Monetising your existing assets. It sounds simple enough – and like a great strategy for business success – turning what you already have into a valuable source of financial savings or even brand-new revenue streams. However, it can be a tricky strategy to get right. In this blog, we’re looking at how the Internet of Things (IoT) can help organisations across multiple sectors to monetise their data analytics.
Using the IoT to monetise data analytics
First, let’s run through some of the variety of ways in which the IoT can be used to monetise data analytics.
At the simplest end of the spectrum, the IoT can offer business leaders a newly unified view of data from across the organisations. Sensors embedded throughout the environment collect and transmit data to a single centralised platform – which in turn provides a single centralised view of business intelligence. The opportunities for new insights and tangible action to drive efficiencies are vast.
Another such example, oft-discussed on our blog, is predictive maintenance. Here, IoT sensors enable the proactive upkeep and repair scheduling of valuable physical assets, in turn extending their useful life and improving the business bottom line.
Then there are aspects of data monetisation which relate more directly to new revenue streams. For example, embedding IoT sensors in consumer products can enable businesses to collect data on how those products are being used – which in turn engenders deeper, richer insights on customer behaviour and product performance. These insights are the key to unlocking new sales, marketing and product development strategies.
And such data can even be packaged up and sold on as a product in its own right, forming a brand-new revenue stream in and of itself.
Monetisation takes multiple shapes
These monetisation examples, then, cover a spectrum. They run from strategies to drive efficiencies and therefore cost savings, which therefore monetise data analytics indirectly, through to strategies which actively drive new revenue streams, which therefore monetise data analytics directly. When it comes to the latter, according to Cisco, in spite of the IoT having ‘the potential to generate about $19 trillion of value over the coming years […] over 70% of organisations do not generate service revenues from their IoT solutions.’ On the one hand, this points to some challenging blockers when it comes to monetising data analytics via the IoT. On the other hand, it points to an exciting opportunity for the businesses that can get it right.
Those blockers, Cisco claims, can be conceptualised around three broad areas: security and privacy concerns; lack of standards limiting revenue potential; and successful monetisation requiring significant investments in acquiring new capabilities, often without clear returns. In other words, monetisation via the IoT may require businesses to innovate, experiment and invest without a clear return on investment being apparent from the outset.
Meeting the challenges
How, then, can organisations best meet these challenges, and effectively use the IoT to monetise the data available within their infrastructures?
The key is a mixture of attitude and practical implementations. On the implementation side, security, privacy and compliance are key. Organisations need to take a bottom-up approach to ensuring the identity of each and every IoT device they deploy, and ensure the protection of data throughout the IoT infrastructure from the moment of generation, in transit and in storage. On the attitude side, they need to be prepared to take an open mind in this hugely dynamic technology space, experimenting and innovating – and sometimes expecting objectives to change.