By: John Gonsalves
According to Gartner, more than $440 billion will be spent on Internet of Things initiatives by 2020. Yet networking company Cisco recently found that only 26% of organizations so far have completed an IoT initiative they consider a success. That percentage isn’t pretty. And companies don’t have much time to climb a steep learning curve and thus avoid costly failures.
So what is preventing companies from getting IoT right? Much of the challenge derives from focusing on implementing technologies without a comprehensive, holistic plan. Sensors? Smart devices? Data analytics? Cloud-based processing? All necessary and helpful. But how will they operate together? How will they collectively transform data into usable information – delivered in time to act in real time? That takes thought. And the thinking must be in the C-suite.
Today’s IoT industry is maturing from stand-alone point applications to integrated systems that capture and process data to derive business insights and even quality of life outcomes. Smart parking solutions, for example, now leverage IoT to analyze parking inventory and guide drivers to available spaces, an outcome with great potential value projected to save hours, miles and even gallons of gas.
A more complex IoT “system of systems,” however, might integrate that parking platform with other IoT-enabled systems, exchanging data that leads to actionable insights. An owner/operator of parking structures could then optimize lighting use in different spaces, control climate for peak and off-peak times and temperatures, assess risks and security needs, respond to staffing shortfalls quickly, and even adjust prices for a particular facility based on volume, previous usage patterns, scheduled local events and consumers’ real-time needs.
An optimal pace to value
Companies have been slow to take their IoT solutions to this next level because they face genuine challenges. How to quantify the potential value to justify the investment? How to stay ahead of security risks? How to understand and leverage multiple complex technologies? Or identify physical installation and support services? Or aggregate, synthesize, store, analyze, act on and monetize their data?
To many, the feasibility of bringing partners and service providers together to create an end-to-end ecosystem is not yet clear. There is the pressure to anticipate integration points and ensure components and people work together. as well as understand and plan for the potential disruptive impact on the organization, customers and business models.
Nevertheless, developing an integrated IoT constellation of devices, sensors, actuators, gateways and network and cloud service providers, a new breed of IoT platform providers, along with analytics, specialty visualization and integration with enterprise applications – all designed to work together – is the best way to optimize results.
The IoT Value Chain
Components of the IoT value chain should include:
- Data capture. Data originates from sensors, actuators, controllers, devices and hardware in the field, but companies quickly learn that implementing a transformational IoT solution involves far more than adding sensors to their packaging, products and the machines that manufacture, deliver and service them. Sensors must collect data spatially (i.e., throughout a space) and temporally (i.e., across time), and be instrumented in such a way that vital signs can be signaled, collected and analyzed for downstream action. Such massive amounts of data must be cloud- and network-agnostic to ensure compatibility with various platforms.
- Data communication and storage. To maximize their value, cloud and network services platforms need to deliver operational insights by working with devices at the edge – that is, where the data is gathered. They must be multilingual (able to talk to any sensors using any communications protocol) and hardware agnostic, so that data can be integrated, synthesized and stored, making it available for future context-aware analysis.
- Data analysis and insights. Making sense of vast amounts of data and taking action is key to unleashing the power of IoT. Predictive analytics providers identify patterns, network effects or anomalies so undesirable outcomes can be anticipated and prevented. Such analytics prompt prescriptive action: Companies can course-correct on the fly – replacing a part or stopping an engine from overheating, for example – to optimize operational efficiency through improved asset performance and employee productivity. World-class algorithms must be domain-sensitive and industry-aware so they can be meaningfully applied to unique use cases; advanced visualization of data may be required in certain situations.
- Infrastructure & security. Beyond cloud and network service providers, IoT solutions at scale need end-to-end security from device to edge to the cloud (and the apps), distributed device management and distributed data management.
- Coordination between IoT components and systems of engagement. Systems of engagement may vary from mobile devices to advanced augmented/virtual reality (AR/VR), mixed-reality or other user interfaces. The focus of IoT solutions is now migrating beyond operations optimization to enable new business models (e.g., pay per use), imagine new products and services (e.g., software-based services), monetize data, etc. Indeed, the opportunities are massive as we develop and benefit from “system of systems.”
- Partners. The variety and range of technologies for the IoT is enormous, yet still immature. Each participant would do well to understand its role in the IoT ecosystem and get to know adjacent players to partner with to deliver smart, connected IoT solutions at scale. Scale implementations need physical deployment of sensors (and device instrumentation), the operations technology and the digital value chain. And they require a skilled system integrator that also knows the associated IT and heritage systems, to develop and orchestrate the combined ecosystem and, thereby, realize business value.
