What Companies Can Learn from India’s IoT Leaders
The Internet of Things (IoT) is pivotal for companies’ competitiveness - and to other technologies like AI and big data analytics. Frontline executives responsible for implementing IoT can learn to separate hype from best practices through lessons from Indian IoT leaders.
The Internet of Things has quickly become a backbone technology for production companies and many other types of businesses, making its way into our homes and cityscapes. For company leaders across the world, IoT raises new questions. For example, when is the best time to invest in IoT? How do you decide on hardware and software? And what are the best ways to manage IoT projects?
BDO advises companies across the globe on IoT, including throughout the Asian tech hubs described in the recent BDO International Tech Hub publications. One of the premier hubs is India, where companies are at the forefront of integrating IoT. Our comprehensive, diverse experience and close collaboration with market leaders and strategists across industry verticals on incorporating and leveraging IoT solutions form the basis of exploring best practices for how companies can make the most of IoT investments.
Asia Leading on IoT
IoT is forecast to have an $11 trillion positive economic impact over the coming seven years. Small, cheap IoT-optimised chips and sensors enable revolutionary data-driven changes and insights across industries. Together with edge AI and data analytics, IoT is creating a paradigm shift away from central cloud-based solutions to decentralised, omnipresent business intelligence.
For companies, the shift leads to flexible and real-time optimisable industrial processes. Reduced operational costs, enhanced efficiency, better asset utilisation, and higher workplace safety are some of the benefits. Furthermore, data from IoT can be invaluable for AI and machine learning solutions.
Asia’s tech hubs are blazing the road for IoT integration. The region holds a global lead in industry-specific IoT deployments that was further consolidated during 2019. As highlighted by IDC findings, Asia led IoT spending in 2019, accounting for 35.7% of worldwide spending, ahead of the US and Europe at 27.3% and 21.2%, respectively. By 2023, it is expected that the region’s IoT market will reach $398.6 billion, driven by China, South Korea, and India.
Projected 2020 IoT growth in spending across industry sectors. Data: IDC. Graph: BDO India
India’s IoT market is predicted to grow by 62% CAGR from roughly 200 million IoT devices in 2016 to 2.7 billion in 2020. IoT investments were close to $5 billion in 2019 and expected to triple to $15 billion by 2021, led by spending on areas such as smart manufacturing (Industry 4.0) and smart logistics.
The Case for IoT Investment
Forbes Insights and Hitachi Vantara surveyed more than 500 senior executives around the world, including 220 in the Asia-Pacific region, about IoT. The report underscores that executives see clear value in IoT initiatives. Amongst findings for the Asia-Pacific region were:
- 70% of companies believe IoT is important or very important to their current business.
- 87% believe IoT will be important to the future of their business.
- Executives view IoT, AI and robotics as the most important for the future of business.
- 72% of surveyed executives said their company has IoT programmes in operation.
- 11% said that IoT is already a major contributor to their business.
BDO India’s experience is that Indian companies also see the following as strong arguments for investing in IoT solutions:
- Diversity of options: Approached correctly, integration of existing IT systems and IoT can streamline and optimise business operations.
- Dynamic change management: IoT data enables companies to react to changes in real-time.
- Scale: IoT sensor integration can be scaled to match business operation needs.
- Operational efficiencies: Insights and data from IoT devices can help lower costs.
- Improved decision-making: Thanks to data and information from IoT, managers and leaders can make better, more informed decisions.
Indian Government Initiatives Back IoT
IoT brings many new opportunities for businesses, but the technology also leads to numerous challenges – particularly in terms of cybersecurity. Government programmes, measures, and policies relating to the security of IoT devices and the privacy of consumers are pivotal. Below are a few Government Initiatives in India aimed at supporting IoT growth and security.
Top Ten IoT Project Considerations
Companies looking to integrate IoT solutions may feel that they are beginning from scratch, forging ahead into unchartered territory. IoT solutions can be complex systems to implement efficiently, due to their numerous sensors and sprawling, physically dispersed implementation processes. For example, maintenance and upgrading devices can become laborious and expensive without correct planning, which lowers cybersecurity protection and the overall effectiveness of your IoT initiative.
Analysis shows that many IoT projects struggle to generate the expected positive results – particularly if careful attention is not paid to areas such as:
- Clear vision and goals: What you are hoping to achieve, and how your current systems and setup can work with the new technology. Set clear goals with measurable KPIs.
