Strong leadership by the CIO, balanced with day-to-day management by the CTO, is a crucial factor in IoT project success, according to a recent survey by Forbes Insights.
In its survey of 500 executives who either launched or started IoT projects, Forbes Insights drilled into the responses of the subset (42 percent) whose IoT initiatives exceeded or met their expectations. The most successful organizations have executive-level governance, a CIO who acts as the project champion and authority, and a CTO who manages the day-to-day development. In four out of five successful companies, the CIO is a prominent member of the IoT development team. But these enterprises also extend responsibility to experts from the lines of business, cybersecurity and product design, according to the report.
As evidence of the pitfalls of lack of leadership and cross-functional collaboration, almost a third of companies who reported being less successful with their IoT initiatives said the management of their IoT programs was either in the hands of small teams or that no individual has day-to-day authority.
“The nature of the IoT is that it demands contributions by many parts of the organization – business units, finance, R&D, etc. Yet the IT contribution is probably the greatest,” Ross Gagnon, director of research for Forbes Insights, said via an email interview. “Therefore the CIO, with the technology expertise and high authority within the organization, is a logical champion of the IoT effort.”
Forbes Insights partnered with Hitachi Vantara to better understand the current state of IoT, releasing the report, “The Internet of Things: From Theory to Reality,” on the survey results. While the IoT space is maturing, it’s still young. Some 51 percent of respondents report significant IoT deployments in operation, while the rest were planning or operating pilots, Gagnon said.
“This is an emerging industry that really only took off in the last two to three years,” he said. “Factors such as an identified ROI are the product of mature, fully operating systems – and the fact that many companies are still building their IoT systems out mutes some of the positive findings.”
That said, executives believe IoT will be the most important of the so-called emerging technologies, ranking it above others such as artificial intelligence or robotics. In turn, the breadth of IoT investment was apparent when executives were asked to identify the functions they see as the highest priorities for IoT – which spanned customer experience, finance and asset management (in that order).
Results of the IoT Institute's research back in November came to similar conclusions.
When building out IoT capabilities, companies said their greatest challenges include the inability to present a compelling return on investment, keeping the IoT secure, cross-department cooperation, integration of disparate data and availability of skilled staff.
“Right up there with keeping IoT secure, CXOs are challenged to present a compelling return on investment out of the gate,” Gagnon said. “Objectives for IoT initiatives are wide ranging, from enhancing CX, to operational efficiency, to transitioning to a new business model, so measuring ROI is a challenge.”
Starting small can help. While survey respondents follow an overall enterprise strategy, 66 percent of successful companies reported that they purposefully pursued smaller initiatives (pilot projects, demonstrations, operational testing) to develop expertise and a technology base for larger ones, according to the report.
“We’re still in that period of experimenting and optimizing – while CXOs see a bright future for IoT, some are being a little conservative as they are just starting to see the results of their initiatives and fine tuning them,” Gagnon said.