“Exploding.” That’s the word that comes to mind when describing the sheer scale of connected “things” — otherwise known as the Internet of Things (IoT). Think about this: Gartner estimates that by 2020, IoT will consist of 25 billion devices, from consumer applications to manufacturing, utilities and transportation. In 2016, it forecast, 5.5 million new things will get connected every single day.
For the CIO, this has created massive challenges, according to a Gartner report specifically on IoT and the datacenter. These include how to develop strategies to deal with storage infrastructure; harvesting and using IoT data cost-effectively; and handling device and network/platform security.
We turned to an expert to discuss the massive mind-shift successful CIOs need to broaden their IoT horizons. Justin Hoss, Principal, CIO Advisory at KPMG, has written extensively on the Internet of Things and IT leadership. His 20-plus years of experience in IT includes work in strategy, IT governance and performance, integrated business transformation, package strategy and implementations, enterprise architecture and IT process improvement.
His take: most strategic-minded CIOs have already moved beyond the “things” in the IoT to the Internet of Everything (IoE), or the idea that devices are just one node on this emerging digital ecosystem, points out.
“If CIOs are focusing on the just connectivity of ‘things’ (devices), they are missing the broader business opportunity,” he says.
Strategic-minded CIOs, he explains, are looking to harness all the aspects that the IoE brings – including people, data, processes and technology — to leapfrog their competition. Real-time connectivity between devices, people, systems and data enable organizations to quickly react to changes in customer demands, enable new services and develop the right product at the right price, and deliver at the right time.
Beyond the Data “Noise”
Not long ago, ubiquitous Internet connectivity was the biggest barrier to take full advantage of IoT/IoE. That is, however, no longer a challenge. Storage too, while still a consideration, is no longer the huge issue it once was, thanks to everything “as a service” cloud providers offering ready access to storage on-demand that is well-secured, as well as providing potential for ever-increasing access points.
Instead, the biggest hurdle to jump is getting beyond the “data noise” that connected devices bring, as well as leveraging this power-charged information vehicle to bring useful insights to CIOs and business stakeholders. Harnessing the power of real-time device and people connectivity means leveraging real-time insights to make better, more accurate, current business decisions.
“This is the real challenge strategic CIOs face,” says Hoss. “How do I make sense of all these new data signals (or pulses) and provide, in real time and on demand, business insights to my enterprise, knowing that my traditional analytics tools are necessary but not sufficient?”
Highly Fragmented Landscape
While the fuss and furor around IoT/IoE gets more frenzied, the landscape remains highly fragmented. In a recent blog post, Forrester analyst Paul Miller described February’s CES show as “awash” in all things internet-connected, from cars and refrigerators to televisions. On the business side trucks are connected to warehouses and driver-monitoring systems; and banks of chiller units are connected to stock control systems and backup generators. But, the “all-encompassing vision remains distant,” he says.
Unfortunately, the “Internet of…” is just not as simple as implementing device connectivity or an analytics engine, Hoss emphasizes. Instead, it’s really about leveraging best-of-breed solutions wrapped in a common, yet agile (or digital) framework, while leveraging key change management practices to get the organization to think differently.”
“CIOs have to have the ability to see around corners, anticipating what their stakeholders will want next,” he says.
There are plenty of future-minded manufacturers out there leveraging IoE capabilities. These include large-scale automotive and medical devices manufacturers getting real-time data for diagnostics, inventory control, demand management, cargo container tracking, geo-fencing and other functions. Also, service providers are leveraging this connectivity and harnessing the insights IoE brings to better understand customer sentiment and predict consumer trends as well as looking to future development of on-demand and tailored services for individual consumers.
Strategic-minded CIOs, says Hoss, will need to figure out what they are going to do with all of that data enabled by device connectivity, and how they are going to make better decisions and provide better business insight based on that data.
“CIOs are quickly being challenged to move from the back office functions to the front and middle offices of the enterprise value chain,” he says. “In a sense, they are being pushed (or pulled) closer to the end consumer, the service and product.”
Security Concerns Remain Top-of-Mind
While it’s clear that IoT/IoE success requires a CIO to be future-minded, experts emphasize that it’s about more than the latest applications, devices and advanced analytics. Bold innovation is key, but security is a must, and has to be addressed in any long-term vision.
A recent study from 451 Research validated these security concerns, with respondents reporting a “land-rush mentality” in the IoT space with companies “scrambling to set up new types of IT architectures without thinking through how their sensitive data will be protected in the cloud or a big data or IoT setting.” Security considerations, an article about the report said, often take a “back seat” to establishing a market presence.
A recent KPMG report, “Security and the IoT Ecosystem”, suggested that firms will need to work “quickly, diligently and decisively” to deal with concerns related to security, such as how well-controlled the device and infrastructure is, as well as data confidentiality and customer confidence issues. Organizations that fail in these areas, the report said, will have a difficult time keeping pace in this wildly evolving environment.
The Power of IoE: Enabling The Real-Time Enterprise
The good news is, visionary CIOs and top executives that really understand the paradigm shift toward the Internet of Everything are moving their organizations up the value chain to a true real-time enterprise, says Hoss. At the same time, they are looking to add value to both their stakeholders and consumers – adding additional services for consumers on top of their traditional products.
“We also feel we will see interesting alliances between what seems like non-traditional partners – such as automotive manufacturers and health providers — by leveraging this ecosystem,” says Hoss. Technology firms, for example, could get into relatively traditional products and services, such as providing health wellness plans or traditional manufacturing firms (such as automotive) providing additional bundled services (such as auto insurance) that were traditionally only offered by insurance firms.”
“All this, by leveraging the power of IoE,” he says.