How To Create Business Value From Internet of Things
When it comes to the Internet of Things, deriving business value is as much about managing relationships as it is about device management. Two-thirds (66%) of the respondents to a new survey who are actively working on IoT projects collect data from and/or send data to their customers, suppliers, or competitors. This exchange of device data across organizational borders deepens existing relationships between organizations and forges new relationships. The findings are part of a new global study by MIT Sloan Management Review and released last week in a report titled Data Sharing and Analytics Drive Success With IoT.
“There’s a surprisingly social aspect to managing connected devices,” says coauthor David Kiron, executive editor of MIT SMR, “The Internet of Things is not just about connecting things. It is also about the connections that IoT creates between an organization and its customers, suppliers, and competitors.”
The survey, sponsored by Teradata, of more than 1,400 executives and managers from a wide variety of industries, and from organizations of all sizes, also showed that organizations with analytical capabilities that are good or excellent are three times more likely to report having no trouble getting business value from IoT, compared to those who rated their analytical capabilities as worse than good.
The analytical capabilities, the report also found, go hand in hand with being able to quantify the potential effect of IoT projects. Forty-five percent of those with good or excellent analytical capabilities can measure the return on their IoT investments, while only 19% of those without good analytical capabilities can do so.
A third key finding of the study was that many companies simply don’t have the technical knowledge to manage IoT projects: Forty-nine percent of respondents indicated that, in order to take advantage of IoT, they needed to improve their IoT talent base. Organizations are building relationships to find this talent. More than half (56%) of survey respondents whose organizations actively use IoT gain IoT expertise by hiring new talent. But for others, IoT activity involves depending on other organizations: Thirty-nine percent engage consultants to access IoT expertise, and 43% obtain IoT talent by partnering with an organization that has the talent it needs.
Strengthen Analytics Capabilities: Because IoT devices typically create a need to manage unprecedented volumes of data, and because the standards and infrastructure that support IoT devices are at an early stage, managers should take seriously the importance of improving their access to strong analytics capabilities.
Prepare to Share: Because sharing data is such a strong feature of managing IoT devices, many companies will need to develop new data-sharing practices. Identifying which practices are best for an organization is one issue to address, but equally important will be identifying who is responsible for developing, monitoring, and adjusting these practices. Identify and analyze material issues and create alignment within the organization to ensure an integrated response;
Prepare the Market: Some consumers may be willing to pay a premium for certain types of IoT devices but not for others. Indeed, some consumers may not want IoT versions of a given device at all (think blenders!). Supporting the demand for IoT devices and understanding it over time may be more complicated than for other types of products.
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