The Internet of Things (IoT) market is rapidly growing and expected to reach US$1.29 trillion by 2020. Although consumer products (CP) companies are anxious to adopt the IoT, they need to identify how they will derive value from this technology.
This and more were discovered as the result of a first-of-its-kind global study detailing adoption trends in the CP industry. The study of CP industry executives yielded three significant findings:
- Less than half of CP organizations know how to build a business case for the IoT
- The real business value of adopting IoT technology in CP will be in process efficiencies
- Companies leading in IoT adoption are prioritizing processes and skills, while laggards are still researching their options
“CP organizations are addressing the rapidly changing business conditions by adopting innovative solutions,” said E. J. Kenney, senior vice president, Consumer Products Industry Business Unit at SAP. “To effectively utilize the IoT, aligning business objectives throughout the supply chain has to be a top priority. A digital core and real-time platforms are key to digital transformation.”
Adoption leaders prioritize processes and skills, while laggards are still laying the groundwork by conducting research or consulting third-party experts.
Additionally, findings of the global study indicate that strategic adoption of the IoT in the CP industry requires alignment in three areas: understanding, knowing the areas most applicable to the business, and having the ability to build a tangible business case. For example, only 41 percent of CP organizations recognize clear applicability to their business. Only 39 percent of organizations have a clear understanding of what it is, and fewer still — 36 percent — can build a business case for adoption.
These results also show stark differences between CP organizations that are considered leaders and those considered laggards regarding adoption. For example, while 46 percent of leaders said allocating more budget to IoT strategy was a key step to unlocking potential business value, only 14 percent of laggards prioritized budget.