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State of the Internet of Things: Wide Impact Anticipated Yet Initiatives Stall

State of the Internet of Things: Wide Impact Anticipated Yet Initiatives Stall

TEKsystems survey reveals companies are still laying the groundwork for IoT initiatives; high levels of impact are eventually expected.

TEKsystems®, a leading provider of IT staffing solutions, IT talent management expertise and IT services, today released research regarding the state of Internet of Things (IoT) initiatives. More than 200 IT and business leaders were polled in Nov. 2015 on project ownership, implementation status, risks, required skill sets and organizational preparedness. The purpose of this survey was to gain a better understanding of how organizations are being impacted by IoT, steps they are taking to prepare, resource barriers and challenges, as well as long-term IoT objectives.

Key highlights from the survey include:

A Minority of IoT Initiatives Have Made it Off the Ground; Security Cited as Top Challenge

Q: Which of the following best describes your organization’s current maturity in terms of IoT and IoT-related initiatives?

Considering – leadership and staff understand some of IoT’s potential and are in early discussions and consideration of how it could impact our organization

42%

Planning – leadership and staff have the desire to implement IoT and have moved to working on analysis, planning and/or gaining approval

19%

Piloting – our organization currently has test projects underway to demonstrate IoT feasibility

17%

Implementing – pilot projects have now transitioned into IoT-driven processes, services and products

22%
Q: What do you see as the biggest risks/challenges in regards to realizing IoT potential?

(Select all that apply)

Increased exposure of data / information security 50%
Return on investment / making the business case 43%
Interoperability with current infrastructure/systems 37%

Finding the right staff / skill sets for IoT strategy and implementation (e.g., internal staff or external consultants)

33%
Securing budget 29%
Concern regarding early-stage technology 29%
Uncertainty regarding areas of application 28%

Inability to address increase in data (e.g., data analysis, storage)

15%
Other 3%
  • TEKsystems’ Take: Less than one-quarter of organizations have reached the stage where IoT initiatives are transforming business processes, services and products. The vast majority are in the preparatory (consideration and planning) or pilot stages. Underlying data indicates larger organizations ($5 billion or more in annual revenue) are more likely than smaller organizations to be implementing IoT initiatives. Increased exposure of data / information security is the biggest challenge to realizing IoT potential for half of organizations. Other early stage concerns, such as return on investment (ROI) / making the business case, and interoperability with current infrastructure/systems, round out the top three risks/challenges on IT and business leaders’ minds. One-third of respondents indicate finding the right staff / skill sets is also a challenge.

IT Maintains Leadership Role for IoT Initiatives, but Organizations Can Expect Shared Responsibility and Cooperation across the Business

Q: In which functional areas does leadership for your current or future IoT and IoT-related initiatives reside?

(Select all that apply)

IT 64%
Business development/strategy 32%
Operations 29%
Research and development 27%
Engineering 24%
Marketing 20%
Sales 12%
Finance 8%
Other / don’t know 6%
Q: “My organization’s business and IT functions are able to work together effectively to guide the organization through changes associated with an IoT project.”
Strongly agree 9%
Agree 44%
Neutral 35%
Disagree 12%
Strongly disagree 0%
  • TEKsystems’ Take: While IT maintains leadership over IoT projects in the majority of cases, other departments are also identified as occupying leadership roles, indicating shared responsibility. Organizations that are already implementing IoT are more likely to report that leadership for these initiatives resides in the area of business development / strategy, according to underlying data. The majority of organizations (53 percent) recognize that a partnership approach is necessary for IoT projects to succeed. Not surprisingly, data also shows organizations that have implemented IoT-related initiatives are more likely to agree their organization’s functions are able to work together effectively.

The Majority of Leaders Anticipate a High Level of Impact; Expectations for Long-term Digital Transformation Foreseen

Q: How much of a long-term impact do you expect IoT initiatives to have on your business?
(Five-year planning horizon)
A transformational impact 13%
A significant impact 42%
Some impact 43%
No impact 2%

Q: How do you expect IoT initiatives to impact your business in the long term?
(Five-year planning horizon)? (Select all that apply)

Create better user and customer experiences 64%
Spark innovation 56%

Create new and more efficient working practices and business processes

52%
Create new revenue streams (e.g., products and services) 50%
Increase ROI on IT infrastructure 36%

Create substantial cost savings and operational efficiencies

35%
Other 4%
Q: What is the primary focus for your organization’s IoT and IoT-related initiatives?

