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UPS IoT strategy is fueled by analytics to bring business insight

by Lauren Horwitz

Managing Editor, Cisco.com

For companies with successful IoT projects, the difference lies in the use of the data.

SANTA CLARA-- Many companies know that data is insight, but only some walk the walk.

While enterprises want to use analytics to cut costs, generate revenue and become forward-looking, many struggle with how to take full advantage of the raw data they absorb.

That’s particularly true with Internet of Things (IoT) projects. These Internet-connected devices gather data from their environments, then transmit this data to other applications for analysis and, ultimately, to help workers make business decisions. IoT projects are emblematic of the kinds of data-driven initiatives companies want to undertake to reduce costs and drive revenue.

But IoT projects can stall when data gathering isn’t connected to business objectives.

According to a Cisco study, only 26% of companies surveyed say they have achieved success with their IoT initiatives. Only 29% of unsuccessful companies used data analytics in these IoT projects, whereas 40% of successful organizations used them. Only 46% of unsuccessful organizations used IoT strategic planning in their initiatives, while 60% of successful organizations used such planning.

Successful IoT projects marry IoT technologies with data analytics. And executives presiding over successful IoT strategy are unwavering about using data as the foundation for business decision making.

“Data minus analytics is just simply trivia,” said Juan Perez, the chief information and engineering officer at UPS, during a session at IoT World 2018.  “Taking raw data and converting it into insight helps us make decisions.”

IoT intelligence drives business decision making

UPS has honed its strategy of enlisting data analytics for strategic insight for quite some time.

In 2010, a volcano erupted in Iceland, and the impact was massive. With the airspace over large parts of Europe shut down, thousands of flights were delayed or canceled. Logistics in the region ground to a halt. So how did UPS get operations up and running within a day?

“Through data and through insights,” Perez recalled. Connected devices generated data, allowing UPS to deploy other alternate modes of transport in the region to restore service to customers. “We had access to the data . . .  to help our company get back in service,” Perez said.

Today, UPS gathers analytics in virtually every area of its business. The company uses analytics to optimize its trucking routes. It also uses data to identify vehicle service issues and keep vehicles on the road longer with fewer maintenance issues.

Handhelds assess how drivers complete their work and indicate which services customers most value. Smart-label technology also enables the company to validate the location of packages and alert customers in real time about routes and estimated arrival.

All those data insights, Perez emphasized, combine to help the company “extract value from our IoT strategy. We live by this day in and day out.”

Perez noted that this IoT success is informed by an ever-maturing approach to data analytics.

According to Perez, the company no longer relies only on descriptive analytics, which analyzes the past, or only predictive analytics, which looks at the present to try and predict what might happen in the future. Today, UPS has matured to prescriptive analytics, which enables the company to use data to prescriptively determine next steps.

IoT strategy: The big picture lies in the details

Perez indicated that a successful IoT strategy requires a dual approach that might, at first blush, seem internally at odds: While executives need to think big to create an IoT strategy, they must also focus on the details to extract value from IoT data.

Connected handheld devices, for example, optimize driver routes so that trucks use less gas and spend less time on the road or idling. By tracking trucks, packages, driver patterns and safety, UPS has saved more than $4oo million a year.

“If we are detail-oriented, we save one mile per driver per day. In the course of a year, all drivers in the U.S. can save UPS $50 million,” Perez said.

“Details matter,” Perez summarized. “As you develop your IoT strategy, ensure that you remain detail-oriented.”

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Lauren Horwitz is the managing editor of Cisco.com, where she covers the IT infrastructure market and develops content strategy. Previously, Horwitz was a senior executive editor in the Business Applications and Architecture group at TechTarget;, a senior editor at Cutter Consortium, an IT research firm; and an editor at the American Prospect, a political journal. She has received awards from American Society of Business Publication Editors (ASBPE), a min Best of the Web award and the Kimmerling Prize for best graduate paper for her editing work on the journal article "The Fluid Jurisprudence of Israel's Emergency Powers.”