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Almost 90% of businesses in the Netherlands are barely aware of the competitive advantages the internet of things (IoT) can offer them.
The figure is striking given that last year, Vodafone’s IoT trends report for the Netherlands found that organsations that do embrace IoT achieve a significant revenue increase, cost reductions, more satisfied customers or more efficient business processes.
The problem appears to be a lack of understanding, rather than a reluctance to adopt the IoT, because the report said that more than a quarter of the companies (28.5%) surveyed regarded their IoT knowledge as limited to almost non-existent.
John van Vianen, director, business market at VodafoneZiggo, said in the introduction to the Vodafone Nederland, IoT Trendrapport 2018: “The outcome of this trend research into the adoption of IoT in the Netherlands as a means to develop new products and services is striking. Almost seven out of 10 Dutch entrepreneurs indicate that they do not really or hardly think about how they could use IoT for their business.
“There is still a world to win for companies – and thus for their customers. In many sectors, you can still be an early adopter. From healthcare to industry to government, IoT solutions are able to improve businesses, make them smarter and to create completely new business models.”
Internationally, the Netherlands is falling behind in the field of IoT. While the proportion of global organisations that use IoT applications has doubled to 29% in the past five years, the Netherlands remains at just 13%.
Vodafone’s report showed that most companies are reluctant to trust the information produced by IoT equipment and applications. Only 9% said they used such data to make everyday decisions.
A large number of organisations said IoT data supports their business, but they are not making decisions based on it. About 20% of the respondents said they do not really use data at all.
Security and privacy concerns were mentioned as the biggest obstacles to implementing IoT by 39% of respondents to the Vodafone survey.
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The lack of knowledge and skills among employees is also seen as one of the biggest obstacles to Dutch organisations implementing IoT. As a result, they are likely to miss out on opportunities compared with international organisations that have already embraced the technology.
Despite the slow take-up in the Netherlands, virtually everyone seems to recognise the importance of IoT in being able to offer better solutions for problems ranging from energy and the environment to crime, healthcare and education.
“It is absolutely vital to gather knowledge in your own organisation,” said Gerd Kortuem, professor of IoT at the Technical University of Delft.
Such knowledge can be built up internally, but that takes a lot of time, he said. Companies need to learn about the success stories and failures of early adopters of the technology, and IoT specialists have an important role to play in making the business case for IoT, then implementation and scaling up.
Companies need help
Jelmer Letterie, IoT specialist at Vodafone, said: “We advise clients to start small and find a knowledge partner who can help to scale up successful business cases.”
For example, he said, for the development of the Bundelz app, insurance company Nationale Nederlanden called in help from Vodafone, among others. With the app – and a prepaid car insurance policy – policyholders only pay for the exact number of kilometres they drive. “Why would you pay the same premium when you drive less than somebody that, for instance, drives 20,000 kilometres a year?” said Letterie.
“By registering the number of kilometres you drive, via IoT, people only have to pay for the exact number of kilometres. They buy a bundle for a certain number of kilometres and get notified when they reach that limit.”
The app was developed with multiple parties. Vodafone was not only brought in for its IoT expertise, but also its experience with prepaid arrangements.
Nearly half of companies in the Netherlands estimate that at least part of their business processes will depend on the IoT in five years’ time. That is why almost one in four Dutch organisations say they are investing more and more in the technology.
Transforming business processes
Vodafone’s IoT trends report shows that the number of connected devices has grown among these early adopters. “We see that companies that already use IoT are creating new services and transforming their business processes,” said Letterie.
But uncertainty over the return on investment in IoT is rife. Almost two-thirds of the Dutch organisations that are investing in IoT said they do not know what it will contribute to their turnover. “It seems that many companies do not yet know how to use IoT to the maximum,” said Letterie.
Some companies do not immediately see what IoT use can yield or where to start, yet Vodafone’s research shows that 51% of entrepreneurs that use IoT see their turnover increase. As well as sales growth, there are many examples of cost savings, working more efficiently and/or a better customer experience.
The main conclusion of the IoT trends report is that most Dutch businesses use IoT mainly for a better customer experience, improved data collection and better productivity, whereas international organisations use it to increase revenue.
Companies that take up IoT technology hope to gain ingenuity, efficiency and profitability, but the main obstacles to these goals are concerns about privacy and data protection, plus practical considerations such as internal reluctance, low budget or a shortage of qualified suppliers of software and sensors.
But the main reason why Dutch companies ignore the IoT is the simple fact that they do not appear to see a clear and convincing business case for it.