The business drivers and challenges of IoT for SMEs
SMEs have much to gain from the Internet of Things (IoT), both as the creators of IoT technology and solutions, and as adopters and consumers of the IoT.
SME technology companies will be a major source of innovation in the IoT; they act like speedboats – their leaner structure allows them to adjust speed and direction quickly. The challenge lies in getting their great ideas in front of slower moving large enterprises.
Small innovative IoT companies are driving innovation in the domain of IoT- the combination of short decision-making cycles and a willingness to try new things means that they often hold a significant advantage when it comes to taking an idea from concept, to prototype, to sellable product.
Larger enterprises, however tend to act like large oil tankers. They are often stymied by corporate inertia and a more conservative attitude to risk and innovation when it comes to the creation and development of ground-breaking technology solutions.
So, on one hand, we have a vibrant community of SMEs with a host of innovative ideas, while on the other hand we have a market made up of large organisations that have much to gain from smart IoT solutions either through efficiency improvements to existing processes or because of new opportunities that the IoT may create for them.
This is where organisations like IoTUK come into play; IoTUK provides a focal point for SMEs that are hoping to bring IoT solutions to market, providing them with support, advice, and more importantly, help, in getting access to their target markets. One further benefit that many IoT start-ups report is that organisations such as the Digital Catapult and the Future Cities Catapult also provide a great opportunity for them to meet, interact with, and partner with other SME organisations.
In the meantime, smart SMEs are also adopting the IoT.For example, Airporter (a medium sized Northern Irish transportation company), took advantage of an IoT fleet management system to advance its operational efficiency. It was able to improve driver behaviour whilst enhancing its environmental impact. Further details can be found here.
A recent Current Analysis survey of 1000 organisations across the globe showed that while companies of all sizes cited improved operational efficiencies as the key benefit expected from deploying an IoT solution, SMEs (notably, 40% of the 301 SMEs surveyed) were clearly ahead of their larger counterparts in this expectation. IoT suppliers of all sizes should not simply focus on cost reduction in their marketing message, but emphasise the operational benefits IoT can deliver, particularly for SMEs.
Another IoT driver is cost savings solutions. For SMEs, managing cash outgoings is the difference between life and death. Stoke by Nayland Hotel, Golf and Spa (a family run leisure provider), reduced its water and energy costs by 80% and 50% respectively, by leveraging an IoT solution. Further details can be found here.
Just as SME technology providers benefit from greater agility, shorter decision cycles and a greater willingness to try new things, these attributes also mean that SMEs represent an attractive potential market for the adoption of new IoT services.