What is the Internet of Things? A Comprehensive Guide for SME Owners and Directors

In the last few years, the term ‘Internet of Things’ or IoT has become a buzzword across various industries. But on the back end, businesses are starting to use it more to make themselves more efficient. So, it's useful to understand what IoT is and how it could possibly revolutionise the way your business operates. In this comprehensive guide, we will delve into the basics, the benefits and challenges of IoT, exploring how businesses like yours might make use of this transformative tech.

What is IoT?

In simple terms, the Internet of Things (IoT) refers to the network of interconnected devices and objects that can communicate and share data with each other over the internet. These devices, equipped with sensors and connectivity features, collect and exchange information, meaning they can do useful tasks by themselves. From smart thermostats and wearable fitness trackers to industrial machinery and self-driving cars, IoT is a vast ecosystem that covers so many uses in our lives.

Examples of IoT devices include:

Smart home devices[1] : Thermostats, lights, security cameras and smart assistants.

Wearables: Smartwatches, fitness trackers and health monitoring devices.

Industrial IoT[2] (IIoT): Sensors and monitoring devices in manufacturing and supply chain processes.

Connected cars: Vehicles with built-in sensors for navigation, maintenance and safety features.

Has this got you thinking? Once you understand the diversity of IoT applications as a business owner or director, you can start to see the potential for how this technology might be integrated into your own business processes.

Put simply, how does IoT actually work?

IoT operates through a network of interconnected devices that communicate and share data over the internet. The process involves three main components:

Devices: These are the physical objects embedded with sensors and connectivity features.

Connectivity: Devices use various communication protocols (Wi-Fi, Bluetooth, Zigbee, etc.) to transmit data to the cloud or other devices.

Cloud: The cloud serves as the central hub where data is collected, processed, and analysed. It can also store historical data for future reference.

For example, in a smart home scenario, a temperature sensor in the thermostat collects data, sends it to the cloud via Wi-Fi, and the user can access and control the thermostat remotely through a smartphone app.

The benefits of IoT applications[3]

Monitor business processes

IoT provides real-time insights into business operations, allowing owners and directors to monitor and optimise processes. From inventory management to production workflows, IoT enhances visibility, leading to more informed decision-making.

Improve customer experience

By making the most of IoT, businesses can create personalised and responsive customer experiences[4] . For instance, retailers can use beacons to send targeted promotions to customers' smartphones based on their location within a store.

Save time and money

Automation and predictive maintenance enabled by IoT reduce downtime and operational costs. In manufacturing, for instance, IoT sensors can predict equipment failures, allowing for proactive maintenance and preventing costly disruptions.

Enhance employee productivity

IoT applications streamline workflows and automate repetitive tasks, freeing up employees to focus on more strategic and creative aspects of their roles. From smart offices to connected machinery, IoT enhances overall workplace efficiency.

The Internet of Things is not just another tech trend

IoT has the potential to reshape the way businesses operate from the ground up. As we’ve seen, you can use IoT to drive efficiency, enhance customer experiences, and stay competitive. By understanding the basics, benefits, and challenges of IoT, you can make informed decisions about adopting this groundbreaking tech.

If you need help with IoT, knowing which new tech to adopt, or any other aspect of your business, get 1-2-1 support by speaking to one of our V-Hub Digital Advisors.