1) Sensing: The first stage of any good IoT implementation is for it to be able to sense its environment. This might be as simple as knowing whether or not a door has been opened or closed, or more complex like monitoring blood pressure or physical motion.
2) Send data: Once the sensor has sensed its environment, it needs to send that information to another system for further analysis and processing. This can mean transferring data between hardware devices and mobile apps, servers in a server network, or even radio towers if you're sending data long distances.
3) Analytics: The sensing and sending of data is all well and good, but the next phase is for that information to be analyzed. This could mean gathering bits of info from different sensors and collating them or using a combination of historical data and current metrics to highlight anomalies in how equipment or infrastructure operates. You can learn more about how analytics works in IoT here.
4) Actuation: This is where the action takes place. Once a device has sensed its environment, sent data to an external source for analysis, and received instructions back as to what actions should be taken next, it's time for the device to obey those instructions and perform the requisite task. That might mean switching on an engine or opening a valve, or it might mean sending an alert to someone's smartphone.