Published on the 04/04/2019 | Written by Heather Wright

Returns proven but still lacking full scale and sophistication…

Ninety-five percent of IoT adopters are already seeing a return on their investment, according to a new survey, which also shows 47 percent of Asia Pacific adopters are seeing ‘significant’ ROI.

The Vodafone Business 2019 IoT Barometer, which surveyed 1,430 respondents responsible for shaping their company’s IoT strategy, including more than 400 from APAC, shows Asia Pacific continues to lead in adoption of IoT, with 43 percent of companies across the region using the technology, versus 34 percent globally.

But it’s not all good news: While we’re enthusiastically embracing the technology for the most part we’re not moving beyond ‘intermediate’ use – with at least one full-scale IoT project in place. Just two percent of Asia Pacific adopters have reached ‘most sophisticated’ usage, with multiple full-scale projects deeply embedded within the wider business, while 15 percent are rated ‘very sophisticated’.

Despite their enthusiasm, companies in this region have further to go in developing their programmes and achieving all the possible benefits.

To put that in perspective, however, the global average for the Most Sophisticated band is also two percent – with the Americas on three percent and EMEA on two percent, while the global average for the Very Sophisticated band is 13 percent – below that seen in APAC.

“This implies that despite their enthusiasm, companies in this region have further to go in developing their programmes and achieving all the possible benefits,” the report says.

The report shows the benefits of IoT can be many and varied. The traditional focus on using IoT for cost management continues, with respondents reporting an average reduction in costs of 18 percent from adopting IoT, or 26 percent for the most sophisticated deployments, globally.

But adopters are also reporting improved collection of accurate data (48 percent), increased employee productivity (47 percent), increase in existing revenue streams (42 percent) better asset utilisation (41 percent), enhanced customer loyalty (39 percent), streamlined compliance with regulation (35 percent) and new revenue streams (33 percent) among the benefits.

“Most IoT projects aren’t about creating headlines; they’re about delivering bottom-line results,” says Stefano Gastaut, Vodafone IoT CEO.

“I believe we’ve already passed the tipping point and IoT has entered the mainstream. Seventy-four percent of adopters believe that within five years companies that haven’t adopted IoT will have fallen behind. For many companies, it’s no longer a case of whether or not to implement IoT, but how.”

The report shows many companies are becoming IoT adopters when they upgrade or replace systems, such as old heating, ventilation and air conditioning or fleet tracking, with many options these days including IoT by default.

Once IoT gets a foot in the door, it quickly scales up, with 80 percent of adopters saying they have more live IoT projects, 83 percent saying the scale of the IoT projects has grown and 79 percent saying they’re investing more in IoT. Over a quarter (27 percent) of adopters have multiple, full-scale IoT solutions, with eight percent claiming their ‘entire business depends on IoT’.

Transport and logistics reported the highest adoption rates globally, at 42 percent – a 15 percentage point increase over last year, with transport companies (those moving people) the biggest adopters and rapidly scaling up their IoT work as they use it to track assets and measure occupation such as traffic congestion and parking.

For the first time the report also includes a look at IoT in insurance, which is proving fertile ground for digital transformation, with IoT adoption hitting 34 percent as insurers seek to process claims applications and risk assessments more quickly. But it’s also being embraced to provide entirely new products like usage-based bike insurance.

“It can even be used to encourage better customer behaviour – IoT sensors can alert home owners when they’ve left a window open, an appliance turned on or a door unlocked,” the report notes. “Eighty-four percent of insurance adopters say their core business strategy has changed as a result of IoT.”

In healthcare – where 57 percent of adopters fall into either the most sophisticated or very sophisticated brackets – sensors are being used to monitor people and their health and encourage patients to take their medicines as prescribed.

In retail, much of the new in-store technology transforming the industry revolves around IoT or uses it in some way. Adopters say they’re using the technology to track environmental factors such as light, sound and temperature, and to generate valuable data on visitor behaviour, including tracking movement around stores.