Companies have identified great potential in the Internet of Things (IoT). But only those who can extract its value for their own business will ultimately reap the benefits.

From analyzing wind farms through checking the condition of elevators and developing services based on tire pressure measurements, the imagination knows no bounds when it comes to hatching ideas for the Internet of Things – as was evident at the Industry of Things World congress in Berlin. Companies are already making some of the necessary moves.

However, there are contradictions:

1. Many Companies Are Technically Enabled, But Don’t Have a Business Idea

According to the Industry of Things World – Survey Report 2015, most of the 738 IoT and Industry 4.0 managers questioned across the globe are convinced that the topic is already high up on their company’s agenda. Three quarters of the companies regard the topic as very important (41 percent) or important (34 percent). Furthermore, some 28 percent of companies are actually already deploying technologies that will enable the IoT in their organization. Almost two-thirds of companies are currently at the implementation stage or are planning an implementation in the next 12 months.

The survey revealed that research and development and IT departments are mainly responsible for these projects, rather than those who are supposed to benefit from the Internet of Things, that is, the unit managers with the business background. Yet, according to the form-follows-function principle, the business idea should come first, and then the corresponding technology should be built. In addition, decision makers with business expertise should shoulder the responsibility. Most companies are taking the approach of upgrading their technology and making the Internet of Things fundamentally possible in the hope that an idea will eventually materialize.

2. The Key to Success Lies in Innovative Business Models, but Most Case Studies Reveal Nothing New

Sensors in tires, windmills, engines, chest straps, and smart watches provide a wealth of information. A platform then gathers this data, processes it, and analyzes it. Ideally, one machine – or one person – can be compared with another, and we can find out what factors lead to the thing or person performing even better or becoming even healthier. There are plenty of case studies in which such principles are demonstrated. And many companies are copying what’s already been done, so they don’t lag behind developments. However, new business models are what are really needed for a genuine breakthrough.

The number one challenge is to understand whether and how the Internet of Things can enrich business (35 percent). And the number two challenge is to understand how money can be made from the Internet of Things (24 percent). After all, the Internet of Things is only any use if it’s profitable. And in turn, for profitability, you need a well thought-out business model. Technology only features as the number three challenge, and encompasses big data, analytics, and cloud computing – the technologies that will, in the future, realize the business models (13 percent) and will thus be vital. Companies are therefore very concerned about how the Internet of Things can be integrated with their existing business model.

3. Although the Internet of Things is Still So Young, Most Companies Are Confident They Can IoT-Enable Their Organization Themselves

The hopes that companies attach to deploying the Internet of Things vary. Some envisage gaining competitive advantage, some anticipate discovering new revenue streams, some want to increase their efficiency, while others want to learn more about their customers. However, there is little variation in the experience enterprises have in dealing with large data quantities, connecting various sensor-equipped machines (M2M), using measuring and analysis methods, and deploying cloud systems: In most cases, it is minimal. Nevertheless, three quarters of the companies surveyed are confident of being able to implement IoT in-house. External expertise – for example, from SAP, T-Systems, or Siemens – is currently an option for 26 percent of companies, the survey reveals.

Hardly an IoT conference goes by without mention of Uber, Facebook, Alibaba, or Airbnb. And it’s true: Business can only really flourish if the courage is there to break existing rules. We can be fairly sure that a reliable platform will be necessary for this.

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