Designing and Building a Viable IoT FrameworkBy Samuel Greengard
Designing and Building a Viable IoT Framework
The internet of things introduces remarkable opportunities for organizations. It's possible to connect devices, machines, physical objects and people in ways that produce exponential gains. Yet, sorting through all the technology options and potential business process improvements can be daunting.
"There are many potential directions to take and many possibilities to consider," states Debbie Krupitzer, digital manufacturing and industrial IoT lead at business and IT consulting firm Capgemini.
To be sure, a CIO must play a central role in designing and building a viable IoT framework, selecting technologies that deliver the necessary performance and flexibility, and ensuring that the organization can actually put data to work and create real-world value. The end goal isn't simply to introduce a flashy new feature or cool app; it's to drive systemic business improvements through smart factories, more efficient supply chains, and innovative consumer products and services that redefine a business or an industry.
The true worth of the IoT is that it creates a closed loop between the physical world and digital world. "It's a way to collect more granular data from objects, communicate with them, process and analyze information, and gain a deeper set of insights," says Alex Blanter, principal at consulting firm PwC.
The result is an uptick in real-time data, distributed data and multiparted data, as well as a decrease in controlled data. "All of this has a direct impact on IT organizations and the business," Blanter says. "The ability to source, translate and process this data determines whether an initiative succeeds or fails."
Of course, it's crucial to understand how an enterprise can apply the IoT to various business and IT challenges. Capgemini's Krupitzer says that the IoT comprises four distinct pillars: the connected factory, which focuses on internal efficiencies; the industrial IoT, which encompasses product and service lifecycle management across a supply chain and beyond; connected places that create the touchpoints; and connected consumer products and services, including sensors in everything from toasters to dog collars.
The common denominator? "These systems introduce real-time monitoring and feedback," she says.
Focusing Capital and Resources
Because the IoT represents a broad swath of technologies that span a vast array of business processes, there are many directions an organization can take. The question is: How does an organization build a business framework around the IoT? How can a CIO decide where to focus capital and resources for maximum gains?
Krupitzer says that it is important to "begin at the business model" level. "You must consider the business you are in, what organizations you deal with, and how intelligence and value can result from connected objects, devices, machines and other things," she says. "It's all about impact, ROI and how the IoT can change a process or an entire business."
For many organizations, a journey to the IoT begins in the manufacturing environment, Blanter points out. An organization can equip machines, devices, goods and other items with sensors and—within an environment totally under its control—experiment, pilot, test and develop connected systems.
As proof points and ROI become clearer, an enterprise can expand on the IoT initiative. This may include rolling it out to partners, throughout the supply chain, and pushing the IoT into products and services that reach consumers. Because every IoT strategy and project is unique, and the nature and volume of data may vary, there's no cookie-cutter approach. "It's a dynamic bidirectional environment," she says.
Designing and Building a Viable IoT Framework
PwC's Blanter says that CIOs must also focus on an IT infrastructure that supports real-time connectivity. An IoT architecture typically has a data source layer, a connectivity layer and a data messaging integration layer.
"You have to have an overall platform in place, but each layer has multiple components comprised of tools, processes and methodologies in place," he explains. Of course, there's also a need for security controls, which can become fairly complex in the IoT world. This may encompass everything from firmware and authentication protocols to patches and encryption. "There must be a set of standards and methodologies in place, whether they are company-specific or part of an industry standard," Blanter adds.
CIO + IoT = ROI
The role of the CIO is at the center of an IoT initiative. Although the task may vary from one organization to another—and depending on the scope of the project—it's critical to recognize that the IoT isn't just another digital initiative.
"It's at the center of moving from a fundamentally stationary digital environment to a widely distributed framework that encompasses both physical and digital things," Blanter says. "This means that the CIO must serve in an advisory role for line-of-business leaders, development engineers, software developers and others. There's a strong need to understand the business and the IoT in a deep and broad way."
The CIO must also oversee the entire portfolio and ecosystem of IoT projects and ensure that there are IT and governance frameworks in place to support the expansion of the technology.
Capgemini's Krupitzer says that the IoT ultimately has the ability to disrupt and transform myriad things, from product lifecycles to consumer interactions. Yet any step forward will introduce new challenges.
The IoT expands a business and IT framework by introducing real-time touchpoints that can fundamentally change business and IT processes. "Sensors operate 24 by 7," she says. "That requires the business to operate the same way."
Consequently, an organization may need to re-examine and rethink its IT infrastructure, sensors, APIs and operating schedules for plants and stores, business relationships and more.
Organizations that get the IoT right will achieve competitive gains and cost savings that lead to a competitive advantage, Krupitzer explains. Yet, in order to achieve a best practice approach, a CIO must understand and define the business case to the organization—preferably before an enterprise launches a major IoT initiative.
"You really have to understand the business case behind any project," Krupitzer points out. "This includes where the value lies, what the costs will be, and what benefits and returns will result. Only then is it possible to make wise decisions about how to proceed with the IoT."
Samuel Greengard writes about business and technology for Baseline, CIO Insight and other publications. His most recent book is The Internet of Things (MIT Press, 2015).