How do I justify investing in IoT for my business?

How could an IoT solution help my business?

“Remember that time is money” said Benjamin Franklin, never truer than when deciding how IoT can help your business. We all make decisions and take actions for our businesses based on information we gather during the day. These can either help us improve sales, reduce costs, or possibly both. However, how often do we consider the cost of gathering that information – the time taken?

Let’s look at an example…

Take a vending machine owner who has to visit his machines to see whether they need re-stocking. The journey time to a machine that does not need to be re-stocked is a cost for his business. Imagine he was able to see the stock position without leaving his office. Imagine he was able to look across his estate of machines and see which lines were selling well and which were not. That information would not only help him save time, but also help him make timely decisions about what he stocks in his machines. You don’t need to be able to imagine it - IoT can do that.

How about another example…

Alternatively, look at a business that collects recycling from bins in car parks. Collecting, or emptying half-filled bins is clearly more costly than if they are full – more cost/time for the same benefit. Collecting from an overfilled bin also increases costs. It has been calculated that it can cost up to three times as much to deal with an overfilled bin. Imagine being able to know whether a bin was filled, or close to full without the need to visit it. Imagine being able to take that information and plan transport needs – visits and routing – based on the latest information. The time and cost savings would be significant. Timely, responsive action would also improve service reputation with users and customers – you can’t buy that. You don’t need to be able to imagine it - IoT can do that.

And finally…

Let’s look at a business that hires plant to builders. Keeping track of where plant on hire is located is critical. Theft is a major issue, and preventing it needs constant vigilance. If theft occurs, insurance can help, but the time dealing with the claim and loss of revenue cannot be recovered. Imagine being able to know where all of your plant is – at any time – without leaving the office, or last thing before bed. Imagine knowing not only where plant is, but getting an alarm when it is being moved at 2.00 am. You don’t need to be able to imagine it - IoT can do that.
man checking plant machinery

I see how IoT can help my business, but what will it cost me?

There are a huge range of IoT solutions available today that meet almost any need. They are also largely built on mainstream technology. That means there are almost limitless opportunities, and the costs have decreased significantly over recent years. An IoT solution will probably cost you a lot less than you think.

What are the cost elements in an IoT solution?

You will need a device to do what you need to do – take a reading, send a location or trigger an alarm. This will typically be a one-off cost of £50 to £400, ranging from a basic GPRS tracker in a vehicle to a flow meter working in a harsh environment.

 You also need something to allow the device to use a network, an IoT ‘module’. That enables the device to connect back to the office. In many cases this will be part of the device itself and so included in the price. If this is needed as a discreet item, it will typically be a one-off cost of between £5 and £25 depending on the data speed your application requires and the type of network you are connecting to.

 The cost of the network to connect to your device will be typically depend on the volume of data your device uses. Mobile is the most widely available network type that could be used, so a useful proxy. We have all become used to increasing data allowances on our phones as we use them for more things. The currency of data allowances has seamlessly moved from Mb to Gb. It is expected that data use on our phones will grow from 1.7Gb in 2016 to 8.8Gb in 2021 . Fortunately, the costs have not increased in the same way. However, coming to IoT with data costs based on smartphones would be a mistake.

 A typical IoT application uses under 5Mb per month. Typically that would cost no more than £1.80 per month, but can be found at lower cost. Other network types, should they be available and suitable are also likely to be lower cost.

 There may also be data storage costs to allow data from the device to be held for trend, audit and historic analysis. As we are increasingly using cloud storage for things now it is likely it could be used for storage of your IoT data too. You will also need an application to reach and read/trigger your device. This is usually bundled with the device itself, so no further cost.

 Assuming a device life of 5 years, it means that the average daily cost per device would be around 15p – less than the cost of the milk for your coffee. When you set that against the potential time IoT could save you, never mind the increased revenue opportunities and customer care benefits the case is overwhelming. It is no longer can you afford IoT, but more you can’t afford to not have IoT. It is one of the most important investment opportunities for your business.