A Practical Guide to IoT Adoption

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In 1999, Kevin Ashton coined the term the “Internet of Things” (IoT) in the title of a presentation he gave while working at Proctor & Gamble. At that time, he was discussing how embedded RFID chips could help with P&G’s logistics and supply chain. Since then, the IoT has become pervasive. In fact, Gartner’s 2014 Hype Cycle for Emerging Technology, which looks at more than 2,000 technologies, services, and trends, puts the IoT at the very top of the summit—at the “peak of inflated expectations.”

Despite the hype, the IoT offers huge promise. According to Cisco, there will be around 50 billion smart, connected devices by the year 2020. For consumers, a connected home environment means that household objects—such as smoke detectors, refrigerators, and cars—can upload data to the Internet for added safety and convenience. On the business front, the IoT can be harnessed in manufacturing, healthcare, energy, construction, services, IT, and more.

Over three-quarters of companies are either actively exploring or using the IoT, according to The Economist Intelligence Unit’s “The Internet of Things Business Index” report. The vast majority of business leaders believe that the IoT will have a meaningful impact on how their companies conduct business. The manufacturing sector currently leads the way in the IoT, and according to the manufacturing companies surveyed one in four already has an IoT system in place, moving beyond passive tagging of objects to autonomous machine-to-machine (M2M) communication with limited human involvement.

So, the IoT is great, why not dive right in?

Well, there are challenges too. Here are five issues manufacturers must address: Strategy, security and privacy, service adoption, skill sets, and standards.

Strategy

Creating products that integrate information-processing and communications is the first challenge of the IoT according to the report “Smart, Connected Products: Manufacturing’s Next Transformation” by Oxford Economics in partnership with PTC.

More importantly, manufacturers must figure out how to build businesses around smart connected products (SCPs) and the data they produce. This requires companies to create a strategy that will transform how they organize themselves to create value for their customers.

According to the report nearly 40 percent of executives say they’ve changed their IT strategy and upgraded IT infrastructure with SCP support in mind. But manufacturers are reaching a point where they must commit to meaningful change around smart connected products or risk being left behind.

“With the Internet of Things and accelerating business velocity, today’s CIO needs to meet new challenges for IT agility,” explains Bob Egan, analyst and founder of the Sepharim Group, a Mass.-based executive advisory and market insight firm. “The IoT is really the ‘Internet of Everything,’ because there will be very little in terms of hardware or sensors that are not connected to the Internet. Now, what is needed is the agility and strategy to drive some sort of management capability for all of those things.”

Security and privacy

Data drives the IoT, and where there is data there are security and privacy issues. As we’ve seen in the retail arena with major breaches of credit card data at Home Depot and Target, companies need to be acutely aware of security and privacy issues and address these proactively.

Since much of IoT data will be uploaded into the cloud and shared between devices, there is loss of control, which translates into even greater vulnerability. The Economist survey states three in five, or 60 percent of respondents, agree that lack of trust and concerns about data privacy are hampering consumer uptake of the IoT.

On the B2B side, protecting proprietary data and intellectual property is viewed as the largest challenge manufacturers must meet in terms of smart, connected products. This is seen as a challenge by 53 percent of Oxford Economics respondents, and will become a challenge to a further 28 percent in the next three years.

Just as legitimate businesses see an opportunity for profit with the IoT, so do cybercriminals. Therefore, it is critical to put security and privacy measures in place from the outset.

Service adoption

Companies need to think about service as they plan for IoT offerings. Since your “things” will be connected to a vast network, how does it all work together? Who will be responsible for IoT enabled service? What if the issue is not with your physical product, but with another point in your network?

Technical support can help make the IoT work as promised by providing services to optimize, secure, and interconnect devices. It makes sense for companies that plan to get involved in the IoT to “own” the service element as well—either handling it themselves, or outsourcing to an expert. Without comprehensive technical support planning, IoT implementation could cause a lot of finger pointing when something goes wrong.

“Long-term use and success of IoT products and solutions will be largely dependent on successful adoption.,” Paul Weichselbaum, executive vice president of PlumChoice, Inc., says. “Brands that overcome the adoption hurdle will do so with end-to-end support services including pre-sales technical consultation, installation, activation and training, plus ongoing specialized support.”

Skill sets

According to Computerworld’s10 hottest IT skills for 2015”, 24 percent of respondents to its forecast survey said their companies plan to add more IT employees over the next year. From security to business intelligence to big data, these are all skills that are applicable to the IoT.

Engineering skills are also a necessity. Desktop Engineer outlines the disciplines of embedded software, communication capabilities, instrumentation, and data and security as key in the article “4 Skills for the Internet of Things.

Manufacturers must re-think skill sets and how they are deployed. To date, 58 perent of manufacturing firms have leaned on their internal talent to develop SCP capabilities according to Oxford Economics. However, building teams to accommodate IoT growth makes sense.

Standards

There is currently a lack of standards as developers create products for the IoT, although some are gradually being created. The automotive industry is leading the way with standards. The Car 2 Car Communication Consortium, for instance, is aimed at creating open European standards for vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication. Myriad U.S. and Japanese transportation groups are now trying to tie into these standards as well.

Wide arrays of standards initiatives are also emerging from technology and telecoms groups. There is an IoT Global Standards Initiative (IoT-GSI) proposed by the International Telecommunication Union (ITU), and Google recently announced a new networking protocol called Thread that aims to create a standard for communication between household devices. In addition, the Institute of Electrical and Electronics Engineers (IEEE) is working to build an overarching architecture for the IoT and has started the P2413 Working Group.

Conclusion

There is huge opportunity in the IoT. But, with an opportunity so vast, an intelligent strategy needs to be developed and many issues need to be considered along the way.

To learn more, read the Harvard Business Review’s article “How Smart, Connected Products are Transforming Competition” which outlines opportunities and critical strategic choices for manufacturers around the Internet of Things.

This entry was posted in Innovation, IoT and tagged , , . Bookmark the permalink.

One thought on “A Practical Guide to IoT Adoption”

  1. Rick Bouter says:

    A Practical Guide to IoT Adoption by PTC

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