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key
questions
to ask
about the
Internet of Things
Copyright © 2015 Deloitte Development LLC. All rights reserved.2 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
The Internet of Things (IoT) has been
simmering for a while, but now
seems ready to boil over as
widespread transformation
seems likely.
Will your organization be ready?
Deloitte University Press | 5 key questions about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Copyright © 2015 Deloitte Development LLC. All rights reserved.3 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
Want to know how many steps you
walked? Miles you drove? Watts you
consumed? The IoT can tell you all that
and more.
But how, exactly,
can the IoT bring
value to your
organization?
Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Copyright © 2015 Deloitte Development LLC. All rights reserved.4 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
To obtain a foundational
understanding of how the
Internet of Things applies to your
business, begin by exploring the
answers to five key questions.
5 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.5 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
How does information generated from
the Internet of Things create value?1
6 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Information within the Internet of Things creates value in
a never-ending value loop consisting of 5 stages:
CREATE
The use of sensors to
generate information
about a physical event
or state
COMMUNICATE
The transmission of
information across networks,
from one place to another
AGGREGATE
The gathering together of
information created at
different times or from
different sources
ANALYZE
The discernment of patterns
or relationships that leads to
descriptions, predictions,
or prescriptions for action
ACT
Initiating, maintaining, or
changing a physical event or state
Copyright © 2015 Deloitte Development LLC. All rights reserved.7 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
It is crucial to look upon the IoT with both an open mind
and a certain level of skepticism.
To learn more, read “The more things change: Value creation, value
capture, and the Internet of Things” from Deloitte Review 17
Download the article
Some changes enabled by the Internet of Things will be incremental, while others
will be transformative. Yet the need to capture value remains as acute as ever.
value
8 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.8 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Where do humans
fit into the equation?2
9 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
At first blush, the obvious implication of the IoT is that
everyday objects can and will become better, more
efficient versions of what they already are.
Copyright © 2015 Deloitte Development LLC. All rights reserved.10 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
But if you look closer, the Internet of Things is not just
about “smart devices”; it is also about devices and
services that help people become smarter.
To learn more, check out “IoT’s about us: Emerging forms of innovation
in the Internet of Things” from Deloitte Review 17
Download the article
Behavioral design thinking is indispensable when building the world
of complex systems of interactions between people and things
Digital breadcrumbs, analyzed with computational social science
tools, will help measure hidden individual and organizational traits
The IoT enables new products and services premised around the
creation of new forms of collective intelligence
11 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.Copyright © 2015 Deloitte Development LLC. All rights reserved.11 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
Customers vs. companies: Who
benefits from the Internet of Things?3
12 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Information is a powerful value-creation tool. However,
the information value loop’s underlying structure tends to
pull IoT deployments in one of four directions:
Hobson’s choice
“Customers are free to decide
but only one option exists;
thus, it is really no choice at all”
All’s well
“Sufficient value is created, and that
value is shared between customers
and companies sufficiently equitably”
Gridlock
“Both companies and customers are
pulled in opposite directions, unable
to move toward an optimal outcome”
Customer is king
“Customers end up capturing a
disproportionate share of the new
value created”
Copyright © 2015 Deloitte Development LLC. All rights reserved.13 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
Companies can employ three techniques to develop an
economically sustainable and mutually beneficial
result for both the company and its customers.
To learn more, read “Power Struggle: Customers, companies, and the
Internet of Things” from Deloitte Review 17
Download the article
Examine how a company
is using IoT technologies
using the Information
Value Loop
Take a hard look at who
benefits most from each
IoT-enabled transaction and
correct value allocations
Assess where IoT
investments may not have
an appreciable benefit and
move away from them
14 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.Copyright © 2015 Deloitte Development LLC. All rights reserved.14 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
How will companies
keep information safe?4
15 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
The complex and rapidly changing landscape within
the Internet of Things demands a structured approach to
identifying risks and appropriate responses.
