8 Steps to a successful IoT Strategy for your company

IoT presents companies unprecedented opportunities to transform their existing businesses and create some new ones. However, with the plethora of platforms and solutions available, most companies are keeping their fingers crossed and evaluating if it is a real game-changer or just another fad. In my previous article, I have highlighted reasons why IoT is here to stay and change our lives forever. In this article, I will discuss eight steps for successfully implementing IoT strategy and practices in any organization.

  1. Think Big, Start small

While it is important to think long-term, the variety of offerings in the IoT domain can lead you to an analysis-paralysis.  The idea is not to go big-bang into IoT but to slowly merge IoT into your operations to gain higher marginal returns. Addressing specific burning issues in your operations and solving them with simple solutions will result in lower cash outflow and faster benefit realization. One of the South-East Asian auto OEM that I am working with is doing this brilliantly. They have identified one burning issue – Traceability of a critical component in one assembly line as their pilot IoT application and they are now building scalable solution for that problem. This solution is a economical solution which one validated can be rolled out to other critical components and other lines. This first success will also allow them to expand to other higher order problems as they gain more and more expertise with IoT solutions.

  1. Do it quick, do it often, do it yourself

If you wait too long that perfect, stable IoT platform, you will lose on the competitive edge that you might get today. Moreover, you will be caught in the Catch-22 situation because the platforms can only stabilize once a critical mass starts adopting the IoT discipline. A better strategy would be to setup a small in-house technical team that can work with start-ups to develop simple IoT solutions for targeted problems. The teams can chose 2 or 3 such problems and experiment with different technology and products combinations. The starter versions of these products are available at nominal costs and at times even free. The in-house teams can develop multiple working prototypes in a shorter turnaround time in order to fail faster, fail often and fail cheaper. And the experience that they will gain through these exercises will provide them excellent learning and hands-on experience to develop long-term IoT roadmap for the company.

  1. Follow the data

I have argued in my earlier posts that the real value of IoT is neither in the ‘Things’ nor in the platforms. The real deal lies in the ‘data’ that gets captured and processed to give insights. The IoT is really an information framework that uses real-life and real-time data to drive innovations in a company. Many companies today are trying to push technologies rather than identifying the applications. This is putting the cart before the horse.

On the contrary, if you first build your IoT framework by defining what data you really need and where can you find it, deploying the appropriate technology becomes very easy.

  1. Rally your people

Improvements come when technology supports behaviors but breakthroughs come when technology transforms the behavior. We have seen this in the telecom industry with the advent of touch-screen phones. If you really want to make IoT successful in your company, make sure your people accept it, adopt it and use it. Otherwise, it will end up becoming just another tool which nobody wants. Since, IoT is data-driven; the benefit can only be realized by regular usage in day-to-day operations.  Further applications can be then derived from these people based on their experiences.

  1. Build simple decision nodes

The value of IoT will be realized if the data that is being processed is actually put to use in the decision making. Our human minds take some time to get used to new forms of data. Hence, it is important to deliberately create ‘decision nodes’ that utilize the IoT data. E.g. if you are monitoring movement of an asset in your plant or workshop, make sure it is connected to some KPI on asset management so that supervisors start using this information in their reporting and managers start using it their decision making. This is a critical step for overall business transformation.

  1. Focus on ‘Returns-to-Scale’

While companies traditionally use ROI for evaluating various projects, IoT requires a focus on ‘returns to scale’. This is because the IoT returns are governed by Metcalfe’s law and hence is a function of ‘scale’ rather than time.  At a machine level, returns will be minimal and will remain so for a long period of time but as you increase the scale to plant level or value chain level, returns will be become phenomenal. Hence, the IoT strategy should clearly define the scale of deployment while calculating the returns.

  1. Develop a scale-technology-investment roadmap

When a company embarks on the IoT journey, it is possible to lose focus and get lost. Hence, it is extremely important to clearly define the key milestones for IoT deployment and match them up with corresponding technology framework and investment plans. These milestones should be defined based on the desired scale of deployment, estimated costs and expected marginal returns. This will not only help you in prioritizing IoT applications, but will also ensure that the technology platforms also keep up with the scale.

  1. Innovate on business practices

Finally, as people and processes mature with your IoT roadmap, you should invest on finding new sources of creating value. The IoT information framework should be utilized to discover patterns and explore new opportunities to innovate business processes and business models. This opens up tremendous potential for transforming your business. The tire manufacturer Michelin has collaborated with Accenture to use data from their TPMS (Tire Pressure Monitoring System) to create a fuel economy consulting business for their customers. Similarly, many hospitals are using IoT platform to integrate wellness, prevention and post-treatment care with their core clinical care products and services to offer innovative healthcare offerings to their customers.

The motive behind these eight steps is to help you slowly and steadily integrate IoT discipline in your operations and then prepare the solid foundation for business transformation. With today’s cost structures and global inflation, a big-bang approach to IoT may not be feasible. Even if it is feasible for some, it will have inherent technological and operational risks and challenges. Hence, in these circumstances, it is better to adopt a structures and consistent approach to derive value from IoT.

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