Understanding The ROI On IoT Investments

The Internet of Things (IoT) has the potential to become big business with big payoffs — or at least that is what the latest results from research published by Tata Consulting Services is pointing to.

This year’s TCS Global trend study, “Internet of Things: The Complete Reimaginative Force,” found that by 2018, IoT spend is expected to increase by 20 percent to $103 million, based on interviews with 795 executives from multinational companies across the globe with average revenues of $22 billion.

The study identifies the massive potential for revenue increases from IoT investments but also highlights the challenges for companies transitioning to the new model.

“The age of IoT is well underway. The question is, whether businesses are ready to realize the full potential of this technology. Our latest global trend study found that leaders in using IoT technologies are using it to completely re-imagine their businesses by changing every aspect of them from business models and products to business processes and workplaces,” Tata Consulting Services’ CEO and Managing Director Natarajan Chandrasekaran said in a company release. “Now is the time for every leader in every industry to reimagine the possibilities for their businesses in a world of smart, connected ‘things.'”

Already, the study has found that 80 percent of companies surveyed have increased revenue by investing in IoT. In 2014, the companies saw an average increase of 15.6 percent, while almost 1 in 10 saw a jump of at least 30 percent in revenue.

The IoT remains an alluring growth opportunity for company executives, as the study showed 12 percent of respondents planned spend of $100 million in 2015, with 3 percent expecting to invest a minimum of $1 billion.

But this big opportunity does not come without its roadblocks.

While the data surrounding IoT investment and its potential impact on revenue growth is encouraging, the TCS Global Study exposed the three biggest factors companies across all sectors are going up against:

• Corporate culture – respondents said adapting the mindset of employees when it comes to customers, products and processes remains a significant challenge
• Leadership – the willingness to invest time and resources in IoT must start at the top
• Technology – many tech-related questions surrounding IoT remain, such as security, handling Big Data and integrating IoT data with enterprise systems

A summary of the TCS Global Trend Study results and insights into the analyzed industries and and spending forecast can be found here:

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