Strategic CIO // Digital Business
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7/16/2014
09:06 AM
Jeff Kaplan
Jeff Kaplan
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Internet Of Things: 4 Areas IT Can Prep

Most IT groups are not ready for the Internet of Things. It's time to get proactive -- or risk expensive missteps that will be difficult to fix.

12 Tech Greats: Where Are They Now?
12 Tech Greats: Where Are They Now?
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Most IT organizations are woefully unprepared for the unprecedented management challenges that will come with the Internet of Things (IoT). What's that? You say you've negotiated the evolution from managing big iron within the four walls of a corporate data center to wrangling a messy mix of mobile devices and cloud resources, with only a few bumps along the way? Congratulations. None of those changes holds a candle to what the IoT has in store. Here's why.

First, the scale of the IoT far surpasses anything we've seen. Cisco predicts 50 billion devices will be connected by 2020. And the IoT will transform nearly every industry. For example, today's Fitbits and other consumer-oriented fitness products are the test beds for even more powerful and sophisticated wearables aimed at addressing serious healthcare issues. The average new car already rolls with 60 microprocessors on board, and electronics account for 40% of the cost of making a car, according to the Center for Automotive Research. The advent of connected cars is dwarfed by the accelerating deployment of a new generation of sensors in trucks and other commercial vehicles aimed at improving their efficiency, safety, and profitability.

We also don't have a lot of time. The commodization of sensor technology, growing broadband availability, and more readily available computing power and storage resources in the cloud are quickly combining to make the IoT a reality.

[Beware the dark side of the IoT: Internet Of Things Done Wrong Stifles Innovation.]

But the biggest reason most IT teams will be severely tested isn't about technology or time. It's about the business, as product and service delivery groups attempt to respond to the escalating expectations created by the IoT phenomenon.

Just 9% of the large companies responding to InformationWeek's Digital Business Survey rate their ability to analyze IoT data as strong, and 13% have no capability.
Just 9% of the large companies responding to InformationWeek's Digital Business Survey rate their ability to analyze IoT data as strong, and 13% have no capability.

IT has heard for years how it needs to align IT initiatives with business goals. Yet a recent survey commissioned by Red Hat found that only 45% of respondents actually spend time on that alignment. Forty-eight percent say they'd like to help identify opportunities for competitive differentiation, but many are bogged down just keeping the lights on.

Make no mistake -- IT must be involved in all aspects of the IoT. This is not like a business unit purchasing SaaS or making a mobile app. Fulfilling the promise entails embedding technology (sensors) into products, making the products software-enabled (APIs), and harnessing captured data to improve products and services continuously and make better business decisions (big data analytics). Success requires that IT have an intimate understanding of product and service delivery requirements.

To get ready, IT must work with corporate executives and strategic business units in the following four areas. Fail to be proactive, and you risk expensive missteps that will be difficult to fix. Better do the IoT right the first time.

1. Connectivity: The IoT doesn't work without the right type and scale of networks in place to connect the "things" with an enterprise's corporate systems and software. Is there enough bandwidth available in the geographies where your company intends to deploy its IoT initiatives? What will it take to ensure sufficient connectivity to support your efforts? If you're not sure, work with business units to understand the geographic range of the objects and devices being monitored; what kind of data they want to collect from the objects and devices; and how they expect that data to support products, services, and corporate decision-making processes. These variables will have a significant impact on how IT calculates the bandwidth requirements to support the IoT initiative.

2. Integration: The IoT requires a supply chain of hardware, software, and service pieces, and no single vendor offers a vertically integrated system. IT must figure out which integration tools, techniques, and skills are necessary to pull together the various IoT pieces to satisfy your company's functional requirements. Work with business units to establish criteria for selecting IoT sensors, software, and systems based on their APIs, compliance with industry standards, and ecosystem of third-party alliances. These partnerships bring greater interoperability.

3. Security: The IoT is fraught with privacy and security risks. What regulatory, cultural, and practical areas must IT address to execute your company's IoT ideas? IT should work with business units to understand and prioritize security and privacy requirements and establish appropriate policies to support these mandates. You also need this information to develop IoT software and technology selection criteria. The last thing you want is to invest in a system and then find out it won't meet some obscure regulatory requirement.

4. Analytics: The IoT is all about data. How will you capture, store, collate, interpret, and share collected information to produce meaningful insights that can be translated into better products, services, and business results? Work with business units to understand what data is most important, so you can prioritize what's to be captured, analyzed, and shared -- internally and with customers, partners, and the broader marketplace. These objectives will shape the way the data is collected, stored, and managed, as well as the reporting software and systems necessary to use the data properly.

The idea of aligning IT with the business has never been more necessary than in the brave new world of the IoT. But don't assume that means a smaller span of control; in fact, the role of IT will never be broader than it has to be in the IoT world.

InformationWeek's new Must Reads is a compendium of our best recent coverage of the Internet of Things. Find out the way in which an aging workforce will drive progress on the Internet of Things, why the IoT isn't as scary as some folks seem to think, how connected machines will change the supply chain, and more (free registration required).

Jeff Kaplan is the Managing Director of THINKstrategies (www.thinkstrategies.com), the only strategic consulting firm focused entirely on the business implications of the transition of the technology industry from a product-centric to a services-driven solution model, ... View Full Bio
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jkaplan024
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jkaplan024,
User Rank: Apprentice
7/17/2014 | 1:35:25 PM
Re: Whiz bang factor
I'd be more concerned about the SBUs taking the initiative without IT involvement and failing to take into consideration the various technical issues I outlined. The best scenario is for IT and the SBUs to work together from the start to set realistic expectations and fully address the potential issues before they derail their IoT efforts.
Lorna Garey
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Lorna Garey,
User Rank: Author
7/16/2014 | 11:18:36 AM
Whiz bang factor
IoT does seem like the sort of tech that will tempt IT to do projects just because they can, and it's cool. Without the deep integration with the business that you discuss, that could lead to a lot of wheel-spinning. 

Or, IT could hit upon something truly innovative that LOB execs would never have thought of!
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