Survey after survey has shown that companies view the Internet of Things (IoT) as an emerging technology that is important to the future of their business and worthy of strategic investment.
However, companies must be careful to avoid the shiny-object syndrome – falling in love with a technology’s cool factor rather than the problems it solves – and address the most important question in IoT: How will they earn a return on their investment and create a sustainable IoT business offering?
As with any other new technology, companies at the beginning of their IoT journeys must understand and thoroughly address their business case. It is critical to assess how IoT can help meet specific strategic objectives, such as bringing greater visibility into operations, improving customer experience, enabling new business models or driving new or incremental revenue growth in a particular market segment. The desired business outcome and customer journey must be to understand and support throughout the entire IoT process.
Despite all the buzz and hype around IoT – 98% of respondents to a McKinsey survey reported that enterprise IoT initiatives are important to strategic roadmaps in their industry – unfortunately it’s still a relatively nascent technology for most companies. Its benefits aren’t as well understood as more established technologies such as cloud or data analytics yet.
Building awareness across the C-suite of how IoT helps drive and realize strategic corporate goals has to be the first step for IoT advocates within companies. By understanding and sharing the big picture, IoT leaders and executive management can gain genuine appreciation of why IoT investments are important and the patience to see them through to desired business outcomes. Conversely, those who fail to justify and validate their IoT plans on a business level are likely to fail at acquiring the necessary buy-in and project sponsorship required for success.
Three key pieces of advice that can help companies build their compelling IoT business case:
1. Focus hard on monetization and return on investment.
Remember that for many organizations looking to take their first step into IoT, the benefits are unclear. Showing how IoT investment can translate concretely into revenue growth or cost savings is the best way to acquire the support to validate IoT initiatives.
One example could be the money saved from predicting maintenance that a device or machinery will require further down the line utilising IoT data to reduce downtime and expensive on-site visits
By demonstrating IoT’s ability to create a broad range of new opportunities to enhance services, extract new business insights and grow new markets, companies can draw direct connections between this shiny new technology and their much sought after ROI results.
2. Start with a proof of concept
Many companies are just getting started with their first IoT project. Organizations should not be reluctant to smartly dive in and start prototyping. They can set up an IoT PoC that pilots new projects but it needs measurable results implemented from the outset to judge outcomes.
By showing the success and value of early initiatives, companies can set the basis and direction for an ever-growing IoT strategy bearing greater results based on early PoC assumptions and actual results.
3. Don’t underestimate the importance of skills
As with any technology, IoT success depends on having the correct talent capabilities necessary to deliver on them. Businesses face a major challenge in recruiting employees with the skills needed to make IoT a success. Those skills include data visualization, artificial intelligence, machine learning and security.
Rather than merely hoping the skills crunch eases, companies must make sure they’re placing the right focus on IoT skills in their recruiting and re-training efforts. They need to recognize that these skills will become only more important and strategic as IoT advances, and to plan for it now. The alternative is to fall behind as IoT adoption increases and become uncompetitive in their respective market
By following these three pieces of advice, businesses can help