It's only the first inning of the nascent internet of things market, but there are indications that valuable IoT-related data is already being wasted because connected-product manufacturers don't know how to use it.
Forrester Consulting, in conducting research commissioned by security authentication application maker LogMeIn, reported Aug. 4 that enterprises are missing a huge opportunity when it comes to their internet-connected products. Examples of these include items such as Nest temperature control, a Wi-Fi setup or a home security system.
The research found that while 51 percent of 232 companies surveyed are collecting data from their connected products, only about one-third are using this data to create actionable insights to benefit customers and expand business opportunities.
This is particularly interesting given that 61 percent of respondents declared product-monitoring features as being a key driver for creating connected products. This shows a clear disconnect between vision and ability to execute on that vision, researchers concluded.
Companies Still Figuring Out the Processes
Although 52 percent of respondents believe data analytics is an important capability to implement during the next one to two years, many companies today are not fully experiencing the full range of benefits IoT has to offer, Forrester said.
Understanding how a product is being used can enable companies to continually personalize and enhance their customers' experiences, open the possibility of new revenue streams and optimize internal processes.
Yet, the results of the study continue to show how most product manufacturers are approaching IoT as a technology challenge rather than a business opportunity—focusing mostly on connectivity and less on realizing the business benefits.
"There are a lot of components of a connected product for manufacturers to think about, but when initially entering the IoT space, their main focus is on connectivity," according to the Forrester researchers. "When we asked manufacturers that currently have devices available how much time was spent on various product capabilities, connectivity was at the top of their list, representing about 20 percent of the total effort.
"However, the reality is that many of the key drivers for IoT can't be realized by just connecting a device."
Data Integration Not Seen as Major Challenge
Despite so many product manufacturers not using IoT data, only 4 percent of those surveyed noted data integration and usage as a challenge. This presents an interesting dichotomy: Few of the surveyed companies reported that data management is a challenge, but at the same time a majority of them are not using IoT data to improve their business.
Gartner, Forrester, IDC and a number of other IT market researchers have estimated there will be 6.4 billion connected devices globally by the end of 2016, with that number expected to skyrocket in the next several years. The data they produce will multiply along with the devices.
The survey revealed a number of other challenges facing product manufacturers, including data security. Keeping data secure was identified as a difficult challenge for 60 percent of respondents, while 38 percent cited security as their absolute biggest challenge.
However, only 33 percent reported they currently protect and secure sensitive data. Connected products can bring a variety of new security risks to companies, both in the technical implementation and in the business processes that are associated with those connected devices. As IoT-connected products continue to scale, these risks and gaps will need to be addressed through platforms, processes and standards.
Other Findings in the Study
Other key findings of the study included:
-- Sixty-two percent reported competitive differentiation as a key driver for getting involved with connected products;
-- Forty-three percent said the complexity and volume of devices was a key issue;
-- Thirty-four percent of surveyed manufacturers that already have deployed IoT-connected devices use platforms to manage their connected products.
Forrester conducted an online survey of 232 manufacturing organizations located in the United States, Canada, U.K., Germany, France, Japan and South Korea, as well as five in-depth qualitative interviews with similar companies. The study began in April 2016 and was completed in May.