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03 september 2015

cxo magazine

Door cxo magazine

An executive’s guide to the Internet of Things

The rate of adoption is accelerating. Here are six things you need to know.

cloud1.jpgAs the Internet of Things (IoT) has gained popular attention in the five years since we first published on the topic (See Michael Chui, Markus Löffler, and Roger Roberts, “The Internet of Things,” McKinsey Quarterly, March 2010.) It has also beguiled executives. When physical assets equipped with sensors give an information system the ability to capture, communicate, and process data—and even, in a sense, to collaborate—they create game-changing opportunities: production efficiency, distribution, and innovation all stand to benefit immensely. While the consumer’s adoption of fitness bands and connected household appliances might generate more media buzz, the potential for business usage is much greater. Research from the McKinsey Global Institute suggests that the operational efficiencies and greater market reach IoT affords will create substantial value in many industries. (For the full McKinsey Global Institute report, see The Internet of Things: Mapping the value beyond the hype, June 2015.) We analyzed more than 150 IoT use cases across the global economy, and using detailed bottom-up economic modeling, we estimated the economic impact of these applications across a number of dimensions. (For more, see the video “What’s the one piece of advice for a business leader interested in the Internet of Things?” And to see how experts believe the Internet of Things will evolve, see “The Internet of Things: Five critical questions.”)

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