What Small Businesses Need to Know About the Internet of Things (IoT)
Small businesses are the backbone of the United States economy. As shown in Figure 1, according to the Small Business Administration, there are 28 million small businesses in the country that account for 54% of all sales. Additionally, over the last 30 years, small businesses have increased by 49%. These businesses have provided 66% of new jobs since the 1970s, and occupy as much as 50% of all commercial spaces. Put into better perspective, small businesses have added 8 million new jobs since the 1990s, as compared to large enterprises, which have added just 4 million.
It’s estimated that about half of all small businesses have an online presence. Somewhere between 5% and 10% of them are solely online businesses. Almost all of them rely on modern technology to sustain day-to-day operations. But few of them are fully aware of the impact of the Internet of Things (IoT), and how it will ultimately pave the road to the future.
What is the Internet of Things (IoT)?
There’s no need to reinvent the wheel here. A Forbes article gives the perfect Internet of Things definition, explaining, “Simply put, this is the concept of basically connecting any device with an on and off switch to the Internet (and/or to each other). This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of. This also applies to components of machines, for example a jet engine of an airplane or the drill of an oil rig.”
In essence, IoT is a representation of anything that’s connected. Whether that’s your smartphone pushing a notification that you just closed an invoice in your QuickBooks account, or your LANDesk Antivirus program informing you that your weekly backup has been completed and that your computers are all secured.
IoT is also representative of any cloud-based or internet connected services that an SMB might be using, from Adobe to Microsoft, apps (internal and external), connected payment processing services or Point of Sale (POS) devices, your cloud-hosted alarm and video monitoring service, and so much more. For even more examples, read our recent article on four industries that are rocking the IoT platform.
How IoT Impacts Small Businesses
The impact of IoT on small businesses is already in full swing. Soon, the days of credit card swiping at a retail payment terminal will be history. Newer U.S. federal regulations require that Europay , MasterCard and Visa (EMV) be integrated in Q1 of 2017 to bring a new standard to the way that these connected devices encrypt information and send it to the card issuer, the receiving bank and the card interchange, according to CreditCards.com.
These connected devices are found in nearly every small business, with the exception of cash-only businesses. As a connected device, they are part of the IoT, and represent the biggest technology change to affect SMBs in years.
An American Express publication offers more insight on IoT and its impact on SMBs in their Small Business Open Forum. They advise that IoT technologies will usher in a new era for SMBs that include real-time operations and improved reporting.
Software giant Microsoft concurs, stating: “An intelligent system is transformative. Point-of-Sale scanners on a retail floor are connected to warehouse systems and analytics software at headquarters for industry-leading efficiency in inventory. Robots on a factory floor send production and maintenance information directly to those who need it, for unparalleled reliability and uptime … In each case, new insights are generated that drive the organization’s objectives forward on many levels.”
More enterprising options
SMBs also benefit from IoT in the form of new enterprising options. As Dell reports, it brings about new business models that create new revenue streams for businesses, enabling the ability to “respond rapidly to customer needs.” This, coupled with real-time information access, gives SMBs an unprecedented advantage that has previously been the boon of big data and the big businesses that could afford it.
In addition, IoT delivers unparalleled access to real-time data and analytics, which give SMBs critical insight into their processes, also enabling the creation of new revenue, as well as the “diversification of revenue streams,” representing a monumental shift in the way that data is captured and shared. This, in turn, results in more intelligence and less costly operational protocols, with enabled A/B testing, minimized cost and maximized Return on Investment (ROI).
A new approach to security
Of course, with these landmark technology shifts also comes responsibility. Security risks are abundant in any technical world. Just ask Yahoo, who recently admitted to the being the victim of the largest data breach in history, according to CNN, where 1 billion accounts were compromised. However, with the right protective mechanisms in place, SMBs can safeguard themselves against any security caveats that IoT may represent, while still taking advantage of its numerous offerings.
A Small Business Computing article offers several security tips for SMBs seeking to tap into IoT. These include:
- Strong passwords
- Frequent software updates
- Strong Wi-Fi security
- Frequent data backups
- Professional IT support and management
With the right approach, IoT is a powerful weapon that can be added to the arsenal of SMBs. Wise business owners already have plans in place to vet their enterprises by taking advantage of the many benefits IoT offers. Yours can, and should, too.
If you are still wondering how you can keep your business ahead of the game, find out how we can help with more than 20 years of IT experience. Talk an IT expert today online to learn your options, or by calling: 1.800.INSIGHT.