Cisco recently released a study on the Internet of Things with some interesting findings. Findings that have ramifications for companies and how they should change their management structures to better align themselves for the growth and ubiquity of IoT.
A key finding, which isn’t shocking to me at all, is that 74% of companies felt they were unsuccessful with their IoT initiatives.
Another 60% stressed that IoT initiatives often look good on paper but prove much more difficult than anyone expected to implement.
But Companies Aren’t Giving Up:
- 64% said that learning from their stalled initiatives helped them to accelerate their IoT projects.
- 61% said they have barely scratched the surface of what IoT can do for their businesses.
- 73% said that data from their IoT initiatives is improving their businesses.
- The top 5 challenges across all stages of implementation were: time to completion, limited internal expertise, quality of data, integration across teams, and budget overruns.
For the companies that felt they’d been unsuccessful, the lack of success wasn’t due to technology but rather human factors like culture, organization, and leadership.
“Nearly 54% of the surveyed IT and business decision-makers said that collaboration between IT and the business side was the top factor that affects the success of a project and for 49% of the sample a technology-focused culture, stemming from top-down leadership and executive sponsorship is a key to success.”
I’ve seen several examples of these last points recently in clients trying to figure out their IoT strategy.
One large company has lost share over the last few years because of their competitors’ aggressive implementation of IoT applications. Their competitors weren’t just selling their company’s products, they were selling IoT systems and data along with their products that help their clients reduce downtime, better manage the supply chain, and improve sales. Customers loved this and shifted their purchases accordingly.
Why had my client’s efforts not worked?
They Faced the Same Issues Identified by Cisco
They spent time developing an IoT product but were unhappy with it because it wasn’t driving sales. The sales force was used to building relationships and taking orders, they weren’t IoT product managers. They weren’t skilled in how to digitize their product and weren’t trained in what to look for in this transition. The good ones understood their clients’ businesses, but weren’t skilled in how to develop IoT systems.
The IT department was well versed in setting up and managing internal IT systems, but had little or no experience in IoT systems and certainly no experience in understanding their clients’ systems, or the ROI needed to implement these systems.
Marketing knew that their competition was stealing share, but they too lacked the skills to technically produce an IoT product that could win back their customers or stop the erosion
Further compounding the erosion, once these new IoT systems were installed at the customers’ locations, it could be years before they’d be displaced because customers want to amortize their investment in these systems. Even if they aren’t paying for the systems, the required integration into their ERP platforms and the necessary investment in training means that switching over is unlikely.
So what’s the right answer?
I could say the answer is to bring in the consultants, but this is often only a short term answer. Consultants can be great for helping companies figure out how to best digitize a company’s products and work with their customers to come up with IoT solutions.
But once the systems are in and deployed, the consultants typically wind down their assignments, leaving companies without the requisite internal knowledge to continually innovate on these IoT systems.
And that’s to say nothing of a company’s own internal IoT needs. Everything that the consultants do for these external IoT systems should be done for internal ones as well. This I why I argue for a new position, the VP of IoT.
The VP of IoT
The right person to fill this role would have the skills necessary to work with internal and external resources. They’d work with:
- Sales and their customers to extract the initial requirements for an innovative new IoT platform.
- Marketing to make sure that what was being built provides a competitive advantage.
- IT to integrate these new external systems into their internal systems.
- Operations or Manufacturing on internal IoT systems design to extract the same kind of value.
- Senior management to make sure this fit with the long term strategic direction.
And they would engage an ecosystem of vendors to assist in the design and ongoing support of systems, and to provide input into ongoing innovations in the systems.
I’ve found this last point on continual evolution to be critical. Every system I’ve built and deployed for companies like Coca-Cola, FedEx, and dozens of others began with one set of criteria and ended up eventually morphing into something entirely different.
As companies use systems like these, they begin to see other uses for the data and ways to extract value. The more agile you are in responding to these requests, the more ingrained your solution becomes to your customers.
It’s hard to do this with outside consultants. It’s better to build this skill-set internally so it can continue to provide this value for the long term.
Just as the prevalence of the Internet changed the role of sales departments and the way IT and Marketing organizations worked together, so will IoT.
Get ready. Here comes the VP of IoT.