Analytics crucial to effective IoT deployments, UPS exec says

Internet of Things (IoT) initiatives are all about gathering unprecedented levels of information, but this data is “useless” if enterprises do not couple IoT deployments with the analytics resources necessary to measure progress toward strategic goals, according to a United Parcel Service (UPS) executive.

Juan Perez, chief information officer and chief engineering officer for UPS, said that his company has “truly transformed” the way it does business by leveraging the power of IoT technology to realize efficiencies and avoid downtime. But achieving these benefits is not a product of simply deploying sensor throughout the organization to gather random information, he said.

“I think we all recognize that IoT is data,” Perez said during a keynote address at IOT World 2018. “But, very importantly, data minus analytics is just simply trivia. I get really, really worried when I hear business units … wanting more and more data in the organization without having a solid strategy as to how that data is going to help us make better business decisions.”

“Of course, trivia can cost UPS lots of money—ultimately, without the type of value that we want to generate from it. However, data plus insight helps with decisions.”

Perez said the key between data being a trivial pursuit and an engine for driving more effective and efficient operations is analytics.

“All of these connected devices that we have at UPS collect a significant amount of data, but raw data is just useless—it doesn’t mean anything to us,” he said. “What we’ve had to do to truly extract value from our IoT strategy and from our data strategy is to get very, very effective at analytics.

“Analytics … is taking raw data and making that raw data be converted into insight, so we can make better decisions. We live by this day in and day out.”

Perez said there are three types of analytics: descriptive, predictive and prescriptive. Descriptive analytics is focused on past performance, and predictive analytics is focused on the present—both can be helpful in identifying areas of improvement within an organization, but they only help personnel make good future decisions if conditions do not change, he said.

In contrast, prescriptive analytics are focused on the future and can be adaptive to changing environments, Perez said.

“Where we want to be is in the world of prescriptive analytics,” Perez said. “The output is now allowing us to make really effective decisions and take action on the way we do work. The focus is not only on the present but also on the future. The question that needs to be asked—which is really important—is, ‘What should I do next?’

“Quite frankly, there hasn’t been a downside to UPS in focusing on prescriptive analytics.”

This approach is manifested in several areas, from package-tracking capabilities to analytics that use sensor data on vehicles to determine maintenance needs, Perez said. In addition, UPS drivers are given routes each day that have been optimized to deliver packages in the most efficient manner, he said.