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INFORMATION VS
OPERATIONAL TECHNOLOGY
The relationship between Information Technology and
Operational Technology for IoT Initiatives.
Published: 02/2018
TABLE OF CONTENTS
3 Introduction
4 Demographics
5 Findings
20 Recommendations
The Internet of Things (IoT) is rapidly emerging Data collected from IoT implementations by IT or
as a core transformational technology of the OT groups has value, but more value can be creat-
digital era. The ability to gather data from sen- ed when this data is utilized collaboratively amongst
sors embedded throughout an enterprise can these two groups to derive overall business insights.
drive insights and operational efficiencies from The promise of IoT implementations come together
the supply chain to the customer. But imple- at this intersection, and require the blending of tal-
menting IoT, or even Industrial IoT (IIoT) often ent from both groups in the design, implementation,
requires close collaboration of both information and operation of IoT systems.
technology (IT) and operational technology (OT).
These two groups, however, often have different
IT manages the infrastructure that collects and goals, performance metrics, and perspectives on
analyzes data, including networking, computing, both the collaboration and the outcome. To gain a
security, cloud, and data storage systems. While better understanding of the relationship, either real
IT focuses on data collection and processing, or perceived, between these two groups, Futurum
OT focuses on the operational technologies Research surveyed the state of the relationship be-
that generate the data, such as the produc- tween IT and OT teams as it pertains to the design,
tion-oriented machinery, tools, fleets, and con- implementation, and creation of value through IoT
trol systems. technologies.
The survey consisted of 15 questions and was status. Approximately 90 percent of respondents
administered during August and September of indicated they had dual IT and OT responsibilities,
2017 to 500 respondents. To be eligible, the with 60 percent stating they were more involved
respondents had to have at least a moderate level in the IT organization than the OT organization.
of IoT planning, configuration, management, and or Throughout the report, IT and/or IT dominant
oversight responsibility within either IT or OT. More respondents are referred to as ‘IT focused’ while
than two-thirds of the respondents self-identified OT and/or OT dominant responses are referred to
as having either high or primary decision maker as ‘OT focused.’
Highly collaborative organizations require focused supply chain to the customer use and experience,
coordination between business units, teams, and offering the ability to improve everything from
individuals to efficiently support overall business product quality and sourcing to predictive
goals. A collaborative working relationship is critical maintenance and logistics. When implemented
for the implementation of new technologies, poorly, however, organizations may not realize
such as IoT, particularly when those technologies positive returns or efficiency gains, and may even
promise transformation with the ability to create disrupt the supply chain, customer experience,
new revenue streams or modernize strategic business processes, and employee satisfaction.
business processes. Collaboration between IT and OT is one key success
factors to implementing successful IoT projects.
How important is IoT to transformation? As
businesses shift into the digital realm, IoT sensors Our survey results confirmed a very close
collect and provide access to the operational data operational relationship between information
required to optimize businesses and deliver new and operational groups. However, the results also
products and services that are more aligned to ever- highlighted six areas where perception and reality
demanding consumer needs. When implemented between IT and OT as well as between mid-level
properly, IoT can digitally link the beginning of the and executive management, may not match.
1. Value Gap. Both IT and OT teams may be 4. Success Gap. When it comes to successful
under-valuing the strategic benefits of IoT collaboration, IT and OT have very different
projects and initiatives. perspectives on how well they work together.
2. Impact Gap. The impact of an IoT project, 5. Challenge Gap. Barriers to a successful
measured by its failure, is judged differently IoT implementation are viewed differently,
between IT and OT, and the customer may though successful IT/OT collaboration and
be the biggest loser of all. coordination is the largest issue.
3. Leadership Gap. IT and OT have different 6. Budget Gap. When it comes to budgets, IT
perspectives when it comes to who is and OT have different expectations moving
actually driving IoT initiatives forward. forward.
