With 1 billion devices and 2.9 billion people connected worldwide, IT systems are flooded with data. However, instead of bailing themselves out, some companies are embracing this information to drive business growth. On the other hand, there are others that are ignoring this opportunity altogether and unknowingly accepting unnecessary risk.

But watch out: The Internet of Things has yet to produce the data tsunami it’s capable of analyticsgenerating – and it will soon happen. In his article “A Match Made Somewhere: Big Data and the Internet of Things,” Howard Baldwin sounds the warning, “Once the Internet of Things gets rolling, stand back. We’re going to have data spewing at us from all directions – from appliances, from machinery, from train tracks, from shipping containers, from power stations. If that doesn’t get you thinking how to handle real-time data feeds, nothing will.”

Turning signals into business value

Even though market leaders such as Pirelli, Tennant, and Alliander are using their data to bring value to customers as well as their enterprise, most companies are still waiting to embed sensor technology in their products and operations. Why? They need to adopt a big data strategy that helps them understand their data and put it to good use.

At its core, big data is a prerequisite for realizing the full value of the Internet of Things. Sure, proper data gathering is needed, but it’s impossible to sort through that information without knowing where to start. During the Americas’ SAP Users’ Group (ASUG) Internet of Things Webcast “From Big Data to Smart Data,” David Parker, global vice president for big data at SAP, advised, “Data alone is not important. It’s how you manage, analyze, and use it that counts.”

Companies need to look at data differently. In the past, it was enough to consider this information as a historical reference. What happened? What caused it? What can we do better? However, that was 15 years ago, when the marketplace did not shift in a matter of nanoseconds. Now, there is constant pressure to capture, process, analyze, and act on data as it’s generated. In other words, real-time data is essential – decision makers (and customers) do not have time for anything less.

3 obstacles or 3 opportunities? It’s up to you

In general, change presents complications – and this the case when it comes to big data and the Internet of Things. Survival and growth depend on the ability to overcome them and realize value as soon as possible.

According to Parker, “[Companies] have to overcome these challenges whether it’s a small or medium business or a large, global conglomerate. You have to be able to understand the data and manage it.”

  1. Complexity. With no or limited agility and scalability of underlying technology for analyzing data of all levels of complexity, companies are likely unable to take advantage of opportunities to expand the customer base. They need to be aware how complexity impacts processes, data analysis, and decision making, and simplify where possible.
  1. Data-driven enterprise. As competitors realize the transformational power of big data, business leaders demand a clear vision for reshaping the entire enterprise to achieve the same – if not, better – result. As data-driven strategies gain a foothold, they become an increasingly important part of creating competitive differentiation.
  1. Digital enterprise. As our physical experiences as social beings are digitized, the volume, variety, velocity, and value of big data increases. And with it comes greater expectations for personalized and simpler interactions. If your company is unable to use this information to deliver intuitive and radically user-oriented goods and services, customers will pass you by and find someone who does.