The IoT Business Case Spreads to Enterprise
Let’s describe an actual IoT business case and discuss the benefits. In an earlier post, we described condition-based maintenance as a salient use of IoT connectivity. Condition-based maintenance enables predictive maintenance. Predicted maintenance means maintenance can be planned both in terms of time and cash expenditures. IoT-enabled planned maintenance allows for more efficient cash-flow, reducing large unplanned cash outlays; a serious problem for both small businesses and large enterprises whose ratings and stock prices are sensitive to free cash flow conversion and other cash-related metrics.
More directly, condition-based maintenance reduces out-of-service time which in turn improves economies of scale by allowing each physical asset to be used over a greater number of units sold. In addition to improving asset usage, companies would also be able to reduce variables costs by reducing wasted man-hours waiting for downed vehicles to be repaired during working hours.
But there is no reason these same exact benefits cannot be used for non-mobile machines. Spread these savings beyond mobile machines to factories and shops with millions of machines and parts that require upkeep or replacement periodically. This is how the Internet of Things will gain the efficiencies so often touted. At this scale, even a marginal amount of savings accumulated over millions of vehicles and machines could easily provide the billions of dollars projected.
The IoT business case is the savings in time and money for simple tasks that can better be automated with cheap ubiquitous sensors reporting data. Much of this data will be data that it didn’t make sense to collect because reporting it was too costly. Some of the data will be data that was available before but when combined with new data has phenomenal new value.
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