How Actionable Insights from IoT Data Analytics Can Give You Positive Business Benefits

9 min readJan 4, 2019

Written by: Istvan Boscha, CEO @Aliz

I will begin with a story. Some parents are really helpful. They are ready, for example, to help their children’s school by buying expensive Smart Boards for their daughter’s or son’s class. That is exactly what happened to one of my friends. He bought a Smart Board for his son’s class. The teachers were happy, and the children were excited about the new possibilities the Smart Board opened for them.

The days passed. Besides the daily routine, my friend almost forgot the kind help he had given. Then, on one of the sunny, sleepy early autumn afternoons, as he waited for his son at the school, he ran into the headmaster. He remembered the Smart Board and asked enthusiastically what the situation was, what was it used for? The answer started with an uncertain response. “Unfortunately, our colleagues are not really able to take advantage of the opportunities offered by this tool, but sometimes, a couple of images related to the actual lesson’s material are shown on the Smart Board for the children….”

Optimizing the story

What… — my friend thought — a very expensive Smart Board used as a very cheap and simple projector?!

I hope you understand why I do not want to share the exact words my friend used to tell the story, as they are not important at all from the point of view of this article, but they could certainly prove the beauty of the Hungarian language, which is quite famous for its very sophisticated swearing.

This sort of sub-optimal use of technology is quite common nowadays. And not only in case of a school but at a much higher scale as well.

The story told above, jumped into my mind a few weeks ago when I was reading an article about how the Internet of Things (IoT) evolved, where it is now and how the future of IoT may look. The IoT has opened up many opportunities for businesses. Some of them are obvious, some less so.

Big data for big ROI

IoT projects are not cheap, not at all, and an expensive technology, like a Smart Board, used sub-optimally, will lead to shocking results. However, used optimally, it will give a good return on investment (ROI) and give your business a competitive advantage.

In this article, I will look at how and why you should use — in my opinion — the best Big Data platform to leverage your IoT investments, optimize your collected information, and utilize a full blown data analytics solution. This concept is not only the foundation of your IoT ROIs, but it can also help you to make a big step towards into Machine Learning (ML) and Artificial Intelligence (AI). These are things that sound really trendy today. However, investment in these technologies now is important for future use.

Data on Big Data

Before we go deeper into the topic, I would like to speak a few words about Big Data in general, as this topic obviously relates to the IoT world.

The term “big data” was first used in the modern sense back in 2005 by Roger Magoulas of O’Reilly Publishing. Big data is all about the massive amounts of information that modern computing creates. Since the advent of the Internet and more lately the IoT, aka Internet-enabled devices, big data has really exploded. Global production of data will reach astronomical levels in the coming years. Analysts IDC, predict that the Global Datasphere will grow from 33 Zettabytes in 2018 to 175 Zettabytes by 2025. This is a lot of data to analyze: 1 ZB = 1021 bytes (1,000,000,000,000,000,000,000 bytes) = one trillion gigabytes.

65% OF THIS DATA WILL BE CREATED AND MANAGED BY BUSINESSES WITH NEARLY 20% OF IT BEING CRITICAL TO OUR DAILY LIVES (FORBES).
ONE OF THE MOST INTERESTING ITEMS RELATED TO DATA GROWTH IS THAT BY 2025 “AN AVERAGE CONNECTED PERSON ANYWHERE IN THE WORLD WILL INTERACT WITH CONNECTED DEVICES NEARLY 4,800 TIMES PER DAY — ONE INTERACTION EVERY 18 SECONDS”
ALSO, THE AMOUNT OF THE DATA “THAT’S SUBJECT TO DATA ANALYSIS WILL GROW BY A FACTOR OF 50 WHERE MORE THAN A QUARTER OF ALL DATA CREATED WILL BE REAL-TIME” (FORBES).
Forbes, 2017

Getting the most out of your data

Coupled with increases in data generation, the modern business is under pressure to make the most of these data. But how will they cope with this data deluge? This is one of the biggest challenges businesses will face in the near future.

Deciding on what is important and what is not, is a crucial first step. However, even if you store only part of the generated data, putting it to effective use is key. You want to use it more optimally than previously. Not to mention that an immense amount of the created data will be real-time data. Therefore, you must accept that approximately a quarter of it will become obsolete very quickly.

Now, that we see which big data challenges we’ll have to face in the near future, let’s go back to IoT.

Is there a problem with IoT and Big Data?

Going back to our earlier tale about the school and the Smart Board. If we analyze what went wrong we find this. When your organization makes the decision to begin an IoT initiative, you look at a lot of things; the features of the devices and the deployment as well as the operational implications of using those devices. This, in itself, is an important decision and one that requires a lot of expertise to make well.

But, IoT projects are about more than deploying smart sensors. These devices also generate vast amounts of data. Understanding how to use this data is as important as choosing the right devices or deploying and operating them well.

