Developing metrics for “Internet of Things” implementation assessment by enterprises

Abstract

The study is devoted to the new technology of Internet of Things (IoT) and the ways how companies can estimate the benefits from its implementation before the investment decision. The applications of IoT embrace all industries and various business domains; it can have impact on virtually any element of value chain of any company. Thus, the research question is how to localize the implementation area and estimate the results. The aim of this study is to develop a list metrics that would allow companies to estimate expected benefits from IoT usage. Metrics include operational and strategic gains. As operational metrics the assessment of profitability change is used, while the strategic gains are seen as the improvement of customer satisfaction and partner network integration. International companies may gain additional benefit from IoT due to the facilitated cross-border activities and communications. Return on Investments and Benefit-Cost Ratio are used as quantification instruments for the developed metrics. The scope of quantification model is narrowed to manufacturing companies and economic gains they are able to achieve due to the implementation of Internet of Things. The application of the metrics and calculation of the return is illustrated on a real case of German electronics manufacturing company. The company claims three issues of the manufacturing process and the study demonstrates how IoT analytical platform can diminish these issues and minimize lost profit for the company.