April 9 2019

Organisations should exploit new technologies – such as IoT – but with certain caution and knowledge

Organisations should exploit new technologies - such as IoT - but with certain caution and knowledge

Nobody questions that digital transformation is a trend that has become fundamental to all organisations regardless of their size or sector of activity. In this transformation process, great technological tendencies like Big Data, Machine Learning, Artificial Intelligence or IoT have an important role to play.

For years now, the major, global technology providers have been evangelising about the benefits that these proposals can bring to areas like business development and growth. Analysts, on the other hand, constantly publish new deployment forecasts. A remarkable example is that of Internet of Things (IoT) which is to reach 40 billion connected devices worldwide in 2023, according to Business Insider findings.

Clearly, the Internet of Things is one of the great tendencies on which to lean when initiating the process of digital transformation. However, when starting a project related to IoT, companies must be aware that different factors come into play that will determine the grade of success achieved. Therefore, it is advisable to gather information widely and seek any necessary support to understand the different models that exist. This will facilitate the decision making in what can become the decisive strategy for the future of the organisation.

Roughly speaking, we can say that there are currently two very different approaches to the reality of the Internet of Things. On the one hand, the project can be based on the standard platforms that telecom operators generally promote. These platforms, while simplifying the development of the project, prevent companies from offering their customers innovative and differentiated products from their competitors. An example of this model with a broad market deployment is the Smart Cities service platforms.

Apart from these assessments, the identification of a real problem that needs solving, both from a business and technical point of view, is key to success. Our recommendation is to start out by choosing a small, visible project that is expected to have a high degree of impact on the business and/or operations and has a clearly defined internal sponsor. We like to call this the “quick wins” that will pave the way for larger projects. The internal data structure, processes and objectives of each organisation and project will influence exactly which techniques and tools that are chosen in each case.

It is necessary to be aware that despite the fact that the differentiating element of this model could be considered minor and the value to the final customer limited, the operators are interested in fostering this approach as it implies a large number of connections and therefore a high volume of business.

Also, it should be taken into account that the standard platform approach sometimes comes as a result of a normative obligation. In other words, the regulator, with the intention of promoting the adoption of new technological tendencies, obliges certain sectors to offer services employing, e.g. IoT infrastructures. This is the case, for example, of the smart meters within the utilities sector.

It seems clear that this model encourages the use of connected devices, but what is less clear is whether it promotes innovation. There are more and more voices that coincide in pointing out that not only does it not encourage innovation, but it is harmful. This can be the result when an organisation is locked in by the standard platform model, and its natural path down the road of Machine to Machine communications and Internet of Things is predefined, making it much more difficult to launch new, innovative projects.

Fortunately though, organisations are free to opt for a custom IoT approach, taking full advantage of the unique potential for innovation that their products and services hold. Sometimes companies are not aware of this potential, so it is advisable to seek advice from an external consultant to help discover and exploit it. The consultant’s expertise in everything related to the possibilities of what the technology can do, together with the company’s knowledge of how its own industry and business work, will make a perfect duo. This will enable drafting a digitisation roadmap that incorporates new business models that represent real innovations.

In the case of IoT, a part from the above, further progression turns even more difficult as it becomes necessary to learn about other elements related to the telecommunications value chain, as is the knowledge and awareness of:

  • Devices, sensors and other elements needed for communication
  • Connectivity in itself, as well as of all the possibilities associated with it, according to different operators’ offerings
  • Possibilities of virtual and cloud deployments of the organisation’s own solutions
  • Different models required for the operation of products and services associated with IoT value adding services

All roads are valid. Thus a choice should be made of what one considers most convenient in each circumstance, but always keeping in mind the options that exist and the degree of innovation required to ensure the future of the company in the complex and extremely forceful reality of the current setting.


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