To the digital enterprise, IoT brings a number of key, The ability to know the status of every asset in real
strategic values. It is the primary data collection time is critical. Device data forms the foundation
mechanism for physical infrastructure responsible of the digital infrastructure, and can be leveraged
for capturing device, sensor, and status data. This throughout the supply chain, within manufacturing
includes not just physical performance data but and distribution processes, and informs how and
geo-location data and environmental data. where a customer is using an asset. Customer
usage data will become increasingly important as
• Where is this device located? more assets are offered to customers with post-
sale services or even as an asset-as-a-service.
• How is it performing?
And yet, companies may not value IoT properly.
• Has it experienced changes in its environment When asked to rate the importance of IoT projects,
(physical force, heat, cold, etc.)? only 27.2 percent of respondents indicated IoT was
Critically Important to their business priorities.
Source: Futurum Research, Bridging the IoT Perception Gap, Survey of 500 IT/OT Professionals
Source:
Source: Futurum
Futurum Research,
Research, BridgingIT/OT
the IoT for IoT Survey,
Perception September,
Gap, Survey 2017
of 500 IT/OT Professionals
By industry, Media & Technology rated IoT Services, and Healthcare/Pharma sectors, we
Critically Import the highest (33.3 percent), while believe the importance to the Public Sector –
Public Sector rated it the lowest (23 percent). particularly in areas such as smart cities and
While the value of IoT is well understood in public safety – is very high and underestimated
the Media & Technology, Banking & Financial by survey respondents.
IoT has the potential to bring vast amounts of industries, such as manufacturing, energy and
operational and customer data to the table, utilities, and transportation. In this case, it may be
yielding valuable and actionable insights in near- that IoT initiatives are not correctly understood
real time. Yet, while a majority of organizations or categorized (ex: measurement and sensors
surveyed rate IoT as a Very or Critically Important as distinct from IoT). It may also be that IoT isn’t
driver of achieving business priorities, a third valued for the foundational role it can play in the
of respondents do not. There could be several capturing of data. If this is the case, the value
factors at work here. It is possible that enterprises of data, from the supply chain to the customer
are still experimenting with IoT, and those and the connection between IoT and business
initiatives are still in the test phase. However value must be more clearly understood and
IoT, and in particular Industrial IoT, has been a articulated—particularly within the operational
core operational requirement for years in many side of a business.
The value of IoT can clearly be identified for internal One way to understand the value (and risk) of IoT
operations, particularly when it comes to optimizing is to look at the impact of failed initiatives. Like
for efficiency and cost controls. The value of IoT also any technology or business initiative, the impact
extends an organization’s ability to better serve the of failure can be viewed from two perspectives:
customer, utilizing supplier, internal, and customer internally (operations and costs), and market-
data. Time to market, quality control of products, facing (customer operations and sales).
and improved maintenance (including the availability
of replacement parts) all benefit the customer and Survey respondents were asked to assess the
help drive both satisfaction and revenue. As more impact of failed IoT initiatives both internally
products include IoT sensors, the ability to gather data and to customers. Overall, just over half of all
from actual use also increases, as improved service respondents agreed that failed IoT initiatives
and support can be realized. IoT sensors in customer would impact both internal and customer groups.
products can also be used to connect the supply chain But in a head-to-head comparison, over a quarter
to the customer, and better inform parts providers of of respondents felt that internal teams would be
issues in real time. But how do organizations perceive impacted more than their customers if an IoT
the value of IoT against possible risks? initiative failed.
Source: Futurum Research, Bridging the IoT Perception Gap, Survey of 500 IT/OT Professionals
and
In a head-to-head comparison, IT focused respon- ing IoT Strategy Initiatives, leading to an interesting
dents perceive that leadership is roughly equal be- disconnect. Given the importance of IoT to business
tween IT and OT, with OT holding a slight edge (33.1 operations, it would be expected that OT, where the
percent to 31.9 percent). However, only 19.5 percent value of IoT begins, would view itself as being in a
of OT respondents Strongly Agree that they are driv- stronger, or more equal, leadership position.
