1. Tackling the Six Principal Challenges of IoT Written by Duke Golden
2. 2 Tackling the Six Principal Challenges of IoT Tangoe Inc. | tangoe.com Over the past several years, the Internet of Things (IoT) and its related technology challenges have been hyped and evange- lised ad-infinitum by every notable technol- ogy player from Silicon Valley to Shenzhen. There have been a lot of exorbitant claims and probably some which were grossly un- derstated. What is notably missing, howev- er, is a realistic view of how this rapid accel- eration of technology adoption is affecting the enterprise of tomorrow, today. Executive Summary This white paper is focused on six main challenges proposed by the myriad of IoT applications on the horizon. It also pro- vides practical measures which enterpris- es can employ to avoid spiralling CAPEX/ OPEX due to the inherent merging of direct and indirect spend complexities on a global scale.
3. 3 Tackling the Six Principal Challenges of IoT Tangoe Inc. | tangoe.com Challenge #1 IoT-centric M2M deployments are, in large part, treated as islands within an enterprise landscape. It is important to note that M2M communication is the very foundation of the IoT evolution in the future. However, because most IoT applications affect the enterprise core business they are managed via direct spend. Traditional fixed and mobile services fall under indirect spend and follow completely different strategic and budgetary guidelines. M2M IoT deployments affect both in different ways. Direct and indirect spend are, traditionally, two different worlds which, very often, do not communicate directly within the organisation. Also, due to the cutting edge technical nature of IoT-related deployments, the business case will be much more focused on the application rather than the indirect spend resulting from the M2M data consumption itself. Also from a carrier standpoint, in many cases a carrier, strong in M2M, may not have the voice/data coverage to satisfy the enterprise, leading to expanded and complex enterprise portfolios. These factors change rapidly and must be reviewed early and often, not only when contracts are up for renewal. Recommendation: Engage both direct and indirect spend representatives within the enterprise. Be curious about their core business and actively enquire as to ongoing M2M initiatives as they relate to the business. The traditional barriers within the enterprise are falling and a new approach to the big picture of telecoms and IT management will be necessary.
4. 4 Tackling the Six Principal Challenges of IoT Tangoe Inc. | tangoe.com M2M data transfer is so minimal; the connectivity price is not an issue. This is a popular misconception which rang true perhaps until about 2012, but it is changing fast. Connected cars that started out consuming 20MB with 3G are now pushing 20GB with 4G/LTE in the span of 2-3 years. According to Cisco, M2M applications consumed, on average, 70MB per month in 2014 with an installed base of 3.2 Billion M2M modules. They also claim that this will rise to an average of 366MB per month for over 8 Billion M2M modules by 20191 . Even according to these conservative projections, a 2.5X growth in volume as well as a 5.5X rise in data consumption paints a very different picture from the low-bandwidth M2M world of today. What happens when 5G/LTE+ is introduced? If an enterprise signs a 36 month M2M contract in 2015, by 2018 bandwidth consumption as well as volumes will be drastically different. Will the business case still be favourable based on antiquated tariffs and conditions? 1 Cisco, Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update 20142019 White Paper, (Cisco Inc.), Feb. 2015. Recommendation: Any IoT-based initiative should be managed vigor- ously from a cost perspective. Factors such as data usage increases and supply chain analysis should be managed and reported on regularly throughout the enterprise. The effective management of the cost aspects of IoT deployments from Day 1 will ensure profitability for both direct and indirect spend areas. A combination of strategic sourcing support, as well as TEM software and managed services, can ensure the entire telecoms and IT estate remains profitable throughout the Plan, Build and Operate phases of any IoT initiative. Challenge #2
