Business leaders aren’t prepared for the IoT

Senior levels of many organisations don’t yet have a good understanding of the potential impact of the IoT, according to Gartner's Nick Jones

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Business leaders aren’t prepared for the IoT Jones: The IoT offers opportunity in consumer-facing products and services
By Staff Writer Published  June 28, 2015

In a recent Gartner survey, more than 40% of organisations expected the Internet of Things (IoT) to have a significant impact over the next three years.

That makes sense for industries dealing with tangible equipment, products and services. For example, many retailers already track inventory with RFID tags, and manufacturers use industrial automation and utilities that exploit sophisticated monitoring and control systems. However, many survey respondents feel that senior levels of their organisations don't yet have a good understanding of the potential impact of the IoT.

The IoT is a network of physical objects that contain embedded technology to sense or interact with their internal state or external environment. Many current uses exist in B2B settings; however, the falling costs of networking and processing mean that there are few economic inhibitors to adding sensing and communications to products costing as little as a few tens of dollars. This creates more opportunity in consumer-facing products and services, such as household appliances and wearable clothing.

Very few organisations expected the primary impact of the IoT would be on employee-facing activities. We feel they are underestimating this potential. We see many opportunities inside the organisation to transform working processes, such as workers and smart machines collaborating, and to design ‘smart' office spaces. The real challenge of the IoT, however, is less in making products smart and more in understanding the business opportunities enabled by smart products and new ecosystems.

Are leaders ready?
Fewer than one-quarter of survey respondents have established clear business leadership for the IoT, either in the form of a single organisation unit owning the issue or multiple business units taking ownership of separate IoT efforts. Exacerbating this lack of leadership is a lack of understanding about the IoT by senior executives, the board of directors, and non-IT workers. Overall, the survey results show that there is a clear need for more internal education and ideation at all levels in the organisation to explain the potential of the IoT and to seek innovative ways to exploit it.

Security and staffing concerns
New domains such as the IoT inevitably pose new risks and challenges, and survey respondents were acutely aware of the possible factors that could inhibit IoT deployment. Security and privacy are, unsurprisingly, top issues. Industries dealing with intangibles were more concerned with security and privacy than those dealing with tangibles, because many operate in very security-aware areas, such as banking. Obtaining staff and skills is another major inhibitor for many respondents, particularly those who expect the IoT to be transformational, because they are likely to need sophisticated skills relatively urgently.

Steps to prepare for the IoT
Organisations should take the following steps to prepare for the IoT:

  • -Appoint an individual to head up IoT initiatives and act as a technical and business focus for the domain.
  • -Educate the organisation on the IoT to improve general understanding at all levels of the organisation, especially among staff in non-technical roles. This will help the organisation improve its understanding and identify opportunities.
  • -Begin skills planning immediately, if you expect the IoT to impact you in the short term, to identify which new skills will be required and to find staff and sourcing partners.

Nick Jones is vice president and distinguished analyst at Gartner

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