need changing and how they could be dispatched in different ways.

"It would help reduce break time and therefore save money," he says.

Although IoT will require new skills sets, SMEs should initially think of partly outsourcing this activity, he recommends.

"Organisations should take a couple of people out of their organisations in an extra room, create innovation labs or use outside support to push things forward." 

© Accelerate SME 2017

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