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Tackling the Six Principal Challenges of IoT

Written by Duke Golden

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©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.

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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.

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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 2014–2019 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

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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 company’s 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

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Challenge #4Bridging 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

overwhelming personnel and reducing productivity

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.

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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 worker’s 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.

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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 horse

to win is more of a long-shot than it ever will be

again. Also, with many IoT applications going

straight to the core of the enterprise business

for years to come, pressure will be high not to be

caught in a technology cul-de-sac.

Recommendation:

While it is seemingly impossible to mitigate risk

due to technology variables out of our control,

we can control the costs. M2M cost management

software and managed services will allow for

total portfolio management complete with one-

touch cost reporting and visibility at all levels of

the organisation. Seeing the cost evolution clearly

can help the enterprise understand the bottom-

line impact IoT technologies are having on the

organisation in real-time.

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Conclusion

Despite these challenges, we have the

technology, knowledge, and ability to

meticulously perform the due-diligence and

constant multi-level management that IoT-related

mobility deployments require. What’s more,

we can accomplish this with a cost-conscious

focus on driving innovation. This rapid phase of

technology evolution will enable the enterprise

to grow and expand in ways unimaginable just a

few years ago. However, it will also challenge us

in our personal and professional lives in a similar

fashion. Enabling global command and control

over the entire Telecom/IT estate in the IoT age

will be the single most important success factor

for global enterprises who wish to evolve and

prosper in the next-generation, IT-centric world of

tomorrow.

Next Steps

Tangoe’s Strategic Consulting Services

leverage deep industry expertise, leading

market intelligence, and client peer analysis to

deliver improvements to your communications

infrastructure, guide strategic decisions about

minimizing costs, maximizing visibility, ensuring

security, and increasing productivity.

Visit www.tangoe.com to find out more about how

Tangoe can help your organization outperform

your competitors.

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About Tangoe

Tangoe (NASDAQ: TNGO) is a leading global

provider of Connection Lifecycle Management

software and services to a wide range of global

enterprises and service providers. The company’s

Connection Lifecycle Management technology,

Matrix, is an on-demand suite of software and

services designed to turn on, manage, secure,

and support various con nections in an enterprise’s

communications lifecycle, including mobile, fixed,

machine, cloud, social, and IT.

Additional information about Tangoe can be

found at www.tangoe.com. Tangoe is a registered

trademark of Tangoe, Inc.

Written by Duke Golden

©Tangoe Inc. | Powering the Connected Enterprise

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