5. 5 Tackling the Six Principal Challenges of IoT Tangoe Inc. | tangoe.com Recommendation: Identify three core results the enterprise must achieve with the IoT initiative and stick with them. Very often within the enterprise, ideas will gain and lose ground rapidly due to personnel fluctuation, external market activities, or internal restructuring. Additionally, taking on more than three projects, es- pecially in a Greenfield IoT environment, greatly in- creases risk via resource planning and knowledge gaps. This makes it imperative to identify three areas in which the core business benefit is undeniably es- sential to the success of the enterprise. These goals must be easily quantifiable across the enterprise and they must have a mandate from the highest level and belong to the companys stated strategic goals. This will ensure that regardless of personnel change, the focus remains on the com- mon target and progress will continue. Identifying appropriate success criteria as well as a compre- hensive management system to provide command and control up to the CxO level will greatly ensure not only the expeditious realisation of the initiatives, but also their sustainable profitability. This should be a primary responsibility of strategic techno- economic consultants to guide enterprise strategy and ensure it is aligned with the cost as well as tech- nology trends. Timeline-driven, IoT technology implementa- tion can produce huge organisational burdens. Within modern enterprises there is a propensity for top-down deadlines which place the organ- isation under extreme stress when not realistically set and monitored. Especially in very hierarchical, older enterprises the likelihood of operational em- ployees raising mission-critical issues to manage- ment is not high. In such strict organisational structures, this can lead to an IoT initiative being doomed to delay even before the kick-off meeting. By the time man- agement is able to see key metrics and reporting for the deployment, the battle has been lost. This invariably leads to resource drain and increased budgets, resulting in substantial loss of ROI. In some cases it could even lead to the loss of core business and market underperformance. Challenge #3
6. 6 Tackling the Six Principal Challenges of IoT Tangoe Inc. | tangoe.com Challenge #4 Bridging the knowledge gap within the enterprise can be a daunting task in the IoT era. Previously, Telecoms and IT specialists within the enterprise were focused solely on traditional fixed and mobile services, Windows upgrades, and iPhone rollouts. IoT technology evolution is causing a huge knowledge drain in the enterprise which is overwhelmingpersonnelandreducingproductivity on a global scale. While a great idea can be a game changer, it can also turn into a money pit if all essential factors have not been properly vetted and prepared for. Recommendation: Take stock of what you already have in the team. Some enterprises, especially technology leaders, will have a huge pool of resources to choose from when making next-generation technology decisions. These companies should create technology task forces to address key initiatives. Other enterprises, however, will not enjoy these advantages. Companies seeking to finally catch up to the technology wave which others are already riding will find the going much tougher. Engaging a carrier-neutral strategic consultant to provide insight and planning for IoT-related RFx exercises will protect the enterprise from IoT brain-drain allowing the enterprise to focus on the result, not the process.
7. 7 Tackling the Six Principal Challenges of IoT Tangoe Inc. | tangoe.com Challenge #5 IoT Security risk can sabotage even the best laid plans. There is no doubt that with the enormous amount of new connections into the enterprise network, the security concerns must be proportionally high as a result. This is a simple fact of life in the IoT era. The simple question is this: Is the gain/advantage to my core business worth the increased risk? If so, how do we mitigate that risk in a way which will not deplete the business case? In many cases there is no simple answer for this. IT law and regulation is very complex and it varies wildly from country to country all the way down to the local level with workers unions also having veto rights over any employee-connected data. Recommendation: It is imperative that the enterprise inform itself thoroughly regarding all local level employee union data security rules and regulations prior to engaging in an active IoT deployment. Not doing so could result in vast resource and productivity loss. Additionally, the enterprise IT departments must be on the cutting-edge when it comes to local, regional and federal data security laws. In many instances the extra resource, as well as brain-drain on IT, will become a limitation during IoT deployments. In order to clear this hurdle, the enterprise must answer these tough questions early and start the learning process even earlier.
8. 8 Tackling the Six Principal Challenges of IoT Tangoe Inc. | tangoe.com Challenge #6 The lack of standardisation within the M2M world and IoT applications brings a new world of risk. This is quite a substantial concern for the enterprise as well as M2M vendors. As in any area of the network, proprietary solutions always introduce an element of risk with regards to interoperability and long term ROI should the sector move in a different direction. Due to the fact that the IoT is really still in its infancy, betting on the right hor