While IoT may be seen as a key building block for future digital business, how can a CIO express its value proposition and relevance in business terms to executive management, help identify use cases for competitive advantage, and ensure organizational readiness for effective adoption?
Jonathan Behnke, Chief Information Officer, City of San Diego
Welcome to CIO Talk Radio with your host Sanjog Aul. All comments, views and opinions expressed on this show are strictly those of the host, guests and callers. Here’s Sanjog Aul.
Sanjog Aul: Hello and welcome to CIO Talk Radio, to learn more about the show please visit www.ciotalkradio.com. And as always we invite you to join the discussion on Twitter, #CTRLive and look this show as #IoT. Today’s topic is getting ready for IoT which is Internet of Things. and our guest for today’s show are Jonathan Behnke, who is the CIO of the City of San Diego. Hey Jonathan, how are you, good morning.
Jonathan: Good morning Sanjog, thanks for having me.
Sanjoy: Oh pleasure is all ours so. We were hoping to talk about IoT and as we know everyone like along with security we see IoT is the next hottest topic right now in the world of both business and IT. I think this is one of those topics which both business and IT people are equally passionate about and equally curious about at this hour. So what is it, if course is to some extent understood. But then even bringing it in the value proposition to some extent is there and recognized but then there is something to be said about how to get the organization ready. How to find the places where it will make the most sense as a point of introduction? How do you on a regular basis seek and the executive management in terms of it’s proposition and relevance, so that we get ongoing funding and maintain the program, finding places where it will actually create competitive advantage and then finally besides the executive management, the rest of the business and technology users and people that are working in your organization, to be ready or to get them ready for that overall effective adoption. So this is quite a bit we have to do in order for IoT to start taking roots and organization and in our ecosystem overall.
So that said, if you were to look at revenue potential and cost efficiency, which is being promised on the surface by this IoT mega-trend. Do you think that is just big enough for it to be a compelling business case or would you say this is because like we ride the hype cycle and this is subjective and hyped?
Jonathan: I think we’ve seen a lot of numbers tossed around. This month Gartner predicted, I think something like 21 IoT billion devices would flood the market by 2020. And IoT devices would reach more than 6.4 billion connected objects by 2016. So that’s a 30% rise from the previous year. And according to the. Business Insider’s, Internet of Things report that was just released this month they predict nearly six trillion dollars would be spent on IoT solutions in the next five years. That report predicts businesses would likely be the leading adapter of IoT solutions with general goals, to lower operating costs, increase productivity, expand new market or develop other new product offerings that improve their bottom lines. And then we look at governments like myself here in San Diego, governments would look at it a little differently. And really the focus on governments is we’re looking at this is, all about increasing productivity, decreasing costs. And then improving citizens’ quality of life, it’s really focusing on our customers which are the citizens.
We also look at how consumers play into the IoT movement. A recent survey of consumers only 16% of them have actually recognize the term Internet of Things but many consumers are already using IoT devices. Like the Nest Thermostat, GPS enabled mobile devices, wireless transponders for the toll ways, you’ve got those in Chicago there. FitBits, Smart TV’s. And I actually use IoT technology to run most of my house. Using a technology called Z-Wave Network. The Z-Wave technology builds out a mesh network of sensors and controller devices. If my home server is not available, those devices actually relay commands to each other, using the last configuration and control things like my lights, my thermostat, locks, detection of water leaks, motion logging, and things like that.
So as a consumer I can easily see those benefits in decrease power usage, automation of daily on off switch commands, remote controlling my house. That even gives me a reduction in my home insurance policy so. If you look at a consumer being able to jump into the IoT technology and see those benefits pretty quickly, I think businesses and governments should be able to capitalize on those opportunities as well obviously at a larger scale. And the hype around this, I think there’s some hype that really never becomes reality. We see Gartner’s classic hype cycle model with new technologies in the trough of disillusionment that’s bound to be experienced by some as they get a little further into it but as the technology matures, I think we see some solutions emerge with clear business value and a solid ROI for business.
