Don't Leave IoT to IT

With the rise of machine-to-machine communications (M2M) and the Internet of Things (IoT), technology developments have gone into overdrive -- homes and cities are getting smarter, while autonomous vehicles are hitting the road in trials. IoT is delivering tangible benefits across the board and around the world, and I see no sign of a slowdown.

In particular, the relentless progress in chip technology is leading to products getting smaller, more intelligent, and more cost-effective. The integration of mechanical, chemical, and optical functionality is enabling chips to function as wireless IoT platforms. This is a real breakthrough that can boost performance and lower costs by an order of magnitude.

Powerful multicore chips allow vendors to embed intelligence and advanced computing power in their devices. This allows for real-time processing of raw parameter and event data at the local level -- i.e., where it is generated -- thereby enabling informed management decisions to be made on the spot. In addition, combinations of historical and real-time data analytics address a generic issue: Organizations lack insight into the critical aspects of their businesses.

That is a powerful statement: It implies a compelling business case for creating and marketing IoT solutions that provide the requisite functionality. And there are numerous other benefits. IoT solutions boost productivity, lower costs, enhance customers' experiences, and so on. In the right hands, the business case is rock solid, but whose hands are they? This isn't something that should be left solely to the IT guys.

Start at the Top
The role of IT management is key in that IT must implement and manage the system, but decisions on which the future of the organizations will depend should be made at the very top -- with the CEO and other C-level executives. That may seem obvious, but IoT systems involve the convergence and intersection of computing and communications technologies and the integration of two very different domains: the IT enterprise domain and the operational technology (OT) domain. The result is a complex environment, but C-level management need not understand those technologies in order to realize their IoT strategies. What is important is awareness of the roles they play: knowing which boxes should be checked.

Roberto Siagri, CEO of Eurotech, a vendor of platforms, frameworks, and devices for the IoT, shared this with me on the role of IT and the C-suite:

Strategy
The business case for IoT is compelling. However, it's also a development that is disrupting established business processes and forcing companies to rethink nearly everything they do.

Developing a strategy that will propel businesses forward into the new environment and the rules of a new economic order is mission-critical. Therefore, it's hard to over-emphasize the importance of starting with a clear, defined strategy -- and that is clearly something that has to come from the top.

Alicia Asín, CEO of Libelium, an IoT platform provider, had this to say on the importance of strategy:

The IoT is impacting industrial structures and changing the nature of competition, exposing companies to new opportunities and threats. It's reshaping industry boundaries and creating entirely new industries.

In addition, smart, connected products raise a new set of strategic choices related to how companies create and capture value; utilize and manage their IoT data; redefine relationships with traditional business partners, including their channels; and determine what role to play as industry boundaries expand.

Internal Implementation
Industrial companies are becoming software- and services-centric. Therefore manufacturers need to integrate staff with varied work styles and from more diverse backgrounds and cultures. Software development goes at a much faster rate than that of traditional manufacturing.

Manufacturing businesses are divided into functional units such as R&D, production, sales, marketing, and IT. With the emergence of smart, connected products, however, this model breaks down. The need to coordinate across product design, cloud operation, service improvement, and customer engagement becomes continuous and never ending. Functional roles overlap and blur as completely new and critical functions emerge -- e.g., the need to manage all the new data and customer relationships that are based on customer experiences. And real-time feedback from devices in the field challenges management's traditional centralized command-and-control model.

As Olivier Beaujard, VP of market development at Sierra Wireless, an IoT wireless solutions provider, said:

In addition, manufacturers must keep producing and supporting conventional products, and that's not likely to change for some time. According to the Harvard Business Review, in established, innovative manufacturing companies smart, connected products represent less than half of all products sold. This indicates that the on-going coexistence of the new and the old will complicate organizational structures.

Evaluating what needs to change should not be done retroactively, i.e., in response to issues that arise once the IoT system is up and running. It should be part of strategic planning, and must have buy-in for relevant staff.

Conclusions
We're going to see a number of significant changes in the way companies conduct business. Less obvious is the need for a methodology in order to ensure that the changes align with the IoT strategy. This process should uncover changes that would have a disruptive impact on the business, thereby indicating the need to refine the strategy and bring everything into alignment.

Boban Vukicevic, managing director of Comgate, a one-stop IoT solutions provider, put it this way:

Hasty entries into the ultra-competitive IoT market are likely to result in expensive failures. Therefore it is vitally important to start with formalized analysis of a company's products and services, its resources and capabilities, and its customers, the competition, and the environment in which it operates. This process is needed in order to create a robust strategy, which in turn enables the creation of a realistic, cost-effective business plan. Then, having realized these key objectives, businesses can move on to the creation and deployment of their smart connected products.