The Internet of Things (IoT)

What is that on your wrist? Did you shut the garage door? Is the “check engine” light on?  Your fitness tracker, smart garage door and vehicle are all part of a network of connected physical devices called the “Internet of Things (IoT).” So, what if we could harness the data these devices collect, store it in the cloud for analysis, benefit from its useful insights and maybe even prevent occurrences such as equipment failure or a heart attack?

Who is using IoT?
Microsoft reports that 79% of today’s manufacturing leaders use IoT in their operations, with 82% of them reporting increases in operational efficiency and product quality. Market reports the health care IoT market segment is poised to hit $117 billion by 2020. Whether on a manufacturing shop floor or in a hospital critical care unit, turning information into insights will lead to improvements in any process or use of equipment.

What are the potential benefits?
The City of Chicago, for example, has officially launched “Array of Things (AoT),” which will include installation of over 500 nodes on downtown buildings, streetlights and light poles. Information will be uploaded to an open-source database, allowing scientists, engineers and researchers to develop data analysis tools and applications. The City was awarded a $3.1 million grant for the development of AoT to monitor wind speed, walking patterns, air quality and light intensity. Chicago will use AoT to become a “smart city” by proactively addressing an array of challenges such as urban flooding and traffic safety.

What are the options, and how much do they cost?
Using near-field communication (NFC) tags, Raspberry Pi, SQL, Access databases, HTML, Wi-Fi and Bluetooth are some of the more common tools we can use to integrate with machines and access their data, data that can then be correlated with financial and other data. Pricing models are typically based on a licensing structure, with upfront costs for design, development, integration, implementation and data source connections. Many companies offer “managed service” models with a fixed monthly fee approach. You should select a solution that aligns best with your needs, budget and desired outcomes.

What is next? 
We should embrace technology and educate ourselves on IoT because it will impact future generations daily, influence decision making and bring opportunities and new challenges to our world. Let’s understand IoT as a tool that illuminates data and improves our personal and business lives.

Written by David Christianson, CPA, Partner, Wipfli LLP – CPAs and Consultants

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