Sanjoy: So based on what you just mentioned, the focus has you had expressed here, is more consumer driven. So yes IoT has some regular used cases and those are not essentials, those are good to have and yes, it will create some incremental value for the consumer in the way they want to live their life. Now when it comes to the business, and since as you are a city, I’m sure citizens are top of mind for you. But internally, whether you talk about preventive maintenance or you talk about other ways to do commerce how the information gets exchanged between devices and within like in transportation logistics, etc. So use cases are there almost unlimited use cases.
When you’re looking at an organization to say let’s embrace it, let’s bring IoT in the house. How are we even approaching it because it looks like you could really do everything, what’s your rationalization and privatization approach which would actually make sense?
Jonathan: Yeah. As we look at, how do we prioritize the proposed business cases and where does it make the most sense. I think we we look at getting as much important information as possible. Getting the business engaged to learn really more about the business case that there is throwing out there. When we looked at some of the recent technologies related to things like smart parking and smart street lamps, that was something that we needed is in the very early stages of development. And so as we try to get feedback and buy in from the business I think we learned a lot comparing the IoT wave just, if we look at the emergence of RFID years ago. I think there are a lot of comparisons. There were a lot of business cases that were tossed around for RFID. Logistics was expected to be completely disrupted by RFID. And if you remember back in 2003 Wal-Mart was the first major enterprise to announce an RFID project. And that story grabbed headlines across the business world. But the project ultimately fell on its face.
The first barrier that Wal-Mart and its vendors encountered was cost. A lot of the consumer products that they sell have really thin margins and at the time RFID takes were estimated costs anywhere between 50 cents and more than a dollar on every pallet and that requirement could have meant the difference between profit and loss for a Wal-Mart supplier so. There’s this added cost of maintaining to inventory streams that include one for Wal-Mart and then one for everyone else. And there is additional cost to the back end systems to collect, in process the data streaming from tech readers.
And the problem with the Wal-Mart project was that they were trying to completely change the industry and force adoption of this new way of managing logistics. But the full job adoption effect never really materialized and Wal-Mart thought that other retailers would follow suit and that they would create this critical mass of all suppliers. So they’d be all forced to do it but the industry really didn’t go along with it. And it really didn’t get off the ground. So there were also technology issues looking at reading of the tags, there was RF interference with liquid and steel, disruption of the RF reads and so they were prone to errors in technology issues.
And so the technology even threaten the suppliers IT departments and managers. So it became hardest to sell it to get movement, looking at the existing legacy systems, they were already something that the suppliers had worked very hard to get into place and to optimize. And now this disrupt– disruptive technology came along and threaten some of the efficiencies and cost benefits. That they had worked so hard to accomplish so I feel lot of these RFID adoption issues having a lot of common ground with IoT projects for the same reasons.
Sanjoy: So you mentioned that Wal-Mart example where we tried to work with external world, try to change or influence them to a point where it would fundamentally disrupt and or threaten that internal people, do you think we have a risk of IoT when pushed out and when you’re trying to do it internally as you’ve got some control, some influence which you can exert much better than when you’re dealing with partners or even third party industry competitors or fellow players. So if IoT wants to fully manifest itself and create the most value and if he attempted to do the same thing, what you’re referring to what the Wal-Mart case. Would you think that is a risk, now that we have hindsight 2020, how would you handle it better because if we don’t do it, then we really don’t maximize what IoT can bring to us.
Jonathan: Yeah. I think there is risk and it really boils down to– we talked a little earlier about it following completely on its face, if you go about it in the wrong way, so I think really mitigating that risk is key for organizations in adopting new Initiatives. And the overall portfolio of IoT applications and technologies is fairly immature. And so we see reports of some successes here and there. And we see reports of other failures so I think it’s really all about getting as much information as possible and bringing the business in and making sure the business isn’t wowed by vaporware and good sales people and making sure they have a solid foundation of understanding of what the benefits can be. And if there’s really a ROI.
Sanjoy: Let’s take a quick break, listeners will be right back. And let’s look at how the businesses seek it. Of course is this an IT out initiative which is IT driving it or businesses saying, let’s bring IoT, these are the business cases or they need hand-holding or mentoring. Are they looking at this as a bio technology which got into new store a fundamental business disruptor. Please stay tuned listeners, we will be right back.
