Companies are already making big bets on the IoT
Early adopter incumbents in the IoT space are allocating as much as a quarter of their IT budgets to Internet of Things projects — on a par with mobile, cloud and analytics.
More importantly, the bigger the investment they are making, the greater the ROI.
That’s a key finding from Vodafone’s IoT Barometer for 2016 released last month.
According to Erik Brenneis, Director, Internet of Things, Vodafone CEO Vodafone Global Enterprise,“This is the fourth year that we’ve published the Barometer, our annual study of how the Internet of Things (IoT) is transforming business. In that time, the market for connected devices has truly come of age.”
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He said this year’s research reveals that 28 per cent of organisations already use IoT and a further 35 per cent are less than a year away from launching their own projects. “More than three-quarters of businesses say that IoT will be ‘critical’ for the future success of any organisation in their sector. So what matters now is not whether a business should adopt IoT, but how. Organisations planning and implementing their own initiatives need benchmarks and best practices that can help them maximise their returns.”
The researchers identified five key themes:
- Bigger commitment produces better results Businesses that allocate more budget and run more projects see stronger ROI. And interest in IoT is higher than ever. Seventy-six per cent of businesses say that IoT will be “critical” to future success, and 63 per cent expect to have live projects within the next year.
- IoT supports business transformation You can use IoT just to optimise operational processes. But when you build it into your products and use it to transform your business, you’ll see greater results. It is also is driving transformation. Forty-eight per cent of adopters say they’re using IoT to support large-scale business transformation and 29 per cent say they’re using it to connect multiple organisations into ecosystems (see chart, below).
- Leaders measure IoT within business processes Most adopters have clear goals, but the top performers are those that treat their IoT initiatives as business projects instead of IT purchases. IoT produces measurable results. Adopters measure on average a 20 per cent improvement in key business indicators like revenue, system uptime, cost and asset utilisation as a result of using IoT.
- IT integration is key to using IoT data effectively Adopters see that IoT applications are a goldmine of data, and are focused on getting that data to the people and applications that need it. Businesses are integrating IoT with business systems. More than 90 per cent of adopters say they store IoT data in the cloud, use analytics to support decisionmaking, integrate IoT data with core systems like enterprise resource planning (ERP), and use mobile devices to give employees access to IoT data.
- Security needs end-to-end attention Security and privacy can’t be ignored. Most adopters are cautiously optimistic, working with their IoT providers to control the risk. Organisations are investing widely in improving security. They’re focusing on staff recruitment and training, process improvements and their relationships with providers.
According to the researchers, “Despite this diversity, organisations that are setting out to build connectivity into their facilities, infrastructures, products and processes face many of the same decisions — and see many of the same results.”