Ensure an effective IoT asset management initiative
IoT devices have boosted the real-time tracking game for items as diverse as tools, shipping containers and vehicles, though other uses of IoT might be more profitable.
Organizations can use asset management and tracking for a variety of purposes, making it no surprise that it is the most common application for IoT. In Nemertes' 2019-2020 research study, 30.5% of participants stated that it was their primary IoT initiative.
Users told Nemertes Research Group Inc. that one of the most compelling IoT applications of asset management is tracking smart tools. Specifically, they track the location of expensive tools and automatically send alerts if the tools move out of their usual locations. This cuts down on pilfering and misplaced items.
It can also alert managers to operational problems. For instance, if a worker takes an unusually long or short time with a tool, there may be a problem in the process, or the worker may require additional training.
More traditional uses involve tracking pallets, containers and products to ensure on-time delivery to customers. One of the earliest asset tracking uses for IoT was to monitor travel paths of shipping vehicles. Given that asset tracking and management was one of the earliest uses -- and remains one of the most common -- it may be surprising to discover that it doesn't correlate with the IoT initiative's success.
The "Nemertes IoT Research Study 2019" of 403 organizations found that successful organizations were 40% less likely to have designated asset management and tracking as their most successful IoT initiative, as shown in Figure 1. To be identified as a successful organization, they had to have initiatives that performed in the top third of all successful IoT initiatives based on the stated goals to save money, drive new revenue or increase operational efficiency.
Figure 1. The success group was less likely to consider asset tracking as their most successful IoT initiative than other study participants.
The organizations that did not meet the requirements to be identified in the highest success group -- the 33.5% that identified asset management as their most successful initiative -- reported an average cost savings of $220,174 per IoT asset management project regardless of project duration.
Out of all organizations in the study, those that selected other initiatives as their most successful achieved more than $19 million per project. Similarly, the mean new revenue generated by IoT asset management projects was $9,448,590 million per project, versus more than $26 million per project for all other IoT initiatives.
Figure 2. This comparison shows organizations' average savings and revenue for IoT asset management projects versus all other IoT initiatives.
Organizations that used IoT for purposes other than asset tracking and management generated nearly three times as much new revenue and saved 87 times more.
How asset management differs across organizations
Organizations that prioritized asset management shared minor differences in the characteristics versus all others. For instance, asset management initiatives are slightly more likely to be smaller, with fewer than 100 devices, and either launched in 2018 or in 2015 and earlier. The initiatives focused more on driving revenue or improving business processes versus saving costs. These organizations are also slightly more likely to experience hyper growth -- increasing device count by 100% or more per year. None of these differences are significant enough to account for the differences in outcome.
Organizations that used IoT for purposes other than asset tracking and management generated nearly three times as much new revenue and saved 87 times more.
Asset management initiatives are significantly more likely to conform to best practices that correlate with objective success, including having an IoT architecture; having an IoT budget that's centrally located and within the business units; and having IoT specialists across a range of functions, such as architecture, security, networks and analytics.
Two areas where asset tracking and management initiatives differ from other initiatives may hold a clue. The first is sourcing strategy. Organizations that report asset management as their primary IoT initiative are nearly 40% more likely to have a DIY approach to integrating IoT technology components than others. The initiatives are 22% more likely to be led by an operational technology group, versus the IT or business groups.
Tips for IoT asset management success
If your organization launches an asset management initiative, Nemertes research suggested some guidelines.
First, engage both lines of business and IT as early as possible since that correlates generally with success and is a missing factor in many asset management initiatives. Second, don't go it alone. Partnering with a value-added reseller or a strategic vendor correlates strongly with success. Finally, don't neglect the basics. Set out clear business goals, make sure you have the internal technical expertise in IoT architecture and security and plan for rapid growth.
