Key to Successful IoT Adoption Lies in Taking a Top-down Approach: KPMG

The Internet of Things has begun to impact a lot of organizations and refine the businesses. Indian organizations can leverage IoT to leapfrog into the future and stay relevant to their customers. The biggest challenge is to adopt IoT lies in identifying the areas which can bring in business value for them. Dataquest interacted with S Vijay, Partner, IT Advisory, KPMG in India to understand how India can benefit from the IoT wave.

What, according to you, are the key Internet of Things (IoT) trends that can take the Indian market by storm?

s_vijayS Vijay

IoT is a leap into the future as it creates a potential for engineering a whole new set of business models that are sensory and predictive in nature. This is of relevance in India particularly in the following areas:

Smart Cities: This programme introduced by the Government of India is a good launching pad for the large scale deployment of IoT devices. Smart solutions are required for surveillance, waste management, and smart metres for utilities management, parking solutions and multimodal transport. IoT forms the core of many of these solutions, and as many more cities aim to become smarter, the penetration of such devices could become ubiquitous.

Make in India: The ‘Make in India’ initiative can enable home-grown IoT solutions to bring down costs and improve adoption. The requirement to be cost-competitive along with the rising wages in Indian manufacturing, is expected to lead to growth in Industrial IoT. In addition, jobs created by these companies locally would have a trickledown effect towards increasing adoption.

Start-up ecosystem: India has the third largest base of technology start-ups in the world. NASSCOM recently launched its first IoT centre in Bengaluru to enable start-ups focussing in this area. These initiatives can help India emerge as a future hub for IoT technology development.

Mobile penetration: Smartphone sales have shown an upward trend. The drop in prices for these devices increases their penetration, leading to greater scope for more mobile to mobile communication and devices to mobile communication.

Cloud adoption: While cloud and IoT may seem like disparate technologies; however, their blend can drive penetration of each other. With global cloud vendors setting shop in India, more companies are willing to deploy cloud and in turn take advantage of it to manage the large quantities of data generated by IoT devices.

Who are the potential candidates seriously considering IoT initiatives?
Globally, IoT has seen a lot of traction in the areas of wearables, automobiles, utilities, mining, healthcare and manufacturing sectors. As more solutions are deployed and proof of concepts delivered, we witness greater adoption of similar solutions in the Indian market. Manufacturing is one of the first sectors to take up large scale deployment of IoT solutions. Asset intensive industries such as oil exploration, telecom infrastructure providers, fleet operators, etc. are presently major users of Industrial IoT (IIoT).

The government serves as a major driver for IoT adoption in India. At the back of the ‘Smart Cities’ initiative, a lot of sensors and centralised management is needed to make this programme a success. Service tracking and enablement can be a use case that may start seeing traction. Additionally, an increasing standard of living has enabled many consumers to adopt wearables, which is another segment poised for growth.

Another area where IoT can have tremendous opportunities in India is the agricultural sector. In fact, the same principles of health monitoring wearable technology in use for humans can be used to monitor the health of animals in the sector, especially within the dairy and animal husbandry domains. Additionally, applications in micro weather forecasting that use IoT technology are likely to start becoming more popular in regions prone to cloudbursts and adverse weather.

The adoption of IoT in private enterprises can be driven by distinct solutions to challenging business problems like improving customer service or IIoT for improving process efficiency and tracking of genuine parts.

In what ways does the customer service stand to change, if organisations embark upon the IoT bandwagon?
The demand for better customer service is an ever increasing one. Organisations are looking at how to reach to customers proactively and this is where IoT can help.

Sensors can track the wear and tear of an equipment on customer premises and can report back to the organisation. This can enable proactive scheduling of maintenance work and parts replacement. Such use cases exist in industries as diverse as automobiles, water purifiers and medical equipment.

Utility services are another area where IoT has already started making inroads. The new gas utilisation metres set up by large piped gas providers are already IoT-enabled. With power being drawn from the flow of gas and metres connected to the cloud, both the gas provider and the consumer can keep track of the usage and consequently, their utility bills.

What are the best practices for businesses to embrace IoT initiatives?
Key to successful IoT adoption is to take a top-down approach – what business problem can deployment of a smart solution solve? Once the business problem has been identified, the following steps can be followed for successful deployment:

  • Develop a business case including the problem statement, proposed solution, cost-benefit analysis
  • Develop a detailed solution architecture comprising of the deployment architecture, communication standards, interoperability, end-user and supporting application requirements
  • Identify key considerations including the infrastructure required for managing the data, bandwidth requirements, security and privacy aspects
  • Conduct a proof of concept to validate the solution and a vulnerability and penetration testing exercise to ascertain the security posture
  • Develop a target operating model comprising of the support organisation, policies and process required to manage the environment once deployed
  • Deploy the solution and the target operating model

Organisations need to take a long-term view considering all aspects of business, technology, security, the organisation and processes required to operate in the environment. However, this is where many organisations have hit a roadblock. Even while the use cases of IoT are plentiful, the ability to monetise and generate profit in the IoT world remains a difficult proposition for now. This is however poised to change.

What sort of challenges are associated with any IoT initiative? How important is it to take note of aspects such as security, compliance and bandwidth?
The recent examples of hackers compromising connected cars, home automation solutions, etc. raise a serious concern related to data security and privacy with IoT solutions. The IT (Amendment) Act, 2008 (ITAA 2008), under Section 43A and the rules under it, holds a ‘body corporate’ accountable to protect data privacy of the data subject (provider of information).Compliance with the act is mandatory and organisations collecting sensitive personal information through IoT devices need to ensure that adequate security and privacy safeguards are in place.

Another key challenge is the amount of data being generated and collected. Organisations need to ensure that data is captured and processed in real time to be able to respond faster. This requires investments in bandwidth and infrastructure, which may not be justifiable. This is where cloud can make a difference as it provides organisations the flexibility and speed to scale up as required.

As IIoT picks up, implementations will need to start focussing on safety as well, apart from the usual confidentiality, integrity and availability. Indeed, the interconnected nature of manufacturing IoT makes it imperative that the safety paradigm works across implementations as well. This requires vendors to work together while the industry standard for safety in IoT implementations evolves.

What are your suggestions to organisations which are already using pigmy forms of IoT such as RFID tags, GPS, etc.? How can they take their IoT initiatives to the next level?
Organisations such as these should undertake an IoT assessment exercise and evaluate the IoT implementations for its benefits vs the risks/issues. To take IoT initiatives to the next level, organisations need to define a robust IoT strategy, considering business challenges and how IoT can help solve the same. They should adopt a top-down organisation wide IoT approach rather than a bottom-up process, specific to the IoT initiative. One must consider IoT for the entire business value chain and plan the initiatives accordingly.

* The views and opinions expressed herein are those of the interviewee and do not necessarily represent the views and opinions of KPMG in India.

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