The technologies that can be integrated into objects such as industrial machines and consumer products include: sensors；video cameras；actuators, which can move or control a mechanism enabling the automation of tasks; transmitters and receivers, which enable the broadcast and receipt of messages and data; and computer chips, which enable data processing within the device – this is known as edge computing.
In order to form the IoT these technologies require a means of connecting to each other and to the cloud or private servers. The software, both in the cloud and at the edge, used to analyse and act on IoT data can also be considered part of the IoT technical infrastructure.
This could have profound implications for society, business and specifically the accountancy profession. The IoT offers many potential benefits - from helping us to manage the planet’s limited resources more effectively, to taking the guesswork out of accounting estimates. It could play a major role in sustainability, improve the quality of people’s lives and enhance productivity. For example, when it comes to vehicles, the IoT enables preventative maintenance, reduced energy consumption, optimal route planning, asset sharing and accurate useful-life and depreciation calculations.
More straightforward uses included: more accurate and automated transaction processing；better asset tracking；automated stock checking；improved asset utilisation. But companies were also using IoT data in many other ways to enable better management of costs, revenues, risks and people. Taken together the various uses of the IoT are clearly enabling new strategies and new business models.
We must, however, also be wary of the risks. For example, once connected to the internet, vital infrastructure – such as energy grids, hospitals and transport systems – becomes vulnerable to attack from malevolent actors. The IoT also gives significant rise to issues of privacy and ethics, because a lot of the data it generates will relate to people’s individual habits, characteristics, or even health.