When implemented correctly, the Internet of Things can increase an enterprise’s productivity and shave waste, create sustainable ecosystems, or increase revenue streams by informing data-driven business decisions.
According to Gartner Inc., by 2020, more than half of new businesses will include IoT in their business processes.
Enterprises can’t afford to ignore it because they are competing with consumer knowledge of what is possible. We’ve learned from Alexa and Fitbit that real-time information allows a brand to anticipate customer needs. This creates a relationship instead of a transaction; and that is invaluable.
However, a recent study by Cisco showed that 60 percent of IoT initiatives stall at the proof of concept (PoC) stage and only 26 percent of companies have executed an IoT initiative that they considered a complete success. In order to avoid that, we’ve outlined a step-by-step plan for success in the proof of concept stage of IoT implementation.
1. Don’t go it alone – Pick a partner
According to a Cisco study, the most successful IoT enterprise implementations are led by an IoT partner. Implementing an out-of-the box solution with an internal team with limited IoT knowledge and capacity cannot yield the same results of working with an experienced team. It takes three things to create an IoT solution: network connectivity, hardware and an IoT platform.
2. Choose success metrics and manage expectations
A critical first step is to have each decision-maker define his or her definition of success before the project begins. In 54 percent of successful IoT initiatives, Cisco’s study credits a collaboration between IT and business departments as the reason for success.
Many business problems can be solved with IoT. The appropriate IoT platform can help improve the customer experience by collecting data from new and existing systems in manufacturing, construction, agricultural or other environments. Visualized data from sensors can help teams track the location, temperature or condition of a business’ assets and do much more with information.
Define the goal for your business. Is it a reduction in cost, man-hours or waste? Set a baseline with a pre-survey or with existing data and then measure for results after the PoC using the same method.
3. Set out to solve a specific business problem
The opportunities for IoT are endless. So much so that we can’t create an exhaustive list. It comes down to this: solutions can either help you or your clients make money or save you or your clients’ money.
4. Start small
A proof of concept isn’t designed to transform 100 percent of your business in 90 days. It is designed to show how an IoT solution can solve a problem or add value to a business segment. Create a plan and determine which percentage of your fleet, facility or office should be piloted.
5. Choose a time frame
As with any probationary period, a proof of concept is designed to work within a specified time frame. How long would your business otherwise measure results? Don’t expect to see an impact overnight. Select 30-60 or 90 days as a trial period.
6. Select a specific data set to measure
Data can be collected and analyzed from millions of sources with IoT. Determine how your business will use it. Align the capabilities of IoT with your business goals. What does your team want to measure, monitor, view or predict?
A recent McKinsey article reported that sensor data used to predict equipment failure in a manufacturing environment can reduce maintenance costs by as much as 40 percent and cut unplanned downtime in half. With the right set of tools, users can easily calculate complex aggregations across one or a family of devices. Graph the data on dashboards for your own team or display it in a custom application for clients.
7. Set a budget
An IoT proof of concept will incur costs. There is a cost to secure the hardware; install sensor devices and set up gateways. Create a budget for the pilot project and ensure your cross-functional team is aligned to spending what is required to make the PoC successful.
8. Understand the limitations of your IT department
Evaluate your existing team’s knowledge of IoT. Assign roles and prepare how your team will share the duties of the PoC. Additionally, ensure your organization is equipped with appropriate bandwidth to handle the project.
9. Be open to new opportunity areas
The use of IoT can also create new revenue streams and business models that would shift competitive dynamics within industries, according to the McKinsey article. “The combined data from connected assets help a supplier to operate equipment much more efficiently than its customers would.”
This article also suggests that products can become services for enterprises that may have not ever considered it. Select an application enablement platform which provides your dev team the opportunity to build custom experiences for the end user.
10. Learn from failure, and fast
Of those who completed the Cisco survey, 64 percent agreed that learnings from stalled or failed IoT initiatives helped accelerate their organization’s investment in IoT. Conduct a meeting to discuss PoC objectives and develop an action plan. Reach an understanding of how the PoC process could be improved or adapted for other business solutions and begin again.
Written by Ashley Ferguson, Marketing Associate at Losant