I recently read an interesting article over at the Harvard Business Review (HBR) and it gave me pause to think about how the Internet of Things is really reshaping how strategy needs to be approached when planning for IT. The article, titled “How Smart, Connected Products Are Transforming Competition” makes a strong case for how the IoT (the proliferation of connected smart devices) is really transforming products and services.
What struck me was where the author wrote:
The phrase “internet of things” has arisen to reflect the growing number of smart, connected products and highlight the new opportunities they can represent. Yet this phrase is not very helpful in understanding the phenomenon or its implications. The internet, whether involving people or things, is simply a mechanism for transmitting information. What makes smart, connected products fundamentally different is not the internet, but the changing nature of the “things.”
It gave me pause to reflect that it isn’t just the connectivity and added integrated functionality that is driving the change – it’s the data. The data that comes from this machine-to-machine interaction, from sensors, from user locations, from conversations – it’s all big data and that can serve as an important input into the strategic planning process. It comes though with its own set of catalysts that will force you to approach strategy a little different than when dealing with the traditional approach. The reason is because, increasingly, we are seeing the creation of data products, and with the creation of data products, you have to consider the nature of what big data is.
Gartner defines big data as having characteristics of “the three V’s” : volume, velocity, and variety. Recently a fourth V has been added, and that is veracity. These four characteristics define what constitutes “big data” and they have a profound impact on how you approach the development of strategy. The biggest factor is the speed at which things are occurring, and changing. The classic approach to strategy is too slow. Changes to your technology environment, or changes to your business understanding, happen far more quickly when dealing with data products involve big data. Remember, business intelligence itself is a very exploratory process. What you are doing could change based on what you find in exploring the data. This nuance is amplified when dealing with big data, as teams of data scientists explore data, analyze data, seek out patterns and develop models, their understanding of “what’s true” or “where are we going with this” changes.
As a CIO or Director of IT, your ability to develop agile, flexible strategy is key. In a sense, it forces us to adopt an exploratory and interactive approach to the development of good strategy. As the Internet of Things continues to emerge, more and more data will be generated and become available to our businesses and it will be up to us to adapt so that we can strategically take advantage of the value that is waiting to be unlocked.