Beyond the Hype: Three Ways to Maximize IoT Budgets

By Dayan Rodriguez

Those who execute purposeful planning and implementation when deploying Internet of Things technologies can ensure both short- and long-term success.

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“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.

2. Employ custom integration networks to drive interoperability.
The largest challenge in IoT implementation is successfully connecting multiple IoT systems. As noted above, the underlying communications infrastructures connecting most systems ‘do not speak the same language. However, modern IoT architectures, standards and networking solutions greatly simplify this area. Multi-protocol gateways, IoT-centric standard messaging protocols, and automated discovery and data population software platforms can reduce the effort and cost, while increasing scale and accuracy. When combined with hybrid edge, cloud and analytics architectures, IoT data can flow into big data analytics platforms much more cost-effectively than past implementations.

3. Engage all business areas to drive internal alignment.
For every IoT implementation, a cross-functional team with different mindsets and skills must be identified, followed by the determination of the key factors and functions for the success of the implementation, from company goals to industrial characteristics and interconnectivity, maximizing reuse of legacy equipment when it makes sense. Following a holistic approach with all relevant parts of the business contributing, in conjunction with a good understanding of industry standards, will maximize the impact of the IoT solution.

How Do You Define Success?
In order to utilize IoT networks and associated budgets most effectively, enterprises must measure efforts against specific metrics of success. Successful IoT integration means increasing awareness of your operating environment, making smarter, faster and more dynamic decisions, and improving business outcomes.

This could mean improving productivity on a manufacturing line, increasing resiliency to support new use cases, or making sure heavy industrial equipment systems last longer and save more money. It could even mean gaining more value from data through analytics or delivering new services to customers.

It is natural for additional implementation complexities to arise as the number of IoT devices and applications increase almost daily. The key question right now is not “What is the IoT?”, “Should we invest in it?” or even “When should we invest in it?”, but rather, “How are we going to implement the IoT?” While the Internet of Things is still a shiny new toy for some, that should not detract from purposeful planning and implementation. Those who execute this can ensure not only short-term, but long-term success.

Dayan Rodriguez is the VP and head of consulting for Internet of Things and Industrial Internet of Things at Genpact. Previously, he was the global business manager of the IT/OT Business Unit at Rockwell Automation, where he led the company’s IIoT, cloud and managed services. Dayan has more than 18 years of experience in engineering, manufacturing, automation, information systems, IIoT, IT-OT convergence and industrial cybersecurity. He regularly lends his expertise when working with clients on challenging projects across numerous industries and verticals. He has deep expertise in applying IoT and IIoT programs for global clients, and serves as a subject-matter expert for end-to-end enterprise solutions for Genpact’s customers.