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According to Gartner, there will be 21 billion things connected to the internet by 2020. ABI Research found that there were 16 billion active connected devices last year. The internet of things (IoT) is already mixing things up and will have many implications for business in the future.
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If your enterprise is embarking on an IoT project, it needs to be well prepared to meet the challenges and opportunities that ensue.
But why should an enterprise embark on an IoT project? Ian Hughes, IoT analyst at 451 Research, says one of the drivers is that IoT enables the industrial trend towards everything being a service, rather than a product.
“Another driver is that IoT shows innovation to shareholders and customers. The key inhibitor is that the nature of the widespread coverage from device to data is not the natural place many enterprises reside,” he says.
Clive Longbottom, service director of business process analysis at research outfit Quocirca, says there are many reasons to undertake an IoT project.
“Let’s start with one – a more intelligent building. By pulling together surveillance, heating, cooling, lighting, hot desking and so on, energy savings can be maximised through only applying heating or cooling where it is needed,” he says.
Actions can be taken when anomalies are seen, for example in the movement of people, so that a pass card can be instantly revoked, trapping a person in a certain area, or applying geofencing so that they have to take a certain route – directly to security guards, do not pass go.
In supply chains, being able to track items from order through manufacturing and then through logistics (and making changes at any stage, for example, ‘please deliver these now to Manchester rather than Sheffield’) means that drivers will be more effective and efficient, and generate cost savings, says Longbottom.
Planning is key
When it comes to developing an enterprise IoT projects, there is a lot to consider. According to Longbottom, the first thing is to plan.
“The idea of an IoT is not to connect everything to everything else – it is to gain the right information at the right time and place for decisions to be made. This is a crucial difference, as connecting everything to everything else will swamp not only a local network but the global internet,” says Longbottom.
He adds that filtering needs to be done as close to the device as possible so that data volumes are minimised. Another aspect that an organisation should be looking at is maintaining investments.
“Just because the IoT sounds like a good idea does not mean that the gazillion devices already on the production line, running smart buildings, security, and so on, have to be replaced – by using the right architecture, they can continue to be used,” says Longbottom.
Hughes said planning for an IoT project should not be any different from any other project. “Pilot projects are to understand the flow of data and an incremental agile approach work. Partnerships are needed with many smaller vendors of platforms and devices, which introduces a management complexity,” says analyst Hughes.
However, Longbottom adds that implementation of an IoT project will be different. “IT is not playing with just IT: the devices could come from Honeywell, GE, Rockwell, Siemens – companies that may well have had little to do with it before,” says Longbottom.
“They will be installed, provisioned and managed by people who may well see IT as disconnected from the real business while seeing themselves as the crucial engine room of it,” he adds.
He says tiger teams will be required and the project must be driven by desired outcomes, not by technical elegance.
“Always ask ‘why are we doing this? What will we do with the data? What will the end result be?’. Make sure that anything done is not a case of going down a cul-de-sac. There will be lots of changes ahead, and whatever is put in place must be able to deal with these changes.”
If you consider an IoT project to consist of hardware devices and sensors, network and communications, data collection and analytics, then those categories can be mapped to an enterprise’s core skills, though not all enterprises have all of those at once, according to Hughes.
When embarking on IoT projects, enterprises should set-up a team of people who have the knowledge and skills to deliver results from the IoT project.
“The skills should complement each other and the roles should vary from technical people, who understand the data and subject matter, to business and strategy experts. This team should be able to focus on delivering results, so management support is necessary right from the beginning,” says Jouni Leskinen, partner and director of research and development at Finnish data analytics specialist Avarea.
Once the team has been established, it should consider how the project is aligned with the company’s mission, vision and strategy, and identify a real world business case based on that.
“To get practical results, theories should be turned into practice by making a proof of concept or prototype. This is also a great way to learn about delivering results from IoT that prove the business value. Roll-out happens by gaining small wins with scoped business areas and business units, then scaling it out to other parts of the company,” says Leskinen.
Small, fast wins
Using IoT and analytics often requires changes to the company culture. That can be achieved by proving the value of IoT through small, fast wins that demonstrate business value, and by showing how the new way is better than the old way and communicating that to the whole organisation.
“If the business case is to develop new products or services that customers are willing to pay for then it’s very useful to find a pilot customer who is involved in the proof of concept and development process,” says Leskinen.
He says it is also important to have a business case that’s aligned with company’s vision, mission and strategy and to prove the value early on by doing a proof of concept in a tightly-scoped area.
“Management should be engaged as early as possible in order to get the resources and support to the project. Engaging customers should prove the value of IoT too, as well as establishing if the customer is willing to pay for the product or service that the business case is about,” he says.
Risks and rewards
Some of the issues associated with IoT involve privacy and security, both of which can be minimised with standardisations and security best practices (both built-in and at the same time enforced by organisations), according to Catalin Cosoi, chief security strategist at Bitdefender.
“IoT ubiquity will not only mean placing more security controls in place but also including them in the security lifecycle of the company. While the rewards of supporting IoT in organisations have yet to be fully explored, companies cannot afford to be ill-prepared for full-blown IoT market penetration within the coming years,” he says.
There is also a risk that in developing an IoT project that a firm simply deploys technology for its own sake.
You need to be careful about “getting carried away with the hype without researching how people will use your product, or having a clear idea of why it exists”, says Nick Thompson, creative technology director at design services provider Foolproof.
Watch out for the hype
This is echoed by Matt Clarke, CTO at digital agency Amaze. He says it is all too easy to caught up in the excitement of IoT without stopping to consider how to really unlock its true potential.
“Those who approach it as a gimmick or with a short-term mentality without creating a strategy around how it can really add value will ultimately fail. Just getting products to turn off remotely, for example, will not cut it. There needs to be real innovation and use,” he says.
Thompson warns that another risk is that business may simply do nothing and not act on their ideas. “The companies who have successfully cracked the IoT have taken huge risks to become market leaders,” he says.
However, the rewards of a successful IoT project for an enterprise are potentially huge: cost savings, new income streams, efficient business processes and happier customers.
Craig McNeil, global IoT practice lead at Accenture Mobility says IoT can transform not only operations for enhanced productivity and increased efficiency, but also business models and potentially entire markets.
“Product-to-service transitions will become a viable strategic choice for all industries thanks to the proliferation of the IoT, platforms and the new ecosystems and partnerships they encourage. This will allow traditional products companies to transform their approach to revenue generation by trying something new,” he says.
“Open IoT platforms can help to minimise risk, speed time to market and encourage increased experimentation for enterprises by enabling ‘fast fails’ for any IoT projects.”
This will set the scene for the coming years where IoT will become genuinely integral to everyday enterprise operations, in ways that will differ for each business and haven’t necessarily been identified yet.
Read more about the IoT
- In this early stage of IoT, it is critical to establish a scalable solution that will push the industry forward as the volume of devices grow. Blockchain may just be that solution.
- What should happen when the maker of an IoT product shuts down its cloud service, rendering customer-purchased hardware useless?
- Connectivity provider Sigfox teams up with GPS supplier Sensolus and the Belgian government to use the IoT to support climate change researchers.