Can IoT Take SMEs to a Higher Growth Trajectory?

Internet of Things (IOT) has become the key theme of the world since 2009 and been considered as the third wave in the information industry after the waves of Computer, Internet and Mobile Radio Communication. It is expected to have a strong influence on small and medium companies (SMEs). The purpose of the article is to examine the relevance, if any, and can the concept of IOT influence the organizational changes in Indian SMEs.

Govt. Support for IoT Promotion
Most of the developed economies, such as US and China have accepted the immediate need to develop these systems. A set of policies for developing and implementing these new technologies is being formed. Overall, IOT has been considered as the third wave of world information industry, after waves of computer, internet, and mobile radio communication. According to one report, the American government has invested 787 billion US$ into information communication technology (ICT) development, mainly in energy, medical treatment and broadband aspects. The government in China has also realised the huge potential of promoting IOT as a means of Strategic Development of its SME sector.
In the IoT scheme of things the physical world is becoming a type of information system-through sensors and actuators embedded in physical objects and linked through wired and wireless networks via the Internet Protocol. In manufacturing, the potential for these systems to improve productivity in the production process and the supply chain is vast. Consider processes that govern themselves, where smart products can take corrective action to avoid damages and where individual parts are automatically replenished. Most industry experts we talked to agree that the next wave of growth in the technology sector will be outside the area of traditional PC and even the mobile and may shift to the concept of IOT. As a related example, think Google Glass--a wearable glass with an Optical Head Mounted Display (OHMD). The idea is to reduce the time gap between intention and action on part of the user. This is a very basic example of implementing the idea of wearable computing with Augmented Display and Virtual Reality. The glass comes with a built in Camera, Display, Bluetooth, Battery, Touchpad, Speakers and Microphone built into the frame.

Another example could be a US based company which has launched an RFID-reading, motion-sensing wristband buzzes to tell healthcare workers if they are washing their hands properly. Authorities want to make hospitals healthier by encouraging workers to clean their hands properly. Its solution is a bracelet that vibrates when the wearer has scrubbed sufficiently, giving employees a way to check their habits and letting employers know who is and isn't doing the things right. Some 100,000 people a year in the United States alone die because of infections that arise from hospital visits, according to the Center for Disease Control and Prevention, and a lot of these infections occur because doctors, nurses, and technicians don't wash well enough. They have developed a technology that allows them to alert healthcare workers on the spot if they aren't washing or sanitizing. Because RFID tags are also placed outside patients' rooms and on some equipment, the system alerts health-care workers to clean their hands before doing a procedure that carries a high infection risk, such as inserting a catheter.

Fridges are also getting much smarter. A leading manufacturer has launched a fridge that comes with an embedded touch screen that connects to the Internet and lets users shop straight from their fridge. Additional features include a washer/dryer manager that allows users to check out how much time is remaining on a load. It doubles up as a TV by streaming from other TVs in the house. Smart Fridge is connected to your local grocery and thus manages your minimum level of goods in the fridge. This also manages freshness of food, besides the expiry dates of various products. The best part is that this device can be remotely controlled by your smart phone.

Initial Usage by SMEs
SME industry owners from industries such as Retail have already started adopting various types of tags to keep track of goods in their stores. There is already a need to take this to next level. The world's top retail companies are using RFID because of the big benefits the technology brings, including:
- Reduced time to take inventory
- Improvements in inventory accuracy
- Use of intelligent racks in the store can result in automatic alert message to the warehousing department in case of "no stock condition" for any product in the rack, below a predetermined level.
- An enhanced customer shopping experience, such as automatic payment debit from the customers card once they are leaving the store (instead of standing in a long queue for paying)
- In one of the surveys large stores customers have complained of spending a long time looking for their preferred brand of product. This can be shortened by picking up the grocery list, from the customer's smart phone, as soon as the customer enters the store and then directing them to the right alley to pick up their preferred product.
Manufacturing SME can potentially be the biggest benefactor of using IOT for their logistic and planning process. Although this is still in its infancy stage, we feel that using the right mix this can become a game changer for the SME sector. Manufacturers today carry a huge amount of past data. With all this new information available-about interdependencies, the flow of materials, the cycle time, and so on-manufacturers can not only reduce their inventory costs but also the amount of capital required. Of course there are many challenges, including cost and the quality of human capital involved.
Facing the challenge of IOT era, SMEs need to invest in new technology development, for example, barcode technique, infrared scanning, Radio Frequency Identification (RFID) and a variety of accompanying application software. Besides this, SMEs need to concentrate on changing their business model and company growth strategies. To develop a business application based on an IoT service, a company might be able to control the development of the whole industry chain, which would become the key factor of success.

Is it Justifiable for SMEs to Adopt IoT?
In a previous issue of PCQuest, we dwelt on the "mindset change" that SME owners need to go through to adopt such technologies. On the flip side we know that a majority of SMEs are not able to even manage their website. For the majority of the manufacturing SMEs, e-business is not a priority area. Planning and investing into e business is just not part of their marketing plan. Is it justifiable to talk of usage of IOT in the SME sector? Should the SME sector use IOT as a tool that will reduce the gap between this sector and the large Enterprise? WILL THE MID SIZE AND LARGE ENTERPRISE LOSE PART of their early entry advantage in the IOT era?

Some other challenges that IoT faces are:
- Technological standardization in most areas is still unclear
- Managing and fostering rapid innovation is a challenge for governments
- Privacy and Security is a major concern
- Absence of governance and human capital concerns remain
Many experts we have talked to opine that with early adoption of at least a part of IoT, SMEs may actually reduce the large technology gap between themselves and the large enterprises.
From any time, any place connectivity for anyone, IoT will ensure that we now have connectivity for anything! With the expected launch of 4G services in India, the era of IoT looks much more promising in India. Imagine what an exciting world it will become if all physical products we use and experience start interacting with products all over the world. Let the SMEs rise and shine and adopt technology in such a way that it catapults them to the next level of growth. Let SMEs unite and rise. After all they have nothing to lose other than their SME status!