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Georgia Institute of Technology (Georgia Tech) Center for the Development and Application of Internet of Things Technologies (CDAIT) IoT Thought Leadership Working Group Atlanta, Georgia, USA Georgia Tech Center for the Development and ApplicationNovemb of Interneter 2019 of Things Technologies (CDAIT) Page 1 of 78 PREFACE The topic for this white paper, Digital Transformation and the Internet of Things, was presented by the Center for the Development and Application of Internet of Things Technologies (CDAIT) IoT Thought Leadership Working Group1, headed by Karen I. Matthews, Ph.D. and Technology and Market Development Manager, Science and Technology at Corning Incorporated, and was approved for creation October 2018 by the CDAIT Executive Advisory Board. The CDAIT IoT Thought Leadership Working Group, along with other CDAIT collaborators, subsequently authored this paper for publication. The key contributors, listed at the end of the paper, come from different walks of industry and academia and are directly involved in Digital Business Transformation and the building of IoT. Special thanks goes to Michelle Mindala-Freeman, former Vice President in the Telecommunications, Media and Technology Practice at Capgemini; Pramod Kalyanasundaram, Ph.D., former Vice President and CTO at Verizon Connect; and Sébastien Lafon former Global Head of Digital and Marketing Services at Boehringer Ingelheim, all Georgia Tech Visiting Scholars at CDAIT, who animated and guided the team’s effort. Following the same approach as for other CDAIT publications, contributors have shared their personal ideas, observations and opinions grounded in research and real-life experience. As a result, the views expressed in this white paper are solely the authors’ collective own and do not necessarily represent those of Georgia Tech, the CDAIT company members, the individual members of the IoT Thought Leadership Working Group, the University System of Georgia or the State of Georgia. 1 Information about CDAIT and the CDAIT IoT Thought Leadership Working Group can be found at the end of this paper. Georgia Tech Center for the Development and Application of Internet of Things Technologies (CDAIT) Page 2 of 78 TABLE OF CONTENTS Preface ............................................................................................................................ 2 Executive Summary ........................................................................................................ 5 1 Introduction ............................................................................................................ 10 1.1 Objectives ...................................................................................................................10 1.2 Definitions ...................................................................................................................10 2 IMAGE: The IoT Value Chain ................................................................................. 16 2.1 Interface: Device Considerations ................................................................................17 2.2 Medium: Network and Connectivity Options ................................................................18 2.3 Application: Software Considerations ..........................................................................21 2.4 Glue: Holding the Value Chain Together .....................................................................23 2.5 Extraction: Analytics and Insights ................................................................................29 3 Transformation Frameworks and Common Themes .............................................. 32 3.1 IMD .............................................................................................................................32 3.2 McKinsey & Company .................................................................................................33 3.3 Capgemini ..................................................................................................................34 3.4 Common Themes and Lessons ..................................................................................35 4 IoT Opportunities and Risks ................................................................................... 36 4.1 Industries and Use Cases – the Big Picture ................................................................36 4.2 Transformation and Value Opportunities .....................................................................37 4.3 Risks ...........................................................................................................................44 5 The DIGIT Framework and Guide to Successful Transformation ........................... 49 5.1 Discover the Problem/Opportunity ..............................................................................51 5.2 Identify the solution .....................................................................................................52 5.3 Govern the process .....................................................................................................56 5.4 Implement the solution ................................................................................................59 5.5 Track effectiveness .....................................................................................................61 6 Conclusion ............................................................................................................. 63 Appendix I - Additional CDAIT Member Views .............................................................. 65 Appendix II - Further Reading ....................................................................................... 67 Key Contributors ........................................................................................................... 76 About CDAIT ................................................................................................................. 77 Georgia Tech Center for the Development and Application of Internet of Things Technologies (CDAIT) Page 3 of 78 LIST OF FIGURES Figure 1 - From Analog to Digital: Digital Transformation ..........................................................14 Figure 2 - IMAGE model of the IoT Value Chain .......................................................................15 Figure 3 - IMAGE as a Logical Architecture ..............................................................................16 Figure 4 - IoT Device Companies ..............................................................................................17 Figure 5 - Comparison of Select IoT Connectivity Technologies ...............................................19 Figure 6 - Insights and Data Capability Ecosystem ...................................................................29 Figure 7 - Vendor companies supporting the Extraction Pillar ...................................................30 Figure 8 - Annual Size of the Global Datasphere ......................................................................31 Figure 9 - The hidden challenges of digital business transformation .........................................32 Figure 10 - IMD’s Digital Orchestra ..........................................................................................33 Figure 11 - McKinsey’s ten guiding principles of Digital Transformation ....................................34 Figure 12 - Capgemini’s Digital Transformation Compass .........................................................35 Figure 13 - View of Benefits & Enablers ....................................................................................37 Figure 14 - Digital Culture Employee Perspectives ...................................................................46 Figure 15 - The DIGIT Framework ............................................................................................49 Georgia Tech Center for the Development and Application of Internet of Things Technologies (CDAIT) Page 4 of 78 EXECUTIVE SUMMARY There has been much said about the Internet of Things (IoT) and what it can bring to business and society - creating a more deeply connected world, informed by data sourced from connected things, made better by smarter, more meaningful actions and interactions. These views often focus on how IoT technical solutions can deliver this new future, emphasizing the technology “DNA” of IoT – devices, networks and applications. We have found, however, both through research and experience, that while technology is, in fact, the core of IoT’s DNA; it is just a piece of the puzzle needed to deliver on IoT’s promise. With 60% of IoT projects still struggling to move out of proof-of-concept and scale successfully2, there is more to IoT success than technology alone. What is needed and how can business leaders plan better for IoT success? We believe the answer rests in both IoT program owners and business leaders taking a more holistic view – both of IoT itself and of IoT in the context of Digital Business Transformation. Our full report attempts to flesh out these views, providing guidance on how to think about Digital Business Transformation and the full IoT value chain; a view into the benefits, risks and mitigations of IoT-driven Digital Business Transformation; and, finally, concrete recommendations on the capabilities that must be in place for both IoT and Digital Business Transformation success. While readers will find many insights, data points and useful references throughout, there are essentially three key takeaways