A Practical Framework to Turn IoT Technology Into Operational Capability
processing capability typically turns big data
into smart data as shown by the chevron
arrows on the framework diagram (Figure 2).
Blockchain is a new generation transactional
ledger that is making its way into business
and IoT solutions. Blockchain-based “Smart
Contracts” as a system of transaction
represent new architectures for distributed
processes or new applications and business
models. “Smart contracts can be used to
provide an implementation of a workflow or
payment instrument, moving virtual
currency around as the situation dictates.” 16
The functionality of operations intelligence
platforms can be achieved by combining
different standalone integration, ESP and
analytics applications, but it introduces
additional complexity in the solution
architecture that is required for an IoT-
enabled process application.
The objective of an industrial IoT solution is
not to have connected assets or devices, but
to deliver on specific business outcomes that
will
improve
operations
and
competitiveness. Creating a shared view and
understanding of the desired business
outcomes for a specific IoT project is a
critical success factor in ensuring that
projects are not regarded as failures and
move beyond the PoC stage as described in
the Cisco survey.
The final stage of the value chain integrates
the smart data into operational business
processes that deliver the desired business
outcomes. Gartner’s Pace-Layered 15
application strategy provides some high-
level guidance on how to achieve this. It
differentiates between typical “Systems of
Record or Transaction,” “Systems of
Differentiation”
and
“Systems
of
Innovation.” The latter tend to apply to the
POC phase of IoT applications and once the
innovation is established it can be integrated
into the day-to-day business workflows to
provide a system of differentiation. The I2OC
framework categorizes business applications
into the systems of transaction and systems
of differentiation. ERP, EAM, CRM and other
COTS (commercial off-the-shelf) solutions
are typically systems of record or
transaction, whereas custom developed
applications
and
business
process
management
tools
provide
the
differentiation.
The IO2C framework categorizes the
business outcomes as (1) improved asset
performance, (2) increased revenue, (3)
reduced costs, (4) reduced risk and (5)
improved customer service. These are
typical benefits associated with industrial IoT
solutions and can be adapted to the specific
requirements of an organization.
Technical project leaders typically start on
the left of the value chain with the assets and
sensors, while business leaders tend to start
on the right hand side and define the
requirements in terms of the expected
15 https://www.gartner.com/binaries/content/assets/events/keywords/applications/apn30/pace-layered-applications-research-
report.pdf
16 http://www.chainfrog.com/wp-content/uploads/2017/08/smart-contracts.pdf
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March 2018