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Internet of Things:
From sensing to doing
Think big, start small, scale fast
Like a wildfire racing across a dry prairie, end-user devices and 49 times higher than
the Internet of Things (IoT) is expanding total data center traffic.2
rapidly and relentlessly. Vehicles, machine Even as businesses, government agencies,
tools, street lights, wearables, wind turbines, and other pioneering organizations at the
and a seemingly infinite number of other vanguard of IoT take initial steps to implement
devices are being embedded with software, IoT’s component parts—sensors, devices,
sensors, and connectivity at a breakneck software, connectivity—they run the risk of
pace. Gartner, Inc. forecasts that 6.4 billion being overwhelmed by the sheer magnitude
connected things will be in use worldwide in of the digital data generated by connected
2016, up 30 percent from 2015, and that the devices. Many will focus narrowly on passive
number will reach 20.8 billion by 2020. In monitoring of operational areas that have
2016, 5.5 million new things will get connected been historically “off the grid” or visible only
to network infrastructure each day.1 through aggregated, batch-driven glimpses. To
As IoT grows, so do the volumes of data fully explore IoT’s potential, companies should
it generates. By some estimates, connected think big, start small, and then scale fast.
devices will generate 507.5 zettabytes (ZB) of Many enterprises already have unused IoT
data per year (42.3 ZB per month) by 2019, up infrastructure built into their manufacturing
from 134.5 ZB per year (11.2 ZB per month) machinery and IT software. We call these
in 2014. (A zettabyte is 1 trillion gigabytes). dormant components “brownfields”: Like
Globally, the data created by IoT devices roots, bulbs, and tubers in the soil, they
in 2019 will be 269 times greater than the need a good “rain” and a bit of tending to
data being transmitted to data centers from begin to thrive. Activating and connecting
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Tech Trends 2016: Innovating in the digital era
these brownfield components may help bounded for deliberate intent and outcomes,
companies leapfrog some implementation and focused on specific, actionable business
steps and give their IoT initiatives a needed processes, functions, and domains.
boost. In contrast, “greenfields”—enterprise The time has come for organizations to
environments with no preexisting IoT think more boldly about IoT’s possibilities
infrastructure—require basic seeding and a lot and about the strategies that can help them
of tending over time to yield a new crop. realize IoT’s full disruptive potential. To date,
The value that IoT brings lies in the many IoT initiatives have focused primar-
information it creates. It has powerful potential ily on sensing—deploying and arranging the
for boosting analytics efforts. Strategically hardware, software, and devices to collect
deployed, analytics can help organizations and transmit data. These preliminary steps
translate IoT’s digital data into meaningful taken to refine IoT approaches and tactics are
insights that can be used to develop new just the beginning. The focus must shift from
products, offerings, and business models. sensing to doing. How do inputs from sensors
IoT can provide a line of sight into the world drive closed-loop adjustments and innovation
outside company walls, and help strategists to back-, middle-, and front-office business
and decision makers understand their processes? Where can those processes become
customers, products, and markets more fully automated, and where can the core be
clearly. And IoT can drive so much more— reconfigured using feedback from connected
including opportunities to integrate and devices and instrumented operations? What
automate business processes in ways never future IoT devices might open up new mar-
before possible. kets? To yield value, analytics-driven insights
Often overlooked is IoT’s potential for must ultimately boost the bottom line.
impacting human lives on a grand scale. For One strategy involves harnessing the
example, in a world where hunger persists, information created by the IoT ecosystem to
“smart farming” techniques use sensor data augment worker capabilities, a process mod-
focused on weather, soil conditions, and pest eled in the Information Value Loop. When
control to help farmers boost crop yields. built to enhance an individual’s knowledge
Meteorologists are leveraging hazard mapping and natural abilities and deployed seamlessly
and remote sensing to predict natural disasters at the point of business impact, IoT, in tandem
farther in advance and with greater accuracy. with advanced analytics, can help amplify
The health care sector is actively exploring human intelligence for more effective decision-
ways in which wearables might help improve making. For example, the ability to monitor
the lives of the elderly, the chronically ill, and the vital signs of elderly patients remotely and
others. The list goes on and will continue in real time will empower medical personnel
to grow. We are only beginning to glimpse to make more accurate care decisions more
the enormity of IoT’s potential for making quickly. Even more profound, automated drug
lives better.3 delivery systems may be triggered to respond
to complicated signals culled from several
Sensing and sensibility parts of the care network.