Copyright © 2015 Deloitte Development LLC. All rights reserved.16 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
IoT solutions need to blend operational understanding
with multilayered cyber risk management techniques
To learn more, read “Safeguarding the Internet of Things: Being secure,
vigilant, and resilient in the connected age” from Deloitte Review 17
Download the article
A system’s resilience defines how quickly a realized risk can be
addressed and normal operations restored
Remaining vigilant to new or unexpected challenges is crucial to
maintaining security
Securing data is critical at every stage of the value loop, especially the
create and communicate stages
17 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.Copyright © 2015 Deloitte Development LLC. All rights reserved.17 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
How does the Internet of Things
create value for your supply chain?5
18 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Information from IoT deployments allows supply chains to
invest less in eliminating variation and instead use it as a
driver of innovation or competitive advantage
Copyright © 2015 Deloitte Development LLC. All rights reserved.19 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
The transformations that the IoT can bring open up the
possibility for new improvements and allow companies to
find new paths to supply chain management
To learn more, read “Forging links into loops: The Internet of Things’
potential to recast supply chain management” from Deloitte Review 17
Download the article
Making visible previously
unseen information allows
for greater efficiency
than process controls
Companies can transform
push-driven order
systems to differentiated
pull-driven systems
Holistic, end-to-end
ecosystems can give
rise to new, innovative
business models
Copyright © 2015 Deloitte Development LLC. All rights reserved.20 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview
The Internet of Things can fundamentally
transform how organizations create value
The Information Value Loop gives
rise to increasingly complex
business ecosystems Big data analytics take
on additional levels of
complexity
Organizations must
determine how to share
value with customers
appropriately
Security and privacy take on
heightened importance
Profound insights
await discovery
across the
supply chain
21 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Share your thoughts with the hashtag #DeloitteReview
Follow @DU_Press on Twitter
Read more from our special “Internet of Things” section in
Deloitte Review Issue 17
Download
Download
Download
Download
Download
22 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
MICHAEL E. RAYNOR
Meet the authors
director with Deloitte Services,
LP and the director of the
Center for Integrated Research
which designs, executes, and
supports research into important
issues facing companies today
MARK J. COTTELEER
research director with Deloitte
Services LP, affiliated with
Deloitte’s Center for Integrated
Research, focused on
operational and financial
performance improvement
JAMES GUSZCZA
US chief data scientist for
Deloitte Consulting LLP
HARVEY LEWIS
UK lead for analytics research at
Deloitte LLP
JOHN LUCKER
principal with Deloitte
Consulting LLP, Global Advanced
Analytics & Modeling market
leader, and a US leader of
Deloitte Analytics
JOE MARIANI
lead Market Insights analyst with
Deloitte Services LP focusing on
technologies and trends that cut
across industries
23 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
Meet the authors
SEAN PEASLEY
principal with the Cyber Risk
Services practice at Deloitte &
Touche LLP and the US
Consumer Business & Industrial
Products leader for cyber risk
services
ARUN PERINKOLAM
senior manager with the Cyber
Risk Services practice at Deloitte
& Touche LLP focusing on cyber
risk strategy and program
development
EVAN QUASNEY
manager with Deloitte LLP, with
extensive experience designing
and implementing IoT
applications for high-tech
manufacturers
IFRAN SAIF
principal with the Cyber Risk
Services practice at Deloitte &
Touche LLP, US Advisory
Technology leader, and a leader
of Deloitte’s CIO Program
BRENNA SNIDERMAN
manager with Deloitte LLP, with
extensive experience designing
and implementing IoT
applications for high-tech
manufacturers
About Deloitte University Press
Deloitte University Press publishes original articles, reports and periodicals that provide insights for businesses, the public sector and NGOs. Our goal is to draw upon
research and experience from throughout our professional services organization, and that of coauthors in academia and business, to advance the conversation on a
broad spectrum of topics of interest to executives and government leaders.
Deloitte University Press is an imprint of Deloitte Development LLC.
This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or its and their affiliates are, by means of this
publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such
professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or
taking any action that may affect your finances or your business, you should consult a qualified professional adviser.
