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IOT Sparking A New Wave Of Analytics-Driven Innovation

This article is more than 6 years old.

These and many other fascinating insights are from The Economist Intelligence Unit’s study, Internet of Things Business Index 2017: Transformation in Motion (24 pp., PDF, no opt-in). The study ‘s goal is to measure the current and future use of the Internet of Things (IoT) by the global business community. The Internet of Things Business Index reflects the priorities and plans of 825 senior business leaders, 412 of whom are C-level executives or board members. ARM and IBM co-sponsored the study completed by The Economist’s Intelligence Unit. For additional details on the methodology please see Page 15 of the study.

Key takeaways of the study include the following:

  • 25% of senior business leaders report their organization’s use of IoT sparked a new wave of innovation thanks to data that gave them better insights. Data management and analysis are where the greatest percentage, 38%, have seen a positive change based on IoT adoption. 29% are seeing the greatest positive change in products or services and 27% in technology infrastructure management. The following graphic compares the areas where IoT use has had the greatest impact and which areas of the business have seen the greatest positive change from IoT adoption.

  • The IT and technology industry leads all others in the area of using IoT in their external products and services, increasing from 4.33 in 2013 to 6.04 in 2016. The Index also reflects financial services’ growing adoption of IoT technologies, increasing from 3.46 to 5.44, and consumer goods and retail from 3.68 to 5.02. The following graphic below provides a comparison of Internet of Things Business Index values by geographic region and industry.

  • Seeking the advice of 3rd party experts and consultants, and learning from the successes and failures of early movers (both 35%) are the most common measures organizations are taking to deploy IoT more extensively in their companies. The following graphic provides insights into the most popular measures organizations are taking who have already adopted IoT, are planning to in three years, and who have no plans in the next three It’s interesting to note that introducing new business models (45%) is the most popular measure organizations planning to adopt IoT in the next three years are taking today.

  • Greatest challenges to IoT adoption include the high cost of required investment in IoT infrastructure (29%) and concerns regarding security and privacy (26%). Additional challenges include lack of senior management knowledge and commitment (23%), weaknesses in an organization's technology structure (16%) and regulation (relating to data privacy) (12%). The following graphic compares the top 11 obstacles currently in the way of organizations adopting IoT.

  • Investments in IoT are expected to rise between 1% and 10% in the next three years. When analyzed by industry, the biggest gains in IoT investment came from financial services, IT and technology, and energy and natural resources. The study found that over the next three years, rises of 50%+ are forecasted by respondents from the financial services and IT and technology sectors, followed by manufacturing.

  • The ability to enable technology innovation (45%), data analytics expertise (32%) and business model innovation (25%) are the top three capabilities organizations consider the most important in succeeding with IoT. Additional capabilities include organizational agility (23%), product design (15%), process engineering design (10), marketing (9%) and partner/supplier management (5%).