If digital transformation is the next enterprise mega trend that will see businesses investing in their IT strategy, then the Internet of Things (IoT) and the infrastructure which will underpin it is the next great enabler of technological innovation.
Gartner wrote last year that “the IoT will help digital transformation but will take 5 to 10 years to gain mainstream adoption”. It was a sobering sight for the technology vendors that have invested in this much-hyped technology to see the IoT appearing on the peak of inflated expectations for the third consecutive year when Gartner published its 2016 Hype Cycle.
However, a more comforting thought is that digital transformation, the thing that Gartner identifies will be underpinned by the IoT, is real and is happening.
The digital economy has already surpassed the size of the oil economy, and the World Economic Forum estimates that it is set to reach $100 trillion by 2025. Furthermore, we can draw on powerful examples of what the combination of a digital-first business model and a sophisticated IoT infrastructure is capable of.
Digital business success stories such as AirBnB and Deliveroo show how the IoT gives individuals the power to transform the world and the way humans interact with it through technology. That’s why Gartner has challenged CIOs to stop investing in commoditised IT and start building digital capabilities, bringing diversity to businesses.
Logistics giant UPS is an excellent case in point. Using on-vehicle IoT sensors, connected to powerful data management platforms across its ecosystem of distribution centres, UPS is now able to calculate the optimum vehicle speed to maximise miles per gallon and monitor mileage by re-routing vehicles in real time based on GPS data – reducing its carbon footprint as well as costs.
In these two excellent examples, we are seeing what could be described as a “digital transformation of things”. While an overused example, Uber is a convenient one. What we have is a situation where the interaction between the smartphone, the taxi, the driver, the discovery, booking, mapping and payment systems has been completely transformed.
The smartphone is the hub that connects all of these “things” together to create an experience which is seamless. Behind this is a complex infrastructure which brings this ecosystem and the different types of data within it together. All of these ‘things’ have had their role and place in the process transformed to create a better experience.
Unleashing digital transformation
These transformative digital-first approaches are what inspire businesses to embark on the path to digital transformation. IDC’s Worldwide Digital Transformation Predictions research in 2015 forecast that by the end of 2017, two thirds of the CEOs of Global 2000 companies will have digital transformation at the centre of their corporate strategy. Now in 2017, this is becoming a reality.
Furthermore, Ericsson estimates that within the next five years, the world will be home to 28 billion connected devices; Cisco says the number of IoT sensors will grow to 50 billion by 2020; Intel predicts that there’ll be 200 billion Internet-connected things by 2030.
Staying in 2030, EMC and IDC statistics concur that we will create, replicate and consume 44 zettabytes, equivalent to 44 trillion gigabytes of data, while the speed of analytics, according to SAP, will intensify thirty times over with 95% of queries being answered in milliseconds.
If Gartner’s assertion that on the road to digital transformation CEOs will be the captains but CIOs are expected to be the co-pilots is correct, then these figures are every bit as daunting for the CIO as they sound.
However, they should be seen as an opportunity rather than a threat and, encouragingly, the movement towards digital transformation is evidence that CEOs and CIOs are investing in their shared future and the digital capabilities to use these phenomena to the benefit of their business.
This digital transformation of things requires a shift in thinking. Arguably, the focus of most businesses when it has come to digitisation has been on ‘looking’ digital – whether that’s making improvements to the company website, embracing mobile or using data analytics to glean better insights into customers buying and decision making thought process.
But now, organisations across industries want to actually be digital. This brings about more existential questions around where a business sees itself, how the business makes money and how it will continue to grow.
Moreover, the conversation about infrastructure becomes more strategic. How will we change the way our device ecosystem interacts? What data is valuable to us? How do we create a future-proofed infrastructure which gives us the scalability and agility we need to succeed in the digital economy?
With this change in tone, CIOs will become strategic partners for marketing, finance, sales and other lines of business, as well as senior management, who all want to know how they can leverage the latest innovative technology platforms and ecosystems.
Businesses can unlock unimaginable possibilities by combining new ideas and technologies with the power of 28 billion connected devices. The difference between those who affect change and succeed in the digital economy and those who are left behind will be dictated by the strength of their digital transformation strategy and the completeness of their digitisation.
Sourced by Anthony Bartolo, president, mobility, IoT and business collaboration, Tata Communications
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