With the internet of things (IoT) expected to add £81 billion to the UK economy from 2015 to 2020, research from SAS, the leader in analytics, predicts that a fifth of businesses are planning to adopt IoT to address customer demand and drive overall engagement. This was one of a number of findings about IoT adoption in 2017 and beyond.
The study explored discoveries made by 75 large European organisations that consider themselves ‘well on their way’ to integrating IoT into their operations. The research predicts that organisations are focusing on improving customer-facing processes or efficiency before spending time and energy on internal process departments. When questioned on the way forward, 17 per cent cited improved customer services and an enhanced digital offering as the main benefits of IoT. Fundamentally, almost 30 per cent stressed the importance of applying design thinking – where the users, or user experience, drive design.
“With each consumer expected to own up to four devices by 2018, there is a huge opportunity for companies to use the IoT to get even smarter in attracting their attention,” explained Peter Pugh-Jones, Head of Streaming Analytics at SAS UK & Ireland. “Investments in IoT are very much a commercial decision and pay-offs in terms of customer operational efficiency are vital. Throughout 2017, a strong customer focus will continue to drive developments in IoT as organisations recognise the need to provide tailored, just-in-time services to stay relevant to consumers.”
Overall, 36 per cent of respondents feel that IoT will have a positive impact on end-user experiences if fully embraced. Meanwhile. 29 per cent believe it would drive them to produce higher quality hardware and services. Yet SAS predicts that increased connectivity will also create increased competition. Nearly one in 10 of those surveyed cited concerns about losing market share to competitors, losing efficiency and not being able to produce a cost-effective service as the biggest risks of not embracing IoT. A consensus among respondents emerged that stopping to audit the market and competitors, which is already becoming ever more unpredictable, may lead to being left behind.
“The focus for many of the respondents is to keep moving,” added Peter Pugh-Jones. “Of those surveyed, 15 per cent admitted that they simply kept developing innovative or disruptive solutions, in the hope that doing so would keep them in a leading position. As the pace of change continues to accelerate, the issue that tends to dominate IoT projects is time. Several respondents commented that IoT implementations took much longer than expected and that the real concern is how to extract useful information from the data quickly.”
One in five of those surveyed named real-time data analytics and security concerns as their biggest challenges in implementing IoT. The most common response to the problem of a skills shortage around data and analytics was to form a partnership with a technology vendor, according to 38 per cent. A willingness to engage with and acquire new skills was also seen as crucial for success, with respondents using terms like 'go shopping' and 'buy in skills'. Many early adopters of IoT have simply bypassed a need to acquire technology expertise by working with consultants to ‘buy-in’ skills that are not available in house. As a result, the skill that was identified as crucial by most respondents was the ability to work collaboratively with external consultants.
“What is clear from this survey is that when businesses take a proactive stance to collaborate and innovate with IoT, they will reap the benefits of enhanced customer engagement and a more connected experience. In the race to stay ahead, many managers realise that building internal capabilities will take time and that IoT development will not wait for businesses to mature their skill sets,” said Pugh-Jones. “To extract the full value from IoT implementations in 2017, a lot of data analysis needs to be done very fast. Early adopters need to develop data management strategies that can support execution.”