Use IoT to Accelerate Digital Transformation
The Internet of Things can drive change in an organization, providing data into a wide range of operational activities. But that change can require integrating that data into the systems used for key decisions.
Experts have predicted that the world will have up to 50 billion connected devices by 2020. While much of the industry conversation has revolved around consumer applications, like the smart home, the Internet of Things (IoT) has a surprisingly long history in the enterprise.
Sensors on industrial equipment, transportation equipment and other critical assets are central to industrial automation, modern equipment diagnostics, and condition-based maintenance systems. As we edge toward 2020, companies are planning to make more sophisticated use of this data to drive business value – potentially transforming their operations. Enterprise software is at the precipice of evolution to facilitate this inexorable trend.
Why? IoT data on its own can provide insight into equipment health, asset status, the current location of a connected device, and other individual data points. But in order to deliver the benefits of digital transformation, it must be integrated with operational systems, and in most businesses, that means enterprise resource planning (ERP) software.
According to Cambashi Ltd Analyst Alan Griffiths, there are a few reasons for this. First, the availability of these technologies is enabling entire new business models, which naturally would impact the operational system of record like ERP.
“IoT projects can offer whole new business models such as ‘product-as-a-service’ or ‘power by the hour,’ so the right people need to be involved to assess the opportunity and develop ideas to fit their organization’s priorities, timescales, budgets and culture,” Griffiths said. “The IoT can also be a catalyst for digital transformation.”
Yet, according to a recent survey of 200 IoT decision-makers in North America, 84 percentofrespondents said their ERP was not integrated with IoT data in their organization. In fact, for many organizations running legacy ERP applications, there may be no logical place for IoT data to reside in the ERP system, or the ERP system just might not be flexible enough to utilize the data in a meaningful way.
Another nontechnical barrier is that organizations have not been able to identify how to interpret IoT data points in ways that are meaningful to their business processes; or indeed, which business processes are best positioned to be transformed by IoT.
