Powered by. IoT STRATEGY : INSIGHTS FROM EARLY IoT ADOPTERS

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1 Powered by IoT STRATEGY : INSIGHTS FROM EARLY IoT ADOPTERS

2 2 GLOBAL IoT REPORT 2017 Executive Summary Technology and trends come and go, but IoT has what it takes to transform organizations and shape the next generation of industry. This research, based on robust, thorough and exciting data from independent research specialists Vanson Bourne, finds that around four in ten (38%) have already implemented IoT and a further 57% plan to in the future. What is also impressive is that 50% of respondents organizations are either ahead of or in line with the IoT curve. IoT is bringing huge benefits to organizations who have taken the plunge, and many more desire this. 100% of respondents would expect to see benefits if their organization were able to increase their use of IoT. But organizations are facing challenges in scaling up their IoT adoption, with 93% who see challenges with the security, among other areas such as scalability and interoperability. Additionally, nine in ten (90%) of those currently using or planning to use IoT face challenges when deciding on the right IoT platform. While most organizations are adopting IoT, many of these early adopters are not taking the right path to overcome the challenges that they face. But, all is not yet lost. A proven end-to-end IoT service provider can aid this transition. Most organizations are already seeing that this is the way forward, with almost three quarters (73%) planning to outsource at least some end-to-end IoT implementation to a service provider. Furthermore, nearly all (98%) of those who are using IoT or planning to, see IoT service providers playing a major role in their organization s IoT journey and forming a valuable partnership. Working alongside a market leading service provider will prove critical to success. Organizations need to act now. Over eight in ten (82%) agree that organizations using IoT will have a stronger position in the marketplace. Those who are held back risk losing their customer base, financial gains and may find their unique selling points disappear. If an organization does not evolve and adapt, then simply, their competitors will. Research Scope HCL commissioned independent technology market research specialist Vanson Bourne to undertake the research. A total of 263 senior IT and business decision makers were interviewed in September and October 2016 globally within the following sectors: Manufacturing and production Healthcare IT, technology and telecommunications GEOGRAPHIES US UK Germany Nordics Others Financial services Business and professional services Retail, distribution and transport Other sectors Interviews were primarily conducted online in the US, the UK, Germany and the Nordics using a rigorous multi-level screening process to ensure that only suitable candidates were given the opportunity to participate.

3 3 ATTRIBUTES FOR SUCCESSFUL IMPLEMENTATION IoT is a technology trend that is rightly gaining in profile and credibility. Are you one of the early adopters of IoT? If not, you could be left behind. Those using IoT tend to be at the beginning of their journey and find themselves in the define and build stages. Elements that are considered for an ideal IoT platform, include security (95%), end-to-end support Security Data analytics End-to-end support User interface Scalability Agility Interoperability 89% 89% 87% 86% 86% 83% 95% Figure 1: Respondents who think that the attributes listed above are very or extremely important in contributing to an ideal IoT platform. Asked of all 263 respondents (89%), scalability (86%) and interoperability (83%). Almost half (47%) have no formal IoT programme in place yet, when asked of respondents whose organizations are using IoT. Of the same respondent group, almost half (46%) state that they are currently defining or evaluating their IoT platform. organizations need a programme in place, so that they can achieve the full range of opportunities that they, and their customers, can experience through IoT. Of respondents whose organizations are planning to implement IoT, 73% say that they plan to outsource at least some of their implementation. Ongoing support from a reliable end-to-end provider in order to establish and maintain an IoT platform is key for maximizing, according to early adopters. In addition, 89% say that their investment in IoT will increase in three years time. IoT has a plethora of benefits on offer and has longevity this is clear from the substantial investment being allocated. 13% 3% 60% 23% We currently have internal teams that will handle the implementation end-to-end We plan to use a mix of in-house internal teams and outsourcing to a service provider to handle the implementation end-to-end We plan to outsource to a service provider to handle the implementation end-to-end I do not know Figure 2: How does your organization plan to implement IoT?. Asked of those 150 respondents whose organization is planning to implement IoT Investment in and the adoption of IoT are almost inevitable, for good reason. Of respondents whose organizations are using or planning to use IoT, more than six in ten cite improving business process efficiency (65%), better customer satisfaction (65%) and cost saving (62%) as primary drivers for adoption. organizations need to build an IoT platform on existing technologies and capabilities, which is bespoke and meets their individual requirements. Otherwise, they will not be successful. Utilising IoT fully will drive additional benefits for organizations. The most likely expected benefits include increased organizational efficiency (66%) and improved use of data in order to drive insights (53%). Despite high adoption rates, there is still some confusion over IoT. 54% organizations may need help in understanding how the benefits of IoT and end-to-end implementation are linked. ROSE SCHOOLER Vice President (Intel Corporation) 100% of respondents expect to see benefits if their organization were able to increase their use of IoT We see internet of things as a huge opportunity to save resources, save money and save lives. For example, technologies such as collaborative cancer cloud provides excellent insights into data that allows you to create personalised care and put medicine at work for individuals, ultimately saving lives.