Technology (e.g., data management and analysis, and infrastructure management)

30%
Products or services 24%

Operations (e.g., manufacturing, supply chain management, logistics, energy management and asset management)

17%
Customer service and support 16%
Employee productivity 9%
Other 4%
  • TEKsystems’ Take: The majority of organizations (55 percent) expect IoT initiatives to have a high level of impact on their business over the next five years. Data also shows organizations that have already implemented IoT initiatives are more likely than others to expect these projects will have a transformational impact on their business. Long-term expectations for IoT include outcomes that will drive digital transformation within the business, including creating a better user and customer experience, and sparking innovation. Larger organizations are more likely than smaller organizations to expect IoT to create new revenue streams. Technology (e.g., data management and analysis, and infrastructure management) is the top focus for nearly one-third of organization’s IoT initiatives, followed by products or services.

Two-Thirds of IoT Projects to be Handled Internally, Yet Most Organizations Are Not Highly Confident in Their In-House Preparedness; Skills Needed in Infrastructure and Analysis

Q: Approximately what percentage of your organization’s IoT needs are, or will be, addressed through current internal resources and what percentage requires support from an external vendor?
Internal resources 63%
External vendor 37%

Q: How would you rate your organization’s current ability/preparedness to complete each of the following phases of IoT initiatives using in-house resources?

Excellent Very Good Good Fair Poor
Strategy definition 12% 23% 38% 20% 7%

Project planning /analysis (e.g., define scope, assumptions and risks)

11% 25% 35% 21% 8%

Project design (e.g., determining the most effective and efficient way to construct the solution)

7% 22% 39% 25% 7%

Technology architecture/construction (e.g., development in technical environment)

9% 28% 35% 22% 6%

Quality assurance and testing

6% 27% 31% 27% 9%

Technology implementation (e.g., moving solution from development status to production status)

9% 23% 37% 25% 6%
Securing connected systems 10% 27% 30% 24% 9%
AVERAGE OF ALL PHASES 9% 25% 35% 24% 7%
Q: For your IoT initiatives, which skill sets are you having the biggest challenge finding?

(Select all that apply)

Rank Skill set Percentage
#1 Information security 45%
#2 Big Data analytics 34%
#3 Architects 27%
#4 Cloud 23%
#5 Programmers and developers 21%
#6 Business intelligence 19%
#7 Software engineers 17%
#8 Networking 16%
#9 Business analysts 13%
*Other skills included mobile (12 percent), quality assurance / testing (12 percent), digital marketing (12 percent), project managers (11 percent), help desk / technical support (10 percent) and database administrators (6 percent).
  • TEKsystems’ Take: Approximately one-third of IoT project needs require support from external vendors versus internal resources. Most organizations are not highly confident in their preparedness to complete each phase of an IoT initiative in-house. Less than 4 in 10 rate their level of preparedness in each phase as excellent or very good. Those with business-related job titles are more confident than those with IT-related titles; they are more likely to rate their organizations as excellent or very good with respect to strategy definition, project planning and project design. Respondents report information security and Big Data analytics skill sets are the most challenging to source for their IoT initiatives. Organizations that have not yet reached the implementation phase are more likely to report challenges in finding software engineers.

“Organizations who are able to successfully implement IoT projects to better understand their business and customers will be positioned to make more strategic and informed decisions,” says TEKsystems Research Manager Jason Hayman.

“However, only a minority of organizations have adopted IoT initiatives, despite a majority recognizing the potentially transformational impact these projects will have on their business. Part of this measured adoption is likely due to a lack of confidence that IoT initiatives can be handled internally, and concerns over information security, ROI and interoperability with current systems.”

“Organizations that are able to develop strong partnerships internally between IT and business leadership, and externally with key staffing and services providers, will be more successful and efficient in moving through the project phases and delivering meaningful results for the business.”

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