Internet of Things starts to make a business impact

Posted by Mike Vizard on Oct 1, 2015 3:57:15 PM

Internet of ThingsWhile the Internet of Things (IoT) is more of a concept than a reality in the minds of most organizations, a survey of 366 business and IT professionals conducted by Forrester Consulting on behalf of SAP finds that organizations that have implemented an IoT application are already seeing major benefits in terms of both operational efficiency and customer satisfaction.

Of the 188 respondents that have already implemented an IoT application, 67 percent report that they have already seen improvements in processes, and 61 percent report improvements in customer service. A full 60 percent report gains in profitability, which would suggest that returns on investments in IoT are going to be generated relatively quickly.

From an IT services perspective, the most significant issue highlighted by the survey is that after security (35 percent), the top challenges organizations face with IoT are implementation complexity (31 percent) and integration challenges (29 percent).

IT services opportunity

No matter how an organization chooses to go about it, IoT is an exercise in distributed computing at a scale many organizations have never attempted. As such, many of them are going to be looking externally for IoT expertise.

Organizations that opt to implement an IoT system need to decide if they are going to route all the data they are collecting into the cloud where it can be centrally processed or if they need to deploy gateways, also known as servers, that collect data much closer to the endpoint. The virtue of the latter approach is that it allows data to be processed on the gateway instead of trying to continually ship raw data across networks that are already fairly congested.

In either case, once that data is collected most organizations don’t have the Big Data analytics applications in place that are needed to make sense of all that data. Put it all together, and the IoT opportunity for IT service providers spans everything from the underlying IT infrastructure to any number of cloud services.

How IoT stands out

But perhaps the biggest difference between IoT and what many IT services firms have known as machine-to-machine (M2M) computing is not so much the level of scale, but rather the role that traditional IT and line of business (LOB) executives are playing to drive the adoption of IoT. While M2M was typically driven by an operation staff trying to optimize a specific function, IoT is largely being driven by LOB executives looking to enhance some fundamental part of one business model or another.

As such, IT service providers that want to engage those LOB executives in the hopes of getting them to invest more in IoT need to have a much better understanding of the organization’s business model. After all, the primary reason organizations invest in IoT is not to make the usage of IT itself more efficient, but rather to gain a competitive advantage that is sustainable for a significant period of time. Naturally, it’s only a matter of time before everybody in their vertical industry figures out how to replicate that innovative use of IoT, which in effect turns IoT into table stakes that most organizations will need to invest in just to stay relevant in that industry.

In the meantime, it would appear that from an IT services perspective IoT may just be the next big thing that provides a revenue gift that just keeps on giving.

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Photo Credit: NYC Media Lab via Used under CC 2.0 License.

Topics: IoT

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