Editors Note: DBizInstitute is excited to share this article, written by Dr. Setrag Khoshafian, with our community and in advance of his new book release. Keep an eye on our website as we share additional articles in the coming months written by Setrag, as well as a pending Meet the Author webcast to discuss his new book ‘How to Alleviate Digital Transformation Debt’ expected to air Fall 2021. Be sure to pre-register! This article was originally published on CognitiveWorld on December 19, 2019.
Despite digital transformation initiatives and several wins involving Internet of Things—consumer or Industrial (aka IIoT) —ROI from IoT is still a challenge companies face. That is the impression, anyway. Vodafone’s 2017/2018 Barometer of IoT shows trends and positive results in the adoption of IoT in different industries. According to the survey Vodafone conducted, “74% agree that digital transformation is impossible without IoT.” The study does reflect some concrete ROI and success from those who have been adopting IoT. Interestingly, the report indicates IoT is being integrated in existing business processes. As we will see, this business process centricity (also referred to as the Process of Everything), is the key to IoT success.
IoT/IIoT challenges include skills shortage, standards, security, and uncertain ROI, to name a few. Usually the forecasts show the exponential growth to tens of billions of devices by 2020 and beyond. However, even though there has been some interesting ROI results as indicated in the report mentioned above, the full potential ROI of IoT remains elusive.
How should organizations achieve ROI results to succeed with IoT/IIoT? There are couple of approaches.
The Bottom-Connect-Up and Middle-Platform-Up Approaches
IoT/IIoT is about connecting sensors and actuators. The foundation for connectivity, balancing range, and power supply considerations is plainly critical. There are several components in the overall stack and multi-tier architectures of IoT/IIoT. The lowest levels include physical devices and systems. It is precisely this cyber-physical connectivity that is laying the foundation of the IoT/IIoT era. The Industrial Internet Consortium’s Reference Architecture (IIRA) describes the Control Domain in the Functional View. The Control Domain’s Communication “connects sensors, actuators, controllers, gateways and other edge systems.” Additionally, business logic can be applied at the edges and edge computing is becoming extremely important in the bottom-connected-up approaches. The bottom-connected-up approach focuses on what could be done with the control and edge layers (networking, bandwidth, power, control, etc.) and moves up to achieve value.
As IoT/IIoT evolved, we saw an explosion of IoT Platforms: Currently there are anywhere between 200–450 IoT/IIoT platform vendors, depending on the features and taxonomies. In others words, a lot! Some might even say too many. IoT Platforms are cyber-physical middleware with capabilities such as connectivity, device management, analytics, security, identity management, sensor data management, and APIs for connectivity with enterprise systems. IoT Platforms also support Cloud deployments and application development capabilities. The IoT platform approaches focuses on the middleware platform as the core enabler for IoT value.
The bottom-up connectivity and middleware approaches via IoT platforms do have some merit, but the overall approach for business success and business value is achieved through top-down Digital Process Automation (DPA) best practices, as discussed in the following section.
What is Digital Process Automation (DPA)?
From its early days of operational efficiency management discipline, to intelligent process automation systems, BPM has been evolving. Artificial Intelligence, Robotic Process Automation, and of course, Digital Technologies are now seamlessly supported or incorporated in robust BPM platforms and solutions. DPA was coined by Forrester and the following reflects this evolution from traditional BPM to Digital Process Automation.
DPA supports Low Code/No Code development with intelligent work automation. There is a spectrum of worker categories and work automation types that are supported through DPA. More importantly, DPA is about a cultural shift from silos to end-to-end value stream connectivity.
Success of IoT through DPA
There are a number of reference architecture and reference models for IoT. IoT Forum’s puts collaboration and Business Processes at the top of the multi-level architecture for IoT.
This is significant: Success can be achieved top-down with concrete business objectives from the get-go. Top-down business solutions involve people, connected devices (aka IoT/IIoT), trading partners, and enterprise applications (aka systems of record) all collaborating and orchestrating their activities towards concrete and measurable Key Performance Indicators (KPIs). The collaborations are in the context of end-to-end value streams (the operating word being value), that are modeled, automated and monitored through DPA for continuous improvement. DPA methodology, competency best practices, and technology is the engine that drives IoT/IIoT success. IoT/IIoT constitutes a powerful extension the business processes that are supported through DPA.
We have seen this before in other infrastructure technologies. Not too long ago—and still quite popular—IT organizations were pursuing strategic SOA initiatives for their next generation Enterprise Architectures. (As I had indicated years ago: The Road to SOA Success Ran Through BPM). BPM has now evolved to DPA. As indicated, “Through a BPM focus, business and IT can speak the same common BPM ‘language.’ BPM focuses on capturing and automating business requirements or objectives. SOA is often focused on building a strong technical architecture foundation. BPM helps IT SOA initiatives prioritize and focus on those aspects of the service architecture that are directly linked to business value. This BPM focus and prioritization helps link business performance objectives to SOA infrastructure capabilities.” You can replace BPM with DPA and SOA with IoT Connectivity infrastructure and Platforms—but the value proposition is the same.
The top down value stream approach for IoT/IIoT ROI is critical—it could best be achieved through Digital Process Automation.
In IoT/IIoT the ROI opportunities always involve end-to-end connectivity from the lower-level devices (sensors, actuators) all the way to the stakeholders; these could be trading partners or end-consumers. There are many layers and complex multi-tier architectures to provide the infrastructure for this value stream connectivity. DPA captures, models, automates and continuously monitors and improves the ROI value stream. It involves orchestration of things, intelligent edge computing, harvested AI models, and (of course) humans. DPA addresses silos par excellence; either within an organization or industry or across extended digital enterprises.
Here are some examples of value streams digitized and automated through DPA for success:
- Digital Prescriptive Maintenance: The ability to remotely monitor, control, leverage AI analytics for prescriptive maintenance is perhaps the most important application of IoT/IIoT. In fact, it is Digital Prescriptive Maintenance. This means the end-to-end value stream for maintenance is digitized and automated through DPA!
- Digital Transformation of Supply Chain: The supply chain models, logistics machine learning from sensor (IoT) events, emerging backbones such as Blockchain for Supply Chain, and automation through Digital Process Automation are the core enablers of digital transformation for supply chain success. Digitization spans the extended manufacturing digital enterprise, including OEMs, parts suppliers, logistics, and transportation.
- Connected Customer Digital Transformation: Connected devices—consumer as well as industrial—are providing additional and sometimes profound understanding of the Customer. Manufacturers are becoming extremely aware of the Customer effectiveness of their smart products: What works and what needs to improve. DPA is enabling a profound Digital Transformation shift in Customer Relationship Management.
Each of these examples involves the orchestration of stakeholders (e.g., customers, partners), connected devices (IoT), trading partners, and enterprise system of record applications. DPA empowers and automates the entire multi-tier architecture from connected devices, the edge computing, and all the way to the enterprise. DPA is also about continuous improvement, best practices, and digital optimization culture. It realizes and optimizes the IoT/IIoT catalysts for a holistic Culture of Connectivity.
After all: Culture Always Trumps Technology!
