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Beyond the Hype: Three Ways to Maximize IoT Budgets

Those who execute purposeful planning and implementation when deploying Internet of Things technologies can ensure both short- and long-term success.
By Dayan Rodriguez
Oct 01, 2017

"IoT" is a very broad term with tremendous hype. This not only confuses the specific applications of the Internet of Things, but also creates uncertainty relative to how companies should allocate budgets to fully maximize the possibilities of the IoT.

To help companies and leaders understand how best to maximize IoT budgets, it's critical to understand how the IoT is being used throughout an enterprise. Examples of how companies use IoT technologies in business operations include using inexpensive IoT devices to collect and use data, leveraging data insights to provide a more holistic understanding of supply chain risks and areas of improvement to help decrease operational costs, increasing sales growth by enhancing products, and launching more efficient product-marketing campaigns. The aforementioned applications are designed to drive better business performance and generate efficiencies. However, only a small portion of businesses have a clear IoT strategy, and even fewer are satisfied with its execution.

A recent Bain study found that U.S. executives and corporations are falling behind their European counterparts when it comes to deploying and integrating IoT solutions. Budget misallocation and poor interoperability are impeding these efforts.

According to Genpact, a staggering $394 billion worth of companies' digital budgets, collectively, may not be used effectively, leading to tremendous waste and inefficiency. In addition, 44 percent of CIOs' budgets are allocated for the Internet of Things. Yet, one of the most persistent problems enterprises face in the IoT is that the underlying communications infrastructure that connects systems 'are not speaking the same language.

What Can Companies Do to Address These Challenges?
There are three steps companies can take to make the most of their IoT budgets and define what "success" looks like.

1. Modernize legacy systems to avoid waste, improve connectivity and follow a clearly defined process.
Every IoT implementation must work around the existing installed base; unfortunately, it is not something that you can rip up and replace. For a cost-effective and successful implementation, companies must get the maximum reuse from their legacy system and ensure that it is economically prudent. Modernizing legacy systems presents various risks—when older equipment links to the main network, it could overload the system and cause it to malfunction.

Additionally, companies should walk through the three basic steps to IoT implementation, particularly relative to maximizing legacy systems: assessing the end-to-end requirements and gaps; designing an infrastructure that is flexible, scalable and secure; and deploying the systems leveraging a modular approach to decrease downtime

By modernizing and making the most out of legacy systems, as well as by following a methodical implementation process, companies can overcome these risks with thoughtful engineering and clearly defined goals from the outset of a project.

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