IDC predicts that the worldwide installed base
of Internet of Things (IoT) endpoints will grow from 14.9 billion at the end of
2016 to more than 82 billion in 2025. At this rate, the
Internet of Things may soon be as indispensable as the Internet itself.
Despite the forward momentum, a new study
conducted by Cisco shows that 60 percent of IoT initiatives stall at the
Proof of Concept (PoC) stage and only 26 percent of companies have had an
IoT initiative that they considered a complete success. Even worse: a third of
all completed projects were not considered a success.
“It’s not for lack of trying,” said Rowan
Trollope, Senior Vice President and General Manager, IoT and Applications,
Cisco. “But there are plenty of things we can do to get more projects out
of pilot and to complete success, and that’s what we’re here in London to do.”
Cisco released the findings at IoT World Forum (IoTWF), an event where Cisco
convenes the industry’s best, brightest and most passionate leaders with the
goal of accelerating IoT. We surveyed 1,845 IT and business decision-makers in
the United States, UK, and India across a range of industries — manufacturing,
local government, retail/hospitality/sports, energy (utilities/oil &
gas/mining), transportation, and health care. All respondents worked for
organizations that are implementing and/or have completed IoT initiatives. All
were involved in the overall strategy or direction of at least one of their
organization’s IoT initiatives. The goal was to gain insight into both the successes
as well as the challenges that are impacting progress.
Key Findings:
1 - The “human factor” matters. IoT
may sound like it is all about technology, but human factors like culture,
organization, and leadership are critical. In fact, three of the four top
factors behind successful IoT projects had to do with people and relationships:
- Collaboration between IT and the business side was the #1
factor, cited by 54 percent.
- A technology-focused culture, stemming from top-down leadership
and executive sponsorship, was called key by 49 percent.
- IoT expertise, whether internal or through external partnership,
was selected by 48 percent.
In addition, organizations with the most successful IoT initiatives leveraged ecosystem
partnerships most widely. They used partners at every phase, from
strategic planning to data analytics after rollout.
Despite the strong agreement on the importance of collaboration among IT and
business decision-makers, some interesting differences emerged:
- IT decision-makers place more importance on
technologies, organizational culture, expertise, and vendors.
- Business decision-makers place greatest emphasis on strategy, business cases,
processes, and milestones.
- IT decision-makers are more likely to think of IoT initiatives as successful.
While 35 percent of IT decision-makers called their IoT initiatives a complete
success, only 15 percent of business decision-makers did.
2. Don’t Go It Alone. Sixty percent of respondents stressed
that IoT initiatives often look good on paper but prove much more difficult
than anyone expected. Top five challenges across all stages of implementation:
time to completion, limited internal expertise, quality of data, integration
across teams, and budget overruns. Our study found that the most successful
organizations engage the IoT partner ecosystem at every stage, implying
that strong partnerships throughout the process can smooth out the learning
curve.
“We are seeing new IoT innovations almost every day,” said Inbar Lasser-Raab,
VP of Cisco Enterprise Solutions Marketing. “We are connecting things that we
never thought would be connected, creating incredible new value to
industries. But where we see most of the opportunity, is where we partner
with other vendors and create solutions that are not only connected but also
share data. That shared data is the basis of a network of industries – sharing
of insights to make tremendous gains for business and society, because no one
company can solve this alone.”
3. Reap the Benefits. When critical success factors come
together, organizations are in position to reap a windfall in smart-data
insights.
Seventy-three percent of all participants are
using data from IoT completed projects to improve their business. Globally
the top 3 benefits of IoT include improved customer satisfaction (70%),
operational efficiencies (67%) and improved product / service quality (66%). In
addition, improved profitability was the top unexpected benefit
(39%)
4. Learn from the
failures. Taking on these
IoT projects has led to another unexpected benefit: 64 percent agreed that
learnings from stalled or failed IoT initiatives have helped accelerate their
organization’s investment in IoT.
Despite the challenges, many in our survey are
optimistic for the future of IoT — a trend that, for all its forward momentum,
is still in its nascent stages of evolution. Sixty-one percent believe
that we have barely begun to scratch the surface of what IoT
technologies can do for their businesses.
