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Interview with IoT Evangelist Vernon Turner: Don’t take Forever

Analyst Opinion: Interview with Vernon Turner, Research Fellow and IoT Evangelist at IDC.

Vernon Turner, Research Fellow and IoT Evangelist at IDC

Vernon Turner Research Fellow and IoT Evangelist at IDC

 

Everybody these days seems to be talking about IoT, but are they actually doing anything about it?

IDC has never had a Research Fellow, but we feel that IoT is so fundamentally important to the IT market that they gave me this title. There’s a lot of evangelism going on right now around IoT, because there is this big knowledge gap. And yes, there‘s a lot of talk, but it’s important that we start implementing.

Surely there must be examples?

There are several initiatives that are highly visible, and there are many more that are behind the scenes and sort of creeping up on us. Let me give you a few cases. On the B2C side, we have seen a jump start in wearables such as Fitbits and other devices that perform what I would describe as rudimentary functions like measuring your heart rate, your sleep, and the number of steps you take. That has been successful in creating public awareness about what will eventually happen. This development has been pushed mainly by the big sporting companies. The problem is: What do I do with that data? When you shift over to the B2B side you start to understand that there’s an opportunity to enter a new world of products and services we’ve never seen before.

Are companies readyfor this?

When I talk with customers who want to start an IoT implementation as a B2B company, I first ask them the following: Do you have a mature cloud strategy? That can be a private cloud or a hybrid cloud or a public cloud. You see, if we do IoT correctly, it will require significant scaling of IT resources, and you can’t do that with an old-fashioned IT model. You need to be able to scale at will and at speed because of the sheer number of devices that will be connected to your network. And to handle that data you need to have an analytics or business intelligent strategy. If you don’t, then why are you collecting all this data? Harking back to the Fitbit example, you end up with information with-out enriching it to create an intelligent business outcome.

What does that mean?

An intelligent business outcome, in the context of manufacturing, should mean that you’re using that data toimprove the factory floor, to improve the way your robots work, to improve your supply chain and your logistics, the movement of goods inside and outside your company. You achieve that through an analytics approach. When you add cloud and analytics to your processes, you start to get into the latest trend that goes hand in hand with IoT, and that is transforming your business. Unfortunately, not everybody is ready and willing to transform their business. That’s where you start to get what I like to call the paintball deployments of IoT. Somebody says hey, I’ve got a great idea. We can write an IoT app in fifteen minutes, and we’ll use our existing corporate network – easy! But then comes the moment when you stop and ask yourself: Are we really ready for this? Are we ready to take advantage of the information it gives us?

What does the readiness and ability to adopt IoT strategies mean for a company’s bottom line and hence for its valuation by analysts and for its credit rating?

I take a leaf out of GE’s approach to IoT in the sense of what we call the one percent. This is not a Bernie Sanders discussion, by the way. That means if you were to improve your company’s performance by one percent, whatever business you‘re in, you would see disproportionate improvement in your bottom line. If Ford Motor Company. were to improve just its manufacturing process by one percent, they would realize something like eleven percent improvement in profits. If you apply that analogy across other industries, you get similar results. Think about Smart Water, for instance: If water companies were to save one percent of water through IoT we would account for 30 percent of this country’s water needs! That’s because we lose so much water through faulty distribution systems and leaking pipes. If you do this right, the returns are measurable and hugely impactful.

Do banks and analysts today understand enough about IoT to judge a company by its ability to execute on the promises of IoT?

We’re still early in the IoT maturity curve, so there are still few best-of-breeds out there. It’s a five-stage model which essentially moves from proof of concept through to reengineering a company. Reengineering your company is where you really start maximizing your data and creating repeatable solutions, thereby changing the way the company is run. Right now lots of companies are still at stage one, quite a few are at stage two and three, and only a handful are at stages four and five. We aren’t seeing enough companies yet getting to that critical mass to be able to measure the results accurately. Banks and analysts don’t know very many examples of successful IoT companies yet.

My suggestion is: Start small and stay contained in that process.

Vernon Turner
Research Fellow and IoT Evangelist at IDC

So there simply isn’t enough data?

Short answer: We aren’t seeing enough companies today that are making enough noise for banks and Wall Street or industry analysts to be able to say, yes, this is truly happening. What we still see are lots of proofs of concept. And while many lines of business realize by now that this will be good for them, they still haven‘t manage to create end to end integrated solutions yet.

Since most of your clients seem to be at the very beginning, what do you advise them to do for a start?

It kind of depends on which industry you’re in. I like to see a workflow in place that is self-contained and where it’s easy to integrate IoT sensors. Take building management. You might want to sensor just one floor to be able to measure things like heat, air conditioning, lighting, air quality. My suggestion is, start small and stay contained. Understand what it takes to collect the data and create the workflow you need to understand that data. And finally, make sure you have a visualization process in place that will let you know what you have here and what you need to do next.

Whose responsibility is that?

You need an advocate within the company, be it the COO or the CFO, as well as the CIO. And you need a dedicated team that can the proven ability to think different. If you have the same people who have been running the business forever, they will tend to try and keep on running it that way even if you give them all this new data. I hate to say this but you need a kind of generational transition; people who are fine thinking outside the box and who can take that information and say, know what? If I combine that with some other form of information, then I create a new solution. So to sum up: Start simple with a workflow solution you can get your hands around, but have a distinct post-processing plan for what to do once you get all the data. You should be working on no longer than 90-day cycles. This should not take forever. We have seen that approach work very well in several of our client engagements.

 

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