The internet of things (IoT) isn’t a technology revolution; IoT is a business revolution enabled by technology. This powerful statement was the crux of a presentation I gave at the recent Housing Technology 2019 conference.
I explained that innovative organisations are taking advantage of a comprehensive set of technologies to make profound changes to their business systems and operating models. The combination of mixed reality, the internet of things and devices, AI and advanced mobility solutions means that operations can be completely reimagined. While the topic of IoT may seem to have been rehashed several times, I once again posed the question of whether it’s all just hype or is there genuine value to be had from investments in these technologies and the associated digital inclusion?
There were some interesting insights that I shared from Housing Technology’s 2017/8 ‘Internet of Things in Housing’ market intelligence report. These insights hinge on the fact that while the possibilities were in reach, there seemed to be a hesitance from organisations to take the leap and seize them. To validate the point, the following findings from the report were discussed:
- Importance of IoT to housing providers’ overall strategies: Despite the relative new-ness of IoT-based technologies, almost half of housing providers (46 per cent) rated IoT as being important to their overall strategies.
- Existing IoT strategies: Very few housing providers (six per cent) have yet established an IoT strategy, although a quarter of them are already considering their options regarding how they might deploy IoT projects, demonstrating the potential growth of IoT over the next few years.
- Timescale for deploying IoT devices: Of the housing providers with IoT plans, over half of them are scheduled for deployment within the next 12 months, and around three-quarters within the next two years. And despite 41 per cent of housing providers having no current IoT plans, the figures and associated timescales suggest an explosive growth of IoT deployments by the majority (59 per cent) of housing providers.
- Senior executive/board understanding of IoT: For a relatively new area of technology, it’s perhaps surprising that housing providers’ senior executives and board members are generally considered to have at least some understanding of IoT (53 per cent), perhaps in part because they are familiar with consumer-grade IoT devices such as Nest and Hive.
Clearly, from Housing Technology’s report, the opportunities IoT can facilitate have been grasped, but the worrying fact is that there seems to be a distinct lack of senior management buy-in and championing, despite three-quarters of housing providers planning to have at least one IoT initiative live within the next 24 months. This was echoed by several conversations from the Housing Technology 2019 conference that summarised IoT as an exciting technology but the conference participants weren’t sure of where it would fit in their organisation. In answer to these questions, I highlighted the following statistics from IDC and Microsoft before diving into some relevant examples:
- There will be 30 billion connected devices by 2020;
- The average increase in operating income for digitally-transformed enterprises is £1.15 million per annum;
- 10 per cent of the data on earth will come from IoT by 2020 (that’s next year!);
- The market for business process automation tools will be £7.65 billion by 2020.
These numbers are truly impressive and when you consider that Microsoft alone is investing $5 billion through to 2021, the only surprising thing is that the technology hasn’t seen more rapid adoption.
One factor that could contribute to this is the fact that often IoT is considered an IT and technology solution rather than something that can fundamentally change and optimise business operations. IoT is too often seen as technology for the sake of it, and where IoT solutions are implemented, the majority focus on B2C scenarios.
McKinsey & Company highlight that 70 per cent of the value enabled by IoT will come from B2B scenarios, so the suggestion is to focus on a number of these use cases to realise genuine value from IoT. Some examples of where IoT can generate value for a housing provider are as follows:
- Advice, support and assisted living;
- ASB and enforcement;
- Billings and collections;
- Change of circumstances;
- Contract management;
- Defects and stock condition surveys;
- Fixed assets and inventory management;
- Health, safety and accessibility;
- Key/fob management;
- Repairs and planned maintenance;
- Tenant self-service;
- Tenant visits and inspections.
In order to realise this value, housing providers do need to capitalise on IoT and there are three relatively simple steps to achieving this:
- Connect your ‘things’;
- Turn data into insights;
- Transform your business through actions.
With a relatively clear roadmap of how IoT can facilitate value and be implemented in a social housing context, why haven’t more providers embarked on this journey? We had a look at some more research from McKinsey & Co to define what separates the leaders from the laggards in the IoT space:
“Leading organisations are aggressive; by pursuing a large number of IoT use cases, they quickly climb the IoT learning curve and pass the point at which new applications consistently generate a great deal of value. They develop a clear idea about the commercial opportunities associated with IoT, and they align everyone in the organisation, from the executive suite to the front lines, towards a common set of goals. And they’re pragmatic about how they implement their IoT plans, building their IoT offerings around existing products and services, and relying on outside partners to furnish them with sophisticated technologies.”
The key point above is to engage with partners on several smaller IoT projects to both prove the value of IoT and to adequately prepare the business to embrace IoT.
While maybe not as obvious as the other point, the statement also refers to building IoT offerings around existing products and services. This should also be a major consideration when evaluating how IoT will integrate with existing business applications. Further insights from Housing Technology’s IoT report agree with this sentiment and state that the integration of IoT devices and their associated data with housing providers’ business applications is uniformly seen as being an important consideration (78 per cent).
In closing, I suggested to the conference attendees that they needed to be practical in the execution of their IoT use cases and leverage already-proven solutions such as the ‘IoT House’ from Hitachi Solutions and Microsoft. The key thing to understand is that IoT is here and that you need to own it and ‘inspire the next’!
Kyle Hill is the director of emerging technology for Hitachi Solutions.