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A report from the MIT Sloan Management Review finds that companies that share data from their internet of things projects are better positioned to take advantage of what the technology has to offer. However, finding IT pros with the right IoT skills set is proving a challenge for many businesses.
The internet of things (IoT) is more than a series of sensors on the factory floor or inside the dashboard of self-driving cars. It's also about the data these devices collect and what companies and their IT departments are doing with all the information that they are accumulating.
The issues of IoT data and what to do with it is the focus on a recent report from the MIT Sloan Management Review titled, "Data Sharing and Analytics Drive Success With IoT." The study, which is available through the MIT website or as a PDF with registration, is based on interviews conducted in the spring with 1,480 business managers, IT pros, and executives from a wide variety of industries and organizations of all sizes. The research project sponsored by Teradata was published on Sept. 8.
The report is a sprawling work that looks at many different aspects of IoT, but one of the key findings is that companies that share data are in a much better position to grow and profit from the technology. Specifically, 66% of respondents say that they are sharing data with not only customers, but also suppliers and competitors.
From that information, the authors find that the more data that is shared with customers, the more these customers are willing to share in return. "This exchange of device data across organizational borders deepens existing relationships between organizations and forges new relationships," the report notes.
One of several examples from the report includes WASH Laundry, a company competing in the $5 billion coin-operated laundry industry. The authors explain how the company's technology unit gathers information not only from customers, but also from equipment suppliers and telecoms supporting the network, to better refine its business model, give customers incentives, and help better manage its supply chain.
While traditional businesses are typically loath to share data with competitors, the MIT report indicates that in the era of IoT, sharing pays off. Of those surveyed, 26% who send IoT data to competitors reported that they have no trouble getting business value from IoT. That number drops to 17% with those businesses that do not send data to competitors.
The key to using IoT data, whether it's internal or shared with the outside world, is having good analytics capabilities. However, this is where the supply of knowledgeable technology talent becomes critical. The authors write:
Our survey found the two most common challenges for deriving value from IoT were in the area of data analytics, specifically handling and analyzing the resulting data from IoT devices. The next most common challenge was the need to increase their IoT talent base. These capabilities aren't yet widespread; this year's MIT Sloan Management Review analytics report classifies 49% of organizations as analytically challenged.
Part of the problem is that IoT produces much more data than many businesses are used to handling -- even for a behemoth like GE, which the authors cite. The report finds that nearly half -- 49% -- of respondents report that in order to take advantage of the technology, they need to improve their talent base.
The good news is that for those IT pros with the right IoT skill set, career opportunities abound. The survey notes that 56% of respondents are gaining more IoT expertise by hiring new talent. Another 39% report that they use consultants, and another 43% are partnering with other firms to get the IoT know-how that they need.
In addition to IoT talent, respondents found that they needed to improve their analytics capabilities, as well as security knowledge, to get more from the technology.
The report offers a lot of optimism about IoT, although it's clear from the numbers that most businesses are not using IoT, or have only begun pilot projects. About 50% reported that IoT is important as of today.
However, only 13% report that their business has been using IoT for two or more years. About 33% report that they are not using IoT, but plan to do so, while 27% have no immediate IoT plans.
[Find out why IT is leading the IoT revolution.]
However, 90% of those interviewed view the technology as an opportunity, and that number goes up to 95% for companies that have deep analytics capabilities.
In its conclusion, the authors note that their research offers three main takeaways for managers:
In the end, IoT is a technology, but managing the data and the relationships around that data is the most important part of the job.
The authors note, "As companies gain experience with the IoT, they become enmeshed in a network of organizational relationships that require dedicated resources and management attention. Creating business value from the IoT depends as much on the maintenance of these relationships as on the development and maintenance of IoT devices."