4 4 Increased organizational efficiency 66% Improved use of data to drive insights 53% Use of value added services Moving ahead of our competitors Ability to adopt new business models Opportunities to move up and down the value chain Better communication between business departments Expanded product portfolios 47% 47% 45% 41% 39% 38% We would not see any benefits We would not be able to increase our use of IoT 0% 0% Figure 3: What benefits would you expect your organization to see if it were able to increase its utilisation of IoT?.Asked of all 263 respondents IoT dictates market strength Ultimately, using IoT is going to elevate the reputation and/or product offering of organizations. The vast majority (82%) agree that organizations using IoT are in a stronger position in the marketplace. While, half (50%) think that their organization is in line with or ahead of the curve on IoT. This also means that half are behind the curve. If these organizations do not act now, they could see their competitors reducing costs, increasing efficiencies and gaining market share. Which half is your organization in? Should you be concerned? Of respondents whose organizations are currently using IoT or who plan to in the future, 98% state that IoT service providers can play a role in their journey. Value is most likely to be seen in IoT device security (51%) and defining IoT solutions that can be used (49%), while 22% say the same for the use of a scalable IoT infrastructure. Ensure IoT devices are secure Help defined what IoT solution could be used Provide on-going support Maintenane of IoT Devices Transform current assets into IoT enabled assets Help to analyse data quicker Help to create a bespoke solution Continuing to offer innovation Iot solution Help to mine data Use of scalable IoT infrastructure A third party could not play a role Don t know 1% 1% 22% 34% 32% 30% 41% 40% 51% 49% 49% 48% Figure 4: What role could an IoT service provider play in your organization s IoT journey?. Asked of respondents whose organization is currently using IoT, or who plan to use IoT (251 respondents) CHRISTIAN PLANTE VP Engineering (Hortau) We have leveraged IoT to help farmers make informed decisions that will save them water, allow them to better use their resources, do less fertilization and better anticipate to produce more vegetables and fruits with fewer resources and in the end, make everything more environment friendly.

