Aligning IoT, the Cloud and Digital Transformation Initiatives

The 18th annual PwC CEO survey of 1,322 corporate leaders in 77 countries, conducted between September and December 2014, found an overwhelming proportion are embarking on digital transformation initiatives to respond to escalating customer demands and intensifying competitive pressures.

However, many are taking different paths to achieve their corporate objectives, and failing to recognize how their digital transformation, Internet of Things and cloud computing efforts are actually interrelated.

Most industry observers and corporate executives agree that the primary objectives of a digital transformation process are to strengthen customer engagement in order to increase customer loyalty and accelerate market penetration, while streamlining operational efficiency to improve organizational effectiveness and profitability.

Specifically, the survey found these CEOs are investing in the key technologies associated with the digital transformation process at varying levels.

Mobile technologies for customer engagement are leading the way with 81 percent. Data mining and analysis is a close second with 80 percent. However, less than two-thirds of the survey participants (65 percent) are prioritizing investment in IoT, and cloud computing fell slightly behind building socially enabled business processes, with 60 percent.

Dependence on Cloud Services

While the variance between these rankings could be considered insignificant, it could lead to bigger issues if the corporate executives and their underlings perceive the IoT and cloud as separate technology trends from digital transformation and mobile communications. This misconception could have serious consequences and even create fundamental flaws in a digital transformation process.

First, nearly every application that enables organizations to become more digital is reliant on cloud services. The majority of these applications are designed to be Software-as-a-Service solutions. They are increasingly being built on Platform-as-a-Service so they can be configured for specific business processes and extended into various vertical markets.

Also, they depend on the economies of Infrastructure-as-a-Service connectivity, storage and computing services for mobile communications, data collection and analytics, and information dissemination. So, failing to incorporate a cloud migration plan into your digital transformation program will quickly derail your efforts.

Second, one the best ways of improving customer engagement and creating greater organizational efficiency simultaneously is to better understand how customers are actually consuming and using products and services. The ability to embed sensors into almost anything and track the use of the object can give us unprecedented insights into how products and services are truly being utilized.

IoT Network Advantages

There are four levels of value that can be derived from deploying IoT networks:

  1. React faster when problems occur to reduce the impact on customer satisfaction.
  2. Anticipate issues before they become problems and mitigate the risk of customer dissatisfaction and abandonment.
  3. Improve product/service quality and better focus current operations on existing customers.
  4. Identify new market opportunities.

Once again, the ability to connect the rapidly expanding universe of sensor-enhanced products and services, capture and analyze the data from these ‘things’, and act on the insights from this information in a coordinated fashion wouldn’t be possible without the cloud.

When you think about it, the IoT benefits are the same as those promised from the digital transformation processes being undertaken by a growing number of companies worldwide.

So, don’t let your organization view the IoT, cloud and digital transformation process as separate. Establish corporate programs that ensure that each of these initiatives is carefully coordinated.

Jeffrey M. Kaplan

Jeff Kaplan is the managing director of THINKstrategies, founder of the Cloud Computing Showplace, and host of the Cloud Innovators Summit executive forum series. He can be reached at [email protected].

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