Internet Of Things: Are Businesses Prepared?
The Challenges Of IoT Adoption
With 20 billion connected devices projected to be deployed by 2020, IoT could change how every enterprise operates. Digital leaders remain bullish on the advanced connectivity of devices, and the IoT market is projected to expand in the coming years. After worldwide IoT spending reached $235 billion in 2017, Bain & Company projects that the market will grow to $520 billion by 2021. Additionally, Dresner Advisory Services says that 48% of enterprises are planning to invest in IoT in 2019, compared to 32% in 2018.
Although enterprises are more interested now than ever before in IoT, the question remains: Are business prepared for IoT? Do preparations begin with the IT department, or with operations, or with HR?
Despite the hype around IoT, it seems that most organizations are not fully prepared to handle IoT adoption. In October 2018, Enterprise Mobility Exchange asked in a Twitter poll if enterprises are ready for IoT. The results were intriguing: 74% of respondents said they were not prepared, and only 26% confirmed that they were prepared.
“I don't think they are prepared, but I think it's not about the technology. It's the way we think about technology that's the problem,” said Brian Laughlin, a technical fellow with Boeing. “The way that I think that we can become more prepared is by focusing on the process. It's always about the process and the soul of your intention. What are you really trying to accomplish? By what process are you going to accomplish it? What technology are you going to facilitate? If you follow that kind of a prescription for how to figure this out, what happens is it eliminates a lot of other superfluous technologies that might have looked like they were valuable, but they didn't really add a lot of value because they don't address what is accomplishing the process most effectively.”
As a leading organization in the aircraft manufacturing industry, Boeing is certainly prepared for the growth of IoT. However, despite industry rhetoric, other organizations are still a ways out from achieving IoT preparedness.
“When you think about everything going on in the technology space right now, organizations are being told they have to do everything to be successful: modernize on-premises data centers, leverage the public cloud, become more data driven by implementing efficient data pipelines for analytics, utilize artificial intelligence (AI) and machine learning,” said Mike Leone, a senior analyst with Enterprise Strategy Group. “With IoT really encompassing all of that, how can you expect IoT to take off without having all of the prerequisites checked off? Many organizations are still figuring out their hybrid cloud strategies, how to integrate all their data across multiple sites, remain compliant with various regulations, ensuring the right levels of security, and protection of data at various stages of its lifecycle. If organizations could snap their fingers and start benefiting from IoT solutions, they absolutely would. They want to get there. But it’s still very aspirational for so many.”
There are numerous factors that come into play with IoT preparedness, including the industry and size of a business. A company with just five employees has a tremendously different set of needs than a manufacturing firm with 50,000 employees. However, IoT plays a role in both of their worlds, with different aspects, such as automation, coming into play. What changes fundamentally and regardless of the size of business and industry is the cadence of business and the pace of change. For larger industries in particular, being prepared for IoT is a must. If a large enterprise is not ready for IoT, it could lose its competitive edge. Companies that don’t embrace IoT are ultimately going to continue to work around normal margins while competitors are producing products more efficiently.
“IoT evolved from M2M, or machine to machine communication, which is part of industrial organizations, especially manufacturing operations,” said Ryan Martin, principal analyst with ABI Research. “Today, there is a very clear and concerted push to stratify a lot of that process and get it up into the cloud, have their data operations work across networks, across processes, and that's where we really see the transition from siloed, enclosed M2M architectures to more open IoT ecosystems that allows companies to take advantage of things, such as analytics. This includes the environment from their solutions providers or by their vendor partners.”
Even if an enterprise wants to prepare for IoT, there are numerous challenges that could prohibit adoption. Integration with current technology, concerns about the return on investment (ROI), and a lack of education around IoT solutions are among the biggest roadblocks that prevent the integration of IoT in the enterprise.
“I think the reason that folks don't go all in at once has to do with an understanding of not what they're looking at on the menu in front of them, but also how their technological decisions today and tomorrow play in to the broader picture of business health,” said Martin.
Regulations are another obstacle that enterprises have to overcome in order to fully embrace IoT. Even larger companies that are prepared for IoT have to deal with regulations in order to succeed. Laughlin said that Boeing is heavily regulated as to how it operates, and it is imperative that things are done in a certain way to ensure quality. It is critical to remain compliant with different rules and regulations when adopting IoT.
Perhaps the biggest IoT challenge in the enterprise is with security. In a 2018 survey conducted by 451 Research, 55% of respondents listed security as the top priority for deploying IoT initiatives. This was due to the immense security risks that come with IoT.
“If it interacts with anything there, there's a potential for hacking,” said Laughlin.
This article was originally published in a report by Enterprise Mobility Exchange.