In a short amount of time the Internet of Things (IoT) has grown to encompass billions of connected devices. From smart kettles to Amazon Echo and intelligent industrial machines and heat sensors, the IoT is a vast network of connected products which creates realms of data on everything from consumer behaviour to industrial machine reliability.
For many companies, selecting the most relevant data that has been generated by IoT devices to analyse is no small task. But the businesses that are able to gain a comprehensive understanding of the data they hold stand to benefit when it comes to extracting data-driven insights into their business operations.
The annual PegaWorld conference, organised by Pegasystems, a leader in software for customer engagement and digital process automation, explores how firms in all industries have implemented advanced technologies, including IoT and AI solutions, towards the goal of achieving success in digital transformation projects. Through the collaboration of AI and IoT, enterprises can enable real-time analytics, as well as predicting customer and machine behaviour.
Pegasystems held the event in Las Vegas for 2019 and welcomed over 4,000 business and IT professionals. I spoke to Dr Setrag Khoshafian, Chief Evangelist and Vice President of Business Process Management Technology at Pegasystems, and Peter van der Putten, Director of Decisioning Solutions at Pegasystems to explore the impact IoT is having in business, the potential challenges of using IoT solutions and how businesses can best extract value from this burgeoning technology.
Dr Khoshafian believes that there are three central business benefits that companies can gain from implementing IoT solutions, namely, improved efficiencies, cost savings, and enhanced innovation.
“Companies are just able to do so much more with IoT, which directly translates to dollars and cents. IoT enables firms to become truly responsive enterprises. For example, all smartphones are part of the IoT due to their sensors and geolocation technology, with businesses being able to combine cloud analytics and IoT to find unique insights into consumer behaviour,” he says.
The transition to an automated enterprise, through implementing IoT solutions, significantly reduces the time skilled staff have to spend manually interacting with basic data collected by IoT devices, freeing these employees to perform more high-value tasks. But the benefits of IoT go beyond just cost savings with there being opportunities to monetise data that has been gathered to unlock new revenue streams.
There are, however, a number of security and privacy issues that any companies looking to embrace IoT products should be aware of and prepare for.
“When it comes to security, there are different types of requirements that you have for security and privacy for each IoT device. And it spans the entire spectrum in a very, very complex technological world,” adds Dr Khoshafian.
In light of a number of high-profile IoT security breaches, including reported vulnerabilities in monitoring devices used to control pacemaker settings and hackers creating clones of key fobs to gain access to luxury cars, consumers are increasingly aware of the security issues around IoT.
A survey of over 10,000 US households by Parks Associates found that close to 50% of consumers are “very concerned” about cybercriminals gaining access to the connected devices in their homes.
Despite there being many initiatives that work to create standardisation in the IoT ecosystem, not all companies that create and build IoT devices follow these standards. The lack of interoperable standards can reduce the effectiveness of these devices and make it harder for them to communicate, with weak security standards also putting entire networks at risk of hacking.
“Quality assurance tests need to happen as the growth of IoT continues. Firms must perform much needed due diligence, which is extremely important for successfully implementing IoT solutions, especially in the industrial Internet of Things,” says Dr Khoshafian.
IoT solutions encompass AI, big data analytics and automation, with the partnership of these technologies creating a meaningful competitive advantage for businesses. “IoT is a powerful enabler for digital transformation. But you need to make it work for you – what is the paradigm that IoT is encouraging and helping make happen?”
Before the emergence of IoT and connected devices, consumers rarely sent feedback or communicated with a manufacturer directly about their products. The vast majority of consumers deal with sellers rather than manufacturers, leaving manufacturers with little insight into the experiences consumers have with their products and devices.
Thanks to IoT, the manufacturer can gain real-time data about how consumers use devices and use these insights to improve future services. “There’s so many opportunities in terms of what manufacturers and retailers can do with this data. They can update device software to fix issues, learn about how their devices are being used and come up with new business solutions,” adds Dr Khoshafian.
While there has been a lot of hype around IoT in recent years, Dr Khoshafian says now is the time to create an IoT strategy that is pragmatic and ensures this innovative technology is not ignored.
“It’s vital for businesses to undertake a discovery of what are the ‘low hanging fruits’, or the areas where IoT insights can bring the most value, so you can begin to form a strategy for IoT in the context of your unique data streams and value chain. But picking the ‘low hanging fruit’ can quickly show the value of IoT solutions,” says Dr Khoshafian. ™嚪
Putting heart into IoT
As the volume of IoT generated data grows, one of the most pressing challenges for businesses is working out solutions to proactively analyse this data and turn it into effective insights. Peter van der Putten, Director of Decisioning Solutions at Pegasystems, explains how the new empathy capability of the Pega Customer Decision Hub allows firms to make better decisions in real-time.
“We provide the always on brain through the Pega Customer Decision Hub, which is hooked up to all the customer interaction channels and provides relevant recommendations. Companies have this tendency to just think in terms of sending messaging to consumers, as opposed to listening on IoT channels. It’s really important to listen to what customers tell you,” says Mr Putten. Effectively implementing IoT solutions doesn’t mean collecting lots of data from devices in isolation, but rather putting solutions in place that select the most relevant data and respond to these insights as soon as possible.
“I think, in a way, IoT initiatives are a little bit behind, because they’re still in this mode of thinking let’s create the data now and figure out later what we’re going to do with it. People are shifting away from just collecting massive data and starting with the use cases to determine what kind of data we need to support our business objectives,” says Mr Putten.
Adding empathy into customer interactions can also help allay privacy concerns around how IoT data is used, as Pega allows for firms to set the level of transparency for AI actions. The most effective AI analysis tools are usually impossible for humans to completely understand with less complex AI being easier to communicate to consumers. “We want to give companies tools to actually control how AI is used in different environments, including the IoT ecosystem. In every single interaction with consumers, firms can now control what recommendations will be made,” says Mr Putten.
Privacy issues aren’t just important when it relates to consumer concerns, with regulations like GDPR giving users the right to an explanation of how major decisions about them are made. According to consultancy PwC, over 50% of the total IoT spend in 2020 will be in the form of business investment, illustrating the large amounts of money companies are set to spend to benefit from the developing IoT networks.
Fully implementing a comprehensive IoT strategy that allows a business to use IoT insights to improve their business bottom line and meet changing consumer needs will not be an overnight process and will require regular assessments of what data is being collected and how it is being analysed.
When used in the most effective way, IoT solutions can provide companies with extremely useful information on how customers are using their products and services and enable consumers to receive improved products after firms incorporate feedback into the next generation of their designs.
Whether data from consumer or industrial IoT devices is collected, these insights can create a far more connected relationship between companies and the users of their products. “You need to put yourself in the customers shoes and do what’s right for them if you want to build a strong relationship in the long-term,” concludes Mr Putten.
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