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IoT, wearable computing need CIOs' discriminating eye to yield ROI

Internet-of-Things-connected devices run the risk of remaining only novel experiments if enterprises don't focus on generating actionable data.

BOSTON -- Hardware and software vendors have swooped in to exploit the Internet of Things and wearable technologies. But industry experts say these devices require a discriminating eye among CIOs and other technologists to move beyond enterprise experimentation and yield real return on investment.

The Internet of Things (IoT) and wearable computing aim to give companies and consumers real-time data transmitted via small sensors or wearable devices. These miniscule devices, hitched to the Web and the cloud, can gather information about a person or an object's location, dimensions, temperature or a host of other information that can feed data in real time for analysis.

Despite the promise of wearables and IoT to yield insight in real time, companies are trying to identify how to garner return on investment (ROI). Because of their small size, IoT-connected devices and wearables run the risk of being novel without delivering meaningful, digestible data in an enterprise context, experts say. Enterprises need to focus on the right business scenario for these devices.

"There are situations that are more appropriate to wearables and digital eyewear than others," said Raimund Gross, solution architect and futurist at SAP AG at the Gilbane Content and Digital Experience conference in Boston last week. A knowledge worker at a desk, Gross said, probably doesn't need connected eyewear. "But as soon as someone is mobile, the situation changes," he said. He presented a scenario in which a maintenance technician could benefit from a wearable device that could provide location information, dimensions and other measurements, all displayed on a hands-free device and supplemented with data coming from other enterprise database information.

A connected device can also allow a mobile worker to troubleshoot a problem in real time, without having to leave his work location, he said. "If a technician gets stuck, a colleague can offer remote support through the device." But Gross noted that enterprise use of wearables will be successful only if a user can benefit. "Replacing one technology with another because it's cool doesn't help. You won't be able to make a business case or create a unique experience," he said.

IoT, wearables promise next technology shift

IoT and wearables are gathering steam in terms of spending as well, and research shows that these technologies will spawn new investments over the next several years. Research firm Gartner Inc. forecasts that the number of connected devices will reach 25 billion by 2020 and will support total services spending of $263 billion. But these figures may be aggressive, particularly given the data security hurdles these devices present, as well as the need for the industry to coalesce around common standards to govern these devices as they transmit data over the Web and have that data reside in the cloud.

IoT and wearables require CIOs' discriminating eye to move beyond enterprise experimentation to yield real ROI.

And yet another challenge is the rapid clip of technology change -- which often places a heavy burden on companies to keep up. For example, users can read only a small amount of data on a smartwatch. Just as companies had to adjust data presentation for mobile devices, wearables and IoT present yet another chapter in the march toward digestible data. "Wearables have their own design language and methods of interaction," said Adam Buhler, vice president, creative technology at DigitasLBi, at the Gilbane conference.

Still, Buhler described new ways in which companies can now use IoT-connected things to transmit meaningful data and foster greater safety in a health-risk situation. Buhler showed a slide of a cockroach with an IoT-connected device attached to its back. These roaches, he said, can be turned loose in a building with a potentially toxic chemical waste spill and act as "first responders" to indicate the location and severity of the spill without having a human enter the dangerous environment.

More prospects for data insecurity

While these devices present clear benefits, experts acknowledge that they can transmit sensitive consumer data over the Web that is sweeping and disturbing in its scope.

Buhler noted that Disney Co. has brought such data gathering to thorough -- and sometimes disturbing -- heights. Disney has created an IoT technology using magic bands, or RFID bracelets, for each family or customer. Disney spent $1 billion for these bands, to build a database and artificial intelligence system on the back end populated with customer data, and to build RFID towers that can read these bracelets over tremendous distances throughout its parks.

"These devices are your tickets to the rides, your credit card, the key to your hotel room and a fire hose of data that goes back to [Disney's] servers," Buhler noted. "But think about this: All of your personal profile data is tied in with this information. They know everything about you," he said.

Buhler noted the opportunity and danger of amassing this kind of customer information. While it enables Disney to streamline operations and satisfy customer preferences, the massive amounts of information these devices now generate places an additional responsibility on Disney to secure this data from breaches -- and to resist simply manipulating consumers, given the information that companies can now have in hand.

Buhler noted that Disney's ability to crunch the numbers based on consumer preferences in food, entertainment and more is becoming limitless, with the company now able to steer customers around the park based on data. "Disney can organize the park based on which rides are getting backed up, which rides are sparsely attended. Everything can be tweaked and optimized." Buhler noted that Disney could take it even further, scanning a company's luxury car upon arrival at the park, and later possibly catering to that family's demands based on its superior ability to pay.

Further, the prospect of using consumer data to manipulate consumer preferences raises concerns as well. In 2012, for example, Facebook Inc.'s efforts in 2012 to elicit certain emotions among its users caused a backlash when the public learned that the site's data scientists enabled an algorithm to omit content that contained words associated with either positive or negative emotions from the news feeds of hundreds of thousands of users.

These devices may also usher in new storage and networking requirements to house and transmit all this data. Buhler noted that the industry needs to agree about standards to govern these devices. Until the industry places cooperation alongside competition, the Wild West environment will continue to create opportunities for thieves and hackers.

Next Steps

IoT's future still emerging

The future role of Internet of Things in enterprises

Seven risks with IoT

Dig Deeper on Internet of Things (IoT) Mobility and Consumers

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Is the Internet of Things in your company's future?
I believe that the IoT way is the direction my company is heading to. Whether an organization admits to recognize the presence of the IoT or not depends on the organization's ability to capitalize on IoT as a technological advancement, and determines how effectively the organization is willing to go to reach the next generation of consumers. My company requires extensive use of technology, so I'm banking on IoT for my company's future business operations.
Probably unavoidable. That's not a bad thing, just acknowledgment that IoT is (or soon will be) pervasive whether planned or not. How we use it is quite another thing - IoT can be a boon to productivity or an invasive tracker. I fear far too many companies (not in OUR field, of course) will use it as a sword, not an enhancement.
I’m sure it is in some form or fashion (both figuratively and literally), but I’m not sure how exactly it will be used.
As with any new technology, the opportunities with wearables are huge, but so are the risks. CIOs can't afford to be distracted by the next shiny object. But you can bet that just as with smartphones, employees will eventually be using these devices to access enterprise data and tools. While this use can be a good cue for how such devices might be applied to the enterprise, it's also important to implement forward-looking policies before these new habits really take over.
The field is wide open and consumers seem to have an insatiable desire to own (or don) the Latest & Greatest, security be damned. A wide array of wearables - from a myriad of manufacturers - will soon be flooding the workplace. 

IT needs to be prepared as quickly as possible, the hatches need to be battened down, the holes patched. Wearables of every kind are coming and resistance is futile....

As with many inventions, the device itself might remain just a toy until it proves solving a real problem in a reliable way. It needs context: problems-people-infrastructure.
What I see with many IoT devices and wearables is that the technology comes first. Kind of like a GPS device without satellite network.
It's all computing envy. Who has the fastest and smallest device. Then one it has been in the real world it changes. Tablets are getting bigger. Where is Google Glass?  Another thing to remember is all of this is geared  for the younger generation. Small screens and old eyes are not a good mix.