5 questions about the IoT (Internet of Things)

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.

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.

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

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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

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

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Where do humans
fit into the equation?2

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.

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
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

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”

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
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

How will companies
keep information safe?4

The complex and rapidly changing landscape within
the Internet of Things demands a structured approach to
identifying risks and appropriate responses.

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
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

How does the Internet of Things
create value for your supply chain?5

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

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
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

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

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
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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

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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5 questions about the IoT (Internet of Things)