What’s the first thing you do in the morning? If you’re like many people, you reach for your phone. You turn off your alarm clock, check the news, and review your email. All of this creates a digital presence that tells a story about your world. The digital world has become a seamless part of our lives, and it’s no different for businesses. All of your systems work together to tell a story, whether it’s about inventory, manufacturing, or people. Your world is connected by bytes and coding, and it’s only becoming more prevalent. The data we create is growing at an astronomical pace, and our ability to tap into the potential of our digital world is based on how we analyze that data.
We create a lot of data. By 2020, the digital universe is projected to grow to 44 trillion gigabytes. IoT embedded systems are expected to account for 10% of the digital universe by 2020, and the containers from those systems (like digital files, RFID tags and sensor files) will become 99% of all of the files in the digital universe (IDC, The Digital Universe of Opportunities: Rich Data and the Increasing Value of the Internet of Things). It’s more than data now; your connected devices are communicating in real-time to create a digital picture of your operations.
The rise of IoT.
None of this is news. In 2016, less than 40% of organizations surveyed had completed at least some kind of IoT implementation. That number is predicted to grow to over 80% by 2020 (Bain & Company, How Providers Can Succeed in the Internet of Things). IoT is quickly becoming the norm, and teams that are able to successfully implement these solutions stand to increase productivity and reduce costs. In fact, 47% of organizations implemented IoT solutions to improve quality of service or product, leading to price premium, lower support costs and 44% did it to increase reliability of operations (Bain & Company, How Providers Can Succeed in the Internet of Things).
This market is only growing. B2B IoT connections are projected to increase to 5.4 billion by 2020. That’s about one device for every two people on the planet. The organizations that leverage these connections are expected to be 10% more profitable (SparkLabs Global Ventures, Internet of Things & Hardware Industry Overview 2016). Can you imagine such a huge boost from such tiny devices?
The use of IoT by businesses is expected to drive $964 billion in spending this year. By 2020, hardware spending is projected to increase to almost $3 trillion for both business and consumers (Gartner, Forecast: Internet of Things). On top of that, the Industrial IoT market is expected to grow to $319.6 billion by 2020 (SparkLabs Global Ventures, Internet of Things & Hardware Industry Overview 2016). These devices represent a significant investment for any organization, but the return can be huge. Many Department of Defense suppliers have already seen the benefits.
A lost opportunity.
Unfortunately, many organizations are not realizing the full potential of their IoT investment. McKinsey Global Institute predicted in 2011 that the manufacturing industry could see up to a 50% lower product development cost, 25% lower operating cost, and a 30% gross margin increase. As of 2016, only 20-30% of that predicted value as been captured (McKinsey Global Institute, The Age of Analytics: Competing in a Data-Driven World). While labor and workforce integration is part of the issue, much of the barrier remains in computing power.
Just about .5% of that data is ever analyzed (MIT Technology Review, The Data Made Me Do It). Think about that. Even with such a huge investment and an even bigger opportunity for optimization, IoT is not yet driving the data revolution.
Driving efficiency with machine learning.
Enter artificial intelligence and machine learning. By 2019, cognitive/AI capabilities will support 40% of all digital transformation initiatives and 100% of all effective IoT efforts. (IDC, IDC FutureSpace: Dawn of the DX Economy and the Digital-Native Enterprise). This technology presents an opportunity to improve regulatory compliance, reduce risk, improve decision-making and operating efficiency, and enhance security. 79% of executives report that AI will make their jobs more efficient and easier (The Economist Intelligence Unit, Artificial Intelligence in the Real World).
We’ve moved beyond simple data analytics in both our personal and our professional lives. In order to stay ahead of our competition, we must take advantage of current technologies and prepare for the future. Odyssey can help you leverage these emerging trends and ensure that you’re prepared for the future of business. Contact us today to learn how integrating cloud-based solutions for DoD suppliers can help you drive efficiency and compliance.