How to Develop a Comprehensive IoT Strategy

By Samuel Greengard Print this article Print
IoT Strategy

It's important for business and IT leaders to evaluate all Internet of things options and approach IoT initiatives smartly and in a cost-conscious manner.

Armored Diesel took aim at the problem by turning to the IoT. It built a SmartTrailer inventory system that uses a computer, RFID, tagged equipment and cellular communications to build a real-time system that allows the company to track and manage parts in real time. A technician enters the trailer with an RFID-enabled badge (it unlocks the door), places items on a Smart Table system the company created, and the system registers the items in the ERP system.

The technology reduces truck and pump downtime by 20 to 40 hours per month, which is equivalent to $20,000 to $40,000 per month for these firms, Mueller says. It also reduces internal errors and allows Armored Diesel to operate faster and more efficiently.

Consider the Business Ecosystem

A good starting point for building a comprehensive IoT strategy is to think about the entire business ecosystem, Capgemini's Smith says. "The IoT is not just technology: It's a framework for collecting and managing data in new and better ways."

This, she says, requires a closer examination—and perhaps re-examination—of the business, customers, partner relationships and more. It may also require new cross-functional teams, the introduction of a digital innovation center or research lab, and business and IT leaders who can view things in a fresh and often outside-in way.

Smith notes that some digital companies now earn a vast chunk of their revenue—if not the majority—through APIs that connect disparate systems, devices and databases. For instance, she says, Salesforce.com generates about 50 percent of its revenues this way, eBay pulls in about 60 percent and Expedia tops 90 percent.

According to Accenture Digital's McNeil, it's important to begin investigating options, testing technology and engaging in rapid prototyping in order to tap the IoT value proposition. It's also important to re-examine governance models and understand who should spearhead an initiative, including the chief marketing officer, chief information officer, chief operating officer or chief digital officer.

"It's becoming very easy to select a use case, toss a few sensors on something, collect data and build a very real business case," McNeil says. "It's no longer a case of sticking your finger up to the wind."

Once an organization has identified a problem or business challenge it wants to tackle, it's simply about mapping out the technology and systems to produce the necessary data and results, he says, adding, "It's possible to introduce it and then scale it up if it's working well."

IT teams have a very important role to play in IoT initiatives. As McNeil puts it: "As businesses move to an as-a-service model and outsource IT functions, digital technologies—including the IoT—introduce an opportunity for IT to become more strategic and shine."

This translates into a need to understand how to assemble various pieces of digital technology, including smartphones and other mobile devices, sensors, RFID and near-field communication (NFC), clouds, APIs, machine learning, artificial intelligence and even social media.

"There are enormous opportunities for organizations that can tap the IoT and use it to connect, compute and communicate," McNeil concludes.

This article was originally published on 2016-07-21
Samuel Greengard writes about business and technology for Baseline, CIO Insight and other publications. His most recent book is The Internet of Things (MIT Press, 2015).
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