Don’t leave it to IT – Part 1
There was a time when I could focus on and write about a key technology development like wireless data for a few years and then, when the Internet bubble burst, move on for a few more years to Voice over IP followed by Unified Communications.
The financial crisis that started in 2008 led to an arid period, but M2M and the IoT came along and at about the same time technology developments went into overdrive and there’s no sign of a slowdown. Lots to write about but not easy so to focus.
Homes and cities are getting smarter, autonomous vehicles are being trialed; the IoT is delivering tangible benefits across the board and around the world; and the relentless progress in chip technology is set to deliver cost-effective products that are getting smaller and becoming more intelligent. For example, integrating mechanical, chemical and optical functionality is enabling chips to function as wireless IoT platforms. This is a real breakthrough that can boost performance and lower costs by an order of magnitude, says Bob Emmerson, freelance writer and telecoms industry observer.
Powerful multi-core chips allow intelligence and advanced computing power to be embedded in devices. This allows raw parameter and event data to be processed in real-time at the local level, i.e. where it is generated, thereby enabling informed management decisions to be made on the spot. In addition, combinations of historical and real-time data analytics address a generic issue: organisations lack insight into the critical aspects of their business.
That is a powerful statement: it implies that the business case for creating and marketing solutions that provide the requisite functionality is compelling. And there are numerous other benefits. IoT solutions boost productivity, lower costs, enhance customers’ experiences and so on. In the right hands the business case is rock solid, but whose hands are they? This isn’t something that should be left to the IT guys.
Start at the top
The role of IT management is key: they have to implement and manage the system, but decisions on which the future of the organisations will depend should be made at the very top, i.e. the CEO and other C-level management have to be convinced. That may appear to be obvious, but IoT systems involve the convergence and intersection of computing and communications technologies and the integration of two very different domains: the IT enterprise domain and the OT (Operational Technology) domain.
The result is a complex environment, but there is no need for C-level management to understand those technologies in order to realise their IoT strategy. What is important is awareness of the roles they play: knowing which boxes should be ticked.
Roberto Siagri, CEO Eurotech, said, “The IT department plays an increasingly important role in IoT, ensuring that the appropriate technology and architecture decisions enable effective IoT/IT integration. However IoT requires attention and decision-making at the CxO level.
“What we have learned in many successful projects is that IoT does a lot more than simply improve OT processes to gain higher levels of efficiency. It is the foundation for implementing new business models and creating new revenue streams. Changing from a product to a service model is one example of a fundamental business transformation and as such it has to be driven by the top management team.”
The business case for IoT compelling, however, it’s also a development that is disrupting established business processes and forcing companies to rethink nearly everything they do. Developing a strategy that will propel them forward into the new environment and the rules of a new economic order is key — it’s a mission-critical issue. Therefore it’s hard to over-emphasize the importance of starting with a clear, defined strategy and that is clearly something that has to come from the top.
Alicia Asín, Libelium CEO, said, “IoT adoption in industry is not to fill factories with sensors. The focus is on the inputs that affect industrial production and their application to smart solutions. It embraces the conditions in the supply chain and product storage as well as the environmental impact that is generated by the industrial activity. That process requires a high-level executive view that prioritises the strategic investments that affect the company at all levels.”
“In Smart City projects we have witnessed a number of interesting correlations between different measurement parameters that would have not arisen otherwise. For example, connections between noise levels and noise pollution in a city relate to the problem of finding free parking spots. In turn there is the negative impact that results from the effect of stress,” she added.
The IoT is impacting on industrial structures and changing the nature of competition, exposing companies to new opportunities and threats. It’s reshaping industry boundaries and creating entirely new industries. In addition smart, connected products raise a new set of strategic choices related to how value is created and captured; how the amount of data they generate is utilised and managed; how relationships with traditional business partners such as the channel are redefined; and what role companies should play as industry boundaries are expanded.
The second part of the article will cover the role of C-level management in evaluating the internal changes that should be part of the strategy and in ensuring that they are implemented before the IoT system is up and running.
The author of this blog is Bob Emmerson, freelance writer and telecoms industry observer
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