The full value of the Internet of Things has yet to be fully realized, but executives consider IoT initiatives to be increasingly valuable and important to their organizations, particularly when it comes to achieving greater operational efficiencies and gaining competitive advantages.

That is one of the findings of a new study by research firm Vanson Bourne. The study, which was sponsored by Aeris, a leading firm in the IoT market, polled 300 enterprise IT decision makers in the United States and United Kingdom. The study looked at the perceived impact of IoT on business in the year ahead, and how perspectives on IoT have evolved since 2013.

The study found that: 74% of all respondents indicate they feel IoT provides their organizations with the opportunity to better meet key business objectives. 71% agree IoT will help them achieve a competitive edge. U.S. executives (86%) are more optimistic than their U.K. counterparts (51%) in regard to how IoT can enable them to better meet their objectives.

“While the research uncovered some intriguing differences across geographies and industries, the generally held consensus is that the opportunities will be met with challenges,” Janet Jaiswal, vice president of enterprise marketing at Aeris, noted in a statement.

“As the number of connected devices grows, organizations will not only be under increased pressures to better manage their devices and obtain data-generated insights to improve operational efficiencies, but they will also need a deeper understanding of how best to address the complexities associated with connectivity and data consumption to lower operational costs,” Jaiswal says.

Big data and application development are other significant concerns within the enterprise, the study notes. A majority of respondents (72%) find it difficult to analyze sensor and connectivity data to obtain useful insights, and 73% say collecting, managing and storing device sensor data is a major challenge.

US executives more optimistic than UK counterparts

The most surprising survey result is that there is so more pessimism in the UK compared to the US when it comes to IoT, Jaiswal told Information Management by email. More specifically:

• The US is more optimistic that IoT gives them a competitive advantage in the upcoming year with 83% agreeing vs. 46% agreeing in the UK.

• Managing data connectivity to reduce operational costs is a major point of emphasis for the upcoming year in the US – 84% agree in 2015 up from 70% in 2013 – but in the UK, just 49% agree this is a priority in 2015.

“The most likely reasons are the challenging economic conditions in the UK and that in general, the British are more conservative, compared to the Americans, when evaluating the prospects for the future,” Jaiswal notes. “It’s also possible that the UK executives may have not fully explored the benefits connected devices bring when compared to the US.”

There are exceptions, however, Jaiswal says.

“For example, IoT is critical to the widespread adoption of usage-based insurance (UBI) -- where the costs are dependent upon the type of vehicle used, measured against time, distance, behavior and place -- in the UK while UBI has yet to gain widespread adoption in the US. Without IoT, the device mounted to a vehicle would not be able to send the information to the insurance company to make UBI cost-effective and, therefore, practical.”

“However, we see that the lack of priority is quickly changing. For example, the UK Chancellor pledged £40million for IoT in its 2015 budget, and as part of this, the government recently announced in July 2015, a competition aimed at exploring the benefits connected devices might bring to U.K. cities with up to £10 million available for the winning consortium partners.”

Time and complexity hold many organizations back

As to the perceived top challenges to obtaining full business benefit from IoT, Jaiswal says “Today, it takes far too long and is far too difficult for many businesses to manage the complexity of all the IoT technologies present.”

“Right across the value chain – from device enablement and integration issues through connectivity to the management and business process integration areas – these factors have stifled widespread application of IoT innovation,” Jaiswal continues. “Compounding this are necessary concerns about security, especially as we move into a world where devices talk to other devices with potentially unanticipated results, such as car-to-car signaling, or where critical systems such as when utilities and smart power are involved.”

“In general, at present, considering that the IoT end-to-end application is in its early phases, businesses are using commercial components, including connectivity platform, IoT data management platform, application development platform, analytics platform, and then integrate those with their own in-house expertise or leveraging system integrators to create a complete end-to-end solution,” Jaiswal says.

Steps to a successful IoT implementation

Businesses should consider the following steps when it comes to successfully implementing an IoT solution, Jaiswal advises:

1. Developing a business case for IoT involves understanding the impetus for the initiative. The reasons can vary, from the need to gain a competitive advantage, create a new product or offering, differentiate an existing one or improve operational efficiencies. Next, businesses should not only understand the costs but also weigh it against other competing opportunities to make sure that benefits are there, and expectations are realistic.

2. The next step is to develop a working prototype. Given that the IoT ecosystem is dynamic and fragmented, implementing an IoT solution can be complex, so it’s critical to spend the time to identify the right hardware providers, connectivity solution, application enablement platforms, business integration solutions, etc.

3. Next, identify a pilot project within an individual group or business unit to understand the benefits and obtain critical learnings before undertaking a company-wide initiative

4. After a successful pilot, businesses then face a critical decision-making point on how to implement an organization-wide IoT initiative. Depending on resource availability, time-to-market, and skillset availability, choices can include partnering with a third-party, building in-house or a combination of the above.

Advice to data professionals

Asked what advice she has for data professionals, Jaiswal says “As more sensors are deployed, they present an even larger challenge for Big Data analysis. We noted that the majority found that collecting, managing and storing data from device sensors is a challenge. Many are also finding they may not be properly equipped to oversee the collection, management and storage of data.

“For data analysts and data scientists, it is important that they be a more integral part of the IoT planning and deployment and to have a holistic view of the system to understand better the source of the data and how the data is processed through the IoT network. Anticipating the IoT program will help get a better grasp on the deluge of data and to ensure the proper processing hardware, data transmission networks, and software is leveraged to manage effectively and make sense of the data,” Jaiswal concludes.

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