Sanjoy: Welcome back. So, Jonathan when we look at any initiative or any area where we want to make progress, we want to work closely with business and business may either be on the sideline or fully immersed and fully on board with something. One is to give you dollars and say, go do something, another is to be a co-player in it. How much of that’s happening when it comes to IoT. So, business is looking at IoT is just a technology or would you say, a fundamental business disruptor that they should really immerse themselves as well?
Jonathan: I think as we look at it from the business perspective, we get a cross-section of business leaders who really see that it as the great unknown and are cautious in moving into something like this. Here in San Diego, in the city, we’re looking at various used cases for IoT and earlier this year, the mayor announced that the city of San Diego had partnered with GE Lighting on a project of its intelligent cities platform and we are doing a pilot that features a software defined light technology that can help San Diego optimize some of its infrastructure challenges. So the intelligence cities partnership will explore some enhanced sensors in GE software platform for the industrial internet. And for us it offers potential for advanced lighting control traffic and parking optimization, environmental monitoring and analysis. So we looked at these network LED lights, street lights and that can offer us the ability to direct drivers to available parking spaces with the help of built in sensors and some wireless transceivers. And the same street lights, can serve as sensors and give warnings in the event of an emergency through PA speakers on the light posts.
And we see other scenarios where microprocessors and sensors could work together to give emergency responders real time views of an area before they arrive on site after a 911 call. And San Diego has had a few significant wildfire events in the past that’s really impacted the whole city and region here. And this time a real time information could be quite valuable for emergency responders and these are features and examples of what could really be driven through the solution, the future as we’re exploring it here.
Another application here is with the city’s infrastructure so the business looked at how can we improve and cut costs looking at pumps in our water utility, so sensors on pumps can indicate where threshold with heat or volume of water going through them, reach a potential threshold of failure. So instead of our citizens contacting the city and reporting an incident for repair following a failure, these sensors can preemptively indicate a problem before that failure takes place. And then a technician can be dispatched before anyone ever notices the problem exists.
And we see other opportunities for even self correction of infrastructure when issues detected that can be addressed by software, so instead of having human intervention initiate the fix, can have self correcting programs run when applicable. So we look at the expense and time to build new roads and freeways here and IoT can offer a management of traffic through sensors or routing so that it might not be necessary to spend millions more on some of the roads.
We look at the open data movement in government by groups like Code for America. And that can allow expanding the value of the IoT data in ways that government really never envisions. The possibilities are really enlists for some of the civic data projects using IoT data. We’ve seen some great innovation from the Open Data groups just using the city’s business data. So I know they do some great things with IoT data. I think on the business side we look at all of those use cases and really explore what makes the most sense and what gives the greatest return in some of the potential with IoT.
Sanjoy: So based on the different initiatives you saw, it looks like a kid in a candy store. You’ve got quite a few things which you could do and which could bring you ROI. But how do you prioritize them, what’s your basis, what would good help you get your organization started crawling before you start running?
Jonathan: Yeah. I think for us, we start by looking at the basics of the business case in the technology. We know that the key candidates would need to ultimately deliver value to the business and provide efficiencies, agility hopefully and some of the baseline things we look at on the tech side which drives a lot of the value, is just the user interface. So what is the presentation layer look like, does the device have a screen, does it have LED’s or buttons on board as an interface. Is it completely controlled remotely? And then we look at things like application logic and rules and what application logic does this device have and how does it communicate with the network. A big area of consideration is the data that’s produced. And what type of data is produced, where is it transmitted and stored, how much data does the device retain and for how long, and is there inscription in place for the data, is any of that data sensitive and does it require special handling, and what are the requirements for a format and the frequency of the refresh of the data. And then once we got that data figured out, it’s really looking at the analytics piece and what value does this data from the devices bring.
