A female business leader outlining the governance and ownership of their internet of things project
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Talk to any C-Suite executive about the Internet of Things (IoT) and they think opportunity, business success or, with executives that are already familiar with the IoT, security.  Everyone is looking to the IoT to expand their business opportunities once all IoT touchpoints have been secured.

IoT Problems

As the IoT continues to expand, more and more organizations will start looking at ways to implement IoT projects. However, not all deployments will succeed, as IoT projects by their nature are high-pressure projects. When organizations fail — and organizations need to prepare for the possibility that they may — they will be a step behind their competitors at best and at worst could create a network that undermines network security, overtaxes the company’s resources, and doesn’t deliver true ROI. 

One of the major deployment problems, according to Rashmi Misra, Microsoft’s general manager of IoT and AI solutions, is that IoT environments are by nature complex, involving many diverse players along with significant challenges. The key to success, is to simplify the entire IoT business from leadership to deployment to practice. “There is a need for simplification and consistency within the IoT chain,” she said when delivering the IoT Ecosystem session at Mobile World Congress at the beginning of March 2018. “With some analysts forecasting 1 million IoT devices being connected every hour by 2020 there is a clear opportunity — and accompanying challenges.”

Traditionally, where technology has been concerned, the CIO takes leadership on technology projects along with the head of IT, and the head of whatever department is likely to be impacted most by the technology. With the IoT, though, its different. The IoT spans every department in the enterprise, every client firm outside of the enterprise and all enterprise customers. It is a business project as much as a technology project. So, who should take responsibility for its implementation?

Related Article: 12 Emerging Internet of Things (IoT) Trends That Will Become Mainstream In 2018

IoT Ownership and Governance

Theresa Bui is director of IoT strategy at San Joes, Calif.-based Cisco. She points out that for years, the topic of IoT has been a boardroom discussion, involving the top executives in the enterprise. For IoT initiatives to be successful, strategic buy-in is needed from the c-suite, whether that support comes from an enterprise’s CEO, CTO or CIO. “In addition to that executive sponsor, we’ve noted that the companies who also have a dedicated IoT role have had the most success. To make sure IoT initiatives transcend the ideation phase and are executed successfully, enterprises should have a head or director of IoT within the organization,” she said

She also points that given the scope of IoT projects and the demand for IoT in the market, enterprises can no longer afford to leave vacancies around IoT strategy. Since IoT touches so many departments and levels within an organization, strong cross-organizational leadership and guidance from a dedicated IoT exec is what helps enterprises become successful in their IoT strategies and deployments.

The Need for IoT Leader

Historically the CTO of many industrial companies dealt with technology that impacted the core business, Stuart Morstead, COO of Palo Alto, Calif.-based Arundo Analytics said. He cited the example of a chemicals company. There, he said, the CTO might focus on materials, process technology, etc., as well as software that dealt with core business operations, such as control systems. Meanwhile, the office of the CIO developed in response to accounting and ERP systems, and often fell under the finance function, reporting to the CFO. 

Today, many companies are conflating aspects of these roles to deal with IoT. Often, they are creating a Chief Digital Officer, or head of data and analytics, to focus on understanding the blizzard of technologies and opportunities related to IoT. “Our view is that the IoT strategy should start with the business unit leader or CEO, because it is fundamentally about enabling better business performance and should be fundamentally tied to the underlying business strategy. Otherwise it can take a long-time and run down a lot of blind alleys before there are tangible revenue or cost improvements from IoT,” Morstead said.

Related Article: 7 Big Problems with the Internet of Things

Business Operations Teams in the Trenches

The bottom line is that responsibility falls ultimately to the business operations technology teams, not the IT teams. The business is dictating what the optimizations need to be — more output in a factory, more efficient supply chain. This is the responsibility of the COO, or heads of business units and the like, Joel Vincent, CMO with Santa Clara, Calif.-based Zededa, said

It may be that CIOs are tasked with fulfilling the implementation details of systems and platforms for IoT that can deliver the results that the business unit seeks.  “[However] In industry 4.0, ultimate buying decisions for many real-time apps that leverage IoT data are made by operations technology teams” Vincent said. “The same would hold true in any organization because the result of using IoT is an improvement in business, using data to enhance experiences, be they supply chain or end user.”

He points out that these individuals generally own the overall budget that goes into business projects. IoT is simply a tool in the overall process of improving business. Organization leaders still must look at the business, identify where improvements can be made, prioritize how to spend the dollars, then driving IT to implement the right tools. It is for this reason, he said, that IoT initiatives need to be led by business leaders.

There is one caveat though. The operations technology team does not have the IT expertise to implement “edge computing” and the information technology team does not have the operational understanding to build, test, and innovate new apps that will improve business. Both teams need to work in tandem and together.

Business Models

Dan Saks is the president and co-CEO of San Francisco-based AppDirect. He said that developing a successful IoT strategy requires understanding technology requirements unique to the business. In the case of IIoT in manufacturing, for example, companies should not only aim for optimized production and machine monitoring, their IoT strategy must also plan for new business models as more companies and industries digitally transform.

Using the expertise of both a CTO and CIO offers IIoT strategies a balanced approach: CIOs determine current and anticipated digital needs of the manufacturers, and CTOs manage new technologies brought into the factory supporting these needs.

Consumer Vs. Enterprise IoT

For organizations that are looking to deploy IoT solutions, if they have facility management for industrial sites, or plant managers, then they will need to be involved in setting standards along with the InfoSec executives like the CSO or CISO, Brian Knopf, senior director of security research and IoT architect at Sterling, Va.-based Neustar, said. This is necessitated by environmental issues and standards like heavy corrosive conditions or extreme temperatures as in offshore oil rigs and other harsh environments.

While the CSO/CISO will dictate the security controls and requirements, the plant managers will need to communicate their specific requirements about what systems they are looking to monitor, manage, or protect along with what specifications are needed for the devices protection.

For companies looking to develop IoT consumer devices, the CSO/CISO along with CPO (Chief Privacy Officer) will need to have their input on what the devices can and cannot collect or how they should be protected. [All these roles] roles will need to work with the product management and engineering executives to make sure that the devices they create meet those requirements for what data is collected, how its stored, who gets access to the data, and what partners or organizations that data is shared with.

Palpo Alto, Calif.-based WSO2’s, Jonathan Marsh, sums up the problem by pointing out that there isn't a single type of IoT strategy. IoT has the potential to alter many parts of the business in such different ways. “It becomes complicated when you try to apply the term across the variety of different market segments, he said.  IoT could enable a new digitally-enhanced product which is a business strategy that involves the CEO. Another use for IoT could be putting it into a product or technology offering, but that is a decision usually driven from the CTO office. Use of mobile devices and IoT-enabled company assets such as buildings or equipment is an operational improvement overseen by the CIO or COO.  

What is clear, though, is that no one case is the same and that senior executives across all departments need to be involved in the planning and deployment of IoT.