- Long-term business goals: IoT projects are not static but can develop over time. Consider how and where you may want to expand your IoT projects in future.
- Detailed, realistic timeline: Setting short- and long-term goals should be based on a thorough analysis of your current situation, strategic goals, and organisational setup.
- Organisational preparation: Clear leadership combined with coordinated activities promoting the IoT programmes throughout the organisation will help increase buy-in.
- Diverse project teams: IoT projects require project teams with diverse skill sets, including hardware, software, and cybersecurity experts, as well as project and product managers.
- Clear responsibilities: Clear guidelines and policies should dictate which parts of your organisation is responsible for specific parts of IoT projects.
- Starting with sandboxes: Proofs of concept, sandboxes, pilots, and narrow use cases for the initial go-round for IoT deployments enables you to learn from mistakes.
- Integrating company-wide feedback: Integrating continuous feedback helps minimise quality and integration problems.
- Technical integration: Aligning IoT equipment and existing IT infrastructure can be a challenging prospect and requires careful planning.
- Data use and protection: Clear outlines of how and where data will be analysed and used – and how it is protected - should be initiated early in the process.
Top ten technical and Cybersecurity IoT Challenges
Between 2016 amd 2017, there was a 600% increase in cyberattacks targeting IoT hardware and software. A 2020 report found that IoT-devices make up about 33% of devices infected with viruses and malware, up from about 16% in 2019.
Simultaneously, more and more sensitive data is captured and processed by IoT devices and transferred throughout companies’ IT ecosystems. From a technical and cybersecurity standpoint, these factors make it pivotal for IoT projects to address the following areas:
- Security: IoT units can lead to new vulnerabilities and attack vectors. Detailed security analysis and security update patches for OS and system security improvements should be initiated before implementing or deploying any IoT device.
- Privacy: The company – and any potential consumers - should be aware of where and how information is recorded, transferred, stored, and used. As IoT devices are highly customisable, there is no one-size-fits-all solution to safeguard these devices or their data processing.
- Device Compatibility: Not all IoT devices are compatible with all data formats, which can lead to compatibility and connectivity issues.
- Scalability: The capacity to scale for firmware, data management, sensor connectivity range, and uptime are a few of the factors to consider before investing in any IoT device or solutions package.
- Data capture: Incorrect data capture can lead to false-positive data analysis results. As a result, connected analysis engines and AI can may erroneous conclusions, leading to inefficient, faulty decision-making.
- Interoperability: All parts and pieces of any IoT device should work flawlessly with all other parts of your IT systems, with appropriate security controls implemented on each component.
- Broader attack surface: IoT devices can create a broader attack surface for outside forces. Attackers could potentially use IoT devices to disrupt larger portions of your IT and security architecture.
- Edge infrastructure: Enterprises must understand what new technical and operational infrastructure that is needed to support new IoT devices. Finding the optimal solution that ensures both efficiency and data protection is pivotal.
- Risk management: Businesses should categorise and classify and seek to protect assets according to operations, value, and connectivity before introducing new IoT devices.
- User access management: Implementing user and role-based IoT access management, including double authentication measures, greatly enhances the security level of IoT devices.
Learning from India’s IoT Growth
One of the core lessons from India’s IoT leaders is that companies should prepare for further IoT acceleration. Driving developments are several factors, including exponential technologies, such as 5G networks, revolutionising our digital infrastructure, bringing greater speed and new opportunities to related technologies, like IoT.
India is one of the fastest developing countries in the world and home to the world’s second-highest Small Medium Business-base consisting of over 75 million companies. About 50,000 of them are already implementing advanced technology such as AI and IoT. Others need to follow to stay competitive, laying the ground for large-scale deployment of IoT devices throughout the country.
These implementations can find backing through the Digital India campaign and Smart Cities project initiative implemented to help create the digital ecosystem of widely connected real-time physical objects that collect and share information over the internet. The projects are backed by investments of $31 Billion that will be deployed by 2022.
The surge in data-dependent fields like AI and Big Data Analytics, competitive advantages, lower prices of IoT implementation and Government backing is not just an Indian phenomenon, but one that companies across Asia – and the rest of the world – should heed. In short, developments have turned the question for companies about implementing IoT from one of ‘if’ to one of ‘how’ and ‘when.’