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Tackling the Six Principal Challenges of IoT
Written by Duke Golden
2
Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
Over the past several years, the Internet
of Things (IoT) and its related technology
challenges have been hyped and evange-
lised ad-infinitum by every notable technol-
ogy player from Silicon Valley to Shenzhen.
There have been a lot of exorbitant claims
and probably some which were grossly un-
derstated. What is notably missing, howev-
er, is a realistic view of how this rapid accel-
eration of technology adoption is affecting
the enterprise of tomorrow, today.
Executive Summary
This white paper is focused on six main
challenges proposed by the myriad of IoT
applications on the horizon. It also pro-
vides practical measures which enterpris-
es can employ to avoid spiralling CAPEX/
OPEX due to the inherent merging of
direct and indirect spend complexities on a
global scale.
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Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
Challenge #1
IoT-centric M2M deployments are, in large part,
treated as islands within an enterprise landscape.
It is important to note that M2M communication
is the very foundation of the IoT evolution in the
future. However, because most IoT applications
affect the enterprise core business they are
managed via direct spend. Traditional fixed
and mobile services fall under indirect spend
and follow completely different strategic and
budgetary guidelines. M2M IoT deployments
affect both in different ways. Direct and indirect
spend are, traditionally, two different worlds
which, very often, do not communicate directly
within the organisation.
Also, due to the cutting edge technical nature
of IoT-related deployments, the business case
will be much more focused on the application
rather than the indirect spend resulting from the
M2M data consumption itself. Also from a carrier
standpoint, in many cases a carrier, strong in
M2M, may not have the voice/data coverage to
satisfy the enterprise, leading to expanded and
complex enterprise portfolios. These factors
change rapidly and must be reviewed early and
often, not only when contracts are up for renewal.
Recommendation:
Engage both direct and indirect spend
representatives within the enterprise. Be curious
about their core business and actively enquire
as to ongoing M2M initiatives as they relate to
the business. The traditional barriers within the
enterprise are falling and a new approach to the
“big picture” of telecoms and IT management will
be necessary.
4
Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
M2M data transfer is so minimal; the connectivity
price is not an issue. This is a popular misconception
which rang true perhaps until about 2012, but it is
changing fast. Connected cars that started out
consuming 20MB with 3G are now pushing 20GB
with 4G/LTE in the span of 2-3 years. According to
Cisco, M2M applications consumed, on average,
70MB per month in 2014 with an installed base of
3.2 Billion M2M modules. They also claim that this
will rise to an average of 366MB per month for over
8 Billion M2M modules by 20191. Even according to
these conservative projections, a 2.5X growth in
volume as well as a 5.5X rise in data consumption
paints a very different picture from the low-bandwidth
M2M world of today. What happens when 5G/LTE+ is
introduced? If an enterprise signs a 36 month M2M
contract in 2015, by 2018 bandwidth consumption
as well as volumes will be drastically different. Will
the business case still be favourable based on
antiquated tariffs and conditions?
1 Cisco, “Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update 2014–2019 White Paper,” (Cisco Inc.), Feb. 2015.
Recommendation:
Any IoT-based initiative should be managed vigor-
ously from a cost perspective. Factors such as data
usage increases and supply chain analysis should be
managed and reported on regularly throughout the
enterprise. The effective management of the cost
aspects of IoT deployments from Day 1 will ensure
profitability for both direct and indirect spend areas.
A combination of strategic sourcing support, as well
as TEM software and managed services, can ensure
the entire telecoms and IT estate remains profitable
throughout the Plan, Build and Operate phases of
any IoT initiative.
Challenge #2
5
Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
Recommendation:
Identify three core results the enterprise must
achieve with the IoT initiative and stick with them.
Very often within the enterprise, ideas will gain and
lose ground rapidly due to personnel fluctuation,
external market activities, or internal restructuring.
Additionally, taking on more than three projects, es-
pecially in a Greenfield IoT environment, greatly in-
creases risk via resource planning and knowledge
gaps. This makes it imperative to identify three areas
in which the core business benefit is undeniably es-
sential to the success of the enterprise.
These goals must be easily quantifiable across the
enterprise and they must have a mandate from the
highest level and belong to the company’s stated
strategic goals. This will ensure that regardless of
personnel change, the focus remains on the com-
mon target and progress will continue. Identifying
appropriate success criteria as well as a compre-
hensive management system to provide command
and control up to the CxO level will greatly ensure
not only the expeditious realisation of the initiatives,
but also their sustainable profitability. This should
be a primary responsibility of strategic techno-
economic consultants to guide enterprise strategy
and ensure it is aligned with the cost as well as tech-
nology trends.
Timeline-driven, IoT technology implementa-
tion can produce huge organisational burdens.
Within modern enterprises there is a propensity
for “top-down” deadlines which place the organ-
isation under extreme stress when not realistically
set and monitored. Especially in very hierarchical,
older enterprises the likelihood of operational em-
ployees raising mission-critical issues to manage-
ment is not high.
In such strict organisational structures, this can
lead to an IoT initiative being doomed to delay
even before the kick-off meeting. By the time man-
agement is able to see key metrics and reporting
for the deployment, the battle has been lost. This
invariably leads to resource drain and increased
budgets, resulting in substantial loss of ROI. In
some cases it could even lead to the loss of core
business and market underperformance.
