The IoT industry is booming, with analysts predicting that the global market will grow to around $520 billion by 2021. However, although this growth rate is impressive, in the rush to innovate, businesses risk undoing the progress made by losing sight of the primary objective digitisation was built to address – improving the customer experience.
Whilst creating efficiencies remains a priority of IoT deployments, fundamentally those efficiencies should seek to address issues that resonate with the customer. From food quality to environmental sustainability and minimising product waste, these objectives will only be achieved through automating both processes and outcomes concurrently.
Aligning IoT to Core Objectives
Despite the positive projected growth of IoT, businesses are falling short of achieving successful deployments, with research from Cisco stating that only 26 per cent of companies have had an IoT initiative that they considered to be a complete success. Although there are several theories behind why a booming industry faces stagnation, such as choice fatigue and unrealistic goals, these are just the symptoms. The cause behind the stuttering progress is the misalignment between the outcomes being worked towards and the core business purpose. Isolated digitisation projects with siloed objectives deliver limited, easily absorbed value, and short term enhancements like these make ROI difficult to validate, leaving such projects vulnerable to C-Suite scrutiny.
A new approach focused on core business objectives is essential in order to accelerate an organisation’s digital transformation. An effective strategy combines tangible business value aligned to specific outcomes, with clear opportunities to reduce cost and improve efficiencies. As a result, significant ROI and efficiency gains can be achieved and opportunities to explore new business models and additional revenue streams unlocked.
To some degree, the IT industry has exacerbated the IoT predicament through offering new technologies that speak to innovation, such as Augmented Reality, but rarely deliver tangible customer value. Further, the weak ROI these propositions demonstrate, due to significant capital investment means they can be inaccessible and costly for businesses. This generates confusion around the true value potential of IoT, presenting a challenge for businesses to establish a viable and future-proof digital transformation strategy.
This confusion will flourish if a shift in focus is not established, from single process-led objectives to the wider business outcomes. It is with a cross-organisational focus on the primary business goals that the true potential of digitisation can be achieved.
Consider the deployment of an IoT layer across refrigeration assets throughout the supply chain to monitor and manage temperature. A process-based strategy would prioritise generating efficiencies, as well as potentially utilising rapid access to refrigeration monitors and controls, in tandem with energy tariffs, to lower costs and energy consumption.
However, through interdepartmental collaboration, the scope of the technology can be dramatically increased to surpass the single objective of energy reduction. Real-time data from refrigeration assets can be contextualised with merchandising data to automate temperatures and correlate with the specific produce type within the case. With produce being kept at optimum temperature, shelf-life improves, waste is reduced and basket size increased due to improved aesthetics and availability. Furthermore, real-time monitoring can be used to inform and improve maintenance productivity, moving the organisation from reactive to predictive maintenance regimes, again improving asset availability and performance and therefore, product quality and customer experience.
Placing a focus on leveraging existing and legacy infrastructure, whilst providing a platform able to support future infrastructure investments, provides an opportunity for numerous business wins. There are now multiple opportunities to reduce waste, improve productivity, transform energy consumption and increase sales from one single IoT deployment, reaching beyond incremental cost reduction and data management. Digitisation can be achieved quickly, without disruption and at a significantly reduced rate of project stagnation. The risks are reduced and return on investment is delivered rapidly by using proven and scalable technologies, offering the opportunity to release otherwise hidden value that can be reinvested back into the business.
With an outcome-led approach, successful digitisation earns the corporate credibility required to create a robust, consistent and sustainable cross-business strategy that will deliver transformative results that support and enhance the core business purpose and improve the relationship between customer and brand.