INTERNET OF THINGS SPECIAL.... Common connections

INTERNET OF THINGS SPECIAL Common connections   Why every CEO should be willing to invest in the Internet of Things The Internet of Things (IoT) is a network of unique physical objects that contain embedded technology to communicate, sense, analyse, and or interact with their internal state or external environment. The IoT is not a single market but, rather, a collection of niche markets,  as well as a subset of the broader embedded electronics market.  It encompasses hardware, the “things“ themselves and the embedded  software that runs on the hardware. It enables the connected capabilities of the things and the services associated with the things  including services  based on analysis of usage patterns and sensor data.  As such, IoT is heterogeneous. The common elements that hold it together  are connectivity, sensors and processing. The concept of IoT is not completely foreign to Indian enterprises. ­  RFID technologies to track and monitor goods and assets, sensor  technologies to monitor cess parameters, operational technologies such  as programmable logic controller and supervisory control and data  acquisition, and manufacturing ex ecution systems to manage plant  operations have already been in use for years now.But there is still a lack  of understanding about how IoT impacts business.  The biggest question in their minds is, “How is IoT different in what it can deliver compared with what we already have (the IT systems)?“ The answer lies in them understanding IoT systems better, and widening  their traditional views of “interconnected systems.“ While the benefit of interconnecting IT systems is clear, many organisations do not see past a world in which the physical assets (equipment and machinery that  are critical to the core business activity) are also interconnected.  This lack of understanding is a major hindrance for organisations from  even taking the first step toward IoT  -which is to understand how IoT  will influence their business. The first and foremost thing that organisations should understand is that  IoT is not a technology initiative ­ it is a business improvement initiative.  Behind every IoT project there is a business priority. It has broad  applications and supports a wide range of business models, though most applications are rooted in four usage scenarios:  >R_RXVconnected things can be monitored and optimised. For example,  sensors on an asset can be optimised for maximum performance or  increased yield and up time. 4YRcXV connected things can be monetised  on a pay-per-use. For example, automobiles can be charged for insurance based on mileage.@aVcReV connected things can be remotely operated, avoiding the need to go on site. For example, field assets such as valves and actuators can be controlled remotely. 6ieV_Uconnected things can be extended with digital services.  For example, connected healthcare equipment can receive software upgrades that improve functionality. These four usage models help organisations tackle two sets of business  priorities; the internal priority, which is essentially to do with reducing costs, improving productivity or efficiency, and optimising resource utilisation, and the  external priority, which is essentially to do with growing sales, finding  new growth markets and enhancing customer satisfaction. Interconnecting physical assets and operational subsystems with supply  chain and enterprise-wide resource planning systems, allows for a single,  unified view of the core business activities and enables faster operational  decisions, cost reductions, asset optimisation and asset utilisation  improvement activities such as predictive maintenance. However, many Indian organisations are currently underprepared to  embrace IoT due to the lack of infrastructure, relevant business use cases,  product ecosystem and awareness levels, as well as due to the lack of  willingness to commit investments in an emerging technology area that is  yet to prove business returns globally. Further, security issues relating to interconnection of critical physical assets to the Internet, IoT-related technology obsolescence, and misplaced understanding that  IoT will require fresh investments in technology, rendering the existing  technology investments redundant also play their part in dampening  IoT adoption. But by 2020, we will see investments from large end-user organisations likely, that are currently at the very initial stages of undertaking some pilot  projects. Government departments (especially from the traffic management  and water quality management perspective) and organisations in the energy  and utility sector (that are adopting smart grids to manage power supply and demand, and to study customer's power usage behavior), and other manufacturing industries such as oil and  gas, automobiles, FMCG, etc., and service industries such as retail,  healthcare, hospitality, etc., are currently identifying various pilot projects  in IoT. The pilot projects target leveraging IoT to help optimise the performance  of large assets (remote operation, extending services or usage-based billing), leading to reduced operating costs (fewer energy costs), enhanced customer satisfaction  (returning customers), improved availability (reduced downtime from  failures) and increased yield (more output from the same operating costs). As more such pilots, and success stories emerge, both globally and locally, Indian businesses will discover that IoT can transform every facet of their organisation ­ manufacturing, supply chain, sales & marketing, customer relationship  management, and new product development. However, for successful IoT implementation, Indian organ implementation, Indian organisations will first have to understand the business use case for  IoT. By not focussing on the immediate opportunities and smaller pilot  projects, business and IT leaders will only end up committing to grand and  expansive plans that demand big leaps of faith to justify investments and  long-term growth but really not deliver the expected results.  Success will also depend on aligning the IT and OT resources, processes  and people carefully, experimenting and looking at other industries as  sources for innovative uses of the IoT, and on ensuring that their enterprise  architecture teams are ready to incorporate IoT at all levels. By Ganesh Ramamoorthy, Research VP, Gartner. CDET10JUL15