And is that data required in real time or is it more valuable being aggregated. And the analytic solution would need to support all of the various business models. And really how would we deliver those analytics to business. And then a huge consideration with which IT security, so how does the device communicate and authenticate. And think about the risks of the device and is it mission critical. And so once we establish some of the basics, we can really take it to the next level. And really dig into the technology and how it should be used. And I think the organization really needs to choose technologies and partners that can support all of the architectures and software. So that ideal solution would be an IoT platform that’s really flexible enough to accommodate the right mix of all the architectures and support the solutions that offer the most value to the business.
Sanjoy: So based on most of the criteria you mention, interestingly you used the technical criteria to help prioritize as a business. Is that what we will have to do are there are certain things which are pure business ways to prioritize which IoT related application areas that we will tackle first?
Jonathan: I think from the business side we know we have to have our ducks in a row to make sure you know from a technology side that those things offer value to the business. But from the business side, I think we approach those use cases like most other technology initiative. So we will– here at the city we have an executive steering committee and the committee really reviews the business cases. Reviews the ROI, we review the initiatives, the high priority initiatives that there are – city has in our business strategic plan for the city. And we really look at all of those things and see how this the proposed projects play into that. And whether it’s the right time to do that and if not, we will put it lower on the priority list but I think if it meets those ROI criteria. And it’s really meeting business requirements and even speed to implement is a big consideration. Can we get it done in a reasonable amount of time which also goes back to the cost. And does it integrate well with the business processes in place. Or is there are a need to change business processes. We like to take all of those things into consideration.
Sanjoy: Now if you look at the different people who may have attempted to work with IoT. And it could include you and other counterparts or peers, within your city organization or many others. Would you think there is enough knowledge base internally for you to be able to drive education, adoption and implementation of such initiatives or would you think this is– since it’s so new for you, you don’t want to have a blind leading another blind?
Jonathan: I think here w do see, it’s very important to go in with as much information as possible. I think it’s important to work with the vendors to get to know the solutions and technologies and network with other early adopters and learn their use cases and what were their lessons learned. And then find the large success stories out there and determine if you have common ground that you can leverage, attending conferences and seminars on the latest developments. And that provides even more networking opportunities with others. Looking to jump into some of those same solutions. I think the other thing to remember is not to go all in it first, take on a small proof of concept project, find out where gaps lie. And find out if the ROI is really what you expected. Find out if you have security challenges. Have your security team– try to find vulnerabilities and try hacking it.
I like to use the independent consultants like Gartner to get as much information as possible before diving into any initiative. Those independent consultants can provide some critical information about any issues with current implementations, can provide lessons learned from the early adapters. And also give perspective on issues concerning vendors or hardware. And then help benchmark some of the projected costs. And it’s important for leadership of an organization to really do their due diligence on these things.
And especially on disruptive technologies ensure you get off to the right start. I think there’s an expectation from the business that IT is an expert on the technology and it’s important to establish early credibility with the business that we take on a project. We want to go in knowing as much as we can and make sure that we don’t go in blindly and lose credibility with the busy early because that would really give us a tough time convincing the business that IT is ready to support IoT and what it takes for a successful project.
Sanjoy: In your world, the way you have been running it, what have you seen so far because of course there is trial and error, brand new area everybody is learning, no one is an expert. Including in some cases the providers because they are only bringing their knowledge that the respect to a solution but they may not always have a complete idea on how that’s going to fit in the bigger picture. So we will just take a quick break but when we come back what’s the hindsight 2020 and what are those lessons learned that you are recognizing which would be useful for anyone who is listening to this show, would be useful for them to consider before they jump onto IoT bandwagon? Please stay tuned listeners, we will be right back.
Sanjoy: Welcome back. So Jonathan, we all have a test attempted. We have dipped our toll. And then we’ve also learned, you mentioned the people who were the earlier adapters. What are those specific things that they are cautioning you. And are saying these are the pitfalls, these are the places where you should be cautious. What are the lessons learned as well in terms of what they tried, what didn’t work for them?
