By Rieva Lesonsky
One of the terms on everyone’s lips here at CES is Internet of Things or IoT. This isn’t exactly new, IoT has been bandied about for a few years now. But, while many of us “civilian” business owners have heard the term, we’re not exactly sure what it is.
We’ve covered IoT throughout the year at SmallBizDaily.com, so I’ve curated some of the information to help you get up to speed.
First, Klaus-Michael Vogelberg, the Chief Technology Officer at Sage called IoT “the next exponential growth opportunity.” He wrote:
Business builders must start thinking about how they will take advantage of the IoT explosion. Similar to the early days of mobile, where an ecosystem of apps, platforms, and services sprung up seemingly overnight, IoT will offer tremendous opportunities to innovators who can get involved at the ground level.
IoT equips everyday objects with sensors and allows them to collect and exchange data, in other words, turns them into endpoints on the internet. The object can be literally anything from a HVAC unit, refrigerator, or thermometer, to a beer flow meter, oil tank, to a soap dispenser—you name it!
Internet-enabled ‘things’ can now participate in any form of process automation, from predictive maintenance to smarter order fulfilment and accident prevention. Most important, they can help deliver radically new and transformative customer experiences.
But equipping objects with sensors and data exchange abilities does not make the object intelligent. Intelligence derives from intelligent backend. A smart gauge in an oil tank does not make the oil tank smart, no matter how much marketing might want us to believe. Intelligence comes from the supplier’s intelligent backend system that analyzes consumption data, understands seasonal patterns, takes weather information into account, checks daily spot rates, and determines the optimal point for replenishing and delivery.
So, it is really the intelligent backend that turns the IoT-enabled endpoint into an intelligent endpoint! All the data in the world won’t matter if you don’t have a platform capable of collecting and transforming it into actionable insights and customer experiences.
An intelligent backend allows businesses to consume data feeds from IoT endpoints, analyze, validate, collate, and record the data in real-time. It also enables the application of machine learning and other data science techniques, which adds context around the data, identifies patterns, creates new insights and speeds up your availability to act upon them. And just as important, it allows businesses to quickly reconfigure processes and add new intelligent endpoints.
The potential for new products and services based off IoT endpoints is as endless as the opportunities early mobile innovators encountered. Yet it will be essential to invest early to have the right backend solution in place to take advantage. An intelligent backend will not only help you prepare for the IoT explosion, but also better manage your business now.
Let’s look at some more examples. One of the exciting applications of intelligent endpoints is the opportunity to transform the customer experience. As a basic example, a retailer could use local weather data to automatically push out a discounted offer on umbrellas, in real time as a storm approaches. An insurer might use data streams from IoT building sensors combined with weather data to safeguard corporate clients against imminent severe conditions.
Transportation, shipping, and logistics are other areas where IoT and intelligent endpoints could offer robust entrepreneurship opportunities. Consider the value a company could offer to the shipping industry if it were able to make use of intelligent endpoints to identify geographic commonalities and bulk different shipments together under one delivery service.
Sarah Lahav, the CEO of SysAid Technologies advised small business owners to keep their eyes on these IoT trends.
An improved customer experience: The consumer world is rife with customer experience (CX)-related improvements and this has worked its way into the B2B space too. IoT devices not only allow SMBs to deliver a better CX, they will also collect customer touchpoint data that helps companies to further improve it.
Better information leading to better decisions: IoT devices will collect and transmit back a wealth of data. SMBs can use this data—with the help of a business intelligence tool and/or machine learning—to drive a multitude of business decisions related to products and services, customer behavior, service quality, staffing, support and customer service, and future business investments.
New products and services: IoT devices will be embedded into existing products and services or be used to create brand new business opportunities—with the power in the “connectedness” and the opportunities this brings. Plus, SMBs shouldn’t overlook the less tangible opportunity of the availability of IoT data being a potential new service in itself—the insight might be more valuable than the product or service it is gleaned from.
Improved business operations: IoT devices will not only remove some of the reliance on people, they will also provide opportunities to improve the way things are done—speeding up business processes and reducing the delays, and potential fallout, from human errors. The collected data is also a rich source to be mined for improvement opportunities that will improve business operations, CX, and margins.
Finally, Cara Sloman, the executive vice president of Nadel Phelan, Inc., warns us that, as more and more devices have become connected, hackers and other malicious actors have focused their efforts on exploiting IoT devices. Once an exploit is successful, history has shown many more are sure to follow.
Security issues can cause businesses to wonder whether the IoT is worth it. In fact, in a recent Ponemon Institute research report on mobile IoT application security, 75% of respondents said the use of IoT apps significantly or very significantly increases security risk.
However, just as time and tide wait for no one, neither do the IoT and its tremendous potential to provide competitive advantage via innovative solutions derived from data analytics. Choosing and deploying secure IoT solutions provides valuable new business insights and efficiencies while protecting your data and infrastructure assets. Holding off too long could be fatal.
It is important to understand the level of security that manufacturers have built into their IoT products before purchasing them. While it is (relatively) easy to design and ship an IP camera, for instance, the ease with which one can be hacked from factory settings makes installing one an unacceptable risk factor to the network—and your business.
Here are initial steps to integrate into an overall IoT security strategy:
- Assess open source wisely: Though many organizations choose open source IoT software because it is an easy, cheap and flexible option, security flaws can be exploited rapidly, and patches are often slow in coming. IT teams therefore should be aware of the risks in using technologies that are based on open source code.
- Clarify to create a strong IoT bench: A job ad asking for an IoT professional may attract 10 people with 10 different backgrounds. Think about what your company does with connected devices and the specific skills it needs to manage and deploy those applications, systems and devices securely. Looking for and training people with IoT certifications is a way to ensure a strong bench of those skills.
- Insist on unique credentials: Plugging in connected devices with factory settings is a security disaster waiting to happen. Require that each device have a unique password from the manufacturer, printed on a sticker that’s included on the device itself. This significantly reduces the chances of compromise.
- Options besides Wi-Fi: Although Wi-Fi is a viable resource, other options exist. For wide-scale installations in specialized vertical network environments, like manufacturing or healthcare, consider using one of the many specialized communications protocols that are available to your engineers. Do all functions need to be performed on the device, or can some be punted back to the network? Minimizing the need for the device to perform all functions and be connected to all traffic all the time can also reduce its threat exposure.
A comprehensive cybersecurity strategy that takes every element and variable into account is needed in today’s treacherous online environment. Organizations that don’t carefully attend to IoT security are likely to face not only loss of customers and reputation but regulatory sanctions as well. Use the recommendations above to build a strong cybersecurity strategy so that you can benefit from the IoT while avoiding its security pitfalls.