When many of us think about the Internet of Things, we envision wearables like FitBit or connected home devices like Nest or Amazon Alexa. But, in Gartner’s definition, IoT is much broader, encompassing “the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.”
Banks have had ATMs connected via secure networks since the 1970s, and cars have long been connected through services like OnStar and Sync. But these are hands-on machines, controlled by humans, so the value of autonomous objects passing data back and forth without human intervention can be hard to grasp. Nevertheless, as accounting executives often say, the numbers don’t lie.
There are more things connected to the internet today than there are people on the planet. Over ten billion “things” are connected right now, and there will be as many as 20 billion by 2020.
That’s a lot of data in motion. CFOs who find ways to extract value from that data are going to seize on some great opportunities. But these forward-thinkers can often meet with resistance from their C-suite colleagues when it comes to the idea of harnessing the opportunities in IoT. It’s not always easy to envision how machine-to-machine (M2M) data transfer will drive down costs in an organization or increase top-line growth.
As a result, only about 26 percent of CFOs plan to make a strategic IT investment in IoT, according to a recent survey.
But here are some reasons why CFOs and their colleagues need to embrace IoT as a market disruption and a huge business opportunity.
IoT advantages in the Finance, Accounting & Procurement world
Imagine real-time, reliable data collected by a tireless network of sensors and devices, all of which are consistently accurate, blissfully silent and smart enough to support emerging consumption-based service pricing models –– that’s a game changer.
Based on this scenario alone, it makes sense for strategic CFOs and accountants to champion the adoption of IoT at their organizations.
Gathering KPIs, Monitoring Efficiency, Ensuring Safety
Whether you’re a financial executive for a manufacturing company, a chain of retail stores, a restaurant franchise or a distribution company, smart sensors and devices are there, gathering and transmitting valuable insights. Connected sensors and devices can collect data on how many customers enter your stores, or how long it will take before a critical piece of machinery will require maintenance or replacement. This data has obvious applicability for finance, accounting and procurement activities like forecasting sales or operational cost planning.
Freight forwarding transportation companies take advantage of technology like telematics to make order to cash (O2C) predictions and analysis. For instance, how many days after a shipment arrives on a customer’s loading dock will they be paid? Or how long has a given vehicle been on the road? Has the driver taken enough rest stops to be safe on the road?
Employee health and safety are key motivators behind telematics technology in the transportation industry. What if one of your fleet vehicles could transmit a message to a customer service agent to alert one of your drivers of a mechanical issue that needs servicing?
Consider the Industrial Internet of Things
The term “Industrial Internet of Things (IIoT)” is often used to describe the devices and sensors that monitor and control energy consumption and lighting; air and water quality or temperature inside buildings like factories or datacenters; or locations of products in warehouses, supporting easier retrieval by human and robotic stock pickers.
In record to report (R2R) there are far-reaching benefits of IoT (or IIoT). It brings a significant edge over humans gathering and distributing information.
With IoT and IIoT:
- Data is collected in real-time, without bias – making it more immediate
- Data is completely accurate and auditable – making it more individual
- Data can immediately be analyzed relative to historical or forecasted results – making it more intelligent
The reasons to not ignore, but instead to seize the opportunities that IoT presents are many.
Does your business sell products or services to customers by weight, utilization or digital consumption? IoT sensors and connected devices are the most accurate way to collect data on how to best invoice customers in order to avoid disputes — particularly disputes around what customers think they used or consumed.
Has your business found ways to increase profitability or reduce costs by adopting IoT technologies while ensuring the best possible customer experiences? Share this article with your CIO colleague, or better yet, share your thoughts on LinkedIn, or leave a comment below.