Processes – the key to unlocking the business potential of IoT?

01 Mar Processes – the key to unlocking the business potential of IoT?

Internet of Things, or IoT seems to be a rising trend nowadays. But how will organizations transform the business potential of IoT into business results? In this blog I ponder IoT’s relation to business processes and how IoT and BPM, which our company is specialized in, will be connected in the future. If IoT as a term isn’t familiar to you, I suggest you read this article. The basics of BPM can be found from here.

According to research done by the Intelligence Unit of The Economist newspaper, organizations around the world are still unsure when it comes to IoT and its business applications. IoT is on the agenda in many organizations, even though in many of them there is still a lot of internal discussion on how big of a weight IoT-business should have. Over 90% of big organizations expect that IoT will be a part of their business, but most of them are still in the research phase. Organizations, especially their management must have a clear picture of IoT as a business in order to develop working business models, products and services around IoT.

How can organizations cash in on IoT?

According to BPM- and IoT –specialist Dr. Setrag Khosfanian, organizations can transform their operations with IoT-technologies in three ways:

  • The focus should be elevated from technology to processes. IoT will make end to end-digitalization of processes possible. A business process is consisted of an input, execution of a task and the business outcome of the task completed. Instead of process participants being only humans, in the future increasing amount of smart machines will participate in processes and thus enable a successful business outcome.
  • In addition to normal happy path –processes one of the most promising applications for IoT is the activation of fully digitalized end to end-exception processes based on sensory data. Reacting to problems will become more efficient.
  • With the help of IoT ‘Big data’ will become ‘Thing data’. Organizations must understand that data by itself is not something that will resolve all their problems. Data must be successfully guided to a business process in order for it to create revenue.


The challenges of creating IoT-business

I got a good overview on IoT’s current business challenges by talking to Pasi Jokinen, the director of Haltian’s Thingsee-business unit. Whereas most of the companies are still only talking, Haltian has moved on from research and planning phase to specialist and solution phase in the IoT-business. According to Jokinen, successful big scale IoT-business is still about two years away. Good systems are starting to see the light of day and at the moment IoT is being used successfully in industry with ‘large expensive devices’, but as of today the consumer business side of IoT has not been yet linked to successful big scale business because:

  • Telecommunications operators don’t yet have a working business model for m2m-subscriptions needed in communication between smart devices.
  • The price of IoT-devices is still a bit too high for consumer business to ‘take flight’. Economies of scale and better margins are yet still to come.
  • The reliability of devices must still be improved for processes they partake to work at an acceptable level. In a network with dozens or even hundreds of smart devices that are talking to each other, there can be no weak links. Reliability can be improved by adopting mesh-networks, but practical applications have not yet been fielded.


From devices to processes and from processes to better business

By 2020 it is anticipated that there will be approximately 30 to 50 billion smart devices in the world. IoT is facing the risk of developing to a situation where there are a lot of devices, but not enough interconnectivity. When the IoT-knowledge of consumers and demand increases, organizations should be prepared for exponential increase in data generated by IoT-devices. According to The Economist, organizations trust their ability to process the data, but from a historical point of view organizations tend to overestimate their competence in these matters.

For IoT to be successfully implemented as a part of business, organizations should understand, that from a business point of view IoT is much more than just a swarm of intelligent objects. The data generated must be transferred to be a part of organizations business processes. This is where BPM comes in. At its core, BPM uses workflow to manage, update and track huge amounts of data and information in the right order. The goal of BPM is to connect people to the right automatized systems and processes. BPM gives added value to IoT by integrating it to be part of business processes.

Managing IoT-devices with BPM makes it possible for their maintenance to be organized. It also enables the possibility to create a tracking layer with which operations can be managed with the help of some well picked KPI’s. All in all, I feel that the IoT will change the world, but BPM will change the IoT.

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Veli-Pekka Mustonen

BPM Consultant, You-Get Finland