Likewise, companies may harness
With so few detailed use cases, the sheer
data-driven insights to augment or
number of IoT possibilities makes it difficult
amplify operational activity in the form
to scope initiatives properly and achieve
of transforming business processes,
momentum. Many are finding that IoT
reimagining core systems and capabilities,
cannot be the Internet of everything. As such,
and automating controls. Eventually, robotic
organizations are increasingly approaching IoT
process automation and advanced robotics
as the Internet of some things, purposefully
will monitor events, aggregate sensor data
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Internet of Things: From sensing to doing
stages act
technologies Initiating, changing,
value drivers or or maintaining an
h av i se event or state
be ns
d or
te t i o n va l u e d r
ma
en
iv
s
or er
gm
nf s
e
au
ly z
cre
ana
at e
Discernment of magnitude Use of sensors
patterns among to generate data
lligence
ork
inte
tw
time
ed
ne
nt e
gm
au
Gathering information Transmission of
ag
gr
te
Source: Michael E. Raynor and Mark J. Cotteleer, “The more things change: Value creation, value capture, and the Internet of Things,” Deloitte
Review 17, July 27, 2015, http://dupress.com/articles/value-creation-value-capture-internet-of-things.
from numerous sources, and use artificial assets, handling any unexpected incidents that
intelligence capabilities to determine which may arise.5
course of action they can take to deliver the
most desirable outcome.4 Risks and rewards
Take manufacturing, for example. At
As organizations work to integrate vast,
a Siemens facility in Amberg, Germany,
disparate networks of connected devices into
machines and computers handle roughly 75
core systems and processes, there will likely be
percent of the value chain autonomously,
new security and privacy concerns to address.
with some 1,000 automation controllers in
These concerns could be particularly acute
operation throughout the production line.
in industries like health care—which may be
Each part being manufactured has its own
aggregating, analyzing, and storing highly
product code, which lets machines know its
personal data gleaned from sensors worn by
production requirements and which steps
patients—or in manufacturing—where risks
to take next. All processes are optimized
may increase as heavy industrial equipment or
for IT control, which keeps failure rates
infrastructure facilities become increasingly
to a minimum. In this facility, employees
connected. More data, and more sensitive data,
essentially oversee production and technology
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Tech Trends 2016: Innovating in the digital era
available across a broad network means that network. Likewise, a decentralized approach
risks are higher and that data breaches could typically focuses on automation: Rules engines
pose significant dangers to individuals and would be embedded at end points, which
enterprises alike. would allow individual nodes to take action.
With IoT, data security risks will very likely In still other scenarios, IoT applications
go beyond embarrassing privacy leaks to, or visualizations could empower human
potentially, the hacking of important public counterparts to act differently.
systems. Organizations will have to determine Ultimately, the machine age may be
what information is appropriate for IoT upon us—decoupling our awareness of the
enablement, what potential risks the assets world from the need for a human being
and information may represent, and how they to consciously observe and record what is
can ensure that solutions are secure, vigilant, happening. But machine automation only sets
and resilient.6 the stage; real impact, business or civic, will
Similarly, as companies add additional come from bringing together the resulting data
inputs to their IT and IoT ecosystems, they and relevant sensors, things, and people to
will be challenged to create new rules that allow lives to be lived better, work to be done
govern how action proceeds and data is shared. differently, and the rules of competition to
Opening up IoT ecosystems to external parties be rewired.
via APIs will give rise to even more risk-related With this in mind, organizations across
considerations, particularly around security, sectors and geographies continue to pursue
privacy, and regulatory compliance. IoT strategies, driven by the potential for new
Acting on the information created by the insights and opportunities. By thinking more
IoT—putting intelligent nodes and derived boldly about these opportunities and the
insights to work—represents the final, and impact they could have on innovation agendas,
most important, part of the IoT puzzle. customer engagement, and competitiveness
Options for achieving this vary. Centralized (both short- and long-term), companies will
efforts involve creating orchestration or likely be able to elevate their IoT strategies
process management engines to automate beyond sensing to a more potentially beneficial
sensing, decisioning, and response across a stage of doing.
