You can't get away from the Internet of Things lately. It's coming and it's going to take over everything. Cisco says it will push the number of internet-connected devices to 50 billion by 2020. But you already knew that, because it's all everybody is talking about.
So, since the IoT is going to take over your organization eventually anyway, you can look at this as an opportunity. You can be the one who introduces it and all the benefits it brings.
But just how, exactly, do you go about introducing this kind of technology? How do you identify the opportunities, and how do you pitch it to the higher-ups in your organization?
Look beyond the obvious
A Harvard Business Review article from last November states the obvious look for the money. That means both identifying areas where the IoT can generate revenue and where it can cut costs. Examples like this can be found in a lot of places, from manufacturing to logistics, and even hospitality, where attaching sensors to equipment and connecting them via networks takes advantage of an obvious need. Monitoring equipment for failure in the field or linking a hotel room's lights and window shades to the keycard scanner seem like no-brainers.
But who wants to pitch the most obvious solutions? An IDC report released earlier this year surveyed CIOs from five different industries, finding that "all the participants in the study were at some stage of evaluation or implementation." If you land that big IoT pitch meeting and walk in prepared just to target the lowest-hanging fruit, chances are the organization is already working on it. As that Harvard Business Review article suggests, look beyond the obvious benefits and try to consider more comprehensive change that the IoT can bring to your organization.
While some retail stores, for example, could deploy internet-connected sensors to store shelves to keep track of inventory, there's more value in the trends these sensors can show. Look at the data on customer behavior while in the store and use it to arrange displays in a more useful way, or even to suggest products to customers based on what they've already picked up.
This thinking can be applied to other industries. Sensors connected to equipment are already useful in that they ensure everything is functioning properly. But the data they generate could reveal inefficiencies in how equipment is used, which could reveal the opportunity for new processes or products.
Know the priorities
As the IoT has evolved from a buzzword to a reality in the enterprise, it's important to understand the motivation behind implementing the technology. According to IDC, CIOs' priorities for the IoT have shifted from internal applications intended to improve asset utilization to external applications aimed at creating new revenue streams.
However, that doesn't mean that organizations have shelved the idea of using the IoT to reduce internal costs as well. In fact, IDC says productivity of both assets and employees, as well as "optimized operations," were close behind revenue growth as the top priorities for CIOs considering the IoT.
Of course, each organization will have its own priorities for investing in a new technology, and those priorities may not always be clear to those outside the boardroom. So it can only help to be prepared to cover all the bases when looking for IoT opportunities. As the Harvard Business Review article suggested, looking at the broader impact of the IoT can help identify new areas it can impact, leading to those that align with the organization's priorities.
"Improving asset productivity benefits the bottom line, but the untapped opportunities for economic impact are in finding creative ways to deploy the technology to drive top-line revenue growth and expense reduction," the article reads. "So far, these have received limited attention."
The IDC report mentioned a tractor company that introduced IoT products to help their customers monitor the tractors' performance while in use in the field. However, these capabilities opened up a new revenue stream for these farmers a "product-as-a-service business model." The IoT tools in the tractors not only helped their customers improve the efficiency of their own assets, they also enabled them to rent the tractors out on a per-use pricing structure, monitoring the renter's activity with the tractor to determine the rental cost.
Balance the potential with the risk
While IDC's study found that cost is "surprisingly" not the top challenge that CIOs cite in regards to deploying the IoT, cost-related factors still ranked near the top of the list. The two most common responses behind infrastructure constraints/scalability were the high cost of investment and a "lack of skills for cost-effective operation." That last challenge basically means they don't want to pay a bunch of new IoT experts in order to launch the technology.
This could be important, as a new IoT initiative with a very optimistic plan could get derailed when the organization discovers that it lacks the infrastructure or expertise to finish the project.
In addition to the obvious security implications of connecting new devices to the internet, risk needs to be evaluated just as much as, if not more than, potential.
To effectively capitalize on the IoT's potential while hedging against the risks, Gartner advises that companies take an "enterprise architecture strategy." This requires enterprise architects to "properly assess the impact in terms of what information will be generated, what the most important information is and how it can be protected, if necessary."
Basically, the enterprise architect will focus solely on the IoT project and work across different departments of the organization to maximize the investment.
"Organizations must understand the profound impact new sources of information will have," Gartner research director Mike Walker said in an April report. "Enterprise architects are best positioned to discuss and enable the most lucrative opportunities in partnership with business unit and IT leaders. At the same time, they must work with chief data officers and security officers to structure this data in a way that mitigates the worst risks of pursuing these opportunities."
It's not going to happen overnight, but incorporating the Internet of Things can bring about massive change in an organization. A lot needs to be taken into account before moving ahead with the deployment, but if it's done right, it can be extremely valuable.