Creating competitive advantage through data

Many business leaders think of IoT initiatives as setting up devices to help them make better business decisions. However, the real competitive advantage does not come from deploying and maintaining devices. True innovation is in the effective use of the right data generated by these IoT devices. To create a real competitive advantage, you must:

integrate those IoT data with your other data sources and thus create a comprehensive, real-time overview of your business,
translate the insights gathered with the solution to everyday business operational tasks,
adapt your way of thinking about making business decisions.

The key is not to use your IoT solutions as a”low price, simple projector”! Modern big data platforms provide a vast amount of features on which you can build your innovative business decisions — use them!

And, this is where “actionable insights” enter the IoT equation. Actionable insights offer us a powerful way to get a great ROI by turning data into effective actions. Utilizing IoT data to drive decisions is about generating “actionable insights” from these data.

What is Meant by Actionable Insights?

This is, in my opinion, a crucial part of delivering an effective IoT project.

Creating actionable insights, in theory, is really straightforward. The solution should:

ingest the data,
apply data analytics on it and then
you just have to process and build those results back into your everyday work.

But when it comes to building such solutions, challenges have to be faced. This includes, how do I:

Scale my solution as I scale my IoT initiatives; operate such a solution?
Decide on data and how long to store?
Integrate my data sources and analyze all these data?

This is especially true when it comes to real-time data analytics.

Three Steps to Actionable Insights from Your IoT Project

According to analysts, Forrester, 74 percent of businesses want to be data-driven. To do this well, they need actionable insights. However, most of the businesses struggle with realizing the real return on investment in their data-driven projects. That only comes from unlocking the power from generating actionable insights.

There are three steps used to generate actionable insights from collected data. These allow you to achieve an ROI on data-driven projects, thus on your IoT projects as well:

Three steps to actionable insights

Ingest and Transform: Preparation of the data is the first step to precise data analysis. This can be a challenge in an IoT project. As you’ve probably experienced, IoT continues to evolve and morph with no true standards among the various technologies and vendors. So this variety adds a factor of complication to the whole ingestion process. The quality assurance of the ingested data and the transformation of it create the right format required by the next stage, which is –
Analyze and Visualize: Large data sets add complication to data analysis and affect precision. Machine learning is a technique that is used to predict outcomes from data and find hidden patterns in data. Visualization tools help human beings to understand the results of the data analysis by presenting them in a graphical and easier to understand way.
Process and activate: Visualization is a great start in separating out, at-a-glance, those insights that are truly actionable, and those that are not. Insights that you process as ‘actionable’ are valuable. Therefore, optimizing your insights during a processing part of the cycle will drive better business decisions. An actionable insight must have certain requisites for it to ‘tick the box of actionable’. Criteria that point to an action include:
Relevant: to your business — the insight is only of value if it fits with your business strategy (or if it can, at least, offer insight in a strategy upgrade) or helps to improve your everyday operations’ efficiency
Contextual: Is there an obvious anomaly in the data? Do you need to collect more data within a specific context?
Fit: Hence, does the insight fit with the environment in which it was generated?
And there is a 4th criteria which is optional, but if achieved, that could make a real advantage: it is not only based on understanding what has happened in the past but is based on what could happen in the future.

Kicking Actionable Insights Up a Notch

Above all, being insightful with IoT generated data will lead to better and more relevant business decisions. However, the speed of achieving relevant insights is also important. Analyst Gartner has stated that payback timelines for IoT initiatives need to be, ideally, less than one year and anything over five years enter a “danger zone” of never achieving pay-back.

Let’s suppose you were able to improve your business efficiency every day with 0,1% on average. We have in Hungary 250 working days in 2019. So this could lead to an improvement of 28% in your efficiency during next year. This is where actionable insights show their enormous power. On the other hand, if your business fails 0,1% daily it may lead to a 23% decline by the end of the day.

But therefore you need to change the traditional way of thinking on how you come to business decisions. In my opinion, in such a highly changeable environment there are no good or bad decisions at a certain point in the time, aside from the ones which are explicitly good or bad. There are only decisions that are based on a mix of environment/context information, data, and intuitions. One can wait until all the information is collected and analyzed for long periods of time and try to decide safely, but especially in the decisions where data can be fast obsolete, this is too slow.

What’s much more important is to make good enough decisions and then iterate — this brings you to that 0,1% improvement of business efficiency described above. Measure the impact and if needed adjust your business operations with new, good enough decisions already on the second day of your previous decision. To be able to do this, you need the right platform, the right information and the right decision making processes. And just not forget to have a team that is agile enough to adjust its operation to the new experiments. A team that is willing to take small risks frequently and learn from mistakes.

Looking ahead

In our second blog, we will take a look what leads to delays in scaling an IoT big data initiative and how to mitigate those delays to overcome 2 out of the above 3 challenges: the right platform and the right information availability for your actionable insights.

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