The worldwide installed base of Internet of Things (IoT) endpoints is expected to grow from 14.9 billion at the end of 2016 to more than 82 billion in 2025. However, a study conducted by Cisco shows that 60 percent of IoT initiatives stall at the Proof of Concept stage and only 26 percent of companies have had an IoT initiative that they considered a complete success. A third of all completed projects were not considered a success.
Cisco surveyed 1,845 IT and business decision-makers in the United States, UK, and India across a range of industries—manufacturing, local government, retail/hospitality/sports, energy (utilities/oil & gas/mining), transportation, and health care. All respondents worked for organizations that are implementing and/or have completed IoT initiatives. All were involved in the overall strategy or direction of at least one of their organization’s IoT initiatives. The goal was to gain insight into both the successes as well as the challenges that are impacting progress.
Key findings in the survey include:
- Human factors like culture, organization, and leadership, are critical. Three of the four top factors behind successful IoT projects had to do with people and relationships: Collaboration between IT and the business side was the #1 factor, cited by 54 percent; A technology-focused culture, stemming from top-down leadership and executive sponsorship, was called key by 49 percent; and IoT expertise, whether internal or through external partnership, was selected by 48 percent.
- Don’t go It alone. Sixty percent of respondents stressed that IoT initiatives often look good on paper but prove much more difficult than anyone expected. Top five challenges across all stages of implementation: time to completion, limited internal expertise, quality of data, integration across teams, and budget overruns. The study found that the most successful organizations engage the IoT partner ecosystem at every stage, implying that strong partnerships throughout the process can smooth out the learning curve.
- Reap the benefits. Seventy-three percent of all participants are using data from IoT completed projects to improve their business. Globally the top 3 benefits of IoT include improved customer satisfaction (70%), operational efficiencies (67%) and improved product / service quality (66%). In addition, improved profitability was the top unexpected benefit (39%)
- Learn from the failures. Taking on these IoT projects has led to another unexpected benefit: 64 percent agreed that learnings from stalled or failed IoT initiatives have helped accelerate their organization’s investment in IoT.
Despite the challenges, many in our survey are optimistic for the future of IoT — a trend that, for all its forward momentum, is still in its nascent stages of evolution. Sixty-one percent believe that we have barely begun to scratch the surface of what IoT technologies can do for their businesses.
Edited from information provided by Cisco. More about the survey is available here