2019 IoT Survey: Speed operations, strengthen relationships, and drive what’s next

For many businesses and consumers, the internet of things (IoT) is the Fourth Industrial Revolution (4IR). While other essential eight technologies are also fundamental drivers of 4IR, IoT 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.

The following four takeaways, based on the trailblazers' approaches, can guide your organization's IoT strategy

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Industry briefs

The internet of things cures health industry headaches

Health has been an early adopter of the internet of things (IoT). Nearly half (46%) of the health industry executives in our survey said their organization is actively using IoT, and another 21% have projects in development.

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The hospitality industry welcomes IoT

Hotels, restaurants, and other consumer-focused hospitality businesses have been quick to adopt IoT. In fact, 70% of hospitality executives report that they have active IoT projects — far ahead of the average (48%) for all others in our survey.

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IoT makes industrial manufacturers ‘smart’

The internet of things has roots in the world of manufacturing and continues to help usher in an era of smart factories. The majority of those in our IoT survey — some 71% of industrial manufacturing executives — confirm they are either building or testing IoT-related solutions.

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Retailers are sold on IoT

The retail sector has the highest percentage of companies with active projects: 58%, compared with 48% of all the respondents in our IoT survey. Another 30% of the retailers have IoT projects in a research or development phase.

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The following four takeaways, based on the trailblazers' approaches, can guide your organization's IoT strategy

Invest in trust

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 2X or 3X 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.

Meet the IoT Trailblazers

We created an IoT Confidence Index to learn what separates IoT leaders from other companies.

Learn more

What to do next

Design cybersecurity and data privacy into IoT initiatives from the beginning.

Make an executive or a team accountable for trusted tech issues.

Develop a comprehensive responsible technology strategy that addresses data and tech ethics, as  well as workforce and societal impact.

Embrace the everyday IoT

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.

Examples of everyday trust-building use cases include 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 see companies improve tracking, management, and reporting of their intercompany and customer activities that may be subject to tax and transfer pricing policies.

What to do next

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/benefit analysis of future IoT projects.

Do more with tech combos

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 is 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.

What to do next

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.

Don’t go it alone

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%).

What to do next

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.

About the survey

PwC Research, PwC’s global Centre of Excellence for market research and insight, conducted this survey of approximately 1,000 US business executives in July 2019. 

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Robert Mesirow

Partner, Connected Solutions, PwC US

David Sapin

Partner, Connected Solutions, PwC US

Steve Pillsbury

Partner, PwC US

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