Organizations need to be careful of futuristic, science project, pie in the sky promises regarding Internet of Things, Patrick Shields, CTO Software AG asserted while making an insightful spotlight presentation titled: Mind Your Business of IoT at the CIO East Africa organized Summit in Nairobi, Kenya.
In his emphasis that technology is not just about devices that can collect data and display it on a dashboard, he noted: “Technology is about delivering outcomes that produce measurable monetized business value. This value needs to translate into money by either reducing costs, improving efficiencies or increasing income,” Shields said.
Aggregated survey results by Software AG show that between 50 – 90% of strategies fail to deliver on their promise and only 40% of the IoT solutions, that do come to fruition, produce business actual value. Progressing from IoT strategy to execution is a process.
“Technology is about delivering outcomes that produce measurable monetized business value. This value needs to translate into money by either reducing costs, improving efficiencies or increasing income,” Shields said.
Patrick Shields, CTO Software AG
The essence of a successful IoT solution is not just in the devices, and in collecting the data but rather about deriving value. The tons of data that is collected by the variety of devices needs to be able to be monetized said Shields.
The outcomes need to create value, and in the fast-moving world of IoT, the value of this data is quickly lost, preventing its ability to offer monetary value if not acted upon in real time. It’s all good and well to monitor a system or business process, such as a CRM or ERP system, the trick is to act on it quickly.
Machines never sleep, they never take leave, nor do they get sick – so creating a solution that uses the predictive analytics to translate the data into actionable insights is where the value lies. But, this isn’t the only value that IoT can offer, it is also able to mitigate risk. I believe that IoT gives us the ability to identify and eliminate “value leaks” in our organisations.
According to Shields a value leak is caused by organizational friction that occurs within a business activity when unresolved inefficiencies and bottlenecks are present. These “leaks” can be prevented, which enables organizations an opportunity to avoid costly occurrences such as missed performance targets, unscheduled maintenance issues and supply chain irregularities. Depending on the size and the severity level, this could cost some business hundreds, if not millions of shillings a day.
By using IoT in conjunction with prescriptive data analytics, a business is now able to rally its systems to prevent a value leak before it happens. By using this technology in creating an understanding as to where, for example, where an important customer touch point was missed, or when a valuable piece of equipment will fail, or what specific stock won’t be available, it will allow a business to proactively take action to prevent a problem from occurring in the first place; as opposed to re-actively managing a crisis.
The cost of being able to prevent is often far less than losing a customer or suffering a shut down. The Software AG Digital Business Platform brings to bear, what we call “Business IoT”.
Shields laid emphasis that the business approach to IoT starts with “high resolution” planning. The more accurate the initial stage of planning an IoT solution is, the better position a business is in to execute the plan with a targeted outcome, and then most importantly measure the financial success of the organisations business problem that IoT was intended to solve.