Why you need a strategy for the Internet of Things

  • Enterprises and service providers need to address IoT technology and business challenges now.
  • A strategic plan and transformation roadmap will help you reduce risks and reap benefits.

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The Internet of Things (IoT) is expected to have a massive impact on the world economy over the next decade with the potential to touch virtually every aspect of our society on a global scale. The ability to realize the massive benefits while managing the risks of IoT technologies will require a change in mindset for both enterprises and their service provider partners regardless of size or vertical market.

Leading industry analysis and AT&T’s own experiences supporting legacy M2M and leading-edge IoT solutions reveal four areas that can result in significant time-to-market risks and time-to-benefit barriers. However, if addressed effectively through a well-developed strategic plan for IoT, these can instead be key areas of competitive differentiation.

1. Enterprise issue: lack of business alignment

To date, many enterprises have focused on pursuing single use cases and narrowly defined IoT solutions that have been developed without clear alignment with defined business outcomes. Now they are being challenged to scale these emerging capabilities to an enterprise level. Complicating this is the fact that there are currently no dominant IoT ecosystem platforms and no single architectural approach to meet the diverse business and technology requirements for all IoT projects. Enterprises are forced to compose IoT solutions from an ecosystem of providers across multiple platforms and technologies, including their own infrastructure and operations. In fact, the ability to do this effectively is a defining characteristic of mature enterprise IT and business operations organizations. However, many simply have not yet developed the internal capabilities or partner relationships needed to support the complex integrations required for IoT.

2. Enterprise issue: lack of enterprise architecture alignment

Widespread adoption of IoT solutions by enterprise organizations directly impacts IT infrastructure and operations. According to some estimates, up to half of the costs of IoT implementations are expected to be spent on integration. Yet many organizations are developing IoT solutions in isolation from the enterprise IT environment and without a clear understanding of the impact to their infrastructure and operations.

Historically, M2M solutions were deployed as closed systems, with proprietary protocols, vendor-specific software platforms, and limited integration with third-party systems. What’s more, IT and operations technology have typically been managed by different parts of the organization. Today, many IoT initiatives are funded or led by the marketing organization, a line of business, or other groups outside IT. Going forward, IoT solutions will need to support integration with other enterprise infrastructure, operations, applications, and data (including real-time voice and video) to support emerging IoT business applications.

3. Service provider issue: narrow focus on connectivity

Wireless service providers have traditionally focused on SIM-connected devices and solutions that leverage their mobile networks. However, many customer solutions include devices that use other IoT-driven transport mechanisms for operational benefit. In fact, according to most industry estimates, connectivity is one of the smallest segments of forecasted IoT revenue as compared to applications, analytics, consulting, implementation, and lifecycle support services. This can result in missed IoT sales and revenue opportunities. It can also negatively impact how service providers are perceived by their customers and the industry as a whole.

4. Service provider issue: increased customer implementation and adoption risks

Many service providers excel in delivering IoT component services and some have even developed discrete, packaged solutions than can be scaled to an enterprise level. In both cases, integrating new services and technologies with existing infrastructure and operations is typically the customer’s responsibility. Many IT, operations, and line-of-business organizations do not fully comprehend what is required for IoT planning, design, implementation, and support. Nor do they have available personnel with the required experience to support complex solution deployment. This results in greater risk for successful IoT solution implementation, delays in realizing benefits, and loss of follow-on revenue opportunities for the service provider.

The art of the possible: how to move ahead strategically with IoT

As with any technology, the most effective implementations are those that align with and best support the requirements of the organization. To that end, having a comprehensive strategy for IoT that is aligned with fundamental business, technical, operational, and financial needs is critical. A strategic plan and transformation roadmap for IoT provides a coordinated way to align technology decisions with key business imperatives to better understand how IoT can be used to transform the business and the potential impact to existing environments.

Using a structured approach to strategic planning for IoT technologies and services enables CIOs, CTOs, and other technology-oriented executives to have productive conversations with their business peers who have responsibility for leveraging IoT tools to drive revenue and support both enterprises and service providers in a cost-effective manner. This collaborative approach will be critical to the success of enterprise-level IoT solutions.

Eric Sineath Consulting Chief Architect AT&T About Eric