The Internet of things (IoT) may present the biggest opportunity to enterprises since the dawn of the Internet age, and perhaps it will be bigger.
The IoT encompasses everything: from connected wearable devices, thermostats, automobiles, and home and commercial lighting, to companies that monitor supply chains via embedded sensors.
As more and more devices get connected, many companies make the assumption that IoT needs to be incorporated into product development, diving right into connecting physical hardware, building apps, and investing significant time and cost on custom development work. However, before spending valuable time and resources, your company should formulate an IoT strategy. In this blog we pull out 6 questions to ask when embarking on that process.
1. Is an IoT investment right for us?
So, the first question any business leader needs to consider is if an IoT investment can help your company to deliver on corporate objectives? Organisational goals remain the same whatever strategy you implement, IoT or otherwise and often include: increasing profitability through the creation of more efficient processes; acquiring new customers based on the best available data and maintaining a competitive edge. If an IoT investment isn’t going to support these objectives, then you need to question if you really need to make it.
2. Is the product suited to IoT?
The IoT is ideally suited where the value of the product can be enhanced by knowing more about certain parameters associated with the product – its usage or utilisation, its performance, its state or condition and its location over a certain time period. The essence of IoT today is capturing these parameters in real-time or near real-time from smart and connected devices. As these devices can spin off bucket loads of data, the challenge is in analysing these parameters to identify trends and other useful business insights. These insights can then be used:
- To improve the customer value of the product directly such as improving performance or reliability; or
- To create ancillary services based on the product’s usage for instance to provide suggestions on how the product can improve customer experience and benefits.
CIOs and senior IT leaders should engage business leaders in a review of current product and service offerings to determine if any are candidates for the development of an IoT enabled solution. If you agree that IoT is a good strategy then the next step is to define your end goal.
3. What is our end goal?
Before a CIO begins to look at IoT options, it is always wise to understand exactly what the company wants an IoT solution to achieve. Perhaps it is to track assets, or to change the business’s model from selling products to selling services. Then, it’s question of identifying the stakeholders within the organisations that can benefit from the data, in what form and understand how long the data should be kept for and why.
To give you a few of examples:
- An aircraft manufacturer may turn to IoT in order to reduce the time that planes are sitting on the tarmac and thereby improve the airline’s customer service and efficiency. IoT makes this possible by enabling transmission of data about the aircraft’s engine health, once it has landed.
- A supply chain management company will turn to IoT if it requires real-time tracking of cargo location and condition of the asset in transit (temperature or pressure for example) to avoid delivery delays, loss or service failures.
4. What is the forecast return on investment?
No new technology, no matter how promising, should be adopted without a clear business case for its use. Working out what you expect your IoT devices to do is of paramount importance. You need cold, hard facts and figures that show the cost of your strategy and the expected return on investment (ROI). Be clear about your expectations, so that you can plan properly and measure the effectiveness post-deployment.
Enterprises expect a quick ROI in the current climate, so any successful strategy must clearly include the expected benefits. When 451 Research asked 1,000 enterprise IT buyers globally, the second top concern raised by 41% of respondents was lack of perceived ROI.
In the case of the airline, a reduction of just 1% in the time that an airplane is on the tarmac can translate into 100,000s of air miles per year. So, if you are asked how IoT could transform your organisation, have the facts and figures at your fingertips even if these may well change later on, any justification at the start of the project will serve you well.
5. Can we start small?
Your IoT strategy should begin by identifying the process, product line or location that makes the biggest impact on your manufacturing organisation. By making small changes that make big impacts, you will be able to quickly bring more devices onto your network, without causing major headaches, all the while gaining support for the programme by quickly demonstrating ROI. However, remember to leave some space on your hardware to grow alongside your aspirations. For example,
- Connect machinery on the shop floor with back-end systems to create a production line with more continuous uptime.
- Add expiration dates to a data set for product inventory to save thousands of pounds in wasted or expired products.
6. What is our security solution?
Securing the IoT came out top of the concern list in the 451-research study, with half of respondents citing it as the main impediment to IoT deployment.
Connecting billions of devices, means managing even more data. Whatever targeted use enterprises have in mind for their product, IoT security must be considered at the design stage including the encryption, passwords and other security protocols.