Jonathan: I think the pitfalls that exist are things like the hype around the new technology that can generate false expectations on the business. When those expectations are too high even a successful project can be viewed negatively since there were unrealistic expectations from the beginning. So I think it’s important for leaders to make sure that all the stakeholders have realistic expectations at the beginning. And then understand the abilities and costs of the solutions out there in the marketplace. I think there may be ideal sounding solutions in the marketplace that that really looks fantastic. But in reality they might be full of bugs and implementations are failing or at least they might have delays or cost overruns with some of the early adapters so those lessons learned. It’s important to select solutions that you really have a high level of confidence and do your due diligence.
I think the other major pitfall for IoT, can be in the area of security and data privacy. Those things really– I’ve been spread across the national headlines, head in the last year or so and looking at the authentication models for IoT, they range in maturity and they still have a lot of question marks. And there aren’t necessarily any clear authentication standards. And so much of what is out there is propriety. And a good example is the recent story about police were in video cameras that were shipped from a manufacturer to a large city and it had the configure worm imbedded in the camera’s factory image so this police department got a large shipment of cameras that were all infected straight from the factory. When the cameras were connected to a computer the malware attempted to spread to other machines on their network and communicate with a command and control server. So when you think about the implications of adding hundreds or even thousands of devices to a network, the potential threats can be pretty serious.
And if thousands of sensors were to ship with malware, they could take down an entire network in moments or even be used to generate a massive internal denial of service attack so. We’ve seen examples of especially equipped vehicles that you were driving, the hacking community to map wireless networks and even clone RFID information from sensitive sources out there so. An entire network of IoT devices really represents a large volume of new targets for hackers and can be used in new ways to disruptiveness or even leak sensitive data.
So many of IoT’s benefits in governments around critical infrastructure, potentially. So the security and authentication concerns I think out there very valid.
Sanjoy: Which particular areas do you think you would like to have business stake ownership versus IT driving it because while it’s a technology but real changes that we will have to bring about would be in the processes?
Jonathan: The business and IT really have to both be accountable for the success or failure of IoT. Just like any other technology and business case so. I think in the case of IoT, I think there’s a lot more dependents on the vendor for creating that solution to ensure that business value is met and the technology is rock solid. That the vendor would also be really important in making sure there’s interoperability with the solution selected that meets requirements for things like data privacy or security, analytics, uptime network connectivity and the other business solutions in the environment.
So ultimately, IT departments are held accountable for the success on the technology side and even if the business is driving the case for the solution and the perceived value, I think it’s important for IT to engage the business stakeholders for the projects and ensure expectations are realistic going into the project and that deliverables are very clearly defined, so that everyone is really on the same page about the success criteria.
And I think the other unique factor for many IoT solutions, is in the area of user acceptance testing. So when projects and implementations are done, the users that are conducting acceptance testing for a solution would have a difficult time in some circumstances validating the data presented by hundreds or even thousands of devices in real time. So it’s not a standard business model for validating a solution. So most other technology projects have that data validation milestone that’s pretty clear to the end user and it’s fairly easily to validate manually. If we look at the potential volume from my IoT projects that makes that user acceptance testing lot more complex. And a good example is the recent news story about a car manufacturer, I think that we have seen that had a firmware that bypassed emission controls. So you think about that and amazingly eleven million cars were sold with that firmware that bypassed emission controls. And it evaded all quality checks. So we think about something like that in mass and how the business— that automotive company is certainly seeing a significant cost to that problem. So we think about IoT and how it’s responsible for– perhaps say consumer billing through a meter or you can see potential for fraud or misuse. I think those are all things that the business and IT really have to take into account for success.
Sanjoy: Now the mindset that you see of the business and even the workers below, how are they coming together or what has a needed to bring them together because again what you’re doing with this is, you are shifting the business model. Maybe the business processes, what an individual worker does in a given day. It may get rid you started to get changed, what are you doing to have that shift happen? Is it just explaining enough or there are some other strategies to be deployed?
Jonathan: We look at the broad impacts and the workforce and business and some economists and futurists are forecasting that something like 80 million Americans will have their employment impacted by automation and autonomous technologies. And I think we’ve already seen a clear example in the medical world. Things like patient monitoring devices, those have cut back and nurses making rounds on hospital floors. Now that portion of their jobs is being replaced with other things, where they used to do will have manual vital signs and things like that. And we see utility companies, putting in smart meters. And getting real time meter reads in studying, having that full staff of meter readers going out on the road putting on expensive miles to get the same information in one or two months at a time.