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Internet of Things: From sensing to doing
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Tech Trends 2016: Innovating in the digital era
The organization piloted its diabetes rooms or even entire floors being closed off to
monitoring application with almost 40,000 save energy.
diabetic patients, demonstrating the viability of IoT’s reach within this building extends
the platform. Next on the agenda: Expanding far beyond lighting sensors. When employees
adoption of the diabetes pilot and extending approach The Edge’s high-tech garage, sensors
the platform to support other conditions such identify their vehicles and then point them to
as congestive heart failure, chronic obstructive available parking spots. Throughout the garage,
pulmonary disease (COPD), and high blood sensor-equipped LED lights brighten and dim
pressure, among others. as drivers arrive and leave.
And that miraculous coffee app? It doubles
Living on “The Edge” as a digital office administrator that can assign
daily workspaces that best fit users’ preferences
It’s morning in Amsterdam. An employee
and allows them to control the brightness of
leaves her desk, walking casually toward a
the lighting above their work surfaces and
break room in the office building where she
adjust the climate of their particular areas. It
works. As she approaches, a custom app on
can direct people throughout the building—
her smartphone engages sensors embedded in
reading a meeting location from one’s online
a coffee machine, which immediately begins
calendar, for example, and suggesting a route
dispensing the employee’s preferred blend,
to get there. Employees can even use the app
complete with the add-ins she desires. When
to track their progress in the on-site gym,
the employee arrives at the break room, her
where some of the fitness equipment actually
custom brew is waiting.
feeds generated wattage into the building’s
Welcome to life in “The Edge,” a futuristic
power grid.
office structure widely known as “the
Sluiter stresses that personal data generated
world’s smartest building.”9 Completed in
by sensors and the app cannot be accessed by
2014, The Edge—which is home to Deloitte
managers or anyone else. Privacy laws ensure
Netherlands—is a showplace for leading-
that nobody can track a person’s whereabouts,
edge deployments of green architecture
monitor how many meetings he or she has
and advanced technology, including IoT
missed, or see what times he or she is using the
applications. The innovative, connected
garage. “This building offers the technology
lighting panels do more than sip minute
to do certain things that would make tenants’
amounts of voltage—they contain some 28,000
lives even easier,” Sluiter says. “But at the
sensors that detect motion, light, temperature,
same time, it’s extremely important to protect
humidity, and even carbon dioxide levels. It’s
people’s privacy and conform to the law.”
these sensors, providing real-time data, that
Those minimal barriers aren’t hindering
make The Edge occupant-friendly.
The Edge’s reputation. “Our aim was to make
The sensors allow facility managers to assess
The Edge the best place to work,” says Erik
how and when certain parts of the building are
Ubels, director of IT and Workplace Services,
being used. “In our building, IT and facilities
Deloitte Netherlands. “Our meeting areas are
management are a combined function,”
filling up because every client and employee
explains Tim Sluiter, property manager, IT
wants to experience this building. It’s not too
and Workplace Services, Deloitte Netherlands.
small yet, but the economy is growing and the
In the short term, collected information can
building is getting crowded. It’s possible we
be used to determine where cleaning is and
made it too popular.”10
is not necessary on a given evening. Long
term, emerging patterns showing light use
in certain locales on certain days can lead to
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Internet of Things: From sensing to doing
MY TAKE
SANDY LOBENSTEIN
Vice president, connected vehicle technology and product planning
Toyota Motor Sales U.S.A., Inc.
At Toyota, we are all about mobility. I’m not talking of data. For example, early on, everyone assumed
just about car ownership. Mobility also includes public consumers wanted apps in cars. Very quickly, the auto
transportation, ridesharing, hoverboards, walking— industry realized that what customers actually wanted
anything that can get people from place A to place B was for the apps on their phones to work in their cars.
more efficiently and safely. Mobility is truly multi-modal. Across industries and sectors, strategists, designers,
and decision makers typically believe that current
Toyota sees the IoT as an enabler of mobility, and we approaches and systems are just fine. It takes vision—
are moving very quickly to embrace its potential. Big and a considerable amount of courage—to break with
data generated by sensors located throughout our cars the way things have been done for the last 100 years
will help engineers develop automobiles that think for and embrace some exotic technology that promises to
themselves. Likewise, Dr. Gill Pratt, the chief executive deliver new opportunities.