How to get started
A good systems integrator will start by asking the question, “What business problem do you want to solve?” From there, the company can help to create the business case for an IoT solution by articulating its value, be it cost reduction, revenue enhancement, asset optimization, customer experience transformation or increased safety.
Then it’s on to the heart of the engagement: defining new operational processes, recommending IoT-enabling information and operational technologies, identifying and classifying the right ecosystem players in the IoT value chain, and assembling and integrating them based on who plays best where.
Challenges certainly remain, but the opportunities for new revenue streams, increased operational efficiency and improved customer engagement have never been greater for companies that leverage end-to-end IoT solutions in consumer, commercial or industrial settings.
This article originally appeared on the Digitally Cognizant Blog
4 ways to plan for the post-pandemic normal
When the crisis eases, we will have entered a new digital normal. Your strategies need to reflect this shift: Consider these factors as you plan for the longer term.
When I sat down to write this article, a follow-on to my previous article on common leadership oversights on the path to digital transformation, the coronavirus’s threat to global business had not reached the magnitude that we feel and see today. In a few short weeks, the pandemic has forced a new virtual work reality on businesses and entire operating models have been shifted – and in many cases, upended.
A business environment that is changing so dramatically and rapidly requires speed, innovation on the fly, and the need to scale thinking beyond anything we might have previously imagined. Now is not the time to back-burner digital initiatives but to ramp them up.
Now is not the time to back-burner digital initiatives but to ramp them up.
When the crisis eases, we will have entered a new digital normal. The strategies we use to run, change, and staff the business will need to reflect this shift. Consider the following factors as you plan for the longer term:
1. The right financials
Any business that isn’t digital by now likely won’t be a business for long. Learning to embrace and adjust is imperative. Continuing – or starting – a digital transformation will be more important than ever, and you’ll need to rethink your business’ capital allocation strategies for digital initiatives and the staffing that supports them.
To figure this out, become best friends with your finance team and think for both the short- and long-term. In the current climate, it can be easy to be either too short-sighted or too far-sighted, but you need to plan for the next week, month, quarter, year, three and five years.
Become best friends with your finance team and think for both the short- and long-term.
Consider how your company may bounce back from the pandemic when stay-at-home orders are lifted, kids go back to school, and consumers begin to mobilize again: We will have entered an entirely different digital world, with new digital expectations from consumers. Is there potential for a rapid and significant surge, followed by a normalization? Will you be facing a slow rise? Digital transformation funds need to be allocated to react appropriately to these various scenarios; staffing discussions should follow based on these decisions.
2. The right tools
It is likely that at least some of your employees will remain virtual, even when the majority can get back into the office. How will you support them? You may have sacrificed some tools or technologies in your move to quickly get employees out of your building and into their homes; you may have also overpaid for the sake of quick deployment.
You’ll need to rework your strategy for the long term. This could include better or more consistent access to networks and servers, the capacity to host formal business meetings online, new portable equipment, virtual collaboration and communication software, and more.
For many, this will require working with your corporate legal team to change their thinking. Where they may have once been risk-averse for the sake of the business, they will now need to take smart risks, also for the take of the business. State your case, find common ground, and move forward.
In some particularly dire situations, you may even need to become comfortable with making decisions first and asking for permission later.
3. The right staffing
You’ll need to continue to make smart staffing decisions – quickly. You likely have three types of talent available:
- Employees who are great at running the business
- Employees who are hungry for more
- New talent that may not yet exist in your business but needs to be brought in
Unfortunately, this global crisis may have created gaps in your workforce.
Identify the individuals in the first two groups and work with your talent management team to assess whether you need to advance digital investments previously planned for. Do these individuals have the right type of skills for their teams? Are they collaborative and communicative? IT cannot work in a silo, and team members need to be able to communicate what they are doing and why, and be clear on how their actions are aligned to larger goals.
When you’ve completed this review, identify the additional skills you will need for the future. This might include teams familiar with building out cloud deployments or working with microservices, etc. Push the rest of your leadership team to break through capital allocation constraints to bring in new employees who not only have the right experience but also can quickly teach your existing teams on new tools organically.
