By William Dupley
As companies look to modernize, they begin to explore the benefits of embedding IoT technologies into their existing products. This can extend their offerings, improve decision making with more advanced analytics, and ultimately serve their customer segments better. In many of these instances, it’s striking that the presidents of said companies are the ones driving IoT initiatives – not IT.
IoT promises a high potential for new revenue streams for many conventional products. IoT, however, is an IT solution and often, the IT department is not involved in these discussions. This is a critical mistake that is far too prevalent. When looking to modernize technology in a company, IT is not leading the company in the use of new technologies. It’s time to ask questions about the critical and changing role of IT when it comes to business innovation.
We believe internal IT teams must focus on becoming Business Innovation Enablers and deliver the following five fundamental capabilities:
Today, businesses have a choice. But now more than ever, they also need their IT organization to help them sort through the myriad of options available to them. It’s clear that cloud solutions are now pervasive in most firms. In the modern market, upwards of 40% of a company’s essential applications are now being delivered through SaaS (Software as a service) models. Of the remaining 60% of their applications, 80% of those are being delivered from an internal private Cloud.
Simply put: to compete, companies must exploit Cloud technology to achieve the speed of transformation that the modern market demands.
Internal IT departments must now become experts in Hybrid IT Delivery (if they haven’t already) and understand what is possible with the many Cloud services that are available today. They also must become (A) a Service Broker, (B) a Service provider and (C) a Business Innovation Enabler to facilitate the many services their business needs. These services include SaaS (Software as a Service), FaaS (Function as a service), PaaS (Platform as a Service) and many other new delivery models.
This type of responsibility demands that the modern IT team is always on top of what’s possible and have extensive case studies up their sleeves that they can communicate to their businesses to identify business outcomes.
IT teams now must be responsible for facilitating the provisioning of services from any source to their customer, facilitating the chargebacks for those services, and providing one-stop shopping through a common portal.
IT departments need to know what’s possible with Cloud services and what workloads should (and should not) be moved to a Cloud environment. They need to be able to identify what workflows are best suited for PaaS and how their business could exploit the benefits. They also need to know how to develop applications and business capabilities faster using new functions such as SaaS, mobility solutions, and big data analytics.
IT teams must ensure that the services that they provide through their portal meet both the required service-level agreements and all the governance policies a company has. For example, some Canadian companies cannot use some US Cloud services due to the Patriot Act. Some companies also have stringent record retention policies and must keep records for years. In each instance, not all Cloud providers are able to meet these requirements.
IT teams need to become the ‘go to’ advisor on what’s possible with Cloud technologies. In doing so, they should understand the bad with the good – they need to develop an in-depth understanding of all the costs and limitations of these services as well.
The number one request coming from any businesses is for advice, and IT teams need to be the ones to provide it. Ideally, it shouldn’t have to come from specialists outside of a firm. Internal IT departments must develop the foundational skill of a Business Innovation Enabler.
Business innovation is the key to new wealth creation. Unfortunately, in many companies, IT departments are not actively involved in the art of business innovation enablement. Gone are the days when IT just took care of applications, infrastructure, and support for business. Today’s market demands an IT team to be a business innovation enabler.
Historically, all application integration required IT to be involved. Today, with the availability of data increasing though open data, the ease of access increasing with Cloud SaaS, and the overall increase in IT knowledge in the next generation of workers, individuals are now building their own applications effortlessly. They need citizen integration services.
Google’s Serverless Compute Platform is enabling users to have extensive access to Cloud functions. These Google services are going to provide even broader expansion of citizen-built application services. To facilitate this transition, IT teams must create the ability to support citizen integration.
This type of service model consists of internal systems and data being made available to individuals in a company using restful API calls. It also requires IT teams to develop a catalog of restful API services which include internal services and external functions as a service. IT teams must enable citizens to be able to integrate their applications and open data with backend systems and company data without IT needing to be involved.
IoT sensors and data collection technology have continued to increase in both the public and private sector. In the 1980s and 90s, these types of technologies were limited to production and process control systems. The groups that manage these types of systems were process control specialists, who were separate from IT.
IoT technology is now an integral part of any IT strategy. IT leads must have knowledge and wisdom regarding sensor, data aggregation technology, predictive maintenance software, and big data analytics as a standard capability of IT personnel.
