All that data can provide valuable insights, but it demands a selective approach
There’s a widespread appreciation in business of what the internet of things (IoT) is all about, but I suspect that a lot of companies are still deterred from getting to grips with the phenomenon by its sheer enormity.
ABI Research has provided the latest indication of the scale of the IoT, with a forecast of a 20% growth in the number of wireless connected devices to 16 billion this year, and a rise to 40 billion by 2020. The data that will flow from all those smartphones, sensors, TVs, wearables and connected household appliances will be a major asset for any organisation able to use it, but also overwhelming in its scale.
So far a minority of organisations have started to use the data in a big way – the analytics is still widely seen as a complex, costly business that only the big players can afford – but it will become more cost-effective as the skills base spreads and specialists step up their offerings of analytics as a service. And as it all becomes more familiar a growing number of companies will begin to see what they can learn from all those devices.
Some will be tempted to grab data from as many streams as possible and throw everything into an analytics mix in search of business insights. But is that going to give them what they need? There’s a danger that data from too many sources – and ‘many’ is what the IoT is all about – can provide ‘insights’ that are over-complicated and lacking the clarity that a business needs.
It’s a danger especially for those that use analytics as a service, bringing in outsiders with the data analysis and science skills but a limited understanding of the individual business. Maybe the best of them will be able to help identify the key data streams for analysis, but I suspect that many will offer a service that is about crunching rather than identifying the data, and needs tailoring by the customer rather than the provider.
This is why business leaders need to think for themselves about the first steps to harnessing the IoT. They should know their business aims and what lessons they need to learn, and in turn have a good grasp of the data that’s going to give them the really valuable insights. When they take that first step they will be ready to bring in the analytics specialists.
It’s also unlikely that they will need the same data all the time. Markets change, new factors come into play and new insights will be needed. This is going to require different streams of data and again it is the business leaders who should take the lead in making the choices.
The growth of the IoT and explosion of data is going to promise some riches for business, but those that reap the full benefits are likely to do more picking and using as needed rather than grabbing data wholesale.