Understanding IoT’s Impact on the 4 Tiers of Digital Transformation

By Michael Rivera, PhD

Digital technologies offer a vast array of possibilities, making digital transformation the best way to prepare your company for the future.

Unfortunately, the biggest challenge for enterprises is not having a comprehensive knowledge of what these digital technologies offer and where to use them in their operations. Digital transformation goes beyond simply adopting technology and using it. Too many companies spend money on technology that does not meet their needs.

There are four main tiers of digital transformation that can help each enterprise understand the technologies it needs. Of these tiers, the Internet of Things features strongly in all.


Data is at the core of digital transformation and IoT. Leveraging data in the contemporary business world is critical considering the constantly evolving industry trends and customer expectations. When applied properly, IoT solutions gather source data from the real world and convert it into useful information for the company.

With more business owners joining the IoT bandwagon to take advantage of this fast-developing technology’s advantages, here’s a look at how IoT impacts digital transformation over four tiers.

1. Operational Efficiencies

Most of a business’s digital transformation happens in this tier. Companies want to improve their day-to-day operations and work quality without increasing costs. Businesses with connected IoT spaces experience productivity because of the improved automation and personalized experiences. Connected devices assist in managing, controlling, and overseeing various corporate operations. These devices can generate data that are sent to cloud-based databases and analyzed with AI. This is then used to highlight performance trends and patterns, improving workflows and productivity

2. Advanced Operational Efficiencies

This tier helps companies learn more about how their products are being used. The products can capture data from users allowing you to gain more insights into the users’ interests and preferences. Companies can leverage the product-user data to make better customer-focused product development and decisions.

Since businesses already know how the products are used, marketing and advertising are easier. Ads will target how your product meets customer needs.

3. Value Chain Data-Driven Services

Data can impact the value companies deliver to their customers and maximize their competitive advantage. Instead of using the data to improve operational efficiencies, some companies also use it to generate revenue.

IoT-driven technologies such as product sensors can be used to detect defects early on and develop smart, not scheduled maintenance. This makes companies proactive instead of reactive. Predictive maintenance helps businesses lower costs and solve problems faster. Companies like General Electric have used this strategy to improve yield in manufacturing processes.

4. Digital Platform Data-Driven Services

This tier is for enterprises that have products with digital platforms. By aggregating data, IoT and AI solutions can be used in many industries to provide tailored experiences. Streaming services could use this data to recommend movies and shows. Delivery services offer suggestions based on the customer’s previous interactions, and ride/cab-hailing services match drivers with customers. Healthcare services could also connect patients to the right doctor based on their symptoms.


Although each company has requirements, the Internet of Things is crucial to the best digital transformation strategies. That’s why at Thinaer, our team of PhDs, technologists, and data scientists can help you find ways to accelerate your company’s digital transformation using IoT. Talk to us today!