of executives believe IoT’s benefits outweigh its risks.
have IoT projects that are live or in development.
are using IoT to achieve internal efficiencies.
report IoT has increased trust with customers.
For many businesses and consumers, the internet of things (IoT) represents the Fourth Industrial Revolution (4IR). While eight other essential technologies act as fundamental drivers of 4IR is the nexus where analytics, artificial intelligence (AI), blockchain and other tech can deliver immediate advantages and generate extensive reinvention down the line.
The IoT ecosystem reveals a complicated picture: The majority of executives in our 2019 IoT survey said their business already has one or more IoT projects in the works, but many admit that cybersecurity issues (48%), privacy concerns (46%) and an uncertain regulatory environment (45%) have slowed or thwarted their IoT progress. On the consumer side, IoT tops the list of 4IR technologies that consumers have embraced, yet they also say it creates new worries about data collection, security and privacy.
It’s clear that decision-makers need to trust that IoT’s data is accurate, up to date and secure—and that it’s not accidentally creating a backdoor to the corporate network. Consumers need to feel confident that their privacy is respected, and that they are getting fair value for their data. Employees, in turn, must trust that two of IoT’s biggest benefits—advanced automation and decision support—will not cost them their jobs.
Confronting these trust challenges head-on is what separates IoT trailblazers from the rest of the pack. The following four takeaways, based on the trailblazers’ approaches, can guide your organization’s IoT strategy:
To pinpoint organizations that are succeeding with their IoT initiatives—and why—we created an IoT Confidence Index, which analyzed responses to questions about IoT benefits realization and competitiveness. We looked for firms that have already rolled out IoT projects, were enjoying the benefits and were confident in their approach. We named companies in the top quartile “IoT trailblazers”.
Trailblazers ranked trust issues as their number-one concern, ahead of technology challenges. They are also often two or three times more likely than laggards to address privacy, cybersecurity, data integrity, and workforce impacts—the dimensions of trusted tech. For example, trailblazers are more likely to think about security at the start of IoT initiatives (64%), bake in “security by design” or opt for private networks that limit threat exposure. They are also more likely to have made someone responsible for IoT security (49%) and to have created IoT-specific security policies (55%). IoT trailblazers are similarly proactive on privacy.
When it comes to data practices, our research finds that trailblazers are taking two stand-out steps: gaining real-time views of higher-priority processes, and implementing multiple leading practices in data privacy and security across the entire organization.
Design cybersecurity and data privacy into IoT initiatives from the beginning.
Make an executive or a team accountable for trusted tech issues.
Answer seven questions to see how you compare to our survey participants.
IoT requires securely gathering huge flows of disparate sources of data from thousands or millions of sensors, and then ensuring that the data is accurate and authentic, effectively analyzed, protected and private. Surprisingly, this may actually offer many ways to enhance trust.
An example of everyday trust-building activities is using sensors to keep better track of equipment, which 42% of executives surveyed said their company is already doing, and another 40% are planning to do within two years. Improving facilities management—whether room energy use, overall environmental conditions or even determining when trash bins need emptying—is something 39% are already benefiting from. Plus, 35% have enhanced security and safety, some by enabling employees to quickly tell management their location if they need assistance.
Such practical IoT applications have improved trust with stakeholders. By monitoring the supply chain, for example, IoT can increase confidence in the end product, while IoT’s tracking of machines and systems provides better predictive maintenance and asset management. And regulators are seeing companies improve tracking, management and reporting of their intercompany and customer activities that may be subject to tax and transfer pricing policies.
Identify challenges where better, trusted data on conditions, location or status could save time or money.
Assess how current IoT deployments could increase trust with stakeholders.
Factor in how boosting trust affects the cost and benefit analysis of future IoT projects.
When combined with other mature or emerging technologies, IoT can answer new questions and solve business challenges. Of the surveyed companies with active IoT projects, 73% are also active with big data analytics, 53% are utilizing AI and 38% are using blockchain. And 97% of those that have integrated IoT with other technologies (or are in the process of doing so) said they have reaped its benefits. For example, IoT is often used with advanced analytics to derive new insights from data, which is then shared securely.
The combination of IoT, blockchain and AI can even automate certain kinds of trust, such as among the players in a supply chain.
A medical device manufacturer, for example, could create a digital “birth certificate” on an IoT tag, with specifications, provenance, cost and other relevant data about each device. This birth certificate would be entered into its enterprise resource planning (ERP) system and integrated with blockchain to create a secure, immutable, cryptographically sealed record. This record would be instantly available in identical form, on the servers of approved participants in the supply chain.
Even regulators and taxing authorities benefit from having better data about tracking products and services, particularly when state or international borders are involved.
Integrate IoT with other technologies’ enterprise-wide standards for data management and governance.
Upskill your people in new ways of working and problem-solving so they can use the appropriate tech tools to address daily challenges.
Look for opportunities to automate trust by combining IoT with other technologies to ensure the authenticity of certain data categories.
Your company can do a lot with IoT. You can gather more and better data to support greater efficiencies and new business models. You can also use that data to enhance trust in everything from operations to employee well-being and customer relations.
These use cases do pose their own challenges, and here too, companies can (and must) solve many of these challenges inside their own walls. In our survey, those respondents with active IoT projects are working to solve trust-related concerns in cybersecurity (61%), data integrity (56%) and consumer or employee privacy (51%). Similarly, they are confronting workforce challenges (a top-three concern), with 36% upskilling the workforce in response to IoT and another 25% planning to upskill within the next two years.
However, many organizations recognize that the problem is bigger than they are: For IoT to fulfill its potential to not just gather data, but also to transform that data into insights that decision-makers and consumers can trust, the members of an IoT ecosystem will have to collaborate. In particular, our survey respondents pinned a share of the responsibility for trust on technology providers (cited by 58% of respondents), regulators (cited by 47%) and ecosystem partners (cited by 45%).
Engage with regulators to help shape emerging IoT regulations in line with your needs.
Collaborate with technology and ecosystem partners to help develop shared standards.
Reassess in-house practices for cybersecurity, data integrity and privacy in light of IoT’s existing and emerging challenges.
Partner, Connected Solutions, PwC US
Partner, Connected Solutions, PwC US
Partner, PwC US