4. The right brand permission
As you work through your accelerated digital transformation, you’ll start to think about your business as a truly digital brand. In fact, you might already think so, simply because you’ve been able to get your staff up and running remotely.
But is this the perception all your stakeholders have? According to the Yale School of Management, “Brand permission defines the limits of customers’ willingness to accept a familiar brand name in new marketplace situations.” For example, you can’t simply say, “We are digital now, world!” and expect your market to immediately accept that if you haven’t been digital historically. You need to earn this right.
You can’t simply say, “We are digital now, world!” You need to earn this right.
Brand permission is something you and the rest of the company will need to work on – largely focused on delivering useful and impactful digital products and services – in order to attract the new talent you need. Start thinking about this now.
The global pandemic has thrown us into an entirely new world. Business leaders can no longer rest on their laurels and, certainly, can no longer put off or draw out a digital transformation. Making the right decisions now will help to ensure your business is positioned well when this crisis passes.
As Chief Digital Officer of Agero, Bernie Gracy brings more than 30 years of technology experience helping drive new product/platform introduction, client delivery, and the establishment of new software-enabled business models.
In his role, Gracy is responsible for all aspects of product and technology development, architecture, infrastructure, and innovation for a rapidly evolving ecosystem powered by digital, mobile, the cloud, location-based services, and IoT.
Five key trends shaping the application landscape
According to application services/application delivery company F5 Networks, 98% of organizations depend on applications to run or support their business — hardly surprising considering that most organizations have some version of a digital transformation plan.
In their new 2020 State of Application Services Report, F5 has found that most organizations have entered the second phase of DX, defined as the integration of automated tasks, “and taking advantage of cloud-native infrastructures to scale the process with orchestration.”
As Lori MacVittie, Principal Technical Evangelist, Office of the CTO at F5 Networks explains in a blog post about the rise of cloud-native architectures, the average enterprise app portfolio is now at 15% modern, microservices-based applications.
“That’s now more than the stalwart 11% of monolithic / mainframe-hosted applications,” she adds. “Considering reports of extreme backlogs for new applications in every industry, that modern apps have consumed such a significant percentage of the corporate portfolio is nothing short of impressive.”
Based on a global survey of nearly 2,600 senior leaders from various industries, company sizes, and roles, F5’s report outlines five key findings on the trends shaping the application landscape, “and how organizations around the world are transforming to meet the ever-changing demands of the digital economy.”
1. 80% of organizations are executing on digital transformation—with increasing emphasis on accelerating speed to market.
As organizations work to scale their DX efforts via a digital footprint with cloud, automation, and containers, “it is time to manage the application portfolio like the business asset it is.”
“Organizations able to harness the application (and API) data and insights generated will be rewarded with significant business value.”
2. 87% of organizations are multi-cloud and most still struggle with security.
27% of respondents reported that they will have more than half of their applications in the cloud by the end of 2020.
But despite the crucial importance of applications to business strategy, “organizations are much less confident in their ability to withstand an application-layer attack in the public cloud versus in an on-premises data center.”
When F5 asked how organizations decided which cloud is best for their applications, 41% responded that it was on a “case-by-case, per application” basis — an important strategy, given the uniqueness of each application and the purpose it serves for the business.
“It is imperative to have application services that span multiple architectures and multiple infrastructures,” outlines the report, “to ensure consistent (and cost-effective) performance, security, and operability across the application portfolio.”
3. 73% of organizations are automating network operations to boost efficiency.
Process optimization is a key motivation for DX efforts, which makes it unsurprising that most organizations are automating their network operations. The goal? Consistent automation across key pipeline components: app infrastructure, app services, network, and security.
“Despite the fact that network automation continues to rise, we are still a long way from the continuous deployment model necessary for business to really take advantage of digital transformation and expand beyond optimization of processes to competitive advantage in the marketplace.”
Respondents report that the most frequent obstacles to continuous deployment are “a lack of necessary skill sets, challenges integrating toolsets across vendors and devices, and budget for new tools.”
4. 69% of organizations are using 10 or more application services.
With the maturation and scaling of cloud-and container-native application architectures, “more organizations are deploying related app services, such as Ingress control and service discovery, both on premises and in the public cloud.”
One of the most widely deployed application services are those largely dealing with corporate and per-application security. “For the third year running, respondents told us by a wide margin (over 30 percentage points) that the worst thing they could do is deploy an app without security services,” details the report.
