As the Internet of Things (IoT) finally becomes a reality, there’s a danger that the hype is obscuring the value to be gained from this new source of data. The key point is that connecting things and collecting data isn’t the source of value—value is created only when the data is used to generate insights that deliver business outcomes.
Gartner predicts there will be 25 billion connected things by 2020, but it’s important not to be distracted by the possibilities of powerful sensors and technologies. Instead, like with any digital strategy, alignment with corporate objectives is a critical first step in developing a strategy for IoT. One example is the connected fitting room developed by Avanade for an international retailer. The solution is a response to the fact that customers going into fitting rooms are 71 percent more likely to buy than those just browsing. By fitting garments with sensors linked into the CRM system, it’s possible to enhance the ongoing customer experience and generate additional sales based on their behaviours.
Key success factors for a successful Internet of Things strategy include access to large amounts of data from across the enterprise, plus scalable processing power backed up by sophisticated and robust analytics. The cloud provides both, making it one of the key enablers for turning the data derived from connected objects into actionable business insights. For example, Avanade developed a remote monitoring system for an equipment manufacturer that provides real-time visibility of equipment, enabling preventative maintenance and thus greater uptime and reduced costs. Another mining client is harnessing its data to generate 15,000 engineering decisions an hour.
So how does a company go about developing an Internet of Things strategy that will deliver a return on investment? Avanade’s experience working with clients around the world is that an IoT strategy needs to be part of a wider digital strategy. In turn, this digital strategy needs to be aligned with business goals, and be sponsored by the top executives. It cannot be the preserve of one member of the C-suite, but must be “owned” by all the corporate leaders.
It is essential to see the Internet of Things as an ecosystem that comprises technology, data, processes, insights, actions, and people. The glue that brings this ecosystem together is collaboration, so an Internet of Things strategy must be integrated with a collaboration strategy to ensure that insights derived from all the data produced by IoT devices are delivered to the right individual (employee or customer), at the right time, via the right channel.
The final piece of the puzzle when it comes to developing a successful IoT strategy is to ensure the right skills are available to execute on it. The Internet of Things demands a diverse set of skills, some of which may be scarce —where would you find a drone pilot?—and in high-demand. It’s also important to recognise that the workforce is no longer only human; robots and cloud-based analytics and automation (machine learning) should also be factored into the strategy. In addition, the strategy should map to the company’s technology infrastructure and strategy, covering operational technologies (such as manufacturing systems, SCADA and so on), information systems, and emerging technologies like wearables, video analytics, and the like.
Of course, this approach can be used not only to improve operations but to create new opportunities altogether—again, only if the starting point is a solid business case rather than what is technically possible.
By Lourens Swanepoel, Chief Technology and Innovation Officer, Avanade South Africa