The Opportunities and Challenges of IoT Part 2 – Challengers
As discussed in Part 1, IoT is the case with all technological upheaval. Realizing the potential of the IoT will take a lot of managerial wisdom, not only in terms of technical requirements, but also the organization. However, challenges remain.
1.Rethinking the organization
Information technology gradually infiltrates all industries, from production tools and assets to the inventory and operations. IT companies will become the keystone, as the Internet of Things will require IT to play a role that goes beyond computers, networks, mobile devices and data processing centers.
In retail, for example, the highest value yet to be found. Sales can be achieved through personalized promotional offers to consumers in real-time. Sophisticated data integration from multiple sources will be needed. Sensors in the building generate consumer geolocation data, together with CRM data, including history internet research and data from the tags of the items displayed in the shop, consumers would be offered coupons on their mobile allowing them to purchase cheaper product they viewed earlier on the Internet. To achieve this essential objective, operational and IT teams, which so far have operated independently, will cooperate closely.
In addition, in the areas of financial services, marketing and operational, skills and systems need to be converged. Employees need to be trained in other skills to win the whole organization in analytical rigor and focus more on the data. Analysts and data scientists need to be integrated with managers and decision makers to maximize data integration. In some cases the decisions will be taken automatically by algorithms, managers are responsible for monitoring the metrics and define the strategy.
2.Overcoming barriers to interoperability and analysis
Interoperability is the critical strategies to use IoT effectively. According to McKinsey, about 40% of the potential value comes from the communication between the different systems in the IoT and data integration. For example, on oil rigs, some equipment, such as pumps, are equipped with sensors certainly connected, but limited in their connection – they individually communicate with their manufacturers, which monitor and control facilities and can optimize maintenance and performance of each device, but separately. However, if the data from these multiple components and systems were combined, operators would be able to identify more than half of the daily performance problems.
Wholesale actors will influence the market enough to force interoperability. This will push those same providers to choose common standards that ultimately will accelerate their adoption. In other cases, interoperability happens by platforms capable of integrating data from multiple systems, which will create new opportunities for specialized software companies.
However, gather data from different information systems will not be enough. In a world using the IoT for prediction and optimization, companies will have to face the challenges of the Big Data analysis. They will develop or buy and then adapt and deploy analytical software capable of extracting actionable analysis from massive data flows generated by IoT. In many cases, embedded algorithms in the software will analyze real-time data streams that most traditional analytical instruments do not. Here is an opportunity for innovative developers.
3.Addressing the security requirements
The prospect of setting up the IoT should further educate leaders about cybersecurity. When an entity connects to millions of sensors, detectors and other connected devices, it will not only create risks normally associated with massive data use, but also with the whole system. Each of the objects connected to the system is a potential point of entry for hackers. The damage can be devastating, becoming a matter of life or death if someone controls the system of a hospital or public transport. On one side, we need to maintain a source of efficiency and performance for a company; on the other hand, we need to identify vulnerable to the risk of cyber-attacks. In parallel, the interconnection between businesses and consumers is becoming a threat to the integrity of corporate networks.
Soon IoT will become a differentiator in the competition. The top management and board members monitoring will take a systematic approach to address organizational challenges and risks, which will accompany the digital expansion. This will be the only way to capture all of the benefits promised by the Internet of Things.