Introduction

The Internet of Things (IoT) has revolutionized the way businesses operate, creating new opportunities for growth and efficiency. However, with the increasing complexity of IoT solutions, it’s becoming increasingly important to develop a solid Internet of Things strategy to maximize return on investment (ROI). According to a report by McKinsey, companies that use IoT strategically can expect to see an average ROI of 15% to 20% (1). In this blog post, we’ll explore how to unlock the potential of IoT and achieve a strong ROI.

Understanding the Internet of Things Strategy

Before we dive into the nitty-gritty of maximizing ROI, it’s essential to understand what an Internet of Things strategy entails. An IoT strategy is a comprehensive plan that outlines how a company will leverage IoT technologies to achieve its business objectives. This includes identifying the right use cases, selecting the most suitable technologies, and developing a roadmap for implementation.

A well-crafted IoT strategy should take into account the following key elements:

  • Business objectives: What are the company’s goals and priorities?
  • Technical requirements: What technologies are needed to achieve these goals?
  • Data management: How will data be collected, stored, and analyzed?
  • Security and risk management: How will the company mitigate potential security risks?

According to a survey by Gartner, 71% of companies consider IoT a critical or high-priority technology for their business (2). However, without a solid strategy in place, companies risk wasting resources and failing to achieve their desired outcomes.

Unlocking ROI through IoT

So, how can companies unlock the potential of IoT and maximize ROI? Here are some strategies to consider:

1. Focus on High-Impact Applications

Not all IoT applications are created equal. Companies should focus on high-impact use cases that can drive significant business value, such as predictive maintenance or supply chain optimization. According to a report by Accenture, companies that focus on high-impact applications can expect to see an average ROI of 25% to 30% (3).

2. Leverage Data Analytics

Data analytics is a critical component of any IoT strategy. By analyzing data from IoT devices, companies can gain valuable insights that can inform business decisions and drive growth. According to a report by IDC, companies that use data analytics can expect to see a 15% to 20% increase in revenue (4).

3. Develop a Strong Ecosystem

No company can do it alone when it comes to IoT. Developing a strong ecosystem of partners and suppliers is critical to achieving success. According to a report by McKinsey, companies that partner with other organizations can expect to see a 10% to 15% increase in ROI (5).

4. Invest in Cybersecurity

As IoT devices become increasingly connected, cybersecurity is becoming a growing concern. Companies must invest in robust security measures to protect themselves against potential threats. According to a report by Cybersecurity Ventures, the global IoT security market is expected to grow to $50 billion by 2025 (6).

Measuring ROI in IoT

Measuring ROI in IoT can be complex, as it involves quantifying the benefits of IoT devices and data analytics. Here are some metrics to consider:

  • Cost savings: What costs have been reduced or eliminated as a result of IoT implementation?
  • Revenue growth: What new revenue streams have been generated as a result of IoT?
  • Productivity gains: What productivity improvements have been achieved as a result of IoT?

According to a report by Forrester, companies that use IoT can expect to see an average ROI of 10% to 15% in the first year, increasing to 20% to 25% in subsequent years (7).

Conclusion

Developing a solid Internet of Things strategy is critical to maximizing ROI. By focusing on high-impact applications, leveraging data analytics, developing a strong ecosystem, and investing in cybersecurity, companies can unlock the potential of IoT and achieve significant business value. We’d love to hear from you - what are your experiences with IoT and ROI? Leave a comment below and let’s start a conversation!

References:

(1) McKinsey. (2019). The IoT imperative: Unlocking value through strategic investment.

(2) Gartner. (2020). Gartner Survey Finds 71% of Companies Consider IoT Critical or High-Priority.

(3) Accenture. (2019). The IoT Advantage: Unlocking Value with IoT.

(4) IDC. (2020). Data Analytics in IoT: Key to Unlocking Business Value.

(5) McKinsey. (2020). Partnering for IoT success.

(6) Cybersecurity Ventures. (2020). Cybersecurity Ventures Predicts the Global IoT Security Market Will Reach $50B by 2025.

(7) Forrester. (2020). The ROI of IoT: How to Measure and Extend the Value of IoT.