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Why Is It The Right Time to Invest In IoT ?

Why Is It The Right Time to Invest In IoT ?
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Welcome to the world of the 21st Century Enterprise (21CE) which is customer experience centric and outcome-based. It’s agile and lean, service oriented, and eco-system driven. These are enterprises, which are adapting to the threat of the “digital revolution” and embracing it for their own growth.

This is heralding a new revolution, which is spearheaded by a mega trend that is getting enabled by several technology evolutions that businesses cannot afford to ignore anymore – Internet of Things (IoT).

Consumer IoT – Only Tip of the Iceberg!

Gartner predicts the IoT to drive a global economic value-add of $1.9 trillion by 2020. A McKinsey Global Institute report goes one step further, predicting that IoT will have a potential economic impact of $3.9 to $11.1 trillion in 2025, which amounts to about 11% of the world economy in 2025. Although consumer-facing applications of the IoT are where most eyeballs are focused now, the report sees greater potential value from IoT in business and the industry. Out of the total top end economic impact of $11.1 trillion, $9.2 trillion is expected from the business impact.

With significant potential value to be gained from IoT, organizations recognize that they need to act now and start assimilating how they can benefit from it. According to a global survey by IDC, 72% of health care respondents, 67% of transportation respondents, and 66% of manufacturing respondents called the IoT transformative.

Where will the Transformations Occur?

The real innovation in the coming future of IoT is set to take place behind the scenes in the Industrial Internet of Things (IIoT).

The immediate impact will be in increased efficiency and improved asset utilization. IoT will help enterprises move toward new business models - as outcome based and enable new revenue streams through data-driven services. From manufacturers to utilities, oil and & gas to transportation, aerospace and defence to semiconductors the ability to have them being “intelligent assets” provides a huge opportunity to optimize activities right across the organization, from maintenance scheduling or repair avoidance to energy consumption, asset utilization, reduce mean time to value and start a whole gamut of new offerings and services, which cuts across not just functional silos of one company but starts traversing the value chain.

For instance, in one early adoption through connecting one of the consumable replenishments to the cloud, a major office automation player was able to improve revenues in the first year itself by more than $ 100 M by giving their sales and channel proactive alerts. Similarly, Healthcare industry studies have shown that continuous tracking of patients’ health through remote monitoring can reduce readmission of a patient by nearly 45%. With increased proliferation of smart devices across, and then the ability to leverage the information to create a transformative impact on business processes and people practices will have far reaching economics and business impacts.

Realizing the full value of IoT

The true transformational value of IoT cannot be realized if we just light up dark assets (or make them intelligent). The connected things need to be at the centre of a value cycle, which involves generating data from the things, optimizing processes to change people’s actions thereby improving productivity. For example, for an airline manufacturer, enabling the engine to transmit live data, such as vibration level, temperature, spare parts’ maintenance history, etc., can optimize the MRO (Maintenance, Repair, and Overhaul) processes to orchestrate right spare parts and the right people at the right time. Thus the cycle of things to things (transmitting data), things to people (dashboards) and people to things (triggers/actions to be taken) needs to be enabled to realize the full potential of IoT in the future. There are of course situations where the final action is also a thing to thing thus eliminating human intervention.

In my next blog, I will cover in detail the steps you need to take to architect the right strategy to justify your IoT investments.

My first part covered in detail the need for an IoT strategy and how can you fully realize the value of IoT . The second part will discuss the approach for architecting your IoT strategy.

IoT Adoption – Together we Can!

To drive IoT adoption the real focus should be on connecting capital-intensive physical infrastructure or assets, such as plants, hospital equipment, electric grids, field vehicles and pipelines. We have to recognize that an IoT program will not mean the same thing to everybody.  It will all depend on the business problem that you want it to solve.

We will need to define - what is the fundamental problem in your business that needs to be targeted as it relates to the asset value chain. It is most likely that IoT will be a solution. It’s also possible today with the massive power of Big Data and Data Science to parse the data being generated to identify potential problem areas and also their solution.

Across the world there are many examples of companies that are using smart connected devices to transform how they operate – smart vending machines that flag when they need replenishment, connected cars that sense problems before they become catastrophic, 

intelligent grids that automatically monitor and optimize energy production, telematics that allow the location, movements, status, and behaviour of fleets of vehicles to be monitored, even smart elevators that reduce waiting time. 

Given the complexity involved across a spectrum of technologies, business impact areas to choose from, the orchestration of process and people practice-related changes to be implemented – the adoption of IoT has to be looked at like a journey. We strongly recommend that to harness this significant potential an approach is defined as below: IoT hence is not the future. It is here!

  1. Establish clear business objectives for your IoT program
    • Identify business processes that could be streamlined to realize efficiency
    • Identify new opportunities to offer new value to your customers – both “within the four walls” and “outside the four walls” of the enterprise.
    • Identify opportunities of adjacencies both at functional and industry level
  2. Establish definitive roadmap for business outcome & technology roadmaps, however with clear focus on an agile flexible approach that can support the business requirements identified.
  3. Identify & leverage right partners from IoT ecosystem – Consulting, Technology Integration, Technology Partners, specialist teams in new areas of technology leverage. Partners who are committed to a Journey!
  4. Invest in your own teams with right blend of process knowledge, technology & skillsets that drive transformation and change management.
  5. While clearly some of this will be journey into unfamiliar territories there has to be framework of governance for Innovation, Risk Management and Change Management to drive the journey forward

What makes a symphony sound so great? The violins, flutes, clarinets or trumpets? None of them alone but all of them together. Likewise, IoT is too huge an opportunity and a challenge to create magic in isolation.

It’s “Now or Never” to start the journey

With billions of dollars of business value at stake, real disruption potential approaching fast on your rear view mirror and the journey of IoT adoption being neither overnight nor a straight-line journey, it has to start now. With its disruptive potential else – “It’s Now or Never”.

 
Edition: June 2017

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