IoT, like most technologies, delivers the best val- chinery, tools, fleets, and control systems, and
ue when the teams that are most likely to benefit will be interpreting and leveraging the data to
from the value drive initiatives. Remember that make day-to-day operational decisions based on
while IT is focused on the communications and the data). If OT perceives itself as less of a strate-
computing systems to gather and process IoT gic driver of IoT initiatives, the chance exists for
data (for the benefit of all business units), OT is IoT to become more technology and communi-
the group that manages the sensor-based ma- cations-driven and less operational-value driven.
The Success Gap was verified when we asked respondents believe that the working relationship
respondents to evaluate the success of IT and OT between IT and OT is either Good or Very Good.
collaborations. The good news is that 78 percent of
Source: Futurum Research, Bridging the IoT Perception Gap, Survey of 500 IT/OT Professionals
Where is the best coordination? Media and Tech- When IT and OT responses are compared, however,
nology, where 88 percent of respondents cited a a perception gap emerges. While 56.6 percent of IT
Good or Very Good working relationship (68 per- respondents believe that IT/OT coordination of IoT
cent cited a Very Good relationship). But in Health- initiatives is very good, that number drops to only
care/Pharma and Public Sector roughly only a third 43.9 percent for OT respondents. Even worse, almost
of respondents believe they have a very good work- a quarter of OT respondents feel that the collabora-
ing relationship. tive relationship either Adequate or Barely Adequate.
To better understand the state of IT and OT collabo- the most significant barrier to successful IoT proj-
ration, it is important to understand the reasons why ects. Lack of IT/OT Coordination was cited by fewer
so many IoT initiatives are considered less than suc- than 20 percent of all respondents as the lead barri-
cessful. Survey respondents were asked to identify er, although no one category dominated the results.
Source: Futurum Research, Bridging the IoT Perception Gap, Survey of 500 IT/OT Professionals
Source: Futurum Research, Bridging the IoT Perception Gap, Survey of 500 IT/OT Professionals
Notable differences between IT and OT responses or declining OT budgets may be the driver here.
highlight IT’s increased concern with OT collabo- Regarding technology, the gap between IT and
ration; OT’s lack of budget; and IT’s concern for a OT may be as simple as an issue of maturity—OT
lack (or immaturity) of technology. Of these, the has been involved with sensor-based industrial IoT
budget and technology issues stand out. Budgets technology for years, while IT is often dealing with
are always a concern, particularly within oper- more commercial IoT technologies that are still
ational functions where cost controls have long early on in the development cycle.
been a priority. Further, as discussed below, flat
Differences in the barriers to success faced by IT derstood by both groups. To overcome these gaps,
and OT teams can hinder successful project collab- IT and OT need to partner not just on projects but
oration and impact the success IoT initiatives. This also on collaboratively addressing these barriers, in-
is particularly true if the challenges are not well un- cluding shared risk and reward frameworks.
To understand how budgetary issues might impact budget surplus are within the Media & Technology
IT and OT plans, we asked survey respondents to sector, with 34 percent of respondents expecting
assess their expectations for budget cycles over budgets to increase dramatically. Banking/Finan-
the coming 12 to 24 months. While two thirds cial Services and Healthcare/Pharma are also ex-
of respondents expect budgets to either remain pected to fare well. Those within the Public Sector
steady or increase slightly over this time period, and Products industries, however, are more likely
slightly over a quarter expect to see dramatic in- to experience budgets that remain steady or only
creases in budget. The primary beneficiaries of this increase slightly.
Source: Futurum Research, Bridging the IoT Perception Gap, Survey of 500 IT/OT Professionals
While over two thirds of overall respondents ex- pect IoT budgets to increase dramatically over the
pect increased budgets over the coming months, coming 12 to 24 months, whereas only 2.4 per-
this optimism is not shared equally by IT and OT cent of OT respondents expect to see budgets
respondents. Over a quarter of IT respondents ex- dramatically increase.
From a plus/minus perspective, the picture is 68 percent of OT respondents expect their IoT
even bleaker. While over 70 percent of IT respon- budgets to either remain steady or decrease over
dents expect their IT budgets to increase, over the same period.
