Analysts predict that nearly 30 billion devices will be connected through the Internet of Things (IoT) within the next two years, generating massive amounts of data that can help organizations become more efficient and innovative than ever before. However, there are significant questions about how organizations will extract insight from that data and integrate the resulting intelligence into their business processes.
Without a strategy for changing existing business processes to incorporate data-driven insight, IoT initiatives will be little more than data-gathering exercises with limited business value. This is why business process management (BPM) principles are essential for gaining value from IoT.
“You have to recognize that IoT is going to dramatically change processes and plan for the redesign and change management that goes along with that,” said Andy Daecher, leader of Deloitte Consulting’s IoT practice. “That’s a big deal, and you don’t get the benefits if you don’t do that.”
Business processes help organizations ensure they are doing the right things in the right way by codifying the steps required to complete essential tasks. Most large organizations have hundreds or even thousands of such processes that reflect best practices for customer service, billing, procurement, staffing, inventory and much more. BPM is a system for ensuring the continual improvement of these processes.
To date, few organizations have successfully connected IoT with process management. Most are doing piecemeal, disjointed implementations, according to a study by Harvard Business Review. Six out of 10 respondents said they have pursued some IoT point solutions or proofs of concept but have yet to develop a comprehensive strategy. Of those who claim they are currently “doing the IoT,” 78 percent admit they are acting on a limited amount of IoT data or they aren't using the data at all.
Nevertheless, those surveyed expect to eventually realize a host of business benefits from IoT initiatives. These include improving customer experience (58 percent), creating new services (52 percent), transforming business models (44 percent), increasing revenue (44 percent), improving efficiencies (40 percent), saving money (36 percent) and creating new products (31 percent).
To achieve these goals, organizations must ensure that processes are being continually evaluated, improved and restructured to accommodate rapidly changing operational and market changes. Without the integration of IoT data, process optimization depends almost entirely on “what-if” scenario models or reviews of past performance that might not be entirely accurate today.
BPM can help organizations take advantage of real-time IoT data to fine-tune business processes. They can adapt dynamically to changes suggested by the data and potentially automate modifications to keep core processes up to date. BPM can also help identify siloed or single-department processes that can be rolled into cross-functional processes that span multiple departments to reduce duplicated efforts.
The supply chain is an area in which IoT-driven process improvements should have a huge impact. Sensors embedded in products, shipping containers, manufacturing centers, trucks, ships and other vehicles will generate IoT data throughout the entire supply chain. This will allow organizations to replace manual, paper-based processes with new digital processes that make the supply chain more efficient, predictable and cost-effective.
If your organization is developing an IoT strategy, contact us to learn how to leverage that data to improve your businesses processes. We recently entered into a strategic partnership with BP Logix to deliver BPM solutions with the integration and connectivity tools you need to transform IoT data into intelligent action.