In a world where businesses are adjusting to a new future, IoT initiatives offer enormous opportunities for companies to adapt and remain resilient in a rapidly evolving operating environment. A new Cognizant/Forrester study evaluates why many IoT projects do not gain the investment or support to scale beyond pilots and examines companies’ IoT implementation efforts and initiatives.
The data reveals that enterprises of all sizes recognise that IoT offers enormous benefits, and most are committed to leveraging IoT across the enterprise.
More than half (55%) of business leaders claim their organisations have struggled to deliver business value from IoT projects. Many who have conducted multiple in-house IoT pilots noted they lacked a coherent strategy to deploy their initiatives enterprise-wide. They reported that the new IoT capabilities often did not receive the necessary investment or leadership support to extend the initiative across the business.
So, where are companies in their journey to adopting IoT at scale?
- Exploration and implementation of IoT is pervasive. Most leaders (52%) support the implementation of multiple IoT use cases or processes, and more than two in five (42%) are planning broader, enterprise-wide adoption, such as implementing an IoT solution that provides data on space utilisation to improve demand forecasting and the user experience. Only a few (6%) view their IoT initiatives as single or isolated use cases.
- Investment has increased and will only grow. Investment in IoT is on the rise, with a significant majority (73%) having increased spending in the last two years, while a quarter (24%) have done so by more than 10%. About three quarters (73%) expect spending to increase by 2022.
- Analytics and process improvement are the top drivers. More than half of business leaders say better use of data and analytics in decision-making is a key driver of IoT initiatives. Almost half (47%) see opportunities for greater efficiency in operational technologies using insights from data.
- Key drivers signal strong appetite for IoT. More than two in five leaders identify further critical reasons to explore IoT: capturing data to optimise actions in real-time (45%), lowering operational costs (43%), improving customer experience (41%), improving employee productivity (40%) and gaining insight into how customers use products (40%).
- Insights remain a top priority for operations. Nearly half of organisations (46%) need greater visibility into processes and operations from automated data collection to make decisions or want to better understand customer needs (45%), enhance collaboration (43%) and improve product performance (44%), including in the field. Other desired outcomes include energy efficiency (41%), improved compliance (39%), optimised use of machinery or assets (37%) and less equipment downtime (33%).
- Despite investment, most still struggle to realise value. While few companies (9%) are yet to proceed beyond the proof-of-concept stage, significantly more than half (55%) report that having done so, they have had limited success or have not yet realised business value. More positively, 45% report IoT having already delivered business value. The manufacturing industry, for example, has seen the most significant IoT benefits to date. IoT has enabled manufacturing operations to light up previously siloed operations to improve overall operations, reducing manufacturing costs significantly. Manufacturers also already benefit from IoT solutions as they have created smart and connected products that offer new revenue sources.
Randal Kenworthy, Cognizant VP of IoT and Engineering Services, says: “Five levers emerged as affecting an organisation’s ability to succeed in implementing IoT at enterprise scale: organisational strategy, infrastructure, integration of IoT into existing processes and systems, use of data and enablement practices.
“Respondents who have addressed these challenges reported greater success in scaling up initiatives and experienced more positive outcomes.
“Collectively, these findings support Cognizant’s perspective on enterprise IoT: while offering clear and measurable business benefits in the short term, IoT initiatives must be integrated into a long-term strategy. IoT should be on the C-suite agenda when planning for the digital evolution of business models.”
The survey questioned 550 C-level executives, IT executives, directors and functional managers at companies in the US and EMEA with revenues from $1 billion to more than $50 billion.