IT must also be able to provide IoT architecture and implementation services for any IoT project and look to augment their knowledge with third parties where necessary to ensure forward progress.
IT teams need to enhance their business skills and improve their ability to help businesses connect the dots between IoT technologies and their direct ties to creating new revenue streams.
Desjardins Ajusto‘s auto insurance is an excellent example of how a new revenue stream can be formed using IoT technology. It has the promise of attracting many good young drivers to their company because of the promise of an alternative insurance product. Their product is based on the actual driving behaviour of the person being insured instead of the performance of their peer group (which has traditionally been pooled and averaged). This technology makes extensive use of mobility data collection by collecting data on the actual driving patterns and behaviours of each specific driver to come up with more actionable, insightful and accurate data.
According to CIO magazine, more than half of IT projects fail. Sometimes it is caused by IT projects not being well aligned with business goals, sometimes because IT projects are implemented to solve process and people problems. In both instances, the projects fail.
In most cases, process and people problems need to be addressed first, before the technology tasks can begin. IT teams must be able to recognize and conduct quality improvement projects before implementing any new IoT technology.
The average life of a corporation today is about 14.5 years. This is a long way from the 61 years that companies survived in 1958. The blog “Why good companies fail” shares that failure can occur in any of seven corporate goals, but the end result is usually bankruptcy. Why companies fail can be tracked back to leadership not responding quickly enough to one or more of the seven catalysts for change listed below.
When it comes to why companies fail, there were two reasons which are very closely related: (1) The inability to adapt to new business models, and (2) the reluctance to exploit new technologies. Each of these go hand-in-hand: new technologies often enable new business models. Uber is an excellent example of this.
Uber successfully utilized mobility technology to create an entirely new public transportation system. Young customers are big users of Uber simply because they don’t have to pay tips – think ease of use. They have the convenience of ordering the service on their phone, reviewing and rating the performance of their driver before they ever get into the car. By exploiting new mobile technology, Uber has successfully transformed an industry.
This article has discussed new technology, new skills, and new responsibilities at length. There is one last responsibility that IT teams need to do for their business. IT teams need to enable the organization to have the foresight to identify when a potential initiative may be technically possible – but not a good idea.
Sometimes businesses simply want to implement this-or-that technology in the name of becoming digital without fully thinking through how it will impact their business model. This topic is explored by Jeannie Ross in an excellent article which can be found here.
The bottom line is that the IT scene is adapting, and IT teams need to help their businesses understand the impact of ongoing digital decisions.
In the ever-evolving environment of IT, digitization, and the modernization of legacy system, the key to survival is knowledge and the willingness to exploit new technologies to enable and empower new business models. That said, some companies may choose not to do this – to these companies; I remind them of the words of William Edwards Deming, the father of the modem quality control:
“It is not necessary to change. Survival is not mandatory.”
It is our role as IT professionals to become the Business Innovation Enabler that helps our companies and governments transform and survive.
At FoxNet, we understand the need for organizations to have good advice. To help our customers identify where IoT and Hybrid IT solutions may be of assistance in their municipality or business, FoxNet provides multiple IoT Education Sessions, Workshops and Hybrid IT Strategic Planning services.
During the IoT Workshops, FoxNet presents detailed case studies of cities and corporations that have implemented IoT solutions to address common city and business issues. FoxNet facilitates a discussion on each of these areas and collects real IoT business scenarios and functional use cases from the workshop attendees. The result of the workshop is a report containing a list of potential IoT pilot projects and a roadmap on what steps need to be taken to address each defined issue successfully.
For additional Information on our, IoT Workshop reach out directly to John Chiappetta, Head of IoT, North America at firstname.lastname@example.org
About the Author
Bill Dupley is a Digital Strategist at FoxNet. He has led IT transformation and strategic planning teams for over 50 companies and governments worldwide and bring extensive experience in IT & Business Strategic Planning, IT process design, and enterprise architecture. Bill has held several positions over his career including the Cloud Chief Technologist for Hewlett-Packard Enterprise Canada and Director of Strategy and Business Development for HPE Canada Consulting. He is a graduate of Ryerson University, a former member of the HPE IT Global SWAT Team, and a member of the Open Data Center Alliance Cloud Maturity Model authorship team. He is dedicated to helping customers equip themselves rapidly for our ever-changing world.