None of Deloitte Touche Tohmatsu Limited, its member firms, or its and their respective affiliates shall be responsible for any loss whatsoever sustained by any person
who relies on this publication.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a
legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and
its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not
be available to attest clients under the rules and regulations of public accounting.
Copyright © 2015 Deloitte Development LLC. All rights reserved.
Member of Deloitte Touche Tohmatsu Limited
Sign up for Deloitte University Press updates at http://www.dupress.com
@DU_Press

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5 questions about the IoT (Internet of Things)

  • 2. Copyright © 2015 Deloitte Development LLC. All rights reserved.2 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview The Internet of Things (IoT) has been simmering for a while, but now seems ready to boil over as widespread transformation seems likely. Will your organization be ready? Deloitte University Press | 5 key questions about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
  • 3. Copyright © 2015 Deloitte Development LLC. All rights reserved.3 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Want to know how many steps you walked? Miles you drove? Watts you consumed? The IoT can tell you all that and more. But how, exactly, can the IoT bring value to your organization? Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.
  • 4. Copyright © 2015 Deloitte Development LLC. All rights reserved.4 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview To obtain a foundational understanding of how the Internet of Things applies to your business, begin by exploring the answers to five key questions.
  • 5. 5 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.5 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. How does information generated from the Internet of Things create value?1
  • 6. 6 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. Information within the Internet of Things creates value in a never-ending value loop consisting of 5 stages: CREATE The use of sensors to generate information about a physical event or state COMMUNICATE The transmission of information across networks, from one place to another AGGREGATE The gathering together of information created at different times or from different sources ANALYZE The discernment of patterns or relationships that leads to descriptions, predictions, or prescriptions for action ACT Initiating, maintaining, or changing a physical event or state
  • 7. Copyright © 2015 Deloitte Development LLC. All rights reserved.7 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview It is crucial to look upon the IoT with both an open mind and a certain level of skepticism. To learn more, read “The more things change: Value creation, value capture, and the Internet of Things” from Deloitte Review 17 Download the article Some changes enabled by the Internet of Things will be incremental, while others will be transformative. Yet the need to capture value remains as acute as ever. value
  • 8. 8 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.8 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. Where do humans fit into the equation?2
  • 9. 9 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. At first blush, the obvious implication of the IoT is that everyday objects can and will become better, more efficient versions of what they already are.
  • 10. Copyright © 2015 Deloitte Development LLC. All rights reserved.10 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview But if you look closer, the Internet of Things is not just about “smart devices”; it is also about devices and services that help people become smarter. To learn more, check out “IoT’s about us: Emerging forms of innovation in the Internet of Things” from Deloitte Review 17 Download the article Behavioral design thinking is indispensable when building the world of complex systems of interactions between people and things Digital breadcrumbs, analyzed with computational social science tools, will help measure hidden individual and organizational traits The IoT enables new products and services premised around the creation of new forms of collective intelligence
  • 11. 11 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.Copyright © 2015 Deloitte Development LLC. All rights reserved.11 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Customers vs. companies: Who benefits from the Internet of Things?3
  • 12. 12 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. Information is a powerful value-creation tool. However, the information value loop’s underlying structure tends to pull IoT deployments in one of four directions: Hobson’s choice “Customers are free to decide but only one option exists; thus, it is really no choice at all” All’s well “Sufficient value is created, and that value is shared between customers and companies sufficiently equitably” Gridlock “Both companies and customers are pulled in opposite directions, unable to move toward an optimal outcome” Customer is king “Customers end up capturing a disproportionate share of the new value created”
  • 13. Copyright © 2015 Deloitte Development LLC. All rights reserved.13 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Companies can employ three techniques to develop an economically sustainable and mutually beneficial result for both the company and its customers. To learn more, read “Power Struggle: Customers, companies, and the Internet of Things” from Deloitte Review 17 Download the article Examine how a company is using IoT technologies using the Information Value Loop Take a hard look at who benefits most from each IoT-enabled transaction and correct value allocations Assess where IoT investments may not have an appreciable benefit and move away from them
  • 14. 14 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.Copyright © 2015 Deloitte Development LLC. All rights reserved.14 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview How will companies keep information safe?4
  • 15. 15 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. The complex and rapidly changing landscape within the Internet of Things demands a structured approach to identifying risks and appropriate responses.
