The Internet of Things (IoT) is reshaping entire industries, and businesses of all sizes can benefit from the connectivity and data insights provided by connecting devices. IoT adoption is rising, enabling organisations to improve their operations and transform customer service.
In fact, according to Vodafone’s IoT Barometer 2019, adoption of IoT is rapidly increasing in the Middle East, with almost a third (31 per cent) of businesses surveyed now using the technology – and the majority of adopters (84 per cent) saying they have more confidence in it than a year ago. The possible applications are both far-reaching and exciting, with the potential to radically transform the way modern businesses operate, increasing efficiency and reducing costs.
The current state of IoT
When IoT technology has been optimised by businesses in the Middle East, it’s been beneficial for the use of assets, resources and the reduction of operating costs. For example, the energy sector in the Middle East is using IoT as a means of integrating renewables, while oil and gas firms are using it to monitor remote assets on both onshore and offshore platforms. IoT is also enabling smart meter networks, which will have a significant impact in countries like the UAE, where water is an expensive commodity and in short supply.
IoT is driving profitability, with 51 per cent of adopters in the Middle East saying it is helping them to increase revenues. Adopters are using the technology to differentiate their existing products and services from the competition, driving customer engagement and satisfaction. This can be seen in sectors like retail, manufacturing and automotive; where IoT sensors are helping to turn one-off product sales into ongoing service subscriptions.
Interestingly, over half of adopters (53 per cent) also agree that IoT is helping them to manage risk and compliance. For example, in the manufacturing sector, there has been a significant uptake of IoT and augmented reality-based plant monitoring. This is helping to improve working conditions and create safer and more compliant factories.
Connected devices also help to up-skill young people and enhance the digital skills of populations with emerging start-ups and technology companies. Research has shown that more than 60 per cent of the population in the Gulf Cooperation Council (GCC) are below the age of 30, and two-thirds of the population own a smartphone. This is driving greater demand for connected services and quicker networks like 5G — which is starting to be rolled out in several ME countries this year.
Confidence in this technology is growing and, unsurprisingly, the scale of implementation and depth of strategy correlates with stronger business results.
Barriers to adoption
While the benefits of this technology are clear, 40 per cent are struggling to find the right solutions, which holds them back from getting started in the first place or expanding on their investment. This was followed by the lack of a strong business case, an obstacle reported by 31 per cent of companies. This is because these companies are likely to start their IoT journeys with off-the-shelf solutions. While this helps them push ahead with implementation to deliver quick wins, it doesn’t set up a robust digital transformation strategy, which would help businesses to gain even more. In fact, our research confirmed that both strategy and implementation are important in getting the best results.
While there are benefits at every step of the way, the most sophisticated users of IoT achieve the greatest returns. Globally, 87 per cent of adopters from the “most sophisticated” have seen significant returns from IoT, compared to 17 per cent of “beginners” (who are just starting out with their IoT implementation plans). The most sophisticated adopters were also more likely to report increased revenue and reduced costs.
Future growth with IoT
With the right approach to implementation, these challenges can be overcome. The first step for businesses is to consider how IoT can form part of wider digital strategies. By bringing together data from different IoT initiatives across the organisation, businesses can put themselves in a better position to draw and action strategic insights.
Dedicated IoT enablement platforms are making integration and device management easier than ever. Integrating IoT with core business systems and processes can have a major impact on the results. Helping businesses move beyond initial, singular, IoT objectives and expand their IoT goals to achieve wider, tangible, business outcomes. Many organisations are also looking to create dedicated IoT teams, who are cross-functional and working across multiple departments rather than just focusing on IT. Further support with third parties and partners can also help make the adoption of IoT-based solutions easier.
It is clear why IoT adoption is becoming an integral part of many businesses’ digital transformation journeys. Whether it’s through integrating IoT into processes and across the supply chain, or making existing products smarter to drive bottom line improvements, it’s clear that more enterprises need to get on board.
While it won’t happen overnight, steps must be taken now to ensure that businesses are embracing IoT in the right way. By driving more sophisticated adoption of IoT to tap into tangible, longer-lasting, business benefits. Only then will businesses be able to deliver more meaningful customer interactions and experiences.