New Australian research reveals the competitive advantage provided by Internet of Things

25 February 2015 – Sydney, Australia: A new Australian report into the application of the Internet of Things has highlighted the significant cost, revenue and productivity benefits for adopting companies, but also revealed a high level of business indifference to the technology.

The research which was released today, was conducted by analyst firm Telsyte on behalf of Microsoft.

Entitled ‘Cut through: How the Internet of Things is sharpening Australia’s competitive edge’, the report shows that two-thirds of organisations that have deployed and measured Internet of Things (IoT) solutions have achieved 28 per cent cost reductions in their day-to-day operations.

Despite those impressive returns, the report reveals there is a long way to go before the competitive advantage of Internet of Things (IoT) is fully harnessed by Australian businesses with just 26 per cent of the 300-plus Australian organisations surveyed indicating they have deployed Internet of Things solutions, and nearly half (48 per cent) have no immediate plans to deploy.

Lee Hickin, Internet of Things Group Lead, Microsoft Australia said, “There are clear signs that the Internet of Things is beginning to take off. The research tells us that two thirds of IT and business leaders have seen at least a five-fold increase in connected devices in their organisation over the past five years with that trajectory set to continue into the near future. The challenge for Australian businesses will be to integrate those devices in a meaningful way and harness the power of the generated data.”

Those organisations which are yet to take the plunge, say they face a series of barriers including technology challenges, cost of services, security concerns and lack of in-house skills identified as the most pressing. Additional findings from the research include:

  • 65 per cent of organisations that have deployed IoT report operational cost savings at an average of 28 per cent
  • 53 per cent of organisations that have deployed IoT have increased productivity and efficiency at an average of 29 per cent
  • However 20 per cent of companies are still unaware of the concept of IoT
  • Only 26 per cent of organisations have implemented any form of IoT

Kellie King, General Manager of Dental Corporation, part of Bupa said “We once had a manual, time-consuming and extremely manual reporting process. On the face of it, we had a reporting issue but once we started looking at solutions we soon discovered that in actual fact it was an integration issue. It was a case of disparate data, disparate applications and disparate devices scattered all over the world. We are embarking on an Internet of Things project in order to connect those applications, data and devices to uncover insights about our business.”

Nicki Page, CEO of Breeze, Microsoft Partner said, “At the end of the day, the Internet of Things is all about using integration to solve business problems. The Telsyte report is justification for early adopters who have identified the tangible benefits of IoT. We are utilising the cloud to bring the Internet of Things to our customers in a scalable environment. By starting small, organisations are able to realise the benefits of the Internet of Things in line with their own business strategy.”

Telsyte Managing Director Foad Fadaghi said, “Australian organisations are faced with a massive increase in Internet-connected devices that will give unprecedented insights into their operations.

“The real-time data generated from IoT devices will usher in a new era of productivity that will be critical for Australian companies looking at staying internationally competitive regardless of industry segment,” concluded Fadaghi.

For those companies about to embark on implementing IoT technologies, Telsyte recommends:

  • Start small then scale: The data explosion generated by IoT devices is creating an opportunity for Australia’s business leaders to cut costs and improve business insights. Inertia associated with rolling out unfamiliar technologies can be overcome if business leaders start small and grow their IoT deployments as business benefits such as boosted productivity and revenues and reduced costs are realised.
  • Climb with the cloud: To overcome complexity, skills and cost barriers, Telsyte recommends exploring proven IoT cloud services or managed solutions, which can be procured on a pay-per-use basis and grown as requirements increase, reducing risk and accelerating deployments.
  • Partner and scale: While IoT pioneers have often had to go it alone, the fast followers are working with experienced vendor partners to reduce risk, leverage skills and ultimately adopt tried and tested vertical solutions. As benefits grow with IoT scale Telsyte recommends investigating vendors that can handle the largest workloads and scale to meet future requirements.
  • Keep it close: Most organisations (77 per cent) in Australia have some restrictions on where data is located[1], Telsyte recommends engaging with IoT solution providers that have an on-shore cloud service or with local managed-service providers that have experience in dealing with data location restrictions.
  • Prepare for real time data: The Internet of Things will generate real-time data — not just large volumes of data — across a range of business processes. Real-time data is about immediacy, and brings with it the potential for fundamental disruption. When possible, Telsyte recommends processes be modelled around the availability of real-time data to build long-term competitive advantage.

[1]  Telsyte Microsoft Australia Internet of Things Decision Maker Study 2014

Notes to editors:

‘Cut through: How the Internet of Things is sharpening Australia’s competitive edge’ research, was conducted by Telsyte on behalf of Microsoft Australia, surveying 306 Australian business decision makers.

The report defined the Internet of Things as the network of physical devices (such as machinery, cars, lighting, manufacturing equipment and sensors) that interact with each other and with business software systems. The IoT collects and collates data from those connected devices, which can be used to improve customer service, increase revenue or reduce costs. Technologies like SCADA, cellular machine-to-machine (M2M) and other networked industrial control systems are also defined as part of the IoT in this report.

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Click the below image for the full size infographic.

IoT Infographic

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