Is the Internet of Things critical to business success and possibly to business survival
Is the Internet of Things critical to business success and possibly to business survival?
This essay considers the role of the internet in the creation, success and survival of business today. Using a combination of literature reviews and practical examples, the essay argues that the internet is useful to business but not to all businesses and not at all times. It concludes that the usefulness of the internet is directly linked to the objectives, methods and environment of a given business at any given point in time.
What is Internet of Things?
Internet of Things or IoT is really that collection of activities and technological advancements that have transferred the conduct of life activities (including business) onto the world-wide web. It includes those physical objects which operate via networks, consumer electronics, and software packages in order to collect; manage; process; and assimilate data (Perkowitz, 2015).
What is the difference between business success and business survival?
The term business success is a bespoke, subjective and individualized concept that can mean anything including profits; employing people; corporate responsibility; ethical operations; charitable contributions; research; innovation; and entrepreneurship (Fandel, et al., 2004, pp. 81-82). In other words it is simply the extent to which any business is able to achieve its stated objectives. Business survival on the other hand denotes the ability of that entity to adapt to; change; make use of; and develop the environment within which it operates (Grunert & Ellegaard, 1992). This environment may include customers; rival companies; regulators; the community at large; and potential entrants into the industry.
The next rung of analysis then considers whether the IoT is a reality for businesses today, the impact it has had and the future prospects it heralds. Iansiti and Lakhani (2014) identify eight principle spheres within which the IoT is critical to business functionality in the modern market. These include accessibility, innovation, information, marketing, competition, connectedness, strategy and prediction. By contrast Skidelsky (2010) aptly notes that businesses thrived well before the internet craze and that indeed the internet bubble went some way to reinforce the idea that traditional methods were perhaps more reliable than the new shiny object that is the World World Web. On the other hand Ghezzi et al. (2013) are much more pragmatic in arguing that the IoT is a necessary evil without which businesses risk irrelevancy in an age where innovation is delivered, assessed and discarded at increasingly fast rates. The only unifying factor within all these strands of thought is the efficacy, neccesity and rightness of the debate surrounding the use of the IoT in business activity.
The answer to that secondary implied question is as complex as the objectives that businesses start out with or adopt along the way. For example Porter and Heppelmann (2015) highlights the case of dot.com businesses whose raison d’etre and modus operandi is inextricably linked to the IoT. These are enterprises that have no realistic future within other realms particularly in terms of engagement with their customers. FaceBook and Twitter are meaningless without the medium of the internet. However Meltzer (2014) also highlights the important exception of professions and businesses that are not quite the right fit for the internet but have somehow been roped into online activities, if only to keep up with the Joneses. A case in point is the upsurge of medical and legal advice websites which unsuccessfully try to mimic the professional practice of qualified doctors and lawyers respectively. These two contrasts then give credence to Day and Ben’s (2005) laissez faire attitude to the IoT. In other words the IoT is only useful in as far as it meets the objectives, purposes, methods and aspirations of a given business at a given time. The latter point then leads Breur (2015) to argue that this approach will necessarily encourage complacency within the business community since there is no imperative to innovate or adapt to the specific dynamics of the internet particularly in terms of handing big volumes of data.
That particular point neatly brings the debate back to the issue of survival. Perkowitz’s (2015) postulates are quite stark in as far as they make the case that few businesses can hope to survive the age of information without making any use of the IoT. To attempt to do so is folly and the equivalence of burying the entrepreneurial head in the sand. Berinato (2014) takes this argument further by acknowleding the difficulties of the IoT including unreliability; lack of control; participatory democracy; disorganization; amateurism; and great diversity. Nevertheless he recommends the strategic use of the IoT in order to create an environment in which businesses have no option but to adapt. They must be excellent in their core business and also in the use of the IoT in order to excel. This type of Entreprenurial Darwinism has been praised by Porter and Heppelmann (2015) for weeding out those businesses that have no business doing business in the first place. Nevertheless the cost of using the IoT in the wrong way at the wrong time can have costs that threaten the very existence of an entire industry. One need look no further than the Bitcoin saga to understand the importance of caution when dealing with this new and volatile instrument (Weinberger, 2015).
How then can all these conflicting, contradictory and often abstract arguments be combined into a winning formula for a potential, new or old business? The very first point is to understand one’s business and one’s customers (Porter & Heppelmann, 2015). This is the lead point that will determine whether the IoT is an indispensable tool of business or a peripheral point of interest that cannot be central to strategic planning. For example if the client profiles are driven by social media in a largely tech-savvy demographic, then it is nothing short of foolhardy to ignore the IoT. On the other hand, if a business is dealing with a more traditional clientele expecting personalized services, then the IoT should never be allowed to get in the way (Kobie, 2015). Doing haute couture client orientation online is not really a winning strategy but it can work very well for a catalogue shopper on the subprime levels of the fashion ladder. It is also important to note that one of the constants of business is change. Tastes, preferences and methods can completely transform within less than a generation. It is not that long ago that people used to visit video libraries. That industry has been rendered obsolete but the entrance of streaming media (Levine, 2011). A business that is stuck in the old ways runs the risk of never finding a future.
What is clear in all this is the fact that the customer remains king. Yes, there are many stakeholders including board directors who have the power to change the rules. However, it is ultimately the customer that will decide whether the IoT is going to be a business tool or an externalized curiosity. Some businesses have profited somewhat from being able to incorporate certain aspects of the IoT into their more traditional ways of working. A case in point is the phenomenon of Hello Food, a company operating in the Middle East and Africa which allows people to order takeaway food online. The chefs are the same but the waiters have been replaced by couriers (Curley, 2013). Perhaps that is the most effective way of approaching the IoT particularly in an environment that is full of intangibles as well as facts that keep changing. Such examples highlight the fact that the IoT is not the do-or-die of modern business. Rather it is yet another great tool for expanding the horizons of a business, its reach and ultimately its long term survival.
It is relatively easy to think of all these things in abstract without addressing the empirical modalities of implementing an IoT business strategy. Assuming that everyone in the company or the team is capable of using the IoT to its zenith is not really an effective strategy. Businesses in general and entrepreneurs in particular should strive to educate people about the use of the IoT. This is not just about discussing the technical aspects of logging online and undertaking certain activities. Rather, it is an in-depth and incisive understanding of how the IoT is relevant to a particular business at a given point in time (Zhang & Chen, 2015). This bespoke usage of the IoT will allow for even better innovations not only in terms of internet functionality but also the functionality of businesses when they are in the online realm. The Uber payment and customer feedback system is just one of many examples of how the powers of the IoT can be strategically harnessed in order to enhance the effectiveness and efficiency of a traditional business (Kees, et al., 2015, p. 11). This approach also stops the owners and operators of the internet from becoming complacent about their critical importance to business activities.
To conclude this essay, we must revisit the original research question. The findings above indicate that by and large the IoT remains an important aspect of business planning, implementation, evaluation and performance. It is a link to customers who might otherwise escape traditional business models. However, the essay also shows that the IoT is not the ultimate tool for all businesses in all industries all the time. Rather the findings are indicative of a tool that is subject to the intentions and methods of a given business enterprise or entity. That seems like a sensible way to make use of one of the most intriguing phenomena of this and the past century combined.
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