What Reinventors Know. Part 1: Realizing the potential of IoT with Artificial Intelligence
Welcome to ‘What Reinventors Know’ – a four-part blog series dedicated to reinventing enterprises with the help of IoT technologies. We’ll share insights from the movers and shakers who are using Artificial Intelligence and the Internet of Things to uncover new opportunities, create new revenue streams, and leave the competition far behind. In this installment, we explore how Reinventors are using AI to realize the full potential of the IoT.
Background: the global C-suite study
Between July and September 2017, the IBM Institute for Business Value (IBV) did a lot of talking with C-suite executives. Why? To find out how they think the Internet of Things can enable the Digital Reinvention of their enterprises. Over the course of 3,158 conversations in this period, and more than 12,000 throughout the year, we learned some valuable lessons from these executives. These lessons form the basis of our C-Suite quarterly report: ‘Intelligent Connections: Reinventing enterprises with Intelligent IoT.’
Of the C-suite executives we surveyed, one group in particular stood out. They’re called the ‘Reinventors’, and they’re leading the way in digital reinvention. Over the course of this series, we’ll be sharing some insights from this successful group including the importance of technology, partnership, platform and culture.
Who are the Reinventors?
The ‘Reinventors’ represent about 19% of the C-suite executives surveyed. They are leading the pack in terms of both financial performance and innovation. And they’re doing it with IoT technologies. Here’s what sets them apart. Reinventors:
- Invest in IoT to leverage sensor data
- Invest in a robust IoT platform
- Align their business strategy to their IT strategy
- Have a vision to integrate AI with IoT across the business
Today, we’ll concentrate on the last point: integrating AI with IoT.
The IBV offers “100 days, 100 opportunities” for ideas on digital transformation.
A visionary approach to an intelligent IoT strategy
Interestingly, while Reinventors have the highest levels of IoT adoption, they are not the only group to be embracing these technologies. Others are getting on board, but not achieving the same results. The difference between these groups is in how they use these technologies.
The C-suite study found that businesses using IoT technology to the greatest effect are doing so because they begin with the end in mind. They focus on outcomes and problems they want to solve for – in other words – use cases. Understanding how to queue use cases for value is the basis for a strategy that caters for these outcomes. They aren’t just collecting real-time IoT data, they’re leveraging it to innovate products and services and design new customer experiences. And they’re doing it with the help of AI.
From connected to intelligently interconnected
In short, Reinventors realise there’s a lot more to IoT than putting connected sensors onto objects. They believe that the full potential of IoT can only be realized when combined with AI and other emerging technologies or capabilities. Capabilities like machine learning, augmented reality (AR), virtual reality (VR) and bots. These emergent technologies can take an enterprise on a journey – from being merely connected, to intelligently connected.
Let’s take a closer look at what’s involved in this journey. There are three main steps:
- Intelligently interconnected
When devices are embedded with electronics that can transfer data over a network, we call them ‘connected devices’. This is the first stage of the journey. This concept of connectedness belongs to the IoT as a ‘foundational technology.’ Connectedness is critical to it and forms the basis for further capabilities that are still emerging.
The second stage of the journey is when devices are able to interact with each other. They become ‘interconnected’. At this stage, sensor data can be gathered and analyzed to yield insights that drive decision making.
Going further with Artificial Intelligence
An interconnected enterprise may still experience limitations, however. This is partly down to the speed at which we analyze IoT data in order to extract maximum value. Some IoT data are time sensitive. Weather data, health and safety flags or insights from a factory floor for instance. They have a short shelf life, and it’s difficult for humans to analyse this information at scale and quickly enough to act on it. To process and act on real-time sensor data, we need AI.
When AI-based algorithms parse IoT data for autonomous decision making, we call this an ‘intelligently interconnected’ ecosystem. At this stage, foundational IoT technology combines with emerging technology (AI, bots, automation, AR/VR) to create ‘cognitive’ solutions. This means they can continually learn, interact, and augment human capabilities by bridging the gap between human and machine. An intelligently connected ecosystem extends efficiency, speed across our enterprises. However, and this is important, it also allows an increase in insight available for novel uses: new designs, customer interactions, alternative revenue streams or business models and demand planning/management.
A use case for intelligent interconnectivity
It is this level of intelligent interconnectivity that the Reinventors are driving in their enterprises. Some are already embracing solutions based on emerging technologies to help achieve their goals.
For example, building engineers are using IoT and augmented reality to see through walls. Using these combined capabilities, they can pinpoint the wall’s exact location on a blueprint, and see what is behind it. This means that even relatively non-experienced personnel have the technical guidance at their fingertips to perform simple maintenance operations. It means that the workforce’s combined experience and knowledge can be made available remotely. In addition, complex tasks become simpler and the time needed to complete them is reduced.
While technologies such as AI and AR are relatively nascent, they are growing quickly and already proving their worth. By incorporating these capabilities into their IT and business strategies, Reinventors are putting in place a robust infrastructure that can cope with fast-growing technologies as they emerge. By doing so, they are paving the way for new opportunities, products and customer experiences that we can’t yet envisage. And it’s this forward-thinking that gives them the competitive edge.
Join us as THINK 2018
From 19-22 March, we’ll be hosting our landmark conference: Think 2018. Join us there to meet 40,000 clients, partners and innovators from all over the world. You’ll have the opportunity to ask Reinventors about their Digital Reinvention journey, and begin your own with the help of IBM.
In the next instalment, we explore how Reinventors are achieving innovation through collaboration.
In the meantime, you might find these resources useful:
- Global C-suite study: 19th edition – ‘Intelligent Connections: Reinventing enterprises with Intelligent IoT’
- Spotlight on the Watson IoT Platform