Challenge #3
6
Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
Challenge #4Bridging the knowledge gap within the enterprise
can be a daunting task in the IoT era. Previously,
Telecoms and IT specialists within the enterprise
were focused solely on traditional fixed and
mobile services, Windows upgrades, and iPhone
rollouts. IoT technology evolution is causing a
huge knowledge drain in the enterprise which is
overwhelming personnel and reducing productivity
on a global scale. While a great idea can be a
game changer, it can also turn into a money pit if
all essential factors have not been properly vetted
and prepared for.
Recommendation:
Take stock of what you already have in the team.
Some enterprises, especially technology leaders,
will have a huge pool of resources to choose
from when making next-generation technology
decisions. These companies should create
technology “task forces” to address key initiatives.
Other enterprises, however, will not enjoy these
advantages. Companies seeking to finally catch up
to the technology wave which others are already
riding will find the going much tougher. Engaging
a carrier-neutral strategic consultant to provide
insight and planning for IoT-related RFx exercises
will protect the enterprise from IoT “brain-drain”
allowing the enterprise to focus on the result, not
the process.
7
Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
Challenge #5
IoT Security risk can sabotage even the best
laid plans. There is no doubt that with the
enormous amount of new connections into the
enterprise network, the security concerns must be
proportionally high as a result. This is a simple fact
of life in the IoT era. The simple question is this: Is
the gain/advantage to my core business worth the
increased risk? If so, how do we mitigate that risk
in a way which will not deplete the business case?
In many cases there is no simple answer for this.
IT law and regulation is very complex and it varies
wildly from country to country all the way down
to the local level with worker’s unions also having
veto rights over any employee-connected data.
Recommendation:
It is imperative that the enterprise inform itself
thoroughly regarding all local level employee
union data security rules and regulations prior to
engaging in an active IoT deployment. Not doing
so could result in vast resource and productivity
loss. Additionally, the enterprise IT departments
must be on the cutting-edge when it comes to
local, regional and federal data security laws. In
many instances the extra resource, as well as
brain-drain on IT, will become a limitation during
IoT deployments. In order to clear this hurdle, the
enterprise must answer these tough questions
early and start the learning process even earlier.
8
Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
Challenge #6
The lack of standardisation within the M2M world
and IoT applications brings a new world of risk. This
is quite a substantial concern for the enterprise
as well as M2M vendors. As in any area of the
network, proprietary solutions always introduce
an element of risk with regards to interoperability
and long term ROI should the sector move in a
different direction. Due to the fact that the IoT is
really still in its infancy, betting on the right horse
to win is more of a long-shot than it ever will be
again. Also, with many IoT applications going
straight to the core of the enterprise business
for years to come, pressure will be high not to be
caught in a technology cul-de-sac.
Recommendation:
While it is seemingly impossible to mitigate risk
due to technology variables out of our control,
we can control the costs. M2M cost management
software and managed services will allow for
total portfolio management complete with one-
touch cost reporting and visibility at all levels of
the organisation. Seeing the cost evolution clearly
can help the enterprise understand the bottom-
line impact IoT technologies are having on the
organisation in real-time.
9
Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
Conclusion
Despite these challenges, we have the
technology, knowledge, and ability to
meticulously perform the due-diligence and
constant multi-level management that IoT-related
mobility deployments require. What’s more,
we can accomplish this with a cost-conscious
focus on driving innovation. This rapid phase of
technology evolution will enable the enterprise
to grow and expand in ways unimaginable just a
few years ago. However, it will also challenge us
in our personal and professional lives in a similar
fashion. Enabling global command and control
over the entire Telecom/IT estate in the IoT age
will be the single most important success factor
for global enterprises who wish to evolve and
prosper in the next-generation, IT-centric world of
tomorrow.
Next Steps
Tangoe’s Strategic Consulting Services
leverage deep industry expertise, leading
market intelligence, and client peer analysis to
deliver improvements to your communications
infrastructure, guide strategic decisions about
minimizing costs, maximizing visibility, ensuring
security, and increasing productivity.
Visit www.tangoe.com to find out more about how
Tangoe can help your organization outperform
your competitors.
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Tackling the Six Principal Challenges of IoT
©Tangoe Inc. | tangoe.com
About Tangoe
Tangoe (NASDAQ: TNGO) is a leading global
provider of Connection Lifecycle Management
software and services to a wide range of global
enterprises and service providers. The company’s
Connection Lifecycle Management technology,
Matrix, is an on-demand suite of software and
services designed to turn on, manage, secure,
and support various con nections in an enterprise’s
communications lifecycle, including mobile, fixed,
machine, cloud, social, and IT.
Additional information about Tangoe can be
found at www.tangoe.com. Tangoe is a registered
trademark of Tangoe, Inc.
Written by Duke Golden
©Tangoe Inc. | Powering the Connected Enterprise
Tangoe Europe Ltd.
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Abingdon, Oxfordshire, OX14 4RR
United Kingdom
Telephone: +44 (0) 1235 829444
Tangoe Deutschland GmbH
Liebigstraße 26
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Telephone: +49 351 418 884 10
www.tangoe.com