  • 16. Copyright © 2015 Deloitte Development LLC. All rights reserved.16 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview IoT solutions need to blend operational understanding with multilayered cyber risk management techniques To learn more, read “Safeguarding the Internet of Things: Being secure, vigilant, and resilient in the connected age” from Deloitte Review 17 Download the article A system’s resilience defines how quickly a realized risk can be addressed and normal operations restored Remaining vigilant to new or unexpected challenges is crucial to maintaining security Securing data is critical at every stage of the value loop, especially the create and communicate stages
  • 17. 17 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved.Copyright © 2015 Deloitte Development LLC. All rights reserved.17 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview How does the Internet of Things create value for your supply chain?5
  • 18. 18 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. Information from IoT deployments allows supply chains to invest less in eliminating variation and instead use it as a driver of innovation or competitive advantage
  • 19. Copyright © 2015 Deloitte Development LLC. All rights reserved.19 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview The transformations that the IoT can bring open up the possibility for new improvements and allow companies to find new paths to supply chain management To learn more, read “Forging links into loops: The Internet of Things’ potential to recast supply chain management” from Deloitte Review 17 Download the article Making visible previously unseen information allows for greater efficiency than process controls Companies can transform push-driven order systems to differentiated pull-driven systems Holistic, end-to-end ecosystems can give rise to new, innovative business models
  • 20. Copyright © 2015 Deloitte Development LLC. All rights reserved.20 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview The Internet of Things can fundamentally transform how organizations create value The Information Value Loop gives rise to increasingly complex business ecosystems Big data analytics take on additional levels of complexity Organizations must determine how to share value with customers appropriately Security and privacy take on heightened importance Profound insights await discovery across the supply chain
  • 21. 21 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. Share your thoughts with the hashtag #DeloitteReview Follow @DU_Press on Twitter Read more from our special “Internet of Things” section in Deloitte Review Issue 17 Download Download Download Download Download
  • 22. 22 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. MICHAEL E. RAYNOR Meet the authors director with Deloitte Services, LP and the director of the Center for Integrated Research which designs, executes, and supports research into important issues facing companies today MARK J. COTTELEER research director with Deloitte Services LP, affiliated with Deloitte’s Center for Integrated Research, focused on operational and financial performance improvement JAMES GUSZCZA US chief data scientist for Deloitte Consulting LLP HARVEY LEWIS UK lead for analytics research at Deloitte LLP JOHN LUCKER principal with Deloitte Consulting LLP, Global Advanced Analytics & Modeling market leader, and a US leader of Deloitte Analytics JOE MARIANI lead Market Insights analyst with Deloitte Services LP focusing on technologies and trends that cut across industries
  • 23. 23 Deloitte University Press | 5 key questions to ask about the Internet of Things | @DU_Press #DeloitteReview Copyright © 2015 Deloitte Development LLC. All rights reserved. Meet the authors SEAN PEASLEY principal with the Cyber Risk Services practice at Deloitte & Touche LLP and the US Consumer Business & Industrial Products leader for cyber risk services ARUN PERINKOLAM senior manager with the Cyber Risk Services practice at Deloitte & Touche LLP focusing on cyber risk strategy and program development EVAN QUASNEY manager with Deloitte LLP, with extensive experience designing and implementing IoT applications for high-tech manufacturers IFRAN SAIF principal with the Cyber Risk Services practice at Deloitte & Touche LLP, US Advisory Technology leader, and a leader of Deloitte’s CIO Program BRENNA SNIDERMAN manager with Deloitte LLP, with extensive experience designing and implementing IoT applications for high-tech manufacturers
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