The Internet of Things (IoT) – an environment in which devices, sensors, and embedded technologies are connected to the Internet – continues to grow in leaps and bounds. According to Gartner, 4.9 billion “things” will be in use in 2015 while that number is projected to rise to 25 billion by 2020.
The sheer volume of information that already is and will be communicated by these sensors is staggering. These devices can provide business leaders with new insights on issues ranging from healthcare outcomes to automotive driver behaviors and operating conditions of plant floor equipment.
But as Tom Davenport, the President’s Distinguished Professor of Information Technology and Management at Babson College has pointed out, it’s the Analytics of Things or the analysis of data from IoT smart sensors that ultimately makes this information useful.
For instance, the Analytics of Things can use sensor data to detect potential problems in machinery, says Davenport, who is also a Research Fellow at the MIT Center for Digital Business and a Senior Advisor at Deloitte Analytics, It can detect and respond to anomalies that are outside of boundary conditions, such as identifying a person who is inhabiting a restricted security area. The Analytics of Things can also be used to notify a retail sales associate when a high-value customer has entered a store and prompt the associate to provide her with personalized and relevant assistance.
These types of insights can offer tremendous business value to enterprises that are equipped to act on them. One of the ways that CIOs can help prepare the enterprise for the Analytics of Things is by ensuring that it has the right infrastructure in place to receive, process, and analyze data that’s generated from a variety of connected devices. This includes ensuring that front-line managers and business leaders are receiving the right information at the right time for effective decision-making.
Historically, IT has spent an inordinate amount of time formatting data to make it usable by the business. Part of the challenge is that some 80% of an organization’s data is unstructured (customer feedback, machine-to-machine data), making it difficult for decision-makers to access insights from the data and make it actionable. In today’s fast-paced business climate, organizational leaders need smarter and faster ways to gain insights from all data types quickly.
Fortunately, advances in areas such as text mining, machine learning, and artificial intelligence are making it much easier for enterprises to use and act on unstructured data. CIOs that are able to effectively communicate the challenges faced by businesses for harnessing real-time data can help convince senior management the value of investing in cutting-edge technologies that can enable the organization to outpace its rivals with swift decision-making capabilities.
By laying the groundwork for leveraging the Analytics of Things, business leaders are also better equipped to identify opportunities to transform the business and to create new revenue streams. It’s another critical way for the CIO to deliver value to the business.
“What really differentiates a company is how you come out to gain share,” says Anup Sharma, Global CIO, GE Oil & Gas in an HMG Strategy video. “And how you gain share is by solving customer problems. I really think that the innovation that we’re at the doorstep of as IT professionals is really analytics and the power of Big Data.”