Nearly half of organisations using or plan to implement IoT in 2016: Gartner

Early adopters say top challenges are cybersecurity, integration and managing business requirements

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The Internet of Things (IoT) will move toward mainstream adoption this year for many industries, according to a Gartner survey.

The analyst firm conducted the survey in late 2015 among Gartner Research Circle Members. Respondents included 465 IT and business professionals spanning 18 business sectors in North America, EMEA, Asia/Pacific and Latin America.

Gartner notes although less than a third (29 per cent) of responding organisations are currently using IoT, an additional 14 per cent are planning to implement IoT in the coming 12 months, with an additional 21 per cent planning to implement after 2016.

In other words, the number of organisations adopting IoT will grow 50 per cent in 2016, reaching 43 per cent of organisations overall, says Gartner.

This indicates majority of organisations (64 per cent) plan to eventually implement IoT. However, it is also important to note that another 38 per cent have no plans to implement IoT, including 9 per cent that see no relevance whatsoever in the technologies.

"While there is near universal acceptance of the importance of the IoT, less than a third of organisations surveyed were actively exploiting it," says Chet Geschickter, research director at Gartner. "This is largely because of two reasons. The first set of hurdles are business-related.

For those organisations that have already implemented IoT, the focus has been on internal operational improvements over external customer-facing objectives.

Internet of Things spectrum: Cool, hot to extreme

"Many organisations have yet to establish a clear picture of what benefits the IoT can deliver, or have not yet invested the time to develop ideas for how to apply IoT to their business," says Geschickter.

"The second set of hurdles are the organisations themselves. Many of the survey participants have insufficient expertise and staffing for IoT and lack clear leadership."

Industry adoption also varies widely with heavy industries such as utilities, oil and gas, and manufacturing leading adoption, and service-oriented light or "weightless" industries lagging.

The survey found that the biggest IoT technology challenges for those that have already implemented IoT are cybersecurity, integration and managing business requirements. However, orchestration of workflows and processes looms as a major concern for those planning to implement IoT.

"2016 will be a very big year for IoT adoption. We are starting to see a wide range of IoT use cases across virtually all industries. But, the big challenge now is demonstrating return on investment. Executives need to validate the contribution that IoT can make in order to justify large-scale rollouts," says Geschickter.

IoT programs and processes will become competitive marketplace weapons starting in 2016

Jim Tully, Gartner

Gartner estimates that slightly more than half (56 per cent) of businesses in asset-intensive "heavy" industries will have implemented IoT by the end of 2016, and approximately one-third (36 per cent) of "light" or "weightless" will do so.

For those organisations that have already implemented IoT, the focus has been on internal operational improvements over external customer-facing objectives.

To date, the primary business case for IoT is internally focused, namely improved efficiencies, cost savings and enhanced asset utilisation (52 per cent of total) versus the externally facing IoT benefits of enhancing customer experience or increasing revenue (40 per cent).

"However, we are poised for a marked shift in focus toward customer-facing benefits for planned IoT implementations, positioning IoT as a key competitive marketplace weapon going forward," notes Jim Tully, vice president and distinguished analyst at Gartner.

The survey shows a dramatic jump in focus on customer experience, doubling in nominal terms from 18 per cent to 34 per cent.

"This indicates that we can expect a much higher IoT focus on end customers during the next 12 months. In effect, IoT programs and processes will become competitive marketplace weapons starting in 2016," he concludes.

Send news tips and comments to divina_paredes@idg.co.nz

Follow Divina Paredes on Twitter: @divinap

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