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The Intersection of IoT and Smart Business

How can companies utilize Internet of Things solutions while avoiding the pitfalls associated with such technologies?
By Linda Rhodes and Charles King III
Aug 07, 2019

The Internet of Things (IoT) is driving business transformation. Its impressive data-collection abilities allow companies to harvest huge amounts of information in real time. When paired with sophisticated data-analytics tools, such as artificial intelligence (AI), businesses can use this data to derive insights into their business operations—creating new revenue opportunities and increasing efficiency. Global IoT spending is expected to reach $745 billion in 2019, and consulting firm Gartner predicts that by 2021, more than 25 billion IoT devices will be in use, up from an estimated 14.2 billion this year.

Although the IoT introduces new opportunities, implementation of IoT systems comes with challenges and risks. IoT devices operate in highly connected networks. The greater the connectivity of solutions, the more opportunities exist for points of failure in operation. Furthermore, a vulnerability in one node of a network can have broad implications throughout the system. Bad actors that exploit deficient IoT security measures can cause numerous harms, including business delays, breaches of security and privacy, and even physical injury.

Another challenge presented by the IoT is making effective use of data. Even when information is collected in a structured format, companies use less than 50 percent of their data in decision-making, and when that data is collected in an unstructured format, the number falls below 1 percent. With these factors in mind, it is not surprising that only 26 percent of businesses believe their IoT initiatives have been successful. So, how do companies utilize IoT solutions while avoiding the pitfalls associated with such technologies?

Companies that implement digital-management strategies up front, beginning with "by design" solutions, can mitigate risk and optimize IoT capabilities. Having a digital-management strategy that gives consideration to safety, security, privacy and data management up front will enable businesses to manage risk in order to turn vast amounts of data into actionable intelligence. "Smart" businesses will further understand that their digital-management strategy cannot be static, in light of changing business requirements, growing threats, evolving regulatory landscapes and the expansion of a supplier base with varied contracting approaches and risk tolerances.

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