Technology always has trends, the good ones find a place in our every day lives like social media and online shopping, whilst, some like QR Codes and Daily Deal websites never make it into our every day lives.
The Internet of Things is a new trend, and it’s one of the most popular ‘buzzwords’ at the moment and rightly so. The Internet of Things (IoT) is here to stay, and will become a very big part of our lives.
To best understand IoT you have to look at where it originated and that is another term called The Industrial Internet, also known as Machine 2 Machine (M2M) . M2M is defined as the technology that allows machines to communicate intelligently via the internet or via mobile communications. For example a snack vending machine indicating what stock it has so that the person coming to maintain it brings the correct quantity of replacement snacks.
A more advanced example would be how a telecoms company is informed that some of their telecommunication assets such as cabling or exchanges have components that need repair or replacement. Machine 2 Machine technology can communicate to the telecoms company what the status of their assets are.
The Internet Of Things although often classed as the same thing as M2M is actually a different layer of technology to M2M. Experts state that whilst M2M refers to machines communicating with each other, The Internet Of Things refers to interactions with technology occurring in a smarter way. Examples range from being able to adjust your homes heating whilst commuting home on the train from work via your smart phone through to your local coffee shop picking up a notification that you’re nearby so they can start preparing your favourite coffee.
The Internet of Things is often confused as a way of describing the modern internet, it’s not. Using the same terminology the correct names would be buzzwords such as ‘The internet of information’ for web sites like Wikipedia, and ‘The internet of people’ for social media. The internet of things is the internet for.. well, things!
So what does the Internet Of Things mean for the office of finance?
The IoT’s advantages in business are often credited to the sales and marketing teams. The modern office of finance is intrinsically involved with all departments of an organisation, so, sales and marketing advantages are relevant. That said there are some advantages that can directly help the office of finance. Such as:
With the modern office of finance being called upon to do more with less, increasing efficiency is absolutely key. Maximising productivity can play a big part of increasing efficiency.
If machines and applications automate invoices between organisations without the intervention of someone working having to work on raising and processing the invoices that saves time and increases efficiency.
Lower vehicle cost:
Petrol prices have risen as much as 45pence per litre in the last 5 years. For organisations running vehicles fuel remains a big cost that impacts profit. The IoT can help with smart fleet management solutions that increase the productivity of an organisations vehicles. Ensuring the driver takes the optimal route to a job and also ensuring the closest driver is sent to the nearest job.
The IoT can go further than that. For example a gas engineer could be set upon the most efficient job list for the day. But, throughout the course of the day new jobs could be added based on his current location and status. The Gas company could also push a list of meters that need reading to the engineer to obtain should he be running ahead of time. This entire process is run via an interactive device such as a smart phone or iPad by the engineer.
Compliance and legal security:
By using a GPS (Global Positioning System) a CFO can feel reassured that an organisations assets such as their people and vehicles are accounted for. An organisation can track and record the location of their vehicles, this allows organisations to be accountable for events their vehicles may or may not have been involved in.
Another consideration is how an organisation tracks work in progress and SLA’s (service level agreements). For example a company who repair roads on behalf of a council are able to use IoT to track where pot holes are located. Once they’ve found a pothole they can record the work in progress and its completion back to the council via a smart device. The device would record the location, the time it took to repair the pothole and attach a photograph of the state of the road before and after repair.
Look after your people:
An organisations people are its most important asset, so ensuring their safety is absolutely key. It’s not just for ethical reasons either; employee safety directly impacts an organisations bottom line with regards to employees being off work and severe incidents can costs an organisations finances and reputation heavily.
The Internet of Things makes workers safer thanks to devices that allow workers who are working alone or in remote locations to be able to communicate their location and well-being back to their employer. An example of this would be A Deep Sea Diving Engineer working on an oil rig who’s oxygen levels, heart rate, depth and other important statistics are communicated back to the surface to ensure all things are well.
To summarise the Internet Of Things has been around for a while, but, is really starting to ramp up now that devices and the machines behind them are becoming smarter and more open to communication. Businesses have been taking advantage of M2M for many years. Like Xerox who’s printers communicate with them as to when they need maintenance, or simply more ink.
In this age where businesses are being required to differentiate in order to compete The Internet Of Things can provide an option to provide something other than a low price.
An idea I’ve had for a while is that insurance companies should utilise GPS technology in order to track customers and offer a pay as you go service with insurance. Not only would your insurance cost reflect your driving distance but the GPS could track whether a driver obeys the speed limits and also give discounts for driving off peak. Just imagine if this became the norm for car insurance; traffic could be reduced due to people putting off travelling at peak times and speeding motorists would be reduced. That said, Google already have a car that uses the Internet Of Things to drive itself, so how long before we’re all just passengers?
Intriguing times ahead for businesses and consumers!