The “Managing the Internet of Things Revolution” e-guide I wrote for SAP was aimed at C-level executives. Even though it’s proven popular enough that the company is translating it into several languages, it appears we need to redouble our efforts to build IoT awareness among executives.
I say that because Gartner has just come out with a survey confirming my suspicions: even though a lot of companies now think the IoT will have a major effect on them, they’re clueless about how to manage it and most have yet to launch major IoT initiatives.
In fact, “many survey respondents felt that the senior levels of their organizations don’t yet have a good understanding of the potential impact of the IoT.” (my emphasis)
That’s despite the fact that a key conclusion of my guide was that (even though the IoT is a long way from full maturity) companies can and should begin their IoT strategies and implementation now, because they can already achieve significant savings in operating costs, improve marketing, and create new revenue streams with the current early stage sensors and analytical tools. Getting started will also build their confidence and familiarity with IoT tools and strategy before they begin more dramatic transformational strategies.
Consider these findings from the survey of 463 business and IT leaders:
- 40% of companies think the IoT will at least bring new short-term revenue and cost reduction opportunities in the next three years — or perhaps even transform them. More than 60% think that will be true over 5 years or more.
- Fewer than 25% said their company had “established clear business leadership for the IoT,” — even among the companies predicting a significant – this includes those who said they expect the IoT to have a significant or transformational impact, says Gartner (however, 35% of them came from this group).
- Yet, few have delegated specific responsibility for IoT strategy and management: “… less than one-quarter of survey respondents has established clear business leadership for the IoT, either in the form of a single organizational unit owning the issue or multiple business units taking ownership of separate IoT efforts.”
- “attitudes toward the IoT vary widely by industry. For example, board of directors’ understanding of the IoT was rated as particularly weak in government, education, banking and insurance, whereas the communications and services industries scored above-average ratings for senior executive understanding of the IoT.”
Gartner concluded most companies have yet to really create IoT strategies:
“‘The survey confirmed that the IoT is very immature, and many organizations have only just started experimenting with it,’ said Nick Jones, vice president and distinguished analyst at Gartner. ‘Only a small minority have deployed solutions in a production environment. 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. The real challenge of the IoT is less in making products ‘smart’ and more in understanding the business opportunities enabled by smart products and new ecosystems.’ However, a lack of clear business or technical leadership is holding back investment in the technology.” (my emphasis)
In line with my current preoccupation, privacy and security, the survey did show companies are concerned with both issues, as well as with finding talented new staff who understand the IoT and how to benefit from it. According to Steve Kleyhans, Gartner’s research vp:
“While a single leader for the IoT is not essential, leadership and vision are important, even in the form of several leaders from different business units. We expect that over the next three years, more organizations will establish clear leadership, and more will recognize the value of some form of an IoT center of excellence because of the need to master a wide range of new technologies and skills.”
If you haven’t launched any IoT projects or begun to create a strategy, the writing’s on the wall: get going!
Carpe diem: I take this survey as an omen that there’s a desperate need for When Things Can Talk: profiting from the Internet of Things revolution,” my proposed full-length book on IoT corporate strategy. Let me know if you can suggest a possible publisher!