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Why All This IoT Heel-Dragging?

Two impediments are keeping the Internet of Things from truly disrupting industrial companies.
By Rick Veague

What it comes down to is this: each market sector and each company will need to identify the best business case for its own needs and its own opportunities—the place where an enterprise IoT approach can and will drive measurable return. It is here that we see the most rapid adoption. For example, in the construction industry, organizations are seeing the greatest, most immediate ROI potential in terms of increased safety. While this is a specific and viable business case for construction, it could also be characterized as a cost-avoidance mechanism. But, small steps.

Issue 2: Gaps in Commercially Available Technology
Large enterprises are able to fund massive systems-integration projects across IoT, SCADA and enterprise software in an attempt to derive enterprise-wide benefits from the Internet of Things. But commercial off-the-shelf solutions that can easily be configured to connect data from connected devices to the enterprise have been, in many cases, slow to come to market.

A 2018 study from the management consulting firm Bain & Co. reveals that would-be IoT adopters believe that vendors have made little progress on lowering the most significant barriers to IoT adoption. The study cites security, ease of integration with existing technology systems, and uncertain ROI as areas of concern. The consultants indicate that, on average, businesses are planning less extensive IoT implementations through 2020 than they were just a couple of years ago.

This is particularly an issue in industrial sectors. With such a wide range of PLC and SCADA systems, it's challenging to combine and consolidate them in a logical way with ERP systems. Because of this, I've seen IoT initiatives quickly turn into a tangled mess, with system integrators attempting to map multiple systems together. Enterprise software will increasingly need to offer streamlined approaches to this arduous task to ease adoption.

For now, a substantial gap remains between connected devices and the transactional software used to run a business, like ERP. In our research, the percentage of respondents who have integrated IoT data streams with ERP software stayed about flat between 2017 and 2018. And to a certain extent, ERP software as a system of record may continue to be a constraint for companies intent on adopting transformational business models built around IoT data. The IFS findings echo Bain & Co.'s findings that vendors have been slow to offer manageable routes to adoption, specifically when it comes to integration with operational technology like ERP software.

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