5 5 DON T BE LEFT BEHIND Around four in ten (38%) report that their organization has already implemented IoT, while almost six in ten (57%) plan to in the future 89% say that investment in IoT will increase in three years time 50% think that their organization is already behind the curve on IoT HUGE BENEFITS FOR IoT USERS 100% of respondents expect to see benefits if their organization were able to increase their use of IoT Expected benefits include increased organizational efficiency (66%), improved use of data to drive insights (53%) and moving ahead of competitors (47%) More than four in five (82%) agree that organizations using IoT are likely to be in a stronger position in the marketplace as a result IoT SERVICE PROVIDERS ARE VITAL TO SUCCESS Nearly all (98%) believe that an IoT service provider can play a role in their journey Service providers are most likely to be needed for ensuring that IoT devices are secure (51%), helping to define the IoT solutions that can be used (49%) and providing on-going support (41%) IoT CHALLENGES AHEAD 1. Turning data to insights Organizations are struggling to utilize the large quantities of data that they are now collecting. For example, 91% are seeing challenges in turning data into insights. Obstacles include not using the right platform (46%) and platforms not being scalable (31%). Consequently, many organizations are collecting dark data, where answers are left untapped, which means that organizations are missing out on highly valuable insights. On average, it currently takes organizations nine days to convert data into useful insight, which is more than four times longer than they would like (two days is their average ideal time). Additionally, data being collected from IoTized devices can be difficult to analyse. But, the good news: IoT has the power to unlock data analysis through increased speed and more intelligent devices and platforms. 100% of respondents would expect to see benefits if their organization was On average, only 48% of data collected by respondents organizations is analysed better able to analyse data through the use of IoT. Using the right platform Data being stored in various siloes A lack of expertise in how to do so 38% 41% 46% Data not being easily accessible Platforms not being scalable A lack of reliability with our platform 33% 31% 31% Not having a strategy in place 25% There are no challenges Don t know 8% 1% Figure 5: What challenges does your organization see when turning data into insight?. Asked of all respondents (263 respondents)

6 6 7% 6% 27% Less than 10% Between 10-25% 28% Between 25-50% Between 50-75% 33% Between % Figure 6: Approximately, what percentage of the data that your organisation collects from IoT is analysed?. Asked of the 101 respondents whose organisation is currently using IoT. This include increasing organizational efficiency (60%), understanding customers needs quickly (54%) moving ahead of competitors (50%), making faster decisions based on customers needs (50%) and the chance to be more innovative (44%). Having the right platform is pivotal. With the right expertise and support, many organizations will be able to add value through data analysis. DOUGLAS JENKINS Vice President Product Development (Xerox Corporation) The Internet of Things is already transforming the office printer and multi-function market. For example, in our Managed Print Services business it has enabled us to be much more efficient and offer our customers new services and solutions such as automated consumables replenishment and remote diagnostics. Work for individuals, ultimately saving lives. 2. Security and scalability the platform is key Similarly to organizations experience with analytics, a vast majority (93%) state that there are challenges relating to security concerns. The most likely IoT security challenge is the large number of devices (46%) which points towards the challenges that being scalable brings. This needs to be tackled in order for organizations to move through the define and build stages as quickly as possible, so that they can join the early adopters and experience the benefits of IoT in the run stage. To overcome these challenges, the use of a secure and scalable IoT platform is fundamental. However, of respondents whose organizations are currently using or planning to use IoT (i.e. early adopters), 90% report that they face challenges in deciding on the right IoT platform. This includes difficulty with integration (47%), showing that interoperability is an important factor for organinzations when choosing the right IoT platform. 43% agree that their organization is failing to utilise IoT fully and that their customers are the ones who suffer

7 7 Fears over IoT security Budget constraints It increases costs Unclear business benefits No clear internal ownership A lack of knowledge internally regarding how to best implement IoT Not being able to make existing devices/ assets IoT enabled Lack of bespoke solutions Lack of a capable provider to work with Not being able to effectively analyse data collected through IoT It is not part of our organization s strategy There is nothing holding us back Don t know 0% 24% 24% 21% 20% 19% 16% 15% 14% 14% 27% 38% 36% Figure 8: What is currently holding your organization back from utilising IoT more?. Asked of all respondents (263 respondents) BARRIERS DO EXIST 90% admit that they face challenges in deciding on the right IoT platform 86% admit that something is holding their organization back from utilising IoT more SECURITY IS A MUST 93% state that there are challenges relating to their organization s security concerns But, IoT service providers can play a role in ensuring that IoT devices are secure (51%) DATA IS BEING LEFT UNTAPPED 91% of those surveyed see challenges in turning data into insight Reasons for this include using the right platform (46%) and a lack of expertise (38%) DO NOT LET YOUR CUSTOMERS SUFFER 43% agree that their organization is failing to utilise IoT fully and that their customers are the ones who suffer DATA ANALYSIS TAKES TOO LONG TO BE USEFUL On average, it takes organizations nine days to convert data into useful insight Two days is the ideal time it would take IoT IS THE ANSWER 100% of respondents would expect to see benefits if their organization was better able to analyse data through the use of IoT Expectations include increasing organizational efficiency (60%), moving ahead of competitors (50%) and faster decision making based on customers needs (50%)

