IoT connects everything from power plants to toasters
The IoT market has matured over the past three years. Industry leaders are IoT-enabling the business using connected devices, cloud services and analytics to build faster, smarter business processes. These data-enriched processes will improve employee productivity, deliver operational efficiencies and provide new revenue opportunities. Over two-thirds of the IT leaders that Lopez Research surveyed listed understanding IoT’s impact on their business as one of their top strategic IT initiatives for 2017. However, less than half of the companies that Lopez Research surveyed have a documented IoT strategy with clear use cases.
Do you have an IoT strategy?
Every business must rethink its overall operational and information technology strategy to maximize business value from the IoT. Companies must optimize existing business processes with IoT data and create new workflows to drive the business forward. IoT strategy was the topic of a recent ebook from SAP titled Insights on the Future of IoT where TopRank Marketing asked 21 Digital Transformation influencers, to provide their thoughts on the future of IoT and its impact on various businesses.
The answer is tricky because the use cases and technologies vary dramatically across industries. The wonderful thing about IoT is that it isn’t limited to one type of business or vertical. Every company can benefit from IoT use cases such as improved asset utilization, predictive maintenance and security threat prevention.
I’m most excited about the potential for businesses to create new business workflows by using data from their own internal sources and data mashups with third parties for information such as weather, traffic, pricing and customer sentiment.
There are many excellent points in the ebook that you can read here. For example, Dion Hinchcliffe, the Chief Strategy Officer of 7Summits, discussed how IoT changes the customer experience. Meanwhile, Yves Mulkers, a Data Architect for 7wData, discussed how IoT could improve industries such as travel and agriculture. In my opinion, one of the greatest benefits of IoT is that machines can talk to people in a meaningful way, requiring product makers rethink how every aspect of engagement from sales through support.
Companies approach IoT in various ways
While there’s no single answer to the question, there are at least three ways that Lopez Research’s enterprise clients are approaching IoT strategies. These plans include using the IoT to:
- Deliver faster access to existing data. Before mobile and IoT, data was locked in systems that required a person to monitor and manage a device at the equipment’s location. Today, connected devices can talk to systems and individuals. For example, retailers can have up to the minute access to inventory availability and supply chain tracking. A plant manager can view alerts and decide on an action while walking the manufacturing floor. And a telecom provider can analyze network issues in real-time to respond to customer support call.
- Improve business with access to new data. In many cases, IoT provides the opportunity to create new business processes and workflows by providing a company with information it didn’t have in the past. For example, Coca-Cola connected its Freestyle machines allowing the company to reduce stock out, understand buying behavior and even provide a new service that allowed its customers to create customized beverages.
- Transform the business with new workflows and business models. IoT offers the opportunity to disrupt industries with new services and business models. One example is how GE has moved from selling jet engines to selling uptime. Another is an extension of an existing model with a new twist, such as an elevator company using IoT to deliver remote monitoring and improved field service.
Fortunately, the industry hype has led to new IoT platform and point solutions from a wide range of established vendors and startups. While a company can’t become an IoT-enabled business overnight, it can build a foundation to support better workflows and fuel business growth with a phased IoT deployment. We’re at the beginning of an exciting journey.
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The platform includes modules such as IoT, analytics, machine learning and blockchain
The IoT market is an ill-defined, nebulous space. While the industry refers to it as the IoT, it isn’t a single product. In reality, the IoT refers to numerous use cases and products that vary across different industries. For example, a mining company and a hospital can both benefit from predictive maintenance, but the problems and implementations are completely different.
A successful IoT implementation requires a coordinated technology and business process transformation strategy. The business process improvement strategy is often overlooked as the technology teams jump into the nuts and bolts of deploying a set of IoT tools. Technology-first thinking is precisely what leads to failed implementations. Companies, fearing they’ll be left behind, have rushed to purchase various IoT components — such as sensors, hubs, and platforms–before the business has defined the problem it’s trying to solve. Leaders in the space have sought out use cases where IoT will improve employee productivity, deliver operational efficiencies and enable new revenue opportunities.
The IoT requires more than one technology change
Once a company defines a set of potential business outcomes, the real fun begins. IoT deployments are anything but simple. Information and operational technology leaders face a morass of vendors, products and integration issues. At a minimum, an IoT solution requires multiple layers that include:
- Connected devices and communications. The IoT vision requires connecting existing and new equipment with sensors. Additionally, there are many wireless connectivity options such as 3G, WiFI, BlueTooth and LPWAN. A complete list of IoT protocols can be found here. Most organizations get hung up on this first stage of defining the proper devices and connectivity options.
- A set of connection platform tools. The first iteration of IoT platform solutions was a hub that could connect to data from multiple devices that used different protocols to communicate. Today a broad set of IoT software platforms solutions exist that include items such as device management that focus on configuring, provisioning, troubleshooting and operating the endpoint devices. Like mobile device management, IoT device management supports monitoring, testing, updating software, and troubleshooting connected devices. Wired and wireless connection management must be part of this suite. API management is necessary for connecting to device data and linking this data to applications and system of record/engagement. This layer continues to evolve rapidly.
- Big data storage and analytics. IoT creates a multitude of new information that varies in volume type and frequency. Connecting and collecting sensor data is useless if you don’t have the right solutions to manage, analyze and create meaningful insights from all this data. Business must decide what data needs to be analyzed in near real-time versus batch processed. The tech team must also define what data will be analyzed centrally versus locally. In some cases, companies will need to balancing marketing’s desire for personalization with the need to maintain the privacy and confidentiality of a user’s data. Once you’ve corralled all of this data, a company also needs to design a long-term machine learning strategy to understand patterns.
- Security. In a recent Lopez Research study, security topped the list of IoT technology concern for 2017. Companies need a security strategy that extends from the IoT devices through the application layer. This will require multiple software solutions. In some cases, the endpoint IoT devices can’t run security, such as embedded encryption, and companies will need an edge gateway to act as a security intermediary.
- Applications that use the data & analytics insight. Once companies have collected and analyzed IoT, this data needs to be integrated into a company’s existing systems of record and engagement to create need insights and opportunities for action. For example, a cold supply chain solution can be redesigned to use IoT data such as temperature and humidity to have fact-driven information on product health through its distribution. Many IoT deployments fail because application integration strategies were an afterthought.
SAP aims to help companies run IoT simply with Leonardo
As you can see, there is a mixture of business and technology decisions that need to be coordinated for an IoT solution to deliver value and market differentiation. On the technology front, vendors are racing to deliver more comprehensive IoT solutions to minimize customer’s implementation woes. Enter SAP’s Leonardo. At the company’s annual SAP SAPPHIRE and ASUG group meeting, a variety of executives took the stage to help SAP’s customers understand how AI, IoT and cloud computing were changing the company’s products and the future of computing.
The company’s CEO, Bill McDermott defined digital business as intelligently connecting people, things and businesses. The conference keynotes showcased how SAP was making efforts to live up to the corporate tagline “Run Simple”. While SAP made many announcements, the bell of the ball was the Leonardo system, which it defines as a digital innovation system. SAP’s Leonardo, not to be confused with the famous polymath Leonardo da Vinci, was clearly chosen as a name to invoke visions of a multi-disciplinary platform that can help its customers achieve IoT success. The sheer volume of products in SAP’s Leonardo highlights the growing complexity of designing an IoT solution.