First there is hype. Then there is fear. Then acceptance.
This is the story of new technology. Over the years, it has been played out time and again. Floodgates of excitement bursting with the possibilities of a new transformative technology, giving way to dark apprehensions during a cycle of testing, early adoption and enhancement; and finally resting with widespread belief in its power to bring big positive change.
It is no different with the Internet of Things (IoT). The past few years have been packed with the hype of smart machines communicating with each other, reports of smart consumer gizmos – and more recently of smart workplaces – that promise unprecedented impact. Understandably, this new wave of change is also creating ripples of apprehension as creases such as interoperability or security are ironed out. And yet, the early birds are in and have already begun to rake in the benefits.
The recent IoT Solutions World Congress in Barcelona left no doubt in our minds that we are in the midst of a new revolution. Participants presented ingenuous cases of IoT business implementation at their workplaces. We dug a little deeper in a panel discussion I moderated on Smart Factories, to brainstorm the ROI of this disruptive new technology, and discovered how smart factories with machine to machine communication and collaboration could progressively reduce costs, increase productivity and boost profitability. It was fascinating to see how “Social Machines”, as coined by one of our Panelists, talk to each other and are able to dramatically improve resource utilization and, in some cases, result in 20-30 per cent reduction in stock levels required to keep supplies rolling.
A leap of faith
The fact is that, as the IoT ecosystem is maturing, more and more organizations – from start-ups to large enterprises – are embracing it. A recent IDC survey reported that 73 per cent of respondents had already deployed IoT smart business solutions or plan to do so within the next year. Its transformative potential was quickly gaining recognition. In the healthcare industry, as many as 72 per cent of respondents called IoT transformative, followed by transportation and manufacturing at 67 per cent and 66 per cent. In Europe’s consolidated IoT initiative, Industry 4.0, we are seeing some real traction. Just last month, the German government appointed five Centers of Competence to catalyze IoT adoption by small and medium manufacturers.
Beyond the first hello
So, now that IoT is taking big strides across the globe, it’s important to go beyond first impressions. By now, we all know that the “IoT” is basically leveraging the smart machines of varying complexity communicating with each other, leveraging the intelligence from the data these machines generate and getting to an ultimate state of autonomy to execute several complex business related processes. So how does that create game changing opportunities? Here’s where the catch lies. To understand the true value of IoT, we have to recognize that it will not mean the same thing to everybody. It will all depend on the business problem that you want it to solve. I’d like to quote the famous ‘Darpa Dan’ here. “I always worry about people jumping to technology to solve a problem without thinking about the problem first.” So my answer would be to question what the fundamental problem in your business is and how you would go about solving it. It is quite possible the Internet of Things will be a solution. But I think it’s a mistake to do it the other way around.
Real business advantage
In my opinion, the true impact on business would be better understood if the Internet of Things is seen more like an Internet of “My” Things. This underlines the fact that IoT means a very different experience for each user and therefore unique benefits in each context. Once this is clear, then IoT begins to demonstrate its transformative power, offering real smart business solutions for real problems, not just proof of concepts but real smart solutions, driving specific benefits on the ground to achieve unprecedented competitive advantage.
At HCL Technologies, our dedicated IoT business line is already helping clients find real value in industries as diverse as energy & utilities, travel & logistics, healthcare and manufacturing. It has been further enhanced with significant investments to collaborate with leading and next-generation technology companies, such as our partnership with IBM that we announced at the event and which will focus on establishing a joint IoT Incubation Center, catering to multiple industries with specific solutions.
A seismic shift
Make no mistake. The intersection of employees, data and technology-enabled smart machines is creating fundamental shifts, new competitive advantages, and even new global dynamics with shrinking labor cost advantages of traditional low-cost locations. This will create both business process level as well as geographic level shifts in how global enterprises will operate.
It’s a whole new world out there and we will need Next-Gen leadership thinking to steer us forward. As has been articulated in what HCL refers to as 21st Century Enterprise - A new vision is needed that can wrap together the impact on productivity, costs, revenue, efficiencies, and even skills, within an entirely new enterprise business model that can facilitate a giant leap forward.