officer of the Toyota Research Institute (TRI), and other
researchers at TRI, will leverage IoT data to advance
the science of intelligent cars as we move into the “...In this era of historic
future mobility of autonomous vehicles. Progress in
these areas will likely deliver autonomous connected
technological innovation, all
cars that are reliable, safe, and fun to drive when you companies must work aggressively
want to. The benefits that these innovations may
eventually provide to everyday drivers, drivers with
to reinvent themselves by
special needs, and to seniors could be life-enabling. embracing new opportunities and
Toyota is no stranger to connected vehicle compelling visions of the future.“
technologies; Lexus began offering connected vehicles
in 2001. Today, all Lexus vehicles are connected, which
But in this era of historic technological innovation,
enables services like Destination Assist, which links
all companies must work aggressively to reinvent
drivers to live agents who can provide directions for
themselves by embracing new opportunities and
getting from point A to point B. Lexus also offers
compelling visions of the future. This is exactly what
sensor-driven “car health” reports on current tire
Toyota is doing with IoT and mobility.
pressure, oil levels, and maintenance needs.
I’m a car guy. In high school, I loved working under
These IoT applications are just the beginning. Cars
the hood of my car, which was the embodiment
are mechanical products built with mechanical
of leading-edge technology at that point in my life.
processes. Sensors are so small that we can place
For the last 15 years, we amateur mechanics have
them virtually everywhere on cars. And what if you
been distracted by other mechanical wonders—the
extend the same sensor technologies that monitor
kind everyone now spends their days staring at and
tires and brakes to the machines used to build vehicles
speaking into. That’s about to change. Connectivity
on the manufacturing floor? These sensors could
and cool new services are going to make cars come
alert production leaders that there is a problem at a
alive. All those people who’ve developed relationships
particular station, and that the parts manufactured at
with their smartphones are about to fall in love with
this station within a specific time frame will have to
cars all over again.
be rebuilt.
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Tech Trends 2016: Innovating in the digital era
CYBER IMPLICATIONS
The IoT connects critical infrastructure that has been • Work to define standards for interoperability:
previously unconnected. As organizations begin Internally, define data and service standards to
harnessing these connections to create value, they guide consistent rollout within your organization’s
may also add functionality to IoT networks that boundaries. Also consider getting involved with
will make it possible to take control of devices and consortia like the IIC12 to develop broader standards
infrastructure remotely, and to automate monitoring and ease connectivity and communication.
and decision-making within certain parameters based
on sensory data. • Refactor with care: Retrofitting or extending
functionality of old systems may be exactly what your
Make no mistake: As companies put IoT to work, the IoT strategy needs. But when doing so, understand
smart, connected objects they deploy offer tremendous that there may be potential security, performance,
opportunities for value creation and capture. Those and reliability implications, especially when pushing
same objects, however, can also introduce risks—many legacy assets into scenarios for which they weren’t
of them entirely new—that demand new designed. Whenever possible, use purpose-
strategies for value protection. built components for the refactoring,
engineered specifically for the
For example, every new device
use case.
introduced in an IoT ecosystem
adds a new attack surface or • Develop clear
opportunity for malicious responsibilities for the
attack, thus adding players in your ecosystem:
additional threat vectors to Rather than sharing
a list that already includes responsibility across a
protecting devices, data, diffuse ecosystem, players
and users. Likewise, identity should know where their
spoofing—an unauthorized responsibilities begin and
source gaining access to end, and what they are
a device using the correct charged with protecting.
credentials—may present Assessing potential risks
problems. And even if devices at each point—and making
aren’t directly compromised but sure stakeholders are aware of
experience a hardware failure or a bug those risks—can help make a solution
in the code, they should be able to fail in a more secure.
safe way that doesn’t create vulnerabilities.
• Get to know your data: The quantity and variety of
Moreover, the ecosystem structures that organizations
data collected via IoT—and the fact that so much of
often rightfully deploy can give rise to vulnerabilities.
that data is now held by third parties—can make it
For example, IoT applications typically depend on the
difficult for companies to know if their data has been
closely coordinated actions of multiple players, from
breached. When dealing with tremendous volumes
vendors along the supply chain to clients, transport
of IoT data, small, virtually unnoticeable thefts can
agencies, the showroom, and end-use customers.
