Innovation Blog
The Internet of Things: The Next Big Things?
By Shlomo Maital
A fascinating article in the latest McKinsey Quarterly, The Internet of Things, [1] by Michael Chui, Markus Loffler and Roger Roberts, makes a key point:
“In what’s called the Internet of Things, sensors and actuators embedded in physical objects—from roadways to pacemakers—are linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the Internet. These networks churn out huge volumes of data that flow to computers for analysis. When objects can both sense the environment and communicate, they become tools for understanding complexity and responding to it swiftly. What’s revolutionary in all this is that these physical information systems are now beginning to be deployed, and some of them even work largely without human intervention.”
A few examples?
1. Tracking behavior
When products are embedded with sensors, companies can track the movements of these products and even monitor interactions with them. Business models can be fine-tuned to take advantage of this behavioral data.
2. Enhanced situational awareness
Data from large numbers of sensors, deployed in infrastructure (such as roads and buildings) or to report on environmental conditions (including soil moisture, ocean currents, or weather), can give decision makers a heightened awareness of real-time events, particularly when the sensors are used with advanced display or visualization technologies.
3. Process optimization
The Internet of Things is opening new frontiers for improving processes. Some industries, such as chemical production, are installing legions of sensors to bring much greater granularity to monitoring. These sensors feed data to computers, which in turn analyze them and then send signals to actuators that adjust processes—for example, by modifying ingredient mixtures, temperatures, or pressures.
Think about your innovative product or service idea. How can you enhance it, by adding “Internet of Things” technology? Chances are, your competitors are doing just that, at this very moment.
The authors conclude:
Companies can begin taking steps now to position themselves for these changes by using the new technologies to optimize business processes in which traditional approaches have not brought satisfactory returns. Energy consumption efficiency and process optimization are good early targets. Experiments with the emerging technologies should be conducted in development labs and in small-scale pilot trials, and established companies can seek partnerships with innovative technology suppliers creating Internet-of-Things capabilities for target industries.”
[1] McKinsey Quarterly March 2010.





