Why Most Firms Aren't Getting Deeper Into IoT?
Most companies see the Internet of Things (IoT) as a means for operational efficiency, yet many have not tapped into the potential for IoT solutions to transform their business models, according to a recent study conducted by Forrester Consulting and commissioned by SAP.
The study, entitled, “The Internet of Things Has the Potential to Connect and Transform Businesses,” evaluated the capacity for enterprises empowered with IoT solutions to achieve efficiency in their processes, deliver increased value to customers and create new business models. It found that even early adopters have only scratched the surface of IoT benefits in current use cases.
IoT solutions and applications are gaining momentum. Eighty-three percent of survey respondents rated “improve the experience of our customers” as critical or high priority, and 71 percent of companies noted that improving the use of data and analytics to make better business decisions and outcomes was a critical/high priority in the next 12 months. In addition, more than two-thirds of companies surveyed believe their use of IoT will make these imperatives easier to address.
Yet, as companies create IoT roadmaps, implementing relevant solutions can bring up new and unfamiliar challenges as operational systems get connected to business systems across organizational boundaries. Furthermore, most organizations have not yet defined clear ownership of the IoT life cycle, with survey respondents reporting IoT fragmentation among three or more executive sponsors at 75 percent of the companies surveyed.
Despite these challenges, companies continue to embrace IoT because of its potential to transform business processes and open new revenue streams. The study found that the majority of business leaders see greater operational efficiencies as the strongest benefit of IoT, while fewer are only just beginning to imagine new business models. When prompted, the majority of executives surveyed can envision new service offerings, but only 31 percent can envision new products enabled by IoT.
“The Internet of Things allows companies to transform into digital enterprises, create previously unimaginable operational efficiencies and digital experiences for customers,” said Steve Lucas, president, Platform Solutions at SAP. He believes leaders in the IoT space such as SAP should continue to help customers achieve tangible benefits such as real-time business insights and beautiful visualizations. The full study can be accessed here.
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