There are a number of different definitions for the Internet of Things, but for me it’s simply how millions – if not billions – of devices can be connected to each other within your business, your home and the wider world – personal, commercial and governmental.

These three – work, home, world – are no longer discrete, self-contained environments, but rather they overlap with each other in this digital age. In fact, you might think of the Internet of Things as being like a digital Butterfly Theory: a sensor somewhere in one part of the world can, and increasingly will, trigger a reaction somewhere far away.

This emerging, digitally integrated world will create opportunities and challenges for everyone. Every business needs to get to grips with it and understand how to integrate it within their everyday processes. Firms have the potential to become much more closely linked to their partners, supplier and customers through the web. In fact, it will, in time, become imperative that your business processes are integrated within the world’s supply chains.

I think even the smallest business has woken up to the digital age. But I’m not sure that many small business leaders have properly got their heads around the potential that the power of this technology will truly unleash within their companies.

As I said in an earlier blog “You can’t have business solutions done to you, you have to be the driver”. What I mean by that is IT firms can provide you with the hardware, software and services you require, but you need to embrace this advanced technology culture to really take advantage. The businesses that keep the new digital world at arm’s length will probably become increasingly marginalised. This is a tough call.

How, as a small business, do you connect to the Internet of Things?

Initially, I don’t think it’s necessary for an individual small business to see the enormity of the Internet of Things. Concentrate instead on your own priorities. Think of the different processes within your business and what the relative cost of performing those would be with and without automation. Automating more of your processes is likely to be essential if you want to get a competitive edge over your more old-fashioned rivals, and to keep your place in the next-generation supply chains.

For example, introducing more automation into your business’s sales and inventory functions, and integrating them with both your customers and suppliers could transform the efficiency of the entire process. Just imagine: a sensor at your customer could alert you if it is running low of one of your particular products; that, in turn, could trigger an alert to your supplier, telling it what you need in your next delivery to fulfill that particular order. That’s just a simple example.

I was fascinated to see how dairy farmers have embraced automation. I saw a robotic cowshed on TV recently, in which every action from when the cow walks into the stall is done using robotics and intelligent sensors, including telling the transport system how much milk to expect – which then tells the farmer at what time he should expect the milk lorry to arrive.

There are plenty of ways in which you can harness the potential of the Internet of Things to do more business. Digital marketing is a great example. It will soon be possible for you to be alerted, thanks to the smartphone in their pocket or bag, of the buying habits and preferences of everyone who walks into your shop, enabling you to adapt your sales pitch to that individual.

What are the consequences for those who embrace, or ignore, the Internet of Things?

The biggest risk of not becoming involved in it is that your business could become marginalised or irrelevant. Many small firms do business with much larger companies, so if a client decides to invest in becoming more automated then its small-business suppliers face a stark choice: either invest themselves in the same tools or lose that client.

The flipside is that by spending the money to become automated, a small firm becomes much more integrated into their client’s processes, making them a closer, more trusted partner.

Being digitally connected with your suppliers, partners and customers offers you greater efficiency and much closer relationships with your key stakeholders, but it also presents dangers. Any network is only as strong as its weakest point, so data is potentially at risk if you, or someone else in your network, is lazy, careless or even malevolent.

I predict that most astute major businesses will start to implement data-security standards within their networks, as they start to realise the potential dangers inherent in the Internet of Things. So becoming a supplier to a big company in the Internet of Things age is likely to require your business to have in place very clear and robust data management, data protection and network protection safeguards.

Your business will still have data risks, which might need to be insured. Both your major client, and your insurer, may require you to meet certified standards (such as ISO 27001) before they will do business with you. Now, more than ever, is the time to take your business’s data security very seriously indeed.

The moral maze

The Internet of Things presents businesses with many opportunities, but as I keep harping on, one of the major challenges it creates is security. At the moment, I don’t think anyone really knows how to ensure an individual’s or business’s data remains private. But the first step towards a solution is being aware of the problem.

Already, companies hold a vast amount of data on us, including our age, income, where we shop, what we buy and what we’re interested in. Also, thanks to our smartphones, our movements can constantly be tracked. That will sound like Big Brother to many people, and I wouldn’t necessarily disagree with them, apart from one important caveat: most of the people who hold our data don’t want to control us, but to exploit commercial opportunities.

All of this raises some genuine moral issues. Should companies be allowed to hold so much information on us and should they be able to sell that data to third parties?

These thorny issues are reflected in the current heated political debate on data privacy. The UK government wants new powers to tap into the big data that has been collected and stored by a handful of companies for commercial purposes to enable it to identify possible terrorist threats.

Who has the right to access my data, and for what purposes? Should my ISP be able to scan my emails to get ideas about the kind of products to sell me? Should my government be able to scan those messages to see if I’m a potential terrorist? I think the debate about how much access we are willing to allow third parties to our personal data gathered by The Internet of Things is set to run and run.

Read more from Mike Briercliffe on data integrity in the disruptive world and the importance of persistence in IT.