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Welcome to the connected world! As one of the forces to drive digital disruption, a new technology revolution is brewing that uses sensors, networks, and analytics software to connect physical objects and infrastructure to computing systems, providing unprecedented visibility and control of the status, location, and activities of products, assets, and infrastructures. Connected world solutions link physical assets to analytics and control systems through the internet, allowing firms to take action based upon comprehensive and real-time understanding of situations. Forrester defines the connected world as one where:

Technologies enable objects and infrastructure to interact with monitoring, analytics, and control systems over internet-style networks.

The connected world will dramatically broaden the reach and impact of information technology systems, impacting economic activities, applications, and use cases that IT has not touched heretofore. In a connected world, software and information systems monitor and control many aspects of the physical world, not just the digital one. This means greater efficiency and asset utilisation across many industrial and commercial scenarios; similar benefits will eventually spread to consumer sectors like automobiles and homes as well.

CIOs will be a crucial catalyst for their organisations to capture emerging opportunities and harness the power of connected world solutions. Context-aware, location-based applications and services change how companies engage with and serve their customers; CIOs balance their efforts between what's possible from a technology perspective and what's meaningful to the business.

To do this, CIOs must:

  • Identify which business outcome(s) the connected world can deliver for your company. It's easy to get caught up in the "gee whiz" of the connected world, and there are many examples of failed pilots going back at least a decade. Instead, CIOs should identify which of the three primary connected world business outcomes is a priority for the firm and which technologies, skills, and process changes are required for success. By starting with the business outcome, CIOs are in a stronger position to help build the business case, including the security, integration, and data analytics components necessary for implementation.
  • Partner with business leaders to ensure organisational and skill set alignment. Different business leaders will be the stakeholders for each class of business outcome: the CTO or R&D head for "differentiate products and services," the CMO for "transform customer engagement," and the COO or CFO for "optimise asset utilisation." The real-time data and insight captured by connected devices opens the doors to improve processes in virtually all functional areas; the CIO should help identify skills that are lacking and help fill the gaps, especially for data and analysis geeks.
  • Address security issues and data privacy concerns. The connected world heightens the importance of information security on at least three dimensions: protecting connected assets from attack, protecting captured data from misuse, and protecting the privacy of individuals whose assets are supplying the data. CIOs must proactively work with their corporate security and risk counterparts to ensure captured data will align with customer preferences as well as regulatory and compliance requirements.
  • Evaluate and expand software skills. The connected world enables businesses to capture how employees and customers use devices and systems; they can use this information to improve employee activities, business processes, and customer experiences. Implementing these systems will require joint business-technology task forces, with analytics experts alongside folks from operations, facilities, and product development. And software development skills will be in high demand too, since very few connected world systems are turnkey and they therefore require architecture, integration, and Agile development expertise.

In industries like utilities, transport, and consumer products, accelerating deployment of connected world solutions shifts the strategic priorities of CIOs and business decision-makers. One-way and one-time product sales will be transformed into ongoing, service-based relationships, based on the collection and especially analysis of connected world data. By understanding the landscape of the connected world, business technology leaders can prepare their firms for the implications — positive and negative — of optimising assets, differentiating products and services, and transforming customer relationships.

Christopher Mines is senior vice president and research director at Forrester Research