Two thirds of organisations plan to implement the Internet of Things – Gartner

Half of those turning to IoT are deploying internally focused projects, while 40% are using it to enhance customer experience or increase revenue

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‘We are poised for a marked shift in focus toward customer-facing benefits for planned IoT implementations, positioning IoT as a key competitive marketplace weapon going forward’

 

The Internet of Things (IoT) will move toward mainstream adoption in 2016 for many industries, according to the findings of a recent survey by Gartner.

The online survey was conducted in November 2015 and included responses from 465 IT and business professionals spanning 18 business sectors in North America, EMEA, Asia Pacific and Latin America.

Although less than a third (29%) of responding organisations are currently using IoT, an additional 14% are planning to implement it in the coming 12 months, with 21% planning to implement after 2016.

In other words, the number of organisations adopting IoT will grow 50% in 2016, reaching 43% of organisations overall, and nearly two thirds (64%) plan to eventually implement it.

>See also: Bridging the operational technology and Internet of Things divide

However, it is also important to note that another 38% have no plans to implement IoT, including 9% that see no relevance whatsoever in the technologies.

“While there is near universal acceptance of the importance of the IoT, less than a third of organisations surveyed were actively exploiting it,” said Chet Geschickter, research director at Gartner. “Many organisations have yet to establish a clear picture of what benefits the IoT can deliver, or have not yet invested the time to develop ideas for how to apply IoT to their business.

“The second set of hurdles are the organisations themselves. Many of the survey participants have insufficient expertise and staffing for IoT and lack clear leadership.”

Industry adoption also varies widely with heavy industries such as utilities, oil and gas, and manufacturing leading adoption, and service-oriented light or "weightless" industries lagging.

Gartner estimates that slightly more than half (56%) of businesses in asset-intensive "heavy" industries will have implemented IoT by the end of 2016, and approximately one-third (36%) of "light" or "weightless" will do so.

For those organisations that have already implemented IoT, the focus has been on internal operational improvements over external customer-facing objectives.

To date, the primary business case for IoT is internally focused, namely improved efficiencies, cost savings and enhanced asset utilisation (52% of total) versus the externally facing IoT benefits of enhancing customer experience or increasing revenue (40%).

“However, we are poised for a marked shift in focus toward customer-facing benefits for planned IoT implementations, positioning IoT as a key competitive marketplace weapon going forward," said Jim Tully, VP and distinguished analyst at Gartner. "The survey shows a dramatic jump in focus on customer experience, doubling in nominal terms from 18% to 34%.

“This indicates that we can expect a much higher IoT focus on end customers during the next 12 months. In effect, IoT programmes and processes will become competitive marketplace weapons starting in 2016."

>See also: Big data and the Internet of Things to add £322BN to UK economy by 2020 – report

The survey found that the biggest IoT technology challenges for those that have already implemented IoT are cyber security, integration and managing business requirements.

However, orchestration of workflows and processes looms as a major concern for those planning to implement IoT.

“2016 will be a very big year for IoT adoption,” said Geschickter. “We are starting to see a wide range of IoT use cases across virtually all industries. But, the big challenge now is demonstrating return on investment. Executives need to validate the contribution that IoT can make in order to justify large-scale rollouts.”