When it comes to IT and OT, IoT is not a compe- 1. The Value Gap: The strategic importance
tition. As the data shows, IT and OT are working of IoT is perceived differently by IT and
to collaborate and drive overall business value. OT focused teams, as well as between
But the data also reveals imbalances and gaps individual industries.
between these two groups—gaps that may be
serving as hidden barriers to the success of IoT 2. The Impact Gap: Over a third of IT
initiatives in many organizations. Overcoming respondents believe that the failure of IoT
these gaps is an important step in realizing the initiatives impacts their internal success,
potential of IoT from both operational and cus- rather than that of the customer.
tomer-focused perspectives.
IoT holds the promise of creating an informed 3. The Leadership Gap: OT perceives itself
supply chain, bringing together both operational as being in less of an IoT leadership
and customer data to drive operational insights position than IT, potentially leading to an
and resource efficiency, and increase overall environment where OT initiatives become
business value. It also holds the promise of bet- more IT-focused and less operationally
ter serving both internal and external customers, driven.
helping to uncover and leverage data that can
be used to develop innovative products, ser- 4. The Success Gap: Over half of IT
vices, and support programs that are focused on respondents believe that IT/OT
customer experiences and outcomes. But to get coordination of IoT initiatives is Very Good
there, IT and OT must move beyond traditional while over half of OT respondents disagree.
silos of responsibility and functions and collabo-
rate closer than ever before.
5. The Challenge Gap: Despite feeling
How important is collaboration? Successful IoT optimistic about IT/OT coordination,
implementations require the balancing of the the two teams perceive IoT challenges
OT operational systems that generate the data differently, as IT respondents are more
and the IT infrastructure necessary to gather and likely to list a lack of IT/OT coordination
process the data. It is a partnership, one that as a leading barrier to IoT success, while
should be designed to not only improve opera- OT respondents are crippled by budgetary
tional efficiencies but to connect the customer issues.
to the supplier and enable the collection of data
that leads to insights, improved customer expe- 6. The Budget Gap: While IT overwhelmingly
rience and core business value. When one team expects IoT-related budgets to increase
has a real or perceived edge over the other, the slightly or dramatically over the coming
result is an imbalance that limits success. And 12 to 24 months, OT overwhelmingly
we see such an imbalance in the survey results. anticipates steady or slightly declining
This leads to the 6 critical gaps that Futurum Re- budgets.
search identified in this study.
There is no easy fix to address the gaps identified tioned throughout this paper, companies must
in this survey and improve the effectiveness of continue to think about customer experience
collaboration between IT and OT for IoT-related and operational success at each step of their IoT
initiatives. However, several actions can balance deployment. With these two critical factors in
the perspective between these two comple- mind, there are a set of key recommendations
mentary teams. Before any successful technol- that we believe organizations should adhere to in
ogy investment should be made, it is critical that order to maximize their IoT Investments and real-
companies understand the purpose of such an ize the greatest collaboration between all parties
investment and align it to strategic goals. As men- involved in IoT projects.
SAS and Hewlett Packard Enterprise (HPE) Event Stream Processing combines with
have partnered for over 32 years to help HPE Edgeline Converged Edge Systems to
mutual customers solve their most diffi- provide real-time analytics where the data
cult business problems. Both companies is being generated. Additionally, HPE infra-
were early entrants of their respective IoT structure integrates compute, storage and
partner ecosystems. They enjoy a close networking, to support a complete and op-
R&D relationship, and HPE engineering timized platform for SAS® solutions. HPE
works closely with SAS to conduct rigor- provides significant expertise in IT man-
ous benchmarking and performance briefs. agement to ensure software availability and
SAS and HPE have collaborated to develop performance of the architecture, as well
robust solutions to address critical indus- as enterprise services management and IT
try-specific challenges, helping organi- outsourcing. Together, SAS and HPE have
zations apply analytics, based on volume, over 10,000 joint customers running deci-
velocity and latency requirements. SAS® sion support systems.
CONTACT
INFORMATION
Futurum Research, LLC
futurumresearch.com
817-480-3038
info@futurumresearch.com
Twitter: @futurumxyz