What separates IoT leaders from laggards?

The Internet of Things (IoT) has gained tremendous attention and momentum over the last few years, spurred by the popularity of connected consumer devices and the availability of low-cost microprocessors. It is estimated that IoT could have a potential economic impact of between $3.9 trillion and $11.1 trillion annually by 2025.

It is hence unsurprising that businesses are embarking on IoT initiatives or trialing IoT projects to improve their bottom-line. The benefits of connected devices are many and include its ability to offer operational enhancements through increased optimisation and efficiency in practically every aspect of the organisation. According to a McKinsey report on what separates the IoT leaders from laggards, cost and revenue impact of 15% or higher is common with successful IoT implementations.

Using IoT, the monotonous task of collating and analysing data is performed by machines and occurs automatically around-the-clock with no need for breaks or holidays. Ample data can be harvested for data-driven decisions that remove assumptions from the equation. Crucially, access to the right data data often puts the spotlight on overlooked aspects of the business.

By identifying wastages and inefficiencies through analysis of IoT data, for example, organisations can better control energy costs. Smart assembly lines could also offer higher yields in production, as highly accurate and continuous data collection makes it possible to correct and calibrate manufacturing systems in real-time. In addition, IoT can allow the measuring and managing of machinery in hazardous environments without putting employees at risk.

Importantly, IoT frees employees from the encumbrance of mundane data-recording activities and manual reports. This not only increases work satisfaction but enables them to focus on strategic tasks that benefit the organisation.

According to the McKinsey report, leaders are more aggressive in their approach to IoT and implement many more IoT applications than their less successful peers. While it may be obvious that spinning off more initiatives will surely culminate in more success stories, what is really at stake is the invaluable experience gleaned from deploying each IoT project.

Practice makes perfect, especially when it comes to the steep learning curve inherent to IoT applications. Organisations get better as they gain vital experience and technical know-how deploying IoT systems, increasing the odds of success with each new implementation. Conversely, just working with one or two IoT projects may not give the organisation the opportunity to gain the requisite experience. Coupled with the fact that the impact of IoT vary greatly across projects, having too few IoT projects is a sure recipe for failure.

Another consideration is how organisations prioritise IoT deployments. Those that view IoT as a competitive differentiator are far likelier to implement necessary changes in business processes and tracked key performance indicators (KPI). To illustrate, consider how the ability to predict failure in machinery using IoT data isn’t much use if KPIs are not tweaked to put the spotlight on unscheduled downtime. Unless there is incentive for proactive action, workers are likely to continue changing parts only when they fail.

As with all IT projects, executive-level support is essential to gain IoT leadership and the establishment of successful, sophisticated IoT programmes. Only when executives and senior management champion the importance of its IoT initiatives, can the entire organisation be mobilised to seize relevant opportunities for maximum gains. Necessary process changes can also be enacted and tweaks to existing systems be implemented.

As noted earlier, businesses should consider implementing multiple IoT use cases, and not just stick with one. Obviously, practical considerations such as manpower limitations and existing IT workloads must be taken into consideration. This means newcomers to IoT should start with “low-hanging” IoT deployments by improving existing processes and systems.

Finally, rather than attempting to develop IoT systems from scratch, it makes sense to leverage the capabilities of an existing IoT ecosystem. Just as no organisation dabbling in DevOps will write their own automation solution from scratch, it makes no sense to develop a completely customised IoT system as the very first project.

The more efficient approach is to leapfrog tedious development and rely on trusted partners with tried-and-tested IoT solutions – allowing them to enjoy the benefits of IoT sooner rather than later.

Ultimately, IoT leaders recognise that to lead change is to change mindsets about the cost and revenue impact the organisation will achieve in adopting IoT. By identifying inefficiencies and waste, IoT leaders control costs and improve revenues as vital data is automatically collected and analysed.

But success is fleeting if investments in gaining the necessary experience is not nurtured. Practice can only improve the odds of a successful IoT implementation and more importantly, enhance the technical knowhow required to continue improving IoT outcomes.

Finally, leveraging partners in an existing IoT ecosystem is a key advantage for IoT leaders. Mobilising an entire organisation to seize opportunities in IoT development is a daunting task without the shared knowledge and expertise of other potential partners. Working with trusted partnerships with a similar agenda and scope of expertise can only separate the gains IoT leaders have over companies lagging behind.

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