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Who’s Afraid of the Internet of Things?
In November 2017, Cisco’s Australian CTO Kevin Bloch stated that three-quarters of all Internet of things (IoT) projects are failing because they were originally designed to solve individual problems and have since become siloed and unsupported as a result. Bloch remarked that enterprises develop IoT solutions that have been designed to solve a particular problem such as lighting or parking and end up with multiple siloes from multiple vendors that are neither interoperable nor secure. As a result, Cisco is constructing an “IoT Phase 2” foundation and offering a platform that integrates data from different sensors, vendors, applications, and data interchanges. Despite the benefits that these solutions provide, they introduce risk to sales of existing products and services, internal workflows, and customer relationships. If execution, technology, or supplier choices are poor, the results will be poor.
In the Field
However, while there are definitive challenges to deploying these types of connected solutions, to say that 75% of all IoT projects are failing is hyperbolic and inconsistent with what we hear from both IoT suppliers and end users. A 2017 survey released by Bsquare looking into adoption of industrial IoT (IioT) in manufacturing, oil and gas, and transportation found that 84% of respondents’ IIoT solutions were extremely or very effective. Additionally, 95% think that IIoT provides a tremendous or significant industry impact at a global level. Respondents cited device health, logistics, operating cost reduction, and increasing production volume as the top business challenges they are addressing with their IoT solutions.
Earlier in 2017, ABI Research released a survey focused on discerning the attitudes, intentions, and deployments of transformative technologies. Respondents included 455 decision makers, influencers, and implementers across the following verticals: retail, healthcare, logistics, automotive, manufacturing, utilities, consumer packaged goods, and government. Across industries, IoT is perceived as a key tool to promote workplace collaboration while also providing better operational visibility of the business. Aligning innovation with existing frameworks and data security and privacy concerns was a key challenge across industries. While there are challenges in deploying connected solutions, enterprises can better realize the benefits of IoT solutions and skirt challenges by planning ahead and asking the right questions early.
|Benefits of Implementing IoT||Challenges in IoT Adoption|
|Promote Workforce Collaboration||Regulatory and Legal Barriers|
|Enhance Process Efficiency||Data Security and Privacy Concerns|
|Workforce Mobility||Unclear Return on Investment (ROI) Path|
|Better Customer Experience||Lack of Funding|
|Reduce Operational Costs||Lack of Internal Skills and Experience|
|Centralized IT and Operation Frameworks||Cultural Aspects and Workforce Resistance|
|Reduce Organization’s Carbon Footprint||Aligning Innovation with Existing Legacy Framework|
|Workforce Automation||Cost of the Technology|
|Faster and More Efficient Decision Making||Complexity and Fragmentation of the Supply Chain|
|Better Assets and Resource Management||Enabling Technologies are Still Largely Immature|
|Tap into New Revenue Streams and Adopt Business Models|
To avoid the risks of deploying a failing IoT solution, enterprises need to ask themselves a series of questions and undergo a process of self and partner evaluation. First, enterprises need to align use cases to customer needs and its strategic objectives. Enterprises need to not only actually solve customer problems but also do so in a manner that allows the enterprise to deploy the solution profitably. Multiple IoT use cases can address customer needs, but some will inevitably be more effective than others based on factors such as timing and resource allocation, in addition to whether the use case aligns with overall enterprise strategic objectives and the competitive environment. Enterprises need to ensure that their IoT deployments optimally use resources and mitigate risks.
Second, internal stakeholder alignment is critical for both solution rollout and for determining if the enterprise should build the solution using internal resources or buy the solution from an external supplier. IoT affects all layers of an organization, and all functional employee groups need to be involved with the process from the beginning to maximize organizational benefits for the current project and any future impact it could have. This stakeholder alignment ensures a proper assessment of an organization’s internal capabilities and strategic priorities to determine which IoT solution components should be built internally or purchased from a supplier.
Lastly, enterprises need to understand that supplier and partner selection, proper data governance models, and IoT lifecycle management operations choices drive strategic and long-term success. Supplier and partner selection is critical to ensure that the IoT solution is built on the proper technology foundation for performance and global availability as the solution scales in the total number of connected devices. Data governance models deliver the right IoT data to the right groups while creating guidelines for maximizing IoT data dissemination to protect corporate intellectual property (IP). Finally, lifecycle management factors ensure that ongoing support operations both scale and seek new efficiencies in emerging areas such as automation.