The research found that while many companies (51 per cent of those surveyed) are collecting data from their connected products, only about one-third are actually using this data to create actionable insights to benefit customers and expand business opportunities. This is particularly interesting given that 61 per cent of respondents declared product monitoring features as a key driver for creating connected products – showing a clear disconnect between vision and ability to execute on that vision.
While 52 per cent of respondents did note that data analytics is an important capability to implement over the next one to two years, many companies today are not fully experiencing the breadth of benefits the IoT has to offer. Understanding how a product is being used can afford companies the ability to continually personalize and enhance their customer’s experience, open up 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 Consulting study. “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% 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.”
Despite so many product manufacturers not leveraging IoT data, only four per cent 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 while at the same time a majority of them are not leveraging IoT data to improve their business. It is estimated that 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. As data connected devices increase at an exponential rate, so will the data they produce, which will only amplify this challenge.
In addition, the survey revealed a number of other challenges facing product manufacturers today, including data security. Keeping data secure was identified as a difficult challenge for 60 per cent of respondents, while 38 percent cited security as their absolute biggest challenge. Only 33 per cent noted that 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.