Originally posted 9/8/16 on TeradataVoice by Daniel Graham
For all the Internet of Things (IoT) enthusiasm out there right now, there’s a general trend to focus on valuable, narrow scope projects to improve efficiency or meet specific cost objectives. Efficiency and cost savings are perpetually good plans, right? Yes. But the Internet of Things is a marathon. That means the first projects are a 200 meter dash, a sprint.
Such projects represent progress toward gaining value from the IoT, but they may come up short in providing elements of flexibility because they are, by definition, built with a single purpose in mind. This tight beam perspective means the technology and analytics put in place will not provide a suitable foundation for meeting wider requirements or integrating with a future, larger data architecture. The second, third, and fourth IoT projects are often seriously constrained by the narrowly focused design of the first IoT projects. Narrow use cases and shortsighted analytic foundations in the early projects tend to cripple corporate agility in follow-on projects.
One of the great opportunities of the Internet of Things is in its macro-level power as a mechanism for digital transformation. As Gartner explains[i], “Digital business transformation has largely focused on operational efficiency. The potential is much greater. CIOs and other digital business leaders can set the terms of competition by creating an industry-specific vision.”
The IoT is a vehicle not only for incrementally improving a business, but also for enabling the creation of entirely new business models. Indeed, some companies plan to transform the competitive foundation of their entire industry. We already see examples of this happening.
Consider two companies that most people think they know, Verizon and AT&T. They are telecommunications companies, right? Yet these companies are offering software that enables connected car and smart city applications. They recognized that their connectivity capabilities can aggregate data from millions of sensors and cars from any manufacturer. They are changing what a car can do as well as the relationship between people and their city.
The lesson for every business engaged in IoT projects is that in these early days, it’s important to take off the blinders that lead you to important but narrow use cases. Look at the horizon as well. It takes the eagle-eyed perspective of an NFL quarterback who at a glance takes in the big picture of the playing field including what lies far down field, even while working with what is right at hand. A broader view makes the difference between a point solution and a foundation for digital transformation growth.
This is a matter of asking “what’s next” when deploying IoT. How will you leverage your first projects to take you to the next level? In a recent survey by EMA, 30% of companies with IoT projects built 4-7 solutions. They see the value of many opportunities leveraging a single infrastructure to reduce costs and complexity.
Even if the immediate IoT objective is well defined, the plan should include the possibility for expansion. That has to be designed into the data infrastructure so that the doors of opportunity are left open.
Organizations need to be open to new, radically different ideas about their role in their marketplaces. This requires a willingness to apply data not only to the business you have today, but to entirely different business models. When an engine manufacturer like Rolls Royce or GE offers a jet engine as a service, rather than selling it as a product, they are seeing that engine as a service instead of a “thing.” As IoT companies, they charge for outcomes—a service—as opposed to selling machines, and in the process make customers adverse to capital expenses very happy.
The Internet of Things will rival the Internet in breadth and depth. It will radically change our personal and business lives. It’s not a project awaiting justification. It’s a marathon of projects, one after another. And it means building the strength for a competitive race to the far horizon. That means getting started now.
[i] Gartner, Industry Visions for Digital Business Set the Terms of Competition