When you implement Internet of Things (IoT) technologies into your operations, you’re under the powerful influence of IoT law. So what is the law of the IoT, and why is it so influential?
This law is industry-defining. It applies to virtually any industry application and use case where the IoT is employed.
We’re not referring to IoT law from a legal standpoint. But from a combined mathematical, technological, consequential, financial, productive, and even scientific position. We’re talking about the IoT law—Walters’ Law of the Internet of Things—named after Monnit Founder and CEO Brad Walters.
Walters’ Law of the IoT states that you achieve natural compounding value for the ways you put IoT technologies to work in your organization. According to the law, there are three methods to engage IoT sensors to benefit your business—reactive, predictive, and transformative.
Each method in Walters’ Law of the IoT has a related value. Orders of magnitude are key to formulating the compounding value of the three methods. Meaning, each of the law’s three methods creates an exponential effect of value or return on investment (ROI). To better understand the IoT law, let’s examine the three methods, their benefits, and their value.
Discover the three methods in the law of the IoT
Critical and essential assets contribute to the overall value of your business. The value of inventory, equipment, and machinery assets can depend on how you manage them—how they’re used and maintained. To make informed, data-driven decisions, you can monitor assets using the IoT law’s three methods or approaches to employ the IoT and the resulting actionable data in your organization.
Here’s how these three IoT law engagement methods—reactive, predictive, and transformative—apply to asset management and maintenance.
Take a familiar, fundamental approach to manage assets using actionable data. You can do it by employing an IoT sensor in a reactive maintenance program. Any sensor can help you be reactive to virtually any operation or activity in your business.
Reactive maintenance means waiting until an asset like a machine fails—partially or entirely. Then, you get an alert on your mobile device from a sensor so you can make the repair or replacement.
For example, a use case could be:
- A telecommunications company has small remote buildings next to its towers.
- There’s equipment inside that’s cooled by an air conditioner to keep the towers up and running.
- An asset manager needs to know when the air conditioner fails to send a worker to repair or replace it.
- The manager sets up a temperature sensor in the remote building to know when the air conditioner isn’t functioning correctly.
- This saves the company time and money by only sending trucks and technicians when the air conditioner isn’t working.
Initially, being reactionary can be the least expensive solution, and there’s typically no planning, but it can be inefficient and costly in the long run. However, even with its disadvantages, reactive maintenance using sensors has some value. So, according to the IoT law and the aforementioned orders of magnitude, we’ll give reactive maintenance its return in value of 101 or 10 times.
Or, even more mathematically speaking, the value equation for the reactive method of the IoT law is: Reactive monitoring equals ROI (1) x 10 or R=10.
When putting IoT technologies to work in your unique applications, being predictive in your decision-making demonstrates a higher, more proactive management level. Considering how the IoT law applies to asset management and monitoring, let’s look at the predictive method and how it works with asset condition-based monitoring using sensors.
In real-time, sensors send data consistently about the state, health, and performance of machines or equipment based on preset parameters. This helps you predict when an asset will require maintenance to prevent costly equipment failure and unplanned downtime.
As a result, predictive maintenance is becoming the industry standard. Applying predictive monitoring to our current use case for remote air conditioners, we see:
- A manager monitoring the air conditioner’s life cycle via a mobile device or computer
- The original temp sensor or smart thermostat is set up in the remote telecommunications tower equipment facility
- Plus, a vibration sensor is connected to the air conditioning unit’s motor to sense excessive fan, housing, and motor motion
- A button press sensor is placed behind filters for technicians to confirm service
- An AC current meter is attached to the unit’s power supply wire to monitor if the power draw rises, indicating upcoming malfunction or failure
- The manager can efficiently and cost-effectively predict when the air conditioner needs maintenance or replacement rather than routinely sending a technician whether it needs it or not
Predictive is proactive. You stay ahead of the uptime threat curve. You’re highly aware of what’s happening, so you can extend your equipment’s life, better plan operations, and predictably fix it before failure. You can stop downtime from disrupting business.
Let’s add to the formula of the IoT law by giving the predictive method a return in value of 102 or 100 times: Predictive monitoring equals ROI (1) x 100 or P=100.
By building upon being reactive and predictive using actionable data, you can be transformative in your business. You can transform processes and entire business operations using data streams and alerts from IoT sensors in three different ways.
Get a complete view of your asset life cycle.
First, you can join asset manufacturer, historical, and real-time condition data to create an accurate view or analysis of asset performance. This is how you catch potential issues earlier so that service can be predicted and scheduled more efficiently. You can eliminate sending workers to remote locations unnecessarily and without the proper tools and resources.
In addition to the benefit of decreasing downtime, when you master reactive and predictive monitoring and maintenance, you achieve greater worker productivity, reduced field service costs, optimized product design and service delivery, and improved worker safety.
Combine different datasets into one analytics solution.
Second, power up data management with a transformative approach. By integrating sensors and systems across your business, you can quickly access and analyze data in one management solution. For example, you can push your security, energy, occupancy, IT, preemptive maintenance, sales, staffing, and more operational datasets into a comprehensive management dashboard.
There’s a wealth of transformative potential when adding machine learning and artificial intelligence capabilities into data analytics too. Then, you’ll be better able to find critical correlational patterns and trends from disparate datasets to streamline and optimize business operations even further and faster.
Create additional cost savings and better ways of doing business.
Third, revisiting our use case example, the company pivoted profitably from reactive and predictive to transformative. Ultimately, the telecommunications leader decided to focus more on their business and outsourced the maintenance of their remote buildings’ air conditioners to HVAC field service specialists at a significantly discounted rate. Part of the deal included the HVAC company using the original sensors already installed and providing valuable data. In this way, the agreement produced additional benefits for both companies.
Let’s round out the IoT law’s value formula by giving the transformative method a value of 103 or 1,000 times. Transformative asset management equals ROI (1) x 1,000 or T=1,000.
Experience the exponential effect of IoT law.
You might have already done the math for the compounding value you can achieve if you put one or all of the methods in Walters’ Law of the IoT to work in your organization. If not, here’s a refresher: Reactive (101) + Predictive (102) + Transformative (103) = 1,110 times a ROI. It’s easy to see, being transformative with the IoT and its actionable data can deliver the highest value. Take a look at your assets, critical business things, and see where you can apply IoT’s law today.