Aside from the technical challenges, there are organizational challenges that can dramatically affect time to market for an IoT service launch. Here are the top five challenges that I have experienced working with various companies across many industries. Surprisingly, the challenges faced are very similar regardless of what industry IoT is being applied.
This high-level look is an executive summary of each challenge. I will elaborate on each of them individually in future blog articles.
Identifying New IoT-Based Business Models
How are we going to make money or save money with IoT?
This is one of the largest challenges most organizations face when considering an IoT strategy. IoT is very new for many companies. There is not always a precedence or a sure fire way to make money using IoT. Especially when most of potential IoT business models are service-oriented and a new arena for product-based companies.
I have found that many industrial companies do not like to be “first” when investing in a speculative opportunity that they haven’t done before. So naturally, there is hesitancy and IoT is seen as taking a big risk. When in reality, it is embracing the current and future market.
Organizational Changes Necessary for IoT
What does the organization need to look like to succeed with IoT?
Change, in organization and in processes, is one of the most underestimated challenges with IoT. The creation of IoT services requires new roles and responsibilities within the organization. Sometimes, new jobs need to be created. Most of the time, existing roles will change.
Also, new processes need to be created. Existing processes will need to be redesigned.
People within the organization will often need to interact with people inside and outside of the company that they have never previously interacted.
The best IoT technical implementation will not deliver unless the organization is ready to leverage it.
How will our people adapt to the new IoT-based services so that we can deliver on our promise?
The essence of this challenge lies in “Change Management.” IoT requires a significant amount of change management discipline. Unfortunately, it is often an afterthought after programs have stalled out or the value proposition is not achieved.
Instead, Internal Adoption and the assignment of roles should be part of the strategic plan from the top-down and throughout the organization.
Value Proposition Creation
How will each stakeholder group, internally and with customers, benefit from IoT?
The answer is key to both internal adoption and customer adoption. Many times, I have seen organizations struggle with defining this objectively. Subjective value propositions are created and many stakeholders don’t believe them or do not find them compelling enough to fully accept the offering.
Objective value propositions are required here. It must be something measurable that each stakeholder group can relate to. It has to be compelling enough to entice participation in the program, even if the first version of IoT is just a step towards a larger value proposition.
The First Launch
What does version 1 of our IoT offering need to be for market acceptance?
Many organizations bite off way more than they can chew for the first release. Adding excessive functionality, or over promising, just adds unnecessary risk to an already risky endeavor.
There are many low risk, easily implemented IoT capabilities that add real value but are underappreciated because they aren’t sexy enough or don’t offer huge value-adds from the start.
Believing you must add large amounts of value for the first IoT release is a fallacy. And, it often results in program failure due to excessive complexity and speculative returns.
In this case, less is more. Being able to do basic blocking and tackling with version 1 of IoT almost always leads to greater value in a shorter period of time than trying to everything out of the gate.
Having a good IoT roadmap is what is needed. Not the first release to be everything to everybody.