Research firm Gartner recently predicted three things related to Internet of Things (IoT) - 6.4 billion connected things by 2016, 43 percent CIOs planning IoT projects in 2016, and more than half of major business processes having some element of IoT by 2020.
However, Ganesh Ramamoorthy, principal research analyst, Gartner, states that despite the industry's big bets on this technology's success, eight out of 10 IoT projects fail even before launch.
What makes a successful IoT project? And if there are so many failed attempts to learn from, why are CIOs so inclined towards it?
Dr. Jai Ganesh, VP and head, Mphasis NEXT Labs, recently deployed an IoT analytics project. According to him, the success of an IoT project depends upon several factors, but the most important one is future-proofing the investment.
"For any successful IoT project, it is important to measure the business outcome even before the pilot is running," he said. Ramamoorthy believes that, in spite of IoT project failures, CIOs want them because a successful one can give big business benefits.
Does this problem exist only in India? According to both Ramamoorthy and Dr. Ganesh, it is a global issue.
In the event of no concrete business process, the IoT project itself becomes the goal. According to Dr. Ganesh, if RoIs aren't fleshed out properly, it ends up being a shiny new project without any particular use. "This is usually when CIOs start questioning the logic behind the undertaken initiative and the budget behind it," he said.
While CIOs have always had a beef with budgets, Ramamoorthy insists that this problem is irrespective of that. "A budget depends on the amount of risk a company is willing to take. One can have a million dollar budget with the risk of having no returns from the project if it fails because they can afford it. Even if the budget is minimal, one should be able to procure at least the basic business benefits out of an IT project with the right business outcome," he added.
The technology itself is riddled with inherent challenges, which makes large scale implementations difficult-and this is where the real benefits will eventually be seen.
Another problem is standardization. "Many times, the vendors themselves get confused about which standardizations will prevail in the long run. The industry is waiting for some sort of strategy to emerge and everybody is sitting on the fence," Dr. Ganesh added.
Ramamoorthy explained that, when a CIO clearly understands what business benefit they wish to achieve from any particular IoT project, they take their first strategic step towards the successful deployment of an IoT project.
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