CIOs have woken up to the power of the Internet of Things (IoT).
Almost three quarters (71%) of IT leaders are now gathering data for IoT initiatives, according to 451 Research. Analyst IDC, meanwhile, expects global IoT spending to reach almost $1.29 trillion during the next three years.
So, how can CIOs make the most of this new era of connectivity? Here are some tips from IT leaders.
Understanding the current state of the market
It is crucial to recognise that an investment in IoT is no guarantee of success. 451 Research suggests security remains the key concern, with half of IT leaders saying it is the top impediment to IoT deployments. A further 41 per cent cite lack of perceived return on investment and business benefits.
Neil Pearce, CIO at Travis Perkins, is one IT leader who is interested in the potential of connectivity. Yet like many of his peers, he suggests IoT is very much a nascent area. "It's probably going to be a bit of a mess for a few years and most CIOs will be researching, rather than implementing," he says. "The key for many organisations and providers will be to get the right groundwork in place."
The extent of the effort required leads Pearce to suggest key developments will not emerge immediately. "I think CIOs will be able to create big benefits from the IoT, but I also think there's still a long way to go," he says. "I think the IoT, and the related areas of robotics and analytics, are the areas that will be key to developments in digital technology going forwards."
451 Research confirms data analytics plays a crucial role in developments, with 69 per cent of IT leaders using data from IoT end points, such as security and compliance. Ian Hughes, analyst at 451 Research, says the trick in terms of IoT is to understand the data you hold and to act, both tactically in real-time and strategically in the longer term, in order to create new business models.
"Analytics and machine learning are the most important components for gaining efficiency savings," he says. "IoT affords cross-industry and cross-silo interaction at a data level. CIOs must remember that data is ultimately platform independent and data science is also now available as a service."
The continued rise of analytics is also recognised by Mark Ridley, group technology officer at venture builder Blenheim Chalcot Accelerate. While predictive analytics and machine learning have been important tools in IT for many years, Ridley says the key difference today is the democratisation of the technology, particularly as these tools can be deployed via the cloud.
"Easy-to-use products like Databricks and Microsoft's Azure Machine Learning Studio are doing for data scientists what the web did for developers and designers 20 years ago," he says. "These features made creating a data science team easier in my previous role as director of technology at reed.co.uk because the tools that the staff used and the support that they needed were more readily available."
Ridley expects to see similar benefits arise in his current role and in other organisations, too. "The availability, and specifically, the accessibility of these new platforms offers businesses an unprecedented chance to understand what customers they should target, what sales conversations to have, how to best support their products and how to forecast their own performance," he says.
Looking at cases of connectivity in action
Proof of Ridley's confidence in the growth of IoT can be already be seen. IDC reports manufacturing and transportation businesses are the highest spenders, reaching $178 billion and $78 billion respectively in 2016. Utilities comes third, with spending of $69 billion. The public sector provides another source of key developments, with significant projects producing real benefits.
Richard Corbridge, CIO for the Health Service Executive in Ireland, says healthcare analytics is already being democratised. He points to the huge growth in wearable devices and healthcare apps. Such advances mean non-medics can use their own technology to understand complex medical data.
"We're reaching the next frontier in healthcare," he says. "By using their own devices, patients have access to information and can turn the delivery of health and wellbeing activities into a competitive gamified process."
The benefits of connectivity are also helping to prevent loss of life. Neil Moore, head of ICT at Hampshire Fire and Rescue Service, says year-on-year reductions in the number of fires across the UK can in part be related to the introduction of key technologies, such as fire alarms and smoke detectors. New connected developments can build on this work.
"We're looking at what types of IoT technologies are available in the market and how we might use those systems to run pilot projects," says Moore, who believes challenges around security can be overcome and suggests IoT can play a crucial role. "What we're looking to create is a seamless service," he says. "The long-term aim has to be joined-up public safety services that boost both efficiency and effectiveness."
CCL chief executive Jos Creese, an independent digital consultant who supports both public and private sector organisations, also points to benefits in healthcare and public safety. He suggests that objects with embedded sensors will help automatically determine public service resource deployment in the future.
Such automation, however, does not mean skilled technologists are not in high demand. 451 research suggests almost half (46 per cent) of IT leaders have difficulty filling IoT-related positions, with security and data analytics seen as the areas with the greatest dearth of expertise. Creese recognises the importance of IoT know-how.
"New skills will be needed in our public services IT teams to understand the opportunity and the management of IoT -- in encryption, firewall configuration for IoT devices, IoT device authentication, detection alerts and more," he says. "It's as big an issue for IT service managers as the introduction of the internet in the 1990s or PCs in the 1980s."
The challenges, however, are worth overcoming. While cultural barriers might act as a barrier to IoT success, the potential benefits are great. As Warwickshire County Council CIO Tonino Ciuffini suggests, IoT can help - and is already helping - to create better customer experiences and higher levels of service quality.
"You have to think about the areas where public interaction is most important," he says. "It's about ensuring you provide good customer service. If the customer prefers automation, then there are some areas where technology can actually improve the ways organisations operate."