Connected Enterprise Definition: Benefits And Challenges
Achieving True Connectivity Is Not As Easy As It Seems
For some time, “connectivity” has been seen as a label to describe new technologies that enable digital transformation. What are the benefits of connectivity? What is a good connected enterprise definition? Finally, what challenges are prohibiting connectivity?
A Connected Enterprise Definition
A connected enterprise leverages the Internet of Things (IoT) in order to gain more insights and improve productivity. As part of a digital transformation, using a connected enterprise strategy allows a company to harmonize people and technological operations while facilitating a deeper level of collaboration.
One area that is a significant part of a connected enterprise definition is the ability to harness data and analytics in order to result in better decision making. This is different than learning from traditional statistics; a connected enterprise is able to access more insightful data in real time, and have that data immediately analyzed in order to improve operations.
Typically, the concept of a connected enterprise is reserved for industrial sectors, most notably transportation, logistics, and manufacturing. Most smart factories have achieved a connected enterprise with a seamless integration of employees and devices. Other sectors, such as retail, could also be categorized as having a connected enterprise due to the growing presence of IoT devices in stores.
Benefits Of A Connected Enterprise
Organizations that embrace connectivity often cite a reduction in work-related mishaps (including workplace accidents) and an overall increase in operational output. The insights achieved from the added connectivity allow enterprises to cut down on unnecessary expenses and to spot issues that can cause downtime.
Smart devices provide real-time visibility into the inner workings of any facility. Connectivity can help companies overcome the perils of data siloes, and it could include machine learning algorithms that enable enterprises to immediately analyze data. With this technology, organizations can spot flaws with machinery before it becomes problematic.
To reap the benefits of connectivity, some enterprises are inserting IoT devices and sensors directly into new machinery before it is in-use. Other companies are adding these devices after the machines has been in service. Either way, having a truly connected enterprise increases the push towards automation and improves efficiencies.
Connected Enterprise Trends
There’s no denying the growth of the connected enterprise market. According to Statista, the connected enterprise market in the U.S. is worth less than $100 billion total this year. By 2025, it is projected to be worth over $400 billion. Meanwhile, Orbis Research projects a CAGR of 32.4% for this market from now until 2024.
The statistics also reveal that organizations are rapidly integrating more IoT devices into operations. There will be over 20 billion IoT devices worldwide by 2020. Part of the reason that IoT devices are being deployed so quickly is because of those benefits. A 2019 study from KPMG and Forrester found that connected enterprises perform two times better than organizations that lack the technology.
Challenges Of Becoming A Connected Enterprise
Meeting the criteria of a connected enterprise is easier said than done. Challenges from data siloes to outdated processes could stymie an enterprise’s aspirations of achieving connectivity.
Some enterprises’ digital transformation efforts are lagging behind competitors. From failing to adopt the right infrastructure for data collection to lacking the machine learning algorithms, some companies do not have the right maturity level that fit the connected enterprise definition. Complicating these efforts is the lack of a data analytics skillset among some workers in the enterprise.
Perhaps one of the biggest issues is the failure to identify business needs before adopting connectivity technology. For example, it is fine to use IoT devices to determine potential safety or maintenance hazards, but trying to connect the enterprise without setting business goals first could prove to be futile.
Overcoming the challenges associated with connectivity will be difficult, but it is attainable. Enterprises should focus on enhancing devices, deploying the right infrastructure, and leveraging the most relevant analytics designed to fix business processes.