Strategizing a conscientious plan will help you launch into the internet of things without any hitches along the way. Here, we look at three methods or best practices that seem to be held in common by the most successful IoT adopters, as indicated by an MIT overview. First, though, we assess statistics on the scope of the IoT and its general business adoption rate.
Is the internet of things on the rise? Well, considering recent IoT market statistics, the answer is a confident “yes”:
- The total market size of the IoT will increase from $900 million to $3.7 billion between 2015 and 2020 (McKinsey).
- The number of devices that make up the IoT will expand from an installed base of 15.4 billion to 30.7 billion by 2020, and on to 75.4 billion by 2025 (IHS).
- IoT hardware, software, and business service providers will have annual earnings greater than $470 billion by 2020 (Bain).
- Over the next 15 years, the total money that will be injected into the industrial IoT will be more than $60 trillion (General Electric).
Despite these numbers, and even though the internet of things is generally a subject of widespread attention, many companies have still not launched an IoT project. A report from the MIT Sloan Management Review published just nine months ago revealed that the majority of companies responding to their international survey (3 in 5) did not currently have an IoT project in place.
However, as Stephanie Jernigan and Sam Ransbotham note in the journal, the flipside is that 2 out of every 5 organizations are moving forward with IoT. The important thing, then, is to figure out what can be learned from the early adopters.
How do you move forward with successful IoT?
Here are the three best practices that seem to differentiate the most strongly successful adopters of the internet of things from the ones who didn’t fare as well, according to the researchers:
#1 best practice – Think big, but act small.
When businesses succeed with their first attempts at the IoT, they don’t get too grandiose with its scale. They select a direction that does not stretch the budget and does not employ excessive devices. A key project mentioned by the researchers is the Array of Things (AoT), a network of sensor-containing boxes currently being installed throughout Chicago to gather and analyze real-time data from the infrastructure, environment, and movement for public and research applications. AoT “will essentially serve as a ‘fitness tracker’ for the city,” notes the project’s FAQ page, “measuring factors that impact livability in Chicago such as climate, air quality and noise.”
Reliability is essential because maintenance is a particular challenge of IoT projects such as this. The MIT research team notes that the AoT has been moving slowly with the launch specifically because they need to make sure they know exactly what the reliability of nodes is. According to the University of Chicago, the first 50 of a total 500 nodes were installed in August and September 2016. The project continues to work in stages through its completion, with all nodes set to be in place by December 2018.
There is another side to size with IoT too. You don’t just have to take care of the devices but the interpersonal connections that are impacted through these means. Companies studied by the MIT researchers typically focused on a single group or smaller group of people (rather than all the company’s points of connection), making the project easier to control from a relationship perspective.
A benefit of starting small and more niche is that you are less likely to create a headache for yourself in terms of integration moving forward.
#2 best practice – Embrace both short-term and long-term vision.
Jernigan and Ransbotham advised first coming up with use cases that might be worthwhile for your firm and then calculating the ROI from each of them. To a great extent, you should be able to come up with numbers associated with the project. Executives that replied to the MIT poll said that they had been able to come up with specific numbers showing the advantage of IoT via:
- Rise in earnings (23%)
- Rise in supply chain delivery or accuracy (20%)
- Drop in fraud or other crime (16%)
- Rise in harvest or manufacturing yields (15%)
The respondents said that these were each reliable ways to gauge effectiveness.
However, it is not enough to simply think in terms of what’s happening right now. When you move forward with the internet of things, it’s important to think about how the insight from the current project can be reintroduced to something more expansive. The MIT scholars note that some enterprises have started out collaborating on the Array of Things before jumping into other ventures.
Once you have your own internal project going, you will quickly think of other applications, says Silicon Labs IoT products senior VP Daniel Cooley – how you can put the data from the devices to the best possible use. “[S]omeone puts this wireless technology in place for a reason[,] and then they find different things to do with that data,” he says. “They very quickly become data stars.”
#3 best practice – Keep looking at different options.
It is key that you are able to see an obvious ROI from your internet of things project, that the data is needed, and that you are gathering it by the best possible means.
Nearly two-thirds of those surveyed by MIT (64%) said that they could not get the results that they have achieved with the IoT in any other way. The reason that the Array of Things took form is that the Urban Center for Computation and Data wanted to be able to answer questions about city concerns through data. Realizing that they did not have all the information they needed, they had to think about their options.
For instance, the UrbanCCD wanted to analyze asthma rates to see how it related to traffic and congestion levels in certain neighborhoods. Leadership at the organization started to think that sensors, connected to the web and distributed throughout the streets of Chicago, would be the ideal way to get reliable information directly from the source. Jernigan and Ransbotham noted that the scientists at the center did not immediately gravitate toward the IoT. Instead, they had a problem, and setting up IoT sensors was the most reasonable fix.
The MIT team highlights a number of other key findings about the internet of things:
- Companies with advanced analytics skills have more than triple the chance of deriving value from the internet of things than firms with less developed skills in that arena.
- The IoT ties together devices, but companies as well. This fact “necessitate[es] managerial attention to the resulting relationships,” say Jernigan and Ransbotham, “not just technical attention to the devices themselves.”
- The IoT ties firms to government agencies and other industry players in addition to their customers and vendors.
- Generally, a large economy of scale is a good thing. That’s not the case with the internet of things, though. It’s often possible that expenses grow faster than the network of devices.
- The internet of things is based on sophisticated bases, including its technical infrastructure and analytics; and it amplifies these complexities.
- The advantage of the complexity is that those who thrive on contemplating different processes and systems are awarded.
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