From Internet of Things (IoT) to Industry 4.0 and Internet of Everything – each of these terms increases awareness for a radical change process: the digitization of our everyday lives. In contrast to the milestones of the Industrial Revolution, such as the start of assembly line manufacturing in 1914, the start of the IoT cannot be pinned to an exact date. Instead, the Internet of Things is slowly but steadily breathing intelligence into everyday objects. It is invading every industry, changing production processes as well as our everyday lives – and ultimately changing customer expectations and customer relationship management as well.
Anette Bronder, Directrice du Département Numérique (Digital Division)
When we talk about the Internet of Things, we don't just mean connecting an object with the Internet. It involves communication between the devices and machines themselves. Data is the language of this communication; the networks are the communication channel. The cloud is the home and destination of the data. It adds intelligence through data analytics software. Smartphones and wearables like data goggles make people part of this network. That's the magic of the IoT – and development and enhancement are continuing at a rapid pace around the world. Although wearables and the Internet of Things are often associated with fitness and lifestyle: the majority of smart devices isn't on our wrists or in our households; it's on the shop floor.
Machines no longer produce mere objects. They also produce a huge amount of data and organize themselves. An unprocessed fender reports promptly to the painting machine, which in turn checks whether it can complete all the announced parts or has to reroute to other machines. Questions about maintenance intervals will soon also be a thing of the past: machines will send notifications independently when maintenance is needed or a component has to be replaced soon.
Cities of the future: from smart building components to smart tourist areas
Smart objects have long left the shop floor and are spreading around the world. IoT is conquering and transforming entire cities that face the challenge of improving their attractiveness with modest budgets. The key is the IT. In Dubrovnik, for example, a popular vacation destination in Croatia, Deutsche Telekom recently introduced a "smart street". A traffic management solution monitors and reports traffic violations in real time and thanks to a smart parking system that identifies vehicles automatically, both locals and tourists can pay parking fees remotely. A smartphone app provides information on available parking spaces and the streetlights provide fast WiFi.
Street lamps can even measure noise and CO2 levels and can respond accordingly: when emissions values exceed a defined limit, traffic is rerouted. The streetlights also adjust to ambient light and respond to movement – abilities which make them a real bright spot in saving costs. According to a McKinsey study, more than 30 percent of global energy consumption is wasted on illuminating unused public surfaces and spaces. The intelligence of cities also extends to smart trash cans which notify the disposal company when they are full, optimizing routes.
What makes the smart city special? The IoT doesn't take place in silos (any longer), custom tailored for specific industries. Instead, it is connected and all-encompassing. A smart streetlight receives information from the parking space and forwards it to the car, which is steered toward it. Everything speaks the same language – at least that's the vision. To get there, we need common standards, agreement on a primary technology, collaboration between the different industries and the support of IT companies.
The customers drive development
Internet of Things
The corporate world cannot avoid digitization. All experts agree on this – whether they belong to IT, economy or policy. The only open question is how fast this will happen. Yet waiting is not an option: Everything that can be digitized, will be digitized and everything that can be connected, will be connected.
IoT makes our lives much safer and more convenient, while companies can become much more efficient and service-oriented. Predictive maintenance alone can deliver cost savings of up to 30 percent. But which solution and strategy are the right ones? That's the question that many CIOs are currently asking themselves. After all, there are thousands of IoT vendors, but just attaching a sensor to something does not guarantee success. And no single provider can solve all IoT problems on its own; there's no such thing as "the" solution. It's all about strong partnerships: combining complementary expertise and getting together to create the best solution for the customer.
It is a fact that the IoT starts with the customer – both in B2B and B2C business. Consumers have long ceased to be the final link in the production chain and are now part of the production and logistics process. As a customer, I want to know where my package is. I want fast, individual customer service. And I want to customize my new trainer, too: with my own design instead of plain. And who knows: in a few years, maybe we'll print our own furniture or shoes ourselves on 3D printers and use virtual reality simulations to treat phobias.
Software is the new secret weapon: it thinks for us, advises us, does our work for us and opens up completely new possibilities for interaction. But we have to have the courage to try out digital products and to trust them. To fully capture the potential of these new technologies, we have to break with old thinking patterns and become more adventurous: no risk, no gain – and no chance of becoming a pioneer. Other nations like the U.S. are more open to innovations – but of course their market isn't as heavily regulated as ours.
Is everything about to become smart?
Use cases for smart technology are nearly everywhere. According to Google, devices will soon cease to exist, because everything will soon be a computer. The most prominent example of this is probably the car, which has evolved from a simple means of transport to a mobile office – with infotainment, automatic parking space search and connection to the smart phone. The connected car is a successful model because it starts with the customer’s pain points. It makes driving safer and more comfortable, giving us more time for other things and improving our quality of life. According to a study, the average car driver spends more than 2,500 hours of his or her life searching for parking spaces.
How were Uber and AirBnB – small startups – able to shake up and fundamentally change the entire taxi and hotel industries? Because they solved a crucial customer problem: high travel expenses. Therefore, successful IoT strategies start with the customer. Companies have to learn how to stop looking inward and start observing their customers better. In this regard, modern technology and the cloud can help as well. Keyword: CRM – Customer Relationship Management. We will have a look at this in more detail later in our Big Data series. But right now we're looking at the Internet of Things. We will be taking a closer look at all these topics, and many more, in the coming months. The articles will be available here on t-systems.com
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