So I think it’s important for organizations to really plan well ahead as they make these changes and engage the employees early in the process to prepare for the changes in their roles. And provide proper training and make it a smooth transition. I think a lot of times we see organizations really unprepared to manage these large changes. And so they end up playing catch up to correct issues and deal with employee morale problems. I think there will be new requirements for the business and staff, technical staff will be managing devices, things like Network Connections, security, data analysis. And then the business side, they will be working with really new sets of data and how they use that data to drive a competitive advantage. And so I think we need to make sure that the organization structure itself is addressed early to avoid finger pointing and make sure they clearly establish the right roles and responsibilities and make sure there are no gaps as they jump into these initiatives.
Sanjoy: In your world, when you are trying to look at the technology team, the business team, the external players who are outside of your organizations. What is the communication collaboration and connection model that you are hoping to establish? So that when you initially getting started and when you scale, you have a strong foundation?
Jonathan: I think if we communicate with the business, we’ve got to really, really ensure that we– number one as they bring us initiatives we look at the street light initiative here. And really trying to fit it into the bigger business strategy and make sure we’re really driving things the right direction. We might see the business listening to some of the hype out there and I think we just have to validate what the business objectives are, and make sure they’re driving to the right objectives as opposed to following some of the hype out there.
Sanjoy: And when you talk about, these all people coming together, is there a culture that you would like to see established within the organization so that it is no longer a push from you or from executive management, it’s more of a pull where they’re all excited, they want to change and they want to take it to the next level?
Jonathan: No, I think that’s very important. We see organizations that some are standing on the sidelines and afraid to move forward with these and then others are really generating energy and the business is fully engaged and there’s excitement and you’re really getting everyone on board to jump into these initiatives. And I think that energy is very important in the success of any new business initiative to make sure that they’re not operating under fear but they’re really part of the overall goal and we get some innovation and ideas. And really get all the value out of the solutions that are being proposed out there.
Sanjoy: And let me talk about the governance model. But we will take a quick break but we’ll come back but then that’s something to put it out there. Is to talk about the governance model, that would really work. So yes, you got started and yes, we are ramping up. But at some point we would like to stabilize things, it cannot be always in a disruptive mode, there is some operationalization required. And what is a good way as we’re ramping up to benchmark the very progress. Because there has to be some basis for us to know whether we are going in the right direction, are we getting enough out of it versus just feeling that this is a sandbox mode, we can stay in that, that’s not realistic. So how do we go about benchmarking our progress and what type of governance model would work well in terms of adopting IoT. Please stay tuned listeners, we will be right back.
Sanjoy: Welcome back. So since you’re sowing this seeds, I’m sure you’re supposed to reap the benefits but how well is that all progressing, what form dashboard progress metrics are you putting in place and once that is supposed to go live and operationalized, what type of governance model that you’re envisioning or you have put in place to make sure that we’re not just doing new things which that don’t work well in the long run?
Jonathan: Yes. Looking at benchmarking progress I think the Agile Methodology is really a good fit for these initiatives. And other similar less mature solutions, some of the best ways to benchmark progress can be found in shorted aeration and proof of concept, they really proved out key assumptions and measure against the business requirements. Early indicators of progress could include the quality and timing of the data that these devices provide to the business. They’re most of up time to make sure that the business can continue to get benefits from them and then the efficiencies that they might produce. And the ROI, are we getting what was expected by the stakeholders. I think many disruptive technologies can have some ambitious assumptions in the early stages. And usually a short proof of concept project can allow those assumptions to be really be tested and evaluated before making a major commitment. The governance side, I think this is really a hot button issue for governance. So that governance model can be a pretty complex picture the ISACA, the Information Systems Audit and Control Association, it’s a worldwide association of security professionals.
