Time to Strategize?
Many companies are already transforming themselves using the Internet of Things (IoT) as a
catalyst. Rest assured, more than a few of your competitors are thinking about how IoT can grow their revenue and profit. The projections are daunting: by 2020 IoT will be a $1.7 trillion industry (IDC) leveraging 50 billion devices (CISCO). CISCO further estimates that $14.4 trillion in net profit will be generated from IoT-related products, services and processes between 2013 and 2022. And while such opportunity has led many early adopters to jump into the fray, countless others are wondering where to start. A recent Accenture study noted that 84% of
CXO’s believe IoT can bring new, service-based income streams to their business. However,
only 7% have developed strategies and made investments to make it all happen. Why?
- It’s early so standards around network connectivity, device management, M2M (machine-to-machine communication) and security are still forming.
- If you aren’t in an industry with obvious IoT opportunity it can be hard to see the possibilities.
- Maybe it’s just hype?
Many wondered if the world-wide-web was just hype. Now it’s so ubiquitous that you may have forgotten that www stands for world-wide-web. Progressive Insurance’s Snapshot is pretty cool. You don’t have an equivalent IoT product for your business? Maybe not, but you can get creative. For example, retailers incentivized by energy costs savings have been outfitting merchandise displays with smart lighting (lighting that turns on and off based on proximity of shoppers). An interesting byproduct of smart lighting is tracking shopper movement through a store (without the negative big brother connotations that come from cameras and tracking smart phones). Of course the standards are coming. A projected $1.7T industry is already seeing a lot of investment in standards and related frameworks and platforms are coalescing with big players like Cisco, Microsoft, HP, Amazon, Google, IBM and Intel leading the way.
Understandably, when there is a frenzy around a new technology caution tends to drive many companies to sit on the sidelines while the dust settles. Embracing a nimble and progressive IoT strategy can give you the confidence to get into the game now.
It’s okay to start small. Find a problem worth solving, assess its potential impact and value and tackle it. Don’t have many devices and sensors? Don’t make your first project procuring and installing hundreds or thousands of them. Start with your existing assets and prove you can get
value from them. Security is certainly important. Solving all of its challenges right out of the gate can derail you before you get going. Start with less sensitive data and choose an IoT platform that has security considerations baked in. Ultimately the value from IoT is derived from the data collected. Make sure early projects have easily accessible data. Early success will justify additional investments in more devices and sensors, implementing a more robust and secure infrastructure and paving more arduous pathways to data.
Next, you’ll need to get operations, product and service development groups thinking about the possibilities IoT can bring to your company. Bring IT or a data analytics partner to the table to collaborate around what data insight opportunities exist and how they can be leveraged. Circulate case studies and success stories from your industry as well as diverse industries. Operations can consider how IoT can improve productivity and operational efficiency. This is often the low hanging fruit. As product and service development begin to think about leveraging IoT in engaging customers, new revenue opportunities may emerge. Beth Parkinson, market development manager at Rockwell Automation notes that in the manufacturing world you’ll also need to get OT (operations technology) collaborating with IT or an outside analytics partner. The automation systems OT supports address real-time decision making, but also hold a wealth of information that can be mined for insight to generate significant new value.
Embrace the Culture Change
As the number of connected things in the world grows to the projected 50 billion and access to the data and insight from them becomes pervasive, it will be possible to respond to challenges and opportunities much more quickly than we are accustom. The traditional sales and operation reaction models will break. It would be silly to keep running a manufacturing line with product that your IoT systems have already identified as substandard. It would be ridiculous to drive to an order fill rate target for demand that your systems already know has shifted. It won’t make sense to schedule equipment maintenance that your IoT systems know needs to be replaced instead of repaired. The traditional timing of annual forecasting, monthly production schedules, and seasonal product sets can be shifted to weekly or hourly or even by the minute. Your company will need to be ready to embrace this to capitalize on the opportunities presented.
Don’t start with so many obstacles in your way – start with what you have. Let a series of successes dictate taking bigger bites and making greater investment. Understand that you’ll need to innovate in new ways. Connect groups that may not have traditionally collaborated. Break the old models and be ready to capitalize on speedy insights to transform how your business runs.
Still not sure it’s worth the investment in time or money? Download our infographic to see the top 3 benefits of embracing the Internet of Things.
Interested in seeing how someone else did it? Read about our work with ABT Power Management and the problems we helped solve.