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Smart Industry 1/2018

Smart Industry 1/2018 - The IoT Business Magazine - powered by Avnet Silica


Smart Business Legacy Systems Legacy Systems Smarter than you think A world of opportunity opens if IoT is implemented in a way that makes business sense. Taking advantage of existing infrastructure is an efficient way to transform your enterprise. ■ By Jason Kay* The Internet of Things (IoT) is taking the world by storm, with most analysts predicting huge things for the uptake of the technology, particularly across the enterprise. Persistence Market Research forecasts the worldwide IoT market will be worth more than $260bn by 2025, highlighting that IoT is showing no signs of slowing. Despite the huge business oppor tunity IoT presents, recent research from Cisco illustrates how decision makers must ensure they remain objectivesfocused when joining the movement. It revealed that 60% of IoT initiatives stall at the proof of concept (PoC) stage and only 26% of companies have an IoT initiative they consider a complete success. It doesn’t help that many of those looking to reap the rewards of IoT believe ripping out and replacing legacy infrastructure is the way forward. Although there is clearly a case for infrastructure investment, the need to disrupt need not be Ripping out supposedly outdated systems and replacing them with new facilities won't do the business any favors tantamount to huge expenditure. If the IoT solution under consideration for a business requires any kind of rip and replace, it’s worth thinking twice before taking the plunge as the exist ing infrastructure may be smarter than you think. IoT short-fallings? The reported IoT failures in PoCs could appear to make worrying reading. IoT technology was conceived with the idea of increasing business efficiency and driving value for adopters, yet research seems to indicate that the intention of improvement is not yet being fully realized by all. If IoT deployments are failing to provide businesses with the value they set out to gain, the growth rate of IoT is surely at risk as enterprises become increasingly wary of investing in it as a result. The reality is that businesses should not fear IoT investment. It remains firmly at the heart of many digital transformation strategies – streamlining the processes and improving efficiency. Yet, for those looking to reap the rewards of IoT, ripping out supposedly outdated systems and replacing them with new, state-of-theart facilities won’t do the business any favors. Not only will this exercise add huge costs to the project, it will also remove the infrastructure that's already there – an infrastructure that holds a mountain of data that could be put to work improving the business. Legacy advantage The potential business benefits of the Internet of Things are truly transformational; not only to increase productivity and save money, but also to generate more by adding value to the business’s core purpose. This is fantastic in principle, but how many are willing to explore this potential if there’s a huge initial investment attached to it? Take refrigeration and cooling in the food retail industry as an example. It seems unlikely that replacing the refrigeration estate is going to appeal 28 *Jason Kay is CCO of IMS Evolve

to a multiple retailer whose core business focus is selling produce, as cost will far outweigh the immediate benefits. For businesses undergoing digital transformation, rather than investing in brand-new equipment they should see if the answer lies in the existing infrastructure. The data that is an increasingly vital part of many enterprises’ digital strategies is already being generated – businesses simply need to find how to extract it, understand it, and release its value. Using an IoT layer, the food retailer could tap into the available data locked within legacy machines. By integrating it with supply chain and merchandising systems, as well as with the fridge control systems in real time, the temperature of each fridge could be automatically managed to suit its specific contents. As a result, not only is the energy consumption reduced, but a higher quality product can be achieved, resulting in a better customer experience. Likewise, within the food manufacturing industry, IoT technology at the edge can provide necessary insights to monitor each stage of the process when creating food in batches. Consistency both of ingredients’ quantities and environmental factors can be regulated and the available data from each stage of the process united to ensure the highest quality, most profitable end product every time. When venturing into the world of IoT, it is critical that businesses and their technology vendor partners take the right approach to ensure the longterm success of their project. This means taking a “business-first” stance, rather than following the ”technology-first” path. Changing the mindset There is a requirement for a mindset shift across the entire IoT industry that makes “Why?” the first and most important question when defining an IoT deployment. Too often the purpose of an IoT project is defined by the capabilities of the technology, but just because a business can achieve something with the solution doesn’t necessarily mean it should. For industries such as food retail there is the opportunity to reap significant benefits and efficiencies from adopting IoT, but for fast-moving environments with low-margin consumer goods and high infrastructure costs, a rip and replace solution to extracting data is simply not tenable. Closing stores or the suspending of operations runs the risk of jeopardizing customer experience, customer loyalty, and brand image, undermining the potential business value of the solution. As demonstrated by the Cisco findings, the value of IoT must be apparent quickly and with minimal downtime, or the project will quickly fall by the wayside. This ability to release value quickly is fundamental to taking a businessfirst approach and accelerating the transition into digitization with low capital investment and a high return on investment. Food for thought Food retail is a good example of an industry with the opportunity to reap huge benefits by adopting IoT, but replacing existing infrastructure is simply not an option for most Instead of asking the question: “This is the technology, what problems can it address?”, the various stakeholders should instead be considering: “This is the greatest issue, how can technology help?” Businesses continuously face multiple challenges, but it takes real insight and understanding of the organization and the industry to understand which solution when applied to which area will have the biggest impact on core purpose and, if addressed, offers the greatest reward. Set to explode It is predicted that the IoT market will explode over the next ten years, but for the industry to remain on this trajectory, a “business-first” approach is necessary and legacy equipment should not be a setback to its fruition – it should be at the heart of it. Many enterprises have all the data needed to modernize sitting unused in their current systems, and now is the time to unlock it. Vendors must work with businesses to deliver sustainable, truly valuable IoT deployments that offer scalability, rapid deployment, and quick ROI. There is a world of opportunity available through the Internet of Things when it is implemented in a way that makes business sense, and by taking full advantage of the existing legacy infrastructure with an IoT layer, an enterprise can efficiently and effectively transform its organization in a way that both supports and enhances its core business purpose. 29