Mar/Apr 19 - ChannelVision Magazine

IoT Leaders: A Closer Look McKinsey found that IoT leaders typically exhibit a few specific traits. For one, they have the drive to press forward. Companies often pull IoT projects before they get past the pilot phase because they fail to generate significant returns. According to McK- insey, though, the first 15 to 20 use cases typically only generate a mod- est ROI. The average payback will continue to increase until a company has about 30. And IoT leaders pursue 80 percent more IoT use cases than IoT laggards. Partners should therefore prioritize companies that are in a position to aggressively roll out IoT deployments. It takes an aggressive effort, and patience to succeed when it comes to IoT. Companies that move slowly should expect to see limited results. Likewise, companies must exhibit a willingness to change. Another reason why IoT projects tend to fail early on is because executive teams tend to perceive IoT as merely a technological change. In some cases, though – spe- cifically with industrial environments – field workers will have to actually adjust their work processes in order to maximize the benefits. IoT leaders were three times more likely than IoT laggards to report that managing changes to busi- ness processes was one of the most important factors to consider when implementing IoT solutions. With this in mind, it can pay to think about how well an organization communicates across all levels dur- ing the qualifying stage. An enterprise that has already implemented some amount of digital transformation, for instance, and is using apps to com- municate and track daily workflows may have an easier time embracing IoT and generating positive results. Be wary of companies using paper-based management systems. McKinsey also points to the impor- tance of rolling out advanced IoT end- points such as augmented/virtual real- ity devices, drones and wearable de- vices. These endpoints can assist field workers with manual processes, reduc- ing manual labor, boosting productivity, and ultimately driving more value. IoT leaders tend to be more aggressive in using these types of solutions. Partners should therefore look out for companies that are willing to go the extra mile in developing technologies to support their IoT goals. Compa- nies that are cautious about spending money, or uncertain about implement- ing advanced endpoints, may struggle down the line. Another important finding was that IoT leaders tend to have a willingness to work with an ecosystem of technol- ogy partners, rather than rely on pro- prietary solutions. IoT leaders are also more likely to choose IoT platforms according to whether they support third-party developers. When qualify- ing sales prospects, partners should therefore investigate a company’s willingness to extend outside of its own borders. If a company is only using homegrown solutions, this could be a red flag that they will run into integra- tion issues down the line. This could prove to be problematic when rolling out IoT deployments. EMERGENT As companies implement more IoT use cases, they see increased financial impact, with the effect leveling off at around 30 Source: McKinsey Companies by level of financial impact from loT initiatives, % of respondents New Services Planned Source: Incognito; Heavy Readin Financial impact per loT use case Financial impact score Number of loT use cases High Low Requirements when selecting loT platforms, % of respondents Laggards <5% 17 66 17 Others 5-15% Leaders >15% Laggards Financial impact of loT initiatives, % aggregate cost saving and revenue gain Others Leaders Source: McKinsey 0 10 10 20 30 40 50 20 30 40 50 Gigabit broadband IP video streaming 5G mobile backhaul Business services 4k/8k video VR/AR IoT BSS/OSS Systems Aff Source: Incognito; Heavy Readin Service c figuration and activ B Order manage Service assur Resource provisio Problem management/han Service quality manag Service cat r = 0.55 2 As companies implem nt more IoT use cases, they see incr ased financial impact, with the effect leveling off at around 30 Source: McKinsey Companies by level of financial impact from loT initiatives, % of respondents N w Services Source: Incognito; H Financial impact per loT use case Financial impact score Number of loT use cases High Low Bots R Requirements when selecting loT platforms, % of respondents who ranked each feature among their top-3 requirements Laggards <5% 17 66 17 Others 5-15% Leaders >15% Laggards Financial impact of loT initiatives, % aggregate cost saving and revenue gain Others Leaders Source: McKinsey 0 10 10 20 30 40 50 20 30 40 50 DevOps and software- development environment Support for advanced end-points Ability to support third- party developers 43 43 19 24 35 43 Gigabit broadband IP video streaming 5G mobile backhaul Business services 4k/8k video VR/AR IoT BSS/OSS Syst Source: Incognito; H Service configuratio Ord Se Resou Problem manag Service qua r = 0.55 2 14 Channel Vision | March - April, 2019