5. 63% of organizations still place primary responsibility for app services with IT operations, with more than half moving to DevOps-inspired teams.
“It’s also no surprise to find that as organizations transform from single-function to modern ops-oriented team structures,” adds the report, “responsibility begins to shift from IT operations and NetOps to SecOps and DevOps.”
One reason why? The shift of application services into modern architectures. “DevOps teams are intimately involved with the CI/CD pipeline, which, for cloud- and container-native apps, includes a growing portfolio of application services such as ingress control, service mesh, service discovery, and good old-fashioned load balancing.”
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Digitized and digital: Two sides of the digital transformation coin
According to a research brief out of MIT, thriving in the digital age means undergoing two distinct transformations: Digitization, i.e. the incorporation of digital technology into core operations like accounting and invoicing, and becoming digital — “developing a digital platform for the company’s digital offerings.”
While both of these require companies to embrace emerging technologies, these present two distinct challenges, each with a differing set of rules and strategies. As explained by Sara Brown from the MIT Sloan School of Management, “Becoming digitized relies on traditional business methods. Becoming digital requires breaking old rules and embracing new thinking.”
Digitization relies on the company’s operational backbone, which supports core operations — i.e. how a company delivers goods and services, maintains its books of record, and completes essential back office processes, explains the research brief. Traditionally, base technologies for these were ERPs, CRMs, and core banking engines. Today, though, it’s likely software-as-a-service (SaaS).
At the same time, becoming digital means creating a digital platform — “a foundation for a company’s digital offerings and their rapid innovation.” Creating speed and innovation, “this platform, a combination of different software components that can link with partners and connect with customers, enables a company to quickly develop and add new digital offerings, and targets revenue growth,” explains Brown.
When it comes to managing both sides of this digital coin, decision-makers must manage leadership, operational, and cultural differences, Brown says:
Leadership: For digitization, leadership is firmly in place, making clear decisions, outlining processes and standards, and ensuring adoption success.
For a digital platform, however, top-down decision making stands in the way of success. Trusted teams are in the driver’s seat, innovating and implementing new ideas. It’s up to management to define an overall digital vision.
Operational: “Changes to the operational backbone can be planned and evaluated using traditional methods like metrics and customer satisfaction,” writes Brown. On the digital platform side, these methods only result in frustration.
Cultural: Digitization isn’t changing the fundamental place of the operational backbone, MIT’s research found. A digital platform, however, “means radical changes in how decisions are made and work gets done. This can be uncomfortable for people at every level.”
When it comes to actually managing these two different teams, MIT researchers suggest these three actions:
Keep ‘em separated: Simultaneous management of digitization and digital means clearly distinguishing their separate responsibilities, says the research brief. Examples of companies that have taken this approach include Schneider Electric, Royal Philips, and Toyota. In another example, one organization’s operational backbone was managed by the CIO, with a Chief Digital Officer taking the lead on the digital platform.
Funding should also be separate. As the researchers outline, “People responsible for digitization can better pursue operational excellence when the operational backbone receives consistent investment, year after year, at the enterprise level.” Meanwhile, funding for short-term digital innovation “experiments” can be easily upped or decreased, depending on outcomes.
It’s important, however, to keep the overall shared vision in mind, explains tech specialist and Tech Wire Asia editor Soumik Roy, for TechHQ. Leaders might feel that separate teams are a waste of resources, he writes, “because ultimately, the business needs its digital initiatives to converge — like its data, analytics, and platforms.” But in reality, separate teams can optimize DX efforts, but only if a shared vision of the organization’s future is kept top of mind: “Each team, working on their own side of improvements, can make contributions that help move closer to the end state. In practice, this is often more productive as well.”
Rule breaking: Inherent in digital innovation is breaking old rules and making new ones, the researchers found — from subverting budgets processes to guarantee resources to bypass CRM approaches, among other challenges.
Rule breaking ends up being manageable because it’s relatively contained to a small team that’s experimenting, though it’s crucial digital teams have sign-off and ongoing support from senior leadership.
New leadership: “Not all people who have successfully led traditional businesses are well-suited to digital business leadership,” says the brief. “The idea of breaking rules to identify what works may feel terribly unnerving for some— even when they have been encouraged to experiment.”
If someone in a leadership position isn’t comfortable with creating new rules, they explain, coaching could be implemented to help guide them in the right direction. Alternatively, there is likely plenty of new talent that is ready to implement a shift.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
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