What the “Internet of Things” Will Mean for Small Businesses

Internet of things will mean for small business

Many security experts, fortune 500 executives, and technology gurus have been heralding the arrival of the “Internet of Things” (IoT). Though catchy, it is not always obvious what the phrase “IoT” is meant to describe. The “Internet of Things” is a generic term used to refer to the phenomenon of increasing connectivity of elements in the physical world (e.g. dwelling spaces, consumer goods, vehicles, etc.) through the Internet. These physical elements are more connected to each other and to software applications designed to allow for their remote control. This new type of technology has opened an enormous world of opportunity for businesses in all industries, and it will fundamentally change the way that people interact with their physical surroundings. Bold predictions claim that at least 30 billion devices will be “connected” within the IoT by 2020.

The Amazon Echo and Google Home products are popular examples of how the IoT affects consumer goods and households. These offerings allow users to control numerous aspects of the average home environment by using an app, or simply by dictating commands to a smart-speaker. Simple tasks like raising the temperature, checking who’s at the door, setting the security system, turning on and off lights, and controlling many electronic appliances (i.e. refrigerator, oven, etc.) can be done with the press of a button – even if the user if thousands of miles away.

Even though these examples are related to consumer products, experts predict that businesses will be the fastest growing segment of IoT adopters in the near future. Regardless of a business’ size, there are huge advantages to be gained by integrating connective technologies into normal business operations. This article will specifically address three key areas where the Internet of Things will affect small businesses:

  1. Streamlined Data Processing
  2. Efficiency & Productivity
  3. Warehouse & Logistics Management

Additionally, we will address the obvious security issues presented by this phenomenon and how those who own or operate small businesses can protect themselves from the threat of increased connectivity in their corporate environments.

How the Internet of Things Will Affect Small Business

Streamlined Data Processing

Smart devices, portable payment platforms, and other new technologies are making it easier than ever for companies to access customer information that is specific, unfiltered and continuously updated. The value of real-time feedback loops for marketers and customer success teams is almost impossible to overstate. With the ability to monitor customer feedback and activity, companies can immediately act to rectify issues or capitalize on marketing opportunities.

Applications like Square and Venmo are also changing the way that consumers pay for products and exchange monies with each other. Small businesses have been empowered to broaden their point-of-sale capabilities by now accepting electronic payments through laptops, smartphones and other portable devices that are connected to cloud-based processing platforms via wireless Internet.

Efficiency & Productivity

The main advantages provided by increased connectivity are increased efficiency and improved ease of access. Combined, these advantages allow even small teams to create a big impact by working smarter and not harder. Because so many functions can now be managed and monitored remotely, employees can substantially increase their productivity and output by managing or performing several operations simultaneously.

Remote employees will continue to realize massive benefits from IoT technologies. Instead of being limited to isolated off-site functions, remote employees will be able to access a broader range of company assets, even allowing for remote work-site monitoring of a factory floor or managing automated/programmed machines.

Logistics Management

New applications and software services are producing significant improvements in inventory management by providing low-cost ways of managing delivery, item tracking and warehouse setup for optimized pick locations. Real-time data sharing will help businesses that operate models like “just in time” fulfillment by facilitating communication and coordination between internal production teams and external suppliers. The IoT enables all of these advantages by connecting endpoint devices like labelers, printers, scanners and handheld inventory counters to each other and a master system used for managing high-level processes and production flow.

As inventory management becomes more and more automated, employees will be able to turn their attention to more productive areas like innovation, quality, and efficiency. This ability to focus on more valuable things will likely result in more engaged employees and a more competitive overall business.

Security Issues

The IoT bridges a gap between what most people think of as separate worlds: the digital and the physical. Most people think of cyberattacks as primarily targeting information. However, the connected architecture described as the Internet of Things presents an entirely different kind of cyber threat; it’s one that can cause damage far beyond computers and networks. Primarily, increasing connectivity between virtual and material environments will allow attackers to remotely access and influence company security systems, machinery, environmental controls, and much more.

International security operations by the US and other foreign government provide clear examples of how of how increased connectivity opens the door for attackers to damage physical environments. Less than a decade ago, the Iranian government’s nuclear program was dealt a crushing blow when a virus dubbed “Stuxnet” allowed remote access to their physical uranium enrichment plant. By intentionally altering the centrifuge speeds, attackers successfully caused permanent damage to the machines and set back Iran’s nuclear program by several years at least.

Attackers do not need to possess the sophistication, resources and organizational capacity of a government security agency to accomplish similar attacks. Only a few years ago, several security researchers noted how mischievous criminals accessed wirelessly connected devices within their home, including a baby monitor in their child’s bedroom.

As connectivity grows, only following recommended cyber security protocols will no longer be sufficient to protect small businesses against rapidly multiplying threats. Continued development of the IoT will only expand the number of ways that attackers can breach defenses and cause damage to virtual and physical assets. Cyber security insurance is quickly becoming a central part of a comprehensive security and risk management approach. Because it’s impossible to predict and protect against all potential attacks, mitigating risk and reducing liability through cyber security insurance should be the starting place for small businesses that are approaching security strategically and proactively.