The internet of things. The internet of everything. The digital transformation. The buzz words in many a conversation. Some of you will have been keeping track of the developments in this area for a couple of years now. But for others, you may have only heard these terms for the first time a couple of months ago, or maybe even right now. For something that most of us are already part of, I believe a lot of us are actually still very unaware. Even if you have heard these terms and that these developments will affect our lives and any business, chances are you don’t know what they mean exactly.

Well, telling you what it is exactly is not easy: giving a definition of these terms is difficult because the definition is still evolving. But I believe at its simplest, the internet of things (or IoT) is every ‘thing’; every physical object; every single device that is connected to the internet to send and/or receive data. This could be almost anything: a smartphone, a thermostat, an electronic door lock or even the sensors in a concrete wall to provide weather updates.

The internet of everything (or IoE) is any object or person that is connected via those devices and the processes that are being used for (meaningful) connection. It is the arch above the IoT. So the wearable fitness tracker on my wrist is part of the internet of things: it communicates the data it collected to the internet. By wearing it and looking at the collected data via an app, I’ve made myself a part of the internet of everything. This development towards total global networked communication is the digital transformation, which is also already being called the fourth industrial revolution, due to the sheer size and speed of the change.As said, most of us are already part of the IoE in our personal life: we use smartphones, social media and many more gadgets that are connected to the internet to make our lives easier and more fun. But how about professional life? Studies show that more and more companies believe that the IoT will have a big impact on their business and their industry within a relatively short period of time. With this belief also comes the recognition that almost any business will have to make adjustments because of it. And there is no doubt in my mind that this is true.

The chances of ‘old fashioned’ business models surviving in this new age seem extremely small. This is already visible all around us. Historically strong retail brands are struggling and closing down because they cannot compete against the internet and companies like Amazon. So change is inevitable. Adopting the new possibilities of the IoT seem a very good investment to make. But the big question is how?

The sheer volume of data that can be collected can make it overwhelming and difficult to know where to start. But let’s first point out one very important fact: the data itself is meaningless. If you just start to collect any and all data in the hopes of jumping aboard the IoT train, then you will get nothing except a very big pile of, well, data. It is all about the analysis and real-time communication of the results. Note the addition of real-time here. This is the true benefit of connectivity. Because let’s not forget that a lot of companies have already been gathering data for years. But the data is usually collected and stored locally on the machine and then downloaded for analysis every once in a while or when there has been a failure. Although this has proven useful in the past, it does not even come close to the benefits of real-time data and analysis can give. Being able to tell why a machine broke down is useful. Being able to tell that a machine is about to break down is a lot more useful.

Let’s look at the benefits of analysis after the fact. Hopefully, the collected data will give you a reason for the breakdown. Perhaps you can even discern a pattern, giving you the option of incorporating something in your processes to try and prevent another failure, such as a higher maintenance and parts replacement frequency. Then it is up to time to tell if the incorporated change was successful in preventing another breakdown. If it doesn’t, more time-consuming data gathering and analysis are needed. If it does, then how do you know that the measures taken are proportionate? The frequency could now be much higher than actually needed. You don’t know – unless you start a very big and long trial and error test, which is often not a risk you can take when there are customers and profits involved.

This is where real-time data collection and analysis can step in to make the difference. In previous analysis of breakdowns found that it is often due to a specific part breaking, then instead of simply replacing that part every 3 months (which comes at a cost for the item, the labour for the replacement and also a possible cost for downtime), wouldn’t it be much better to have a sensor telling you the current state the part is in? The sensor collects the data, sends it via the internet to a tool for analysis and if the first signs of weakness are detected, you are immediately notified via e-mail or a workflow etc. This enables you to make a plan to replace it, leading to very probably a much lower replacement rate and therefore cost savings without having to become less reliable. Even the opposite: the reliability of the machine will go up, as you can now know and fix the problems before they cause a breakdown.

This is an example of how the IoT can help in bringing the traditional methods of data gathering and analysis forward to become more useful. For a lot of companies, especially high asset companies such as service or rental businesses, I believe this is a good approach on how to start adopting the IoT technologies and make use of its advantages. The advice here is basically to start now and to start small and simple with something that has a very high probability of truly bringing benefits. Starting small will enable you to successfully adopt the IoT technology, whereas starting now will give you the chance to use this relatively early experience to expand the usage before you’ve missed the boat.

Because don’t forget that the IoT and IoE offer a lot more. Once you have gotten your toes wet in ‘modernizing’ the data gathering and analysis you were already doing, you can start to think on how to use these technologies to help you in areas of your business where so far you do not have anything yet. We have arrived at a point where it is not the technology, but only our imagination stopping us from utilizing the full potential of the IoE.

This is where the true challenge lies. Opening up our minds to the endless possibilities it offers. However cliché it sounds, this is where we truly have to think outside the box to make true progress. The IoT is not about modernizing what we have, it is about expanding all of our horizons in creating smarter solutions. That is the digital transformation.

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