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Most of us have seen the memo: The internet of things will become the backbone of the next industrial revolution and is emerging as one of the most impactful technology trends in recent memory. But now we have some decent metrics to qualify these claims.
McKinsey & Co. has forecast that IoT will generate up to a whopping $11 trillion in annual savings and new revenues by 2025. This is serious IT monetization. Smart business leaders are increasingly recognizing that IoT, like the cloud before it, is an architectural disruption that is paving the way for new breakthroughs in IT and factory automation, analytics, artificial intelligence, robotics and others.
To fully maximize IoT’s potential however, decision makers must fully understand the benefits, challenges, best practices and requirements to successfully implement an IoT strategy and drive business value for their company.
Hitachi Vantara and Forbes Insights recently partnered on a study designed to help companies better understand the current state of IoT, surveying more than 500 senior executives around the world that are currently engaged in or evaluating IoT initiatives.
The study’s findings, published in the report: “The Internet of Things: From Theory to Reality—How Companies Are Leveraging the IoT to Move Their Businesses Forward,” underscores that companies are successfully driving business value with IoT. This article includes excerpts from the report and expert commentary on the industry and future of the IoT market from top executives at Hitachi Vantara.
Data Point 1: The IoT’s Inevitable Business Impact
Almost two-thirds (64 percent) of executives believe the IoT is important to their current business, and more than 90 percent believe it will be important to the future of their business. IoT’s rapid expansion and early traction have established it as a competitive reality in the market, and standing by without action is not an option, the report found. Companies will need to move, and move quickly, to implement an IoT strategy. Otherwise, they risk falling behind or being disrupted.
Data Point 2: From Embracement to Implementation, IoT is here to Stay
Companies are not only prioritizing IoT, they’re beginning to take action. More than half of respondents—51 percent—say their company has significant IoT programs in operation or that these programs are a major contributor to their business. The other 49 percent remain in the early stages of IoT planning or are operating pilot programs.
Data Point 3: IoT Wins the Gold Medal in Emerging Technologies
Of all emerging technologies, executives believe IoT will be the most important, ranking it above others that include artificial intelligence and robotics.
The growing emphasis on IoT comes from the increasing realization that machine connectivity and reliance on data is becoming the future of many industries. As Hitachi Vantara CTO Hu Yoshida, a recognized expert in the IoT space, noted: “IoT is an opportunity that can benefit all industries, whether they are highly automated manufacturers or more manually oriented businesses like agriculture, which can benefit from timely, connected information about weather, soil conditions, equipment maintenance, etc.”
Data Point 4: IoT’s Pending Global Domination
At a global level, IoT is being recognized as an emerging technology. Companies are embracing IoT, and while the extent may vary, this is clearly a global phenomenon; respondents report use across Europe, the Americas and Asia-Pacific. IoT is not exclusive to a single industry or subset of industries; it is affecting many parts of organizations. Most heavily, it is impacting customer experience (55 percent), finance (48 percent) and asset management (42 percent). One reason for this widespread impact is that IoT often has cross-functional effects, such as when a product-based sensor tracks a unit from manufacturing through distribution and to the customer.
Data Point 5: What’s Holding Companies Back?
When building out IoT capabilities, companies say their greatest challenges are the inability to present a compelling return on investment (32 percent), keeping the IoT secure (32 percent), cross-department cooperation (31 percent), integration of disparate data (30 percent) and availability of skilled staff (29 percent).
However, quality partners can help navigate the landscape to build out IoT programs. According to Gary Breder, Director of Cloud and Services Product Marketing at Hitachi Vantara: “2018 will be the year in which companies begin to develop IoT strategies, going beyond isolated testing and small scale, experimental deployments.”
Data Point 6: What’s Driving Companies Forward?
As companies continue to embrace and implement IoT solutions, it’s essential to learn from those that have found success. By examining companies whose IoT initiatives are meeting or exceeding expectations, the survey results identified three best practices that are driving implementation success: 1. IoT efforts are typically championed by the CIO (53 percent); 2. external vendors are on IoT planning teams (66 percent); and 3. companies use a third-party platform as the basis for IoT operations (81 percent).
Data Point 7: The Fate of IoT
Based on the Forbes findings, 64 percent of executives claimed that IoT is important to business today, and 91 percent understand its importance to their future initiatives. Companies are “doubling down” on IoT as edge devices get smarter and IT and operational technology systems continue to move closer together.
Data Point 8: Key Drivers of IoT Success
IoT is here to stay and organizations that embrace it will be better prepared for the future. Here are a few recommendations for finding success with IoT deployments:
- Begin with the business case, not with the technology.
- Develop a comprehensive IoT strategy.
- Start small to go big.
- Join with a seasoned co-creation partner to help you plan, develop and implement IoT solutions.
- View IoT as both a source of competitive advantage and a competitive threat.
- Instill a sense of urgency in yourself, your team and your company.
To read the full report, go here.