You’ve seen the statistics: about three-quarters of IoT projects fail. Ironically, numbers like this can become self-fulfilling prophecies.
To be clear, that figure is outdated. A 2020 report from Beecham Research placed IoT failure rates at more like 58 percent—and there’s every reason to believe the number will continue declining as technology and understanding grow. In fact, that “three-fourths” figure can be traced back to a 2017 survey from Cisco, which found that 76 percent of IoT projects never make it to the scaling phase. That survey also presented a more compelling detail: Cisco identified a lack of collaboration between IT and business departments as the leading factor in the collapse of IoT projects.
In other words, stakeholder buy-in—full cooperation between company leadership, IT departments, operations teams, partners, and customers—is a prerequisite for obtaining the benefits of enterprise IoT. That was true in 2017 and 2020, and it’s true today. If you’ve crunched the numbers and determined that IoT is the answer to your operational challenges, the next step is to convince your team. Here’s a tried-and-true method for getting the stakeholder buy-in you need to avoid adding to a daunting statistic.
Building the Initial Business Case for IoT Investment
Like any business investment, you’ll need to build a compelling business case for spending on IoT, whether you plan to manufacture an IoT product or optimize internal processes by utilizing IoT technologies. You’ll also need to respond to your teammates’ concerns—we’ll cover those in the next section—but the conversation starts with the business case.
Before you even start your outreach, make sure you have a clear goal in mind: What are you trying to achieve, and if IoT is a part of that goal, how are you implementing this particular IoT system?
- For product manufacturers, what’s the customer pain point your IoT device will address? How does your new IoT product line provide quick, recognizable value to buyers?
- For industrial IoT and process optimization projects, are you simply trying to boost operational efficiency? Is the value reduction of human intervention, improving workplace health and safety, or any of the hundreds of other use cases IoT addresses?
Whatever it is, keep the goal front and center as you pitch the IoT project to your team. Start the conversation with a problem statement that clearly shows the challenge and how the IoT project will solve it.
Next, it’s time to face down the question of cost—and not just the cost of IoT hardware, network connections, and service. Spending on IoT takes place across a wide range of initiatives. For instance, if you’re offering a new IoT product, what will you need to invest into marketing, sales, operational processes, security, and partnerships? How much will you spend on batteries or replacement modules over time if you’re installing an IoT-based asset? Create a comprehensive cost model. Then you have to show that you’ll get a healthy return on that spending—in other words, an ROI.
Once you have a clear use case, strong ROI calculations, and a hypothesis for how the IoT project will improve your operation, you may need further proof. Deploy the IoT solution in a limited trial to verify your calculations. For instance, if you add predictive maintenance to just a few thousand of your industrial products, you’ll probably see measurable savings from reduced service calls. Say those savings add up to 10% across 100 machines; you can expect that figure to scale up across your entire operation, which is a strong argument in favor of taking the predictive maintenance systems company-wide.
Addressing Common Stakeholder Concerns About IoT
Even if you show up with spectacular ROI figures, your partners will have questions before they sign off on a significant IoT investment. Here are some of the concerns you should be prepared to address as you work to align stakeholders in favor of an IoT innovation:
Risk Versus Reward
We usually think of risk in financial terms, but it goes beyond dollars and cents for comprehensive technology investment. An IT manager may worry about future-proofing (tech does move fast). Production teams may wonder if you’ll need downtime during implementation. Human resources executives could ask how many staff hours you plan to devote to training. These questions all point to risk factors. Ultimately, decision-makers need reassurance that the rewards of the IoT investment—a bold new product line, more efficient daily operation—will offset these inputs. Be prepared to explain how.
Time to Value
Stakeholders often want to know precisely how long it takes before the total value of investment starts to pay off. Maybe your CEO wants to hit sustainability goals by the end of the year; if the smart building management system (BMS) you’re proposing can’t go online for 16 months, your proposal’s dead on arrival. When advocating for an IoT project, know the value and when that value will emerge.
It goes without saying that you’ll need a strong security strategy to get your IoT project off the ground, but your choices on particular security systems may be limited. Many companies—particularly large enterprises—have strict rules governing which information security frameworks (ISF) they’ll accept. Do your research to make sure your security strategy meets industry standards.
Regional Technology Stacks
In some areas of the stack, there is a large amount of fragmentation that creates confusion and frustration. For instance, some national markets only offer NB-IoT network coverage in the IoT connectivity space. CAT-M dominates others. Some provide both, and others neither. Local regulations may require a unique version of a device’s firmware or only use local connectivity. The point is, every market has unique technology and compliance challenges; be sure you work those into your calculations if you operate globally.
Build a plan to work with teams closest to IoT systems, clearly identifying the advantages they’ll see directly. Less data entry, a safer production floor, automated task completion; whatever the benefits are, share them widely. The most important stakeholder is the one that interfaces with the IoT device and the insights it creates.
Even with a clear use case, strong ROI calculations, and great responses to objections, you may find it tough to get broad alignment on IoT. The good news is you’re not alone in this effort. Reach out to a trusted provider of connected-device services for everything from building your business case to choosing devices to managing resilient network connectivity. With a bit of expert help, you’ll find it much easier to get full buy-in on your next IoT project—and start tilting the numbers even further toward success.