Given the popularity and obvious value creation possible when rolling out Internet of Things (IoT) initiatives, why do so many projects fail? The hard truth is that for every IoT project which succeeds, some analysts estimate up to three projects don’t end up succeeding and scaling.
International Data Corporation (IDC) predicts that worldwide installed base of Internet of Things (IoT) endpoints will grow from 14.9 billion at the end of 2016 to more than 82 billion in 2025. This is an enormous increase which will propel the world economy, as well as, transform the way businesses and individuals interact with technology.
Regardless of this proven momentum, a 2017 study conducted by Cisco revealed that 60 percent of IoT initiatives stalled at the Proof of Concept (PoC) stage and only a quarter of companies had an IoT initiative that they considered a complete success.
What are companies missing, between the ideation and commercialization phases?
The IoT is now a distinctive part of every business, government, and personal landscape, impacting all aspects of our lives. The technology, ranging from sensor technology, communications, data analytics, security, privacy, autonomous and connected vehicles, and more, has advanced to a point that would have been unrecognizable less than a decade ago.
Failure, or lack of success incorporating IOT initiatives, is not because the technology has not advanced to the point where the value can be realized. Rather, according to the experts at Rocket Wagon Venture Studios who are pioneers in connected systems, it is due to limited architectural vision, full understanding of the technology and its implication to business, and inadequate organizational adaptation needed to take advantage of the opportunities created by the IoT. At the most basic level, there is a lack of awareness and understanding at executive and senior management levels in most companies.
What can business do to build off lessons learned, established best practices and industry standards?
First, education is critical. Executive management charged with decisions on where to invest, how much and when, can do a better job when they fully understand opportunities afforded by the IoT in the context of their specific businesses. They bring subject matter expertise – for example a manufacturer of home appliances – but they may not fully appreciate how those appliances, when instrumented and connected can become more competitive while also uncovering recurring revenue services including management and maintenance.
By learning from others, and understanding the fundamentals of IoT success, they will be better positioned to get organized, mobilize the right teams, and avoid spending limited resources and unnecessary time delays.
Second, they can enlist the help of people who have “been there and done that,” whether they are deciding whether to fund and initiate a new project, or need help assessing the status of a project already underway. With an experienced team bringing in fresh perspectives and experiences in commercializing IoT systems, guidance can be provided with respect to staffing, skills, financing, architectural decisions, vendor selection and more.
Third, they can avoid costly mistakes which often occur when issues including security, privacy, regulatory and compliance are not tackled early on that are linked to business models, pricing, ecosystem partners, data ownership and data sharing, revenue sharing and more. This can be a strategic high-level long-term strategy, or as granular as ensuring the appropriate protocols are selected. There are over 500 IoT “platforms” in place today, and not all of them will make it. Getting real world experts to weigh in can save time and help organizations get to market faster with truly competitive solutions that will scale.
Some of the challenges faced by organizations implementing IoT include:
- Developing a strategic value based approach, which incorporates a strong business case;
- Incorporating cyber security, privacy, data governance and regulatory and compliance risks;
- Growing new revenue paths and opportunities;
- Reducing costs, increasing efficiencies and profitability;
- Utilizing data analytics to increase strategic insights, decision-making and overall outcomes;
- Developing a strategic methodology that focuses on an efficient business operating model and process which considers technology integration;
- Enhancing the customer acceptance and their experience; and
- Scaling the integration of technology.
Winning IoT initiatives are rolled out in a systematic, high quality fashion, and include clear project definition, market context and competition, vendor awareness and selection, solid architectural decisions and deep comprehension of data ownership, security, privacy, regulatory and compliance implications, and governance.
Winning projects have pillars of support from executives, support from across the organization (IoT is a team sport!), excellent project management, continual communications and collaboration, ongoing risk analysis with identification and remediation of gaps, and a regular oversight process.
We recently launched Rocket Wagon Venture Studios Strategic Advisory Services (RWVS SAS) as we are passionate about the value connected things and systems are creating, and enjoy nothing more than to provide the framework and support that helps our clients move with more confidence and through the lifecycle of IoT innovation – from ideas to commercialization.