Interesting article in AssetDNA.com “Is Business Ready for the ‘Internet of Assets’?”
Here is a link to the AssetDNA.com article
Article quotes Digital analyst GSMA Intelligence that “… there are now more than 7.28 billion active mobile connections globally compared to 7.20 billion humans as per the US Census Bureau’s world population clock. What is more, these gadgets are multiplying 5 times faster than we are.”
IOT captures millions of information elements in many businesses, but today’s firms face three challenges to use this data:
1. How do you use this information to reduce costs, increase revenue, and improve strategic position ?
Today, most IOT is not effectively used. One example I like to use is McKinsey’s perspective looking at the oil drilling sector:
“… most data generated by existing IoT sensors are ignored. In the oil-drilling industry, an early adopter, we found that only 1 percent of the data from the 30,000 sensors on a typical oil rig are used, and even this small fraction of data is not used for optimization, prediction, and data-driven decision making, which can drive large amounts of incremental value.”
I see a similar situation in other sectors
2. Who is assigned responsibility to maximize the benefit of IOT?
Maybe the CIO, or Operations Manager, Production Manager, Customer Service Manager, or other functional group? For the oil drilling sector, safety and muster drill compliance are critical factors and safety executives may be the decision makers. But to maximize IOT benefit, the starting point I always emphasize is understanding the value chain – that means quantifying value chain metrics, defining peer group benchmarks, identifying operational information ‘gaps’, and other management metrics to drive an optimum IOT solution. This is done before the first IOT device is installed with strong participation and management oversight at the “C” level.
3. How do you realign organizational structures given the reach and capabilities of IOT?
Think about production and operations management whereby decision making is often done by highly experienced line management with decades of experience. Or customer service and support groups using well-established, ‘proven’ techniques that have worked well for decades. Now imagine replacing that with ‘algorithm decision making’ whereby integrated IOT and analytic models provide optimized decisions in the key value chain elements from supply side management and production through sales and customer service. How do you align the organization to meet these changing needs, what new skills are needed; what should be outsourced; how do you transition the organization to support the new business models- these are representative challenges that must be met for an organization to capitalize on the IOT and big data ‘tsunami’ we are now seeing.
My recommendation is view IOT and big data as ‘technology enablers’, enabling you to improve and streamline business processes.The winning strategy- get past what I call the ‘gee-whiz’ factor, recognize that IOT, analytics, and other technologies are a “means to the end” driving new business processes to reduce costs, increase revenue, and improve strategic position.
Paul B. Silverman
Paul B. Silverman is Managing Partner of The Gemini Business Group, LLC, a new venture development firm dedicated to helping global entrepreneurs succeed (www.geminibusinessgroup.com) . He writes about entrepreneurship, healthcare, analytics, and strategy management and is the author of “8 Building Blocks To Launch, Manage, And Grow A Successful Business.” See more at Paul B. Silverman Blog and sign up for Entrepreneurship Today! email updates to track latest new venture developments.