No Internet of Things – yet! #exsum13

Internet of Things

Forrester analyst Sarah Rotman Epps was the second speaker to take the stage at the Sogeti Executive Summit 2013. She was asked to answer the question whether we already had passed the tipping point regarding the penetration and adoption of the Internet of Things (IoT). Ms. Epps denied but immediately also added ‘yet:’ There is no IoT – yet.

Some domains and economic sectors are ahead but the best is yet to come, and it will be worthwhile. So-called ‘smart’ things today are still fragmented and have only limited utility. For instance, the 94Fifty basketball tracks dribble speed and shot angle. Nike+ Hyperdunk shoes measure how high you are jumping, how fast you are moving, and overall ‘intensity.’ Armour39 tracks our heart rate, how many calories are burned, real-time intensity and WILLpower. But none of these devices talk to each other or would even recognize they are playing the same game. They’re made by three different manufacturers and the data is siloed in separate apps.

Awareness, Analysis & Action

Even in the current fragmented state, of which there are many more examples in totally different areas, one can readily see the Internet of Things’ potential. First, there is an increasing software control of the physical world. We are combining sensors, networks and analytics to connect physical objects, products, and infrastructure to computing systems. This creates platforms for Awareness, Analysis and Action – a triple-A effect – and it allows us to improve business otcomes in ways we only have begun to imagine. New technology and common standards will increase investment and innovation as we technologically move forward to next-generation sensors, actuators and processors, to open APIs, to platforms with built-in security and to new connectivity standards such as Bluetooth low-energy, ultra-low band (SigFox), and 802.11ah WiFi. Investment is increasing across industries.

Today’s IoT Leaders

The Forrester FORRsights Mobility Survey from Q2 2013 shows that five economic sectors are ahead in having implemented IoT/M2M (machine-to-machine) initiatives: primary production (29%), oil and gas (22%), high-tech products (22%), retail (20%), and healthcare (18%). The top industries that are planning such inititatives are: utilities (41%), pharma and medical (33%), industrial products (32%), high-tech products (30%), and healthcare (28%). Taken together this means that high-tech and production, health services in a broad sense, and energy lead the pack. 

Systems of Engagement

The payoff of IoT/M2M investment will look different depending upon the business model involved. Audi City uses sensors to enhance its urban store experience and increase conversion. Craftsman uses sensors to solve a customer pain point, increasing product satisfaction, and the office furniture company Hermann Miller for instance to open up new revenue streams with consultative services. Overall the investment in ever cheaper sensor and actuator technology goes into cyber-physical systems and services, making ‘systems of record’ work like ‘systems of engagement.’ Such systems of engagement function like an organism if you imagine connected devices as organs. Each organ on it’s own may not be that smart but intelligence comes from the entire organism functioning together. Data in feedback loops is  the lifeblood of these ‘smart’ things. Often, business functions or operations lead IoT initiatives, and the IT department is responsible for the integration with can be a daunting task. Therefore CIO’s should take a more active role in identifying their customers’ needs, in connecting customer needs to business value, and in collaborating with internal and external partners to execute and build systems of engagement tot better satisfy clients and users.

Think Big, Sideways and Systems

Ms. Epps final recommendation for successfully  unleashing the business potential of ‘smart’ and connected digital ‘things’ is threefold: think big, think sideways and above all think systems, instead of just ‘things.’

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