They conducted a survey last year of about 2000 members and in the survey they found unanimous agreement that the IoT really poses a governance problem for their networks and increased security threats were most often cited and governance issues that were raised by IoT adoption. There was a serious concern about risks posed by all of these IP enabled devices that are starting to connect into their corporate networks. And they also polled 4000 consumers worldwide. And they found that IT professionals were actually less competent then the consumers in about the benefits of IoT for enterprises. And only four in ten agreed that the benefits of IT adoption actually outweighed the risks. While half of the ISACA members polled for the IT professional saw that the benefits of IoT to consumers outweighed the risks so. Only a quarter of the IT pros surveyed felt that the risk of IoT outweighed benefits for enterprises. And then about a third felt that the risk outweighed benefits for consumers.
So we see the ISACA survey really identify the areas of greatest concern around security threats and attacks aimed at these new internet connected endpoints. And then the data privacy risks. 75% of those members surveyed also listed their top– their issues at the top of their governance concern and they also had concerns with things like access management challenges and compliance. So as we looked at things, here we want to make sure that the governance model really needs to address data privacy, security threats, Identity Management, compliance requirements, and really ownership of the technology and data. So who owns the data and making sure that the business is accountable for their side and in making sure that technology teams are accountable for their side of the equation. So I think the picture is just a little more complex with IoT than a standard Business Technology solution out there.
Sanjoy: And if you were to look at what all of the organizations have been trying to do so far, what does work versus not, would you say that is a playbook that someone can develop or since you’ve been going through it, at least you’ve not gone all the way yet. But whatever you’ve done, do you think you can envision a playbook that you’re going to offer it to the listeners?
Jonathan: Yeah. Looking at what some of the early adopters have done and looking at what we’ve done here, I think IT, the the biz is really, we need to partner closely for the projects at the beginning it’s important to do due diligence and make sure that there’s really a solid business case for the solution and like any new technology, there’s a lot of hype out there and sales people might be pushing vaporware to the business executives. Well IT departments can get the job of really doing the reality check on the capabilities being marketed. I think the other big thing is revisiting policies and procedures so. These disruptive technologies can usually do a real number on the policies and procedures. We see organizations not in not getting to that soon enough and as they implement these technologies, issues might arise or auditor’s will come in and find gaps because they just didn’t move quickly enough in adapting their business processes and procedures to the new solutions.
And making sure the business is prepared for the impact of disruptive technology. Depending on your business model, you might find that IoT is actually changing your revenue or customer model. If you don’t change quickly enough, you can find yourself slipping into– from a market leader down to irrelevance in a really short amount of time. You look at the impact of things like Uber on the taxi industry or AirBNB on the hospitality industry. Those examples are a real quick impacts on the industry and then in you look at examples of even slow revolutions out there like the change from CD to MP3 way back where the recording industry could see it coming. But they dragged their feet because they couldn’t let go of a high profit model. Even though really it was evident that consumers had moved onto MP3 format and until Napster came along and had huge impact on revenues. Before the industry decided slowly begin adopting their business models to the MP3 format. And then they got hit with a second blow when Apple came along with iTunes and the music industry was not only forced to adapt to a new format of delivering their product but now they had a completely new sales channel than they did before. So I think these disruptive technologies businesses really need to be thinking hard about the the short and long term impacts.
Really a key is change management. We see innovators use change to their advantage and its competitive edge in organizations that stand on the sidelines paralyzed with fear might find themselves too far behind their competition to stay competitive. And organizations we need to separate that hype from reality and find a value of IoT. And once a decision is made for some sort of adoption, I think it’s important to generate excitement, energize the organization, meet the challenge, and then celebrate those successes.
So change management I think will play a huge role in the success of IoT projects.
Sanjoy: On behalf of the show and our listeners, I’d really like to thank you Jonathan, you provided tremendous insights and of course your firsthand experience dealing with IoT, how you bringing into your own city and how the others can do effectively. Thank you so much again for your contribution.
Jonathan: Thank you Sanjog, great talking with you.
Sanjoy: Thank you so much again. And listeners, hope your enjoyed, got some nuggets out of it. Please like us on Facebook, search for CIO Talk Radio and be sure to follow us on Twitter. Thank you again for listening to CIO Talk Radio, this is Sanjog Aul, your talk show host, till next week, take care, and God bless.