add up over time. Companies can address this threat
Vulnerabilities exist within each node and handoff
by developing a deep understanding of the data they
seam between sensors, devices, or players. It should
possess and combining this knowledge with analytics
not be assumed that partners—much less customers—
to measure against a set “normal.” By establishing
have robust mechanisms in place to maintain data
a baseline of access and usage, IT leaders can more
confidentiality and guard against breaches.
readily and reliably identify possible abnormalities to
In the face of these and other challenges, companies investigate further.
can take several steps to safeguard their ecosystems:11
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Internet of Things: From sensing to doing
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Tech Trends 2016: Innovating in the digital era
44
Internet of Things: From sensing to doing
Bottom line
The Internet of Things holds profound potential. It is a futuristic fantasy made real—the connected
home, connected workplace, and connected government come to life. The sheer scope of IoT carries
countless implications for business, both finite and abstract. To sidestep such distractions, focus on
solving real business problems by creating bounded business scenarios with deliberate, measurable
value. For example, how can you use IoT to get closer to customers or increase efficiency in your
manufacturing operations or supply chain? Look for hidden value in your brownfields. Move from
strategy to prototyping as quickly as possible. Only real data, actual users, and sensors that respond
with actions can demonstrate the remarkable value proposition of IoT.
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Tech Trends 2016: Innovating in the digital era
Authors
Andy Daecher, Technology Strategy & Architecture principal,
Deloitte Consulting LLP
46
Internet of Things: From sensing to doing
Endnotes
1. Gartner Inc., “Gartner says 6.4 billion con- resilient in the connected age,” Deloitte
nected ‘things’ will be in use in 2016, up 30 Review 17, July 27, 2015, http://dupress.com/
percent from 2015,” press release, November articles/internet-of-things-data-security-
10, 2015, http://www.gartner.com/newsroom/ and-privacy/, accessed December 22, 2015.
id/3165317, accessed December 9, 2015. 7. Micah Maidenberg, “Why Caterpillar is letting
2. Cisco, “Cisco Global Cloud Index: Forecast its geek flag fly,” Crain’s Chicago Business,
and methodology, 2014–2019,” October July 4, 2015, http://www.chicagobusiness.
28, 2015, http://www.cisco.com/c/en/us/ com/article/20150704/ISSUE01/307049995/
solutions/collateral/service-provider/global- why-caterpillar-is-letting-its-geek-
cloud-index-gci/Cloud_Index_White_Paper. flag-fly, accessed January 12, 2016.
html, accessed December 9, 2015. 8. Caterpillar, “Caterpillar and Uptake to Create
3. Satish Tembad, “How the Internet of Things Analytics Solutions,” press release, March 5,
can change the India we live in on its head,” 2015, http://www.caterpillar.com/en/news/
Business Insider India, September 8, 2015, corporate-press-releases/h/caterpillar-and-
http://www.businessinsider.in/How-the- uptake-to-create-analytics-solutions.html,
Internet-of-Things-can-change-the-India-we- accessed January 12, 2016; Craig Brabec
live-in-on-its-head/articleshow/48871985. (chief of analytics, Caterpillar Inc.) and Dan
cms, accessed February 12, 2016. Henderson (director of research and advanced
4. Jonathan Holdowsky, Monika Mahto, Michael engineering, Caterpillar Inc.), interview
E. Raynor, and Mark J. Cotteleer, Inside with the authors, December 18, 2015.
the Internet of Things, Deloitte University 9. Tom Randall, “The smartest building in
Press, August 21, 2015, http://dupress.com/ the world,” Bloomberg Business, September
articles/iot-primer-iot-technologies- 23, 2015, http://www.bloomberg.com/
applications/, accessed December 9, 2015. features/2015-the-edge-the-worlds-greenest-
5. Kevin O’Marah, “The Internet of Things building/, accessed February 8, 2016.
will make manufacturing smarter,” 10. Deloitte, 2015 Global Report, 2016, http://
Industry Week, August 14, 2015, http:// www2.deloitte.com/global/en/pages/about-
www.industryweek.com/manufacturing- deloitte/articles/global-report-2015.html.
smarter, accessed December 21, 2015. 11. Saif, Peasley, and Perinkolam, “Safe-
6. Irfan Saif, Sean Peasley, and Arun guarding the Internet of Things.”
Perinkolam, “Safeguarding the Internet 12. Industrial Internet Consortium, http://www.
of Things: Being secure, vigilant, and iiconsortium.org, accessed January 11, 2016.
47
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