February 7, 2017
Popular buzz often swirls around the connected refrigerator as the prototpyical example of the Internet of Things (IoT). While very of-the-moment, the “house-ification” of the IoT market is largely hype for now—the much greater value of IoT today and in the future lies in the business sector.
“The applications for interconnected devices in the home are just starting to emerge, but the true reality and opportunity of IoT can be found in business settings like manufacturing, transportation, logistics, utilities and smart cities,” says Maciej Kranz, Vice President of the Corporate Strategy and Innovation Group at Cisco.
Kranz points out in his new book Building the Internet of Things that IoT hype focuses on billions of inter-connected devices, driving digital transformation and trillions of dollars of economic opportunity. While true, Kranz thinks it’s time for an IoT reality check: “For business leaders and front-line managers, these numbers don’t matter. These decision makers care about top and bottom line results: greater profitability, reduced costs, improved quality, and better productivity.”
“These decision makers care about top to bottom line results: greater profitability, reduced costs, improved quality, and better productivity.”
To break it down, technology plays only a relatively small role in successful digital transformation.
Other IoT factors include integration with business processes, effective change management, building a partner ecosystem and what Kranz calls, “The IoT Generation.” That’s a catchall phrase for bridging the IoT skills gap by adopting a culture of constant learning and role evolution, helping employees acquire new skills, encouraging new business models, embracing continuous change, transforming organizations into cultures of innovation, and attracting the best entrepreneurial talent. All of this is the “new normal” provoked by IoT.
A warehouse of refrigerators
While just one IoT-connected refrigerator might be trendy to talk about, a whole warehouse of IoT-manufactured refrigerators is a much bigger story. In fact, manufacturing is a unique case of an industry that missed the first wave of the Internet, but is now in the forefront of IoT adoption.
But companies can’t ride the IoT wave alone. Strong partnerships must be forged for IoT development in different markets. IoT is so vast and complex that no single company can capture its full value alone. That’s why in the early days of IoT Cisco teamed with Rockwell Automation–a provider of industrial automation products.
Rockwell and Cisco joined forces to migrate customers’ industrial networks to open standards and Ethernet/IP. The partners developed joint architectures that included a plant-wide Ethernet and a Secure Industrial Network. They are now working together to create curricula to help others develop the right skills for manufacturing.
To date, all of these products, architectures, and solutions have been deployed by over 10,000 global customers.
“It was a match made in heaven. What Rockwell Automation brought to the table was an understanding of manufacturing environments and Operational Technologies,” says Kranz. “Cisco contributed an understanding of Internet technologies and IT environments.”
Kranz outlines to The Network three key pieces of advice to any company that wants to start the IoT journey in their own organization.
1. Start with a small project
“Dream big, but start small—look first for the low-hanging fruit,” says Kranz.” Don’t reinvent the wheel. Pick a scenario that has already been implemented by your peers—well documented and proven. Once you get your initial successful project under your belt, you earn the right to accelerate your IoT and digital transformation,” says Kranz. “IoT is a ten-year journey filled with multiple projects with increased complexity and impact.”
2. Secure sponsorship
“Secure sponsorship from a C-suite executive,” Kranz advises. “Remember, with IoT you are not just implementing a single solution, you are transforming your company—operationally and organizationally. So you need to make sure that you have top management support for your IoT journey.”
3. Build a partner ecosystem
IoT solutions require multiple components and skillsets – one company or vendor cannot do it all. You have to assemble an ecosystem of vendors and partners that can help you spec and implement solutions, especially ones customized for particular markets.
A new normal
Today, companies are taking first steps on their IoT journeys by improving their operations. The next steps will include new value propositions such as mass customization and personalization, shift to service-oriented business models and transforming every part of their organization around real-time data analytics. With IoT, unprecedented opportunities will become the new normal.
“For me, success will be when we won’t have to talk about IoT anymore,” says Kranz. “It will become ingrained and embedded into everything we do.”
Stephanie Ellen Chan is the Editorial Producer for Cisco’s tech news site The Network. Prior to her time at Cisco, Stephanie interned at Marie Claire and worked as the editorial producer for tech publication ReadWrite. Used with the permission of http://thenetwork.cisco.com/.