8 8 CONCLUSION Customers want more. Customers expect more. Markets are becoming more competitive. organizations need to stay as far ahead as possible. The use of technology can be the key differentiator between similar organizations by enabling efficiencies, analysis and cost reductions. In turn, this can help retain customers and attract new customers, while increasing market share. In particular, the utilisation of IoT can enable digital transformation and result in huge gains. This can be through business efficiency, new products or increasing financial opportunities. These benefits should be enough to drive investment now. With 38% who have already adopted IoT, is it too late for the remainder to do so? No. But, now is the time to invest. Many organizations are early adopters, but find themselves in the define and build stages of adoption. They need to find the right way to propel themselves into the run stage, in order to achieve the full range of benefits that can be seen. IoT is not going away and the sooner organizations can move forward with their adoption the better. They need to see this opportunity and take it. If they do not, then their competitors will. IoT can help organizations transform. This is often a long end-to-end journey, so having the right expertise is key, whether in-house or external. With so many variables in IoT platforms, technologies and stages of adoption, any trusted provider that organizations are working with in partnership can be a crucial differentiator. So, can organizations afford to ignore this opportunity? Can you? ABOUT IoT WoRKS TM BY HCL IoT WoRKS TM, the internet of things business unit of HCL Technologies, enables organizations to leverage best in class IoT solutions for maximizing returns from their asset investments and create entirely new services that deliver measurable business outcomes. IoT WoRKS TM, ABOUT HCL offers end to end IoT services for organizations across the three phases Define, Build & Run, to help design enterprise IoT programs, develop and implement IoT systems for realizing business value. Recognized as a market leader in IoT by four leading analyst firms - IDC, Everest Group, HfS and Zinnov - IoT WoRKS TM continues to strengthen its leadership position in fast growing global IoT services market. For more information, please visit HCL Technologies is a leading global IT services company working with clients to impact and redefine the core of their businesses. Since its emergence on the global landscape after its IPO in 1999 and listing in 2000, HCL Technologies, along with its subsidiaries, today operates out of 32 countries and has consolidated revenues of US$ 6.6 billion, for 12 Months ended 30 September, For the 21 st Century Enterprise, HCL focuses on business model transformation, underlined by innovation and value creation, ABOUT VANSON BOURNE offering an integrated portfolio of services including BEYONDigital TM, IoT WoRKS TM, Engineering and R&D Services and Next Generation ITO that focuses on integrated infrastructure services, applications services and business services. HCL leverages DRYiCE TM, its third generation autonomics and orchestration platform, global network of integrated innovation labs, and global delivery capabilities to provide holistic multi service delivery in key industry verticals including Financial Services, Manufacturing, Telecommunications, Media, Publishing Entertainment, Retail CPG, Life Sciences Healthcare, Oil Gas, Energy Utilities, Travel, Transportation Logistics and Government. With 109,795 professionals from diverse nationalities, HCL Technologies focuses on creating real value for customers by taking 'Relationships Beyond the Contract'. For more information, please visit Vanson Bourne is an independent specialist in market research for the technology sector. Our reputation for robust and credible research-based analysis, is founded upon rigorous research principles and our ability to seek the opinions of senior decision makers across technical and business functions, in all business sectors and all major markets. For more information, visit For any more information visit us at write to us at iotworks@hcl.com