We’ve all seen the ‘smart refrigerator’ commercial where the consumer uses their phone at the store to check whether they are out of milk. Smart devices are infiltrating our personal lives, whether it’s connecting our houses or cars. Many companies are rapidly investing in Internet of Things (IoT), which are Internet-connected devices with embedded sensors and mobile devices to provide actionable intelligence. Companies are integrating sensor and device data with analytics and enterprise applications to provide insights into business processes and operations. Although IoT technology has been growing for several years; for many IT departments, IoT is a new frontier and a new responsibility.
Huge Growth and Impact
The projected growth in the IoT industry is staggering. IDC (May 2016) predicts IoT spending will grow from $692.6B in 2015 to $1.46 trillion in 2020, with a compounded annual growth rate of 16.1%. Installed IoT endpoints will grow from 12.1B to more than 30B in 2020. IoT has been enabled by breakthroughs in the cost of sensors, increased processing power, new processing capabilities for big data, ubiquitous wireless coverage, and increased bandwidth. IoT has been deemed as one of the major disruptive technologies with a broad impact on our personal lives as well as every industry.
Gartner Group identifies IoT as an immature technology in their Hype Cycle for Emerging Technologies. Although early adopters have had some bumps along the way, many have achieved significant payoffs from their investments. Cited benefits have included better asset utilization, improved customer experience & quality of service, faster decision-making, reduced costs, improved employee productivity & efficiencies, and increased revenue. The technology is rapidly becoming a key force in strategic plans.
Keys for IoT Success
Following are key success factors as you plan your IoT journey:
- Know how you will use the data. Begin by determining what information the business needs. Do not just collect the data because you can collect the data; make sure the information adds true business value and improved business outcomes. Know the purpose of the data, what business decisions you will make with the data, what data will add value, and how you will analyze the data. Additionally, understand how the business processes around the data will function. Know the degree you will share the analytics and data with other stakeholders, such as customers, suppliers, partners, or departments.[spacer height=”20px”]
- Plan for a tsunami of data. It is like trying to take a sip out of water out of a fire hydrant. Do not underestimate the volume of information you will receive. As stated by one organization, “Every two weeks we get the equivalent of all the data we have accumulated in the last twenty years.” Understand how you will store the data, what format the data will be in, frequency that you will make the data available, how you will filter, categorize and classify the data, how long you will retain the data, how you will summarize and roll up the data, and how you will dispose of the data.[spacer height=”20px”]
- Partner with the business. For IoT to be successful, IT and the business must be converged. IT must rely on the business and operations for maximum insight into the data and how it will be used.[spacer height=”20px”]
- Partner with multiple vendors. As IoT platforms are immature, product and technology categories are not yet clearly established within the ecosystem and there will be a lot of changes in the industry. Typically, needs cannot be satisfied by a single product or vendor. Make sure the role of each vendor is clear. Use the right tool for the situation rather than the adage if all you have is a hammer, everything looks like a nail. Leverage BI and cloud providers for collection, storage, and analysis of data.[spacer height=”20px”]
- Architect for change. Use a layered and modular architecture so future changes in technologies or vendors can be accommodated. Ensure your entire ecosystem and API compatibility is planned and works in tandem with both the desired hardware and software. Strive for interoperability between vendors where desired.[spacer height=”20px”]
- Watch for infrastructure pitfalls. Reliability issues, interfacing issues, connectivity issues, privacy and security issues around the devices and network should not be underestimated. In all these areas, IoT will give us new, sophisticated, and fast-evolving challenges. Security issues were highlighted in the Target Corporation breach and many others that had network breaches compromise their confidential customer data.[spacer height=”20px”]
- Crawl-walk-run. Start small, then expand your IoT footprint. Begin your journey with a small pilot to make sure you understand the full implications of this powerful new technology.[spacer height=”20px”]
- Start with a smart strategy for smart things. Before diving into IoT, make sure you have clearly articulated and communicated the overall strategy. Know the business benefits and value you will obtain from the technology. Understand the entire investment and cost of ownership. Make sure you start with a vision of the end in mind. Ensure the organizational culture supports data-driven decision-making capabilities.
It is indeed an exciting time for IoT as we continue to evolve, implement, and take advantage of this powerful technology. IoT is clearly a priority and opportunity for almost all companies. As with any new technology, start your journey with a clear understanding of how you plan to use the technology and understand how it will obtain the value for your enterprise. The capabilities, opportunities, vulnerabilities, and pitfalls of IoT will become clearer as we all proceed down the path. The biggest risk may be doing nothing.
Contact us if you need help discussing or planning your IoT journey!