MIT Sloan Executive Education Blog

The human side of IoT: Digital transformation is about more than technology

The Human Side of IoT

Many organization think of digital transformation as the implementation and use of cutting-edge technologies. But advancements in information technology—and the Internet of things (IoT) in particular—pose opportunities and challenges that far transcend technology. In order to seize strategic advantage with IoT, many businesses require hard fought for talent and organizational shifts. In fact, our new online course, Internet of Things: Business Implications and Opportunities, approaches IoT as a leadership opportunity and a mechanism to transform business, rather than viewing it as a purely technical topic.

IoT’s human capital transformation

Research shows that talent and skills are the biggest barrier to harnessing the power of IoT, particularly among industrial firms that suddenly find themselves in need of a broad base of talent across a variety of roles and responsibilities. The Internet of Things Talent Consortium (IOTTC), an industry-wide initiative focused on building and growing IoT talent, recently surveyed more than 1,500 senior executives, asking them about impediments to success in digital transformation; 50% identified lack of digital expertise and skills as a top barrier. Further, the world’s largest CIO survey conducted by the Gartner Group, showed that 66% of CIOs believe that demand for talent will outpace supply by 5X through 2021.

Adding complexity to the problem, today’s highly consolidated and demanding job roles require talent with a broad set of skills that includes project management, business analysis, change management, strategy, and business relationship management. Not only is a new breadth of skills necessary for those entering the industry, but also for those already within the industry. These individuals must upskill as IoT technologies evolve.

What does this means for organizations? A key finding from MIT Sloan Management Review and Deloitte’s global research on digital transformation was that maturing digital organizations don’t tolerate skill gaps. More than 75% of respondents from these leading companies say that their organizations are able to build the necessary skills to capitalize on digital trends either in-house or through an external partner organization. (Among low-maturity entities, the number plummets to 19%.) These organizations have developed responsive learning programs that map to specific goals and outcomes they want to achieve through IoT.

Organizational shifts required

Acquisition or development of the necessary skills and talent at the individual level addresses only part of equation. Care must also be taken to address organizational-level constructs including culture, alignment, and leadership.

Recent literature from the IoT Talent Consortium reports that nearly three-quarters of digital transformation efforts driven by the growth of IoT end in failure, resulting in losses that have an effect across the entire organization, not just in IT. The underlying reasons for these failures are as wide ranging as their effects and include organizational level challenges as well as employee-level concerns.

The MIT/Deloitte research concurs. “In many companies, the failed implementation of enterprise resource planning and previous generations of knowledge management systems are classic examples of expectations falling short because organizations didn’t change mindsets and processes or build cultures that fostered change,” write the authors.

In the MIT Sloan Executive Education program, Implementing Industry 4.0: Leading Change in Manufacturing and Operations, Senior Lecturer John Carrier and MIT Sloan Professor John Van Maanen warn executives of the systemic errors that are bound to repeat themselves in this fourth era of industrial revolution. In the race to implement new technologies, it is often forgotten that factories (or organizations) already have systems in place. A mix of old and new technologies can be counterproductive, unpredictable, and result in defect-laden products delivered behind schedule. They also stress the importance of decoding cultural and workforce factors prior to making an investment in new technologies, and to understand the people who will be using the technology.

It is clear that becoming a digital leader is not simply a matter of technological savvy. Preparing for IoT and broader digital transformation requires a strategic approach that carefully considers human capital and broader organizational transformation. At its core, IoT is not a technology, it's a mechanism to transform businesses—and a leadership opportunity.

To learn strategies for developing the skills and foundational capabilities necessary to support IoT technology implementation, consider signing up for the 6-week online (self-paced) executive program, Internet of Things: Business Implications and Opportunities.


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