IoT and Digital Transformation: What's the Difference?
The two terms are often used interchangeably, but one actually enables the other.
The terms “IoT” and “digital transformation” often are used interchangeably both in media and in casual discussions. They shouldn’t be. Digital transformation is a business strategy aimed at digitizing manual or analog business tools and practices. IoT is a powerful means to that end.
Why Bother?
No one implements IoT technologies just to connect all of these “things” for the sake of it. Take the example of a trucking company. By putting cellular-based sensor gateways on its vehicles, the company always knows each vehicle’s location, drivetrain condition, fuel consumption and cargo status. Now it can automate tasks (the digital transformation) such as route planning, maintenance scheduling and identifying which vehicle models have the highest operating costs. That automation frees employees to focus on other tasks and increases the company’s operational efficiency.
IoT goes hand-in-hand with data analytics, where sensor data is mined to understand what has happened, show what is happening and predict what will happen. The trucking company could use data analytics to identify where its vehicles often get stuck in traffic jams and then develop alternative routes. That helps improve customer satisfaction by minimizing delivery delays, and it saves money because trucks don’t waste fuel sitting in gridlock.
The increasing adoption of IoT technologies is a result of the convergence of a myriad of internal and external business dynamics as well as the maturation of a number of key technologies including: miniaturized electronic sensors, 5G wireless networks, low-powered wireless technologies, long-lasting batteries, data analytics, the cloud — and the pace of innovation is only going to accelerate.
The trucking example highlights why the right analytics solution is key for enabling digital transformation. Without it, the deluge of IoT data becomes information overload. Businesses understand the importance of analytics, but they often struggle when it comes to identifying where and how to get started.
Not Just Another IT Project
Digital transformation is not an IT project. It’s an organizational initiative, and it won’t occur by simply employing some IoT technologies on the edge. It requires business processes to adapt and evolve. Organizational structure may need to be shifted, and new people and skills will be needed. The culture of the company may need to adapt to the shift in how it serves both customers and employees in new ways. While IoT tools might be deployed in the span of months by the IT organization, digital transformation can take years and will require many company departments to collaborate and work together to solve problems in new ways.
The important thing is to have a shared vision within your company and a plan to bring it to life. But that alone doesn’t ensure success. Here are a couple of key principals to consider that can help keep your plans on track:
- Think Big. Envision the desired outcomes and chart out a plan to get there even if you don’t have all of the answers yet.
- Act Small. Tackle that plan piece by piece, focusing on incremental strategic investments that can generate a fast, measurable return to keep you on track. Turn your proof-of-concept experiments into proof-of-value projects with defined, measurable success criteria.
- Move Fast. It’s better for your company to transform itself from within before external forces can disrupt it from the outside.
That’s often easier said than done, which is why the best piece of advice we give at CDW is “Don’t go it alone.” Digital transformation may be a long journey into uncharted territory, so find a partner that knows the terrain.
Learn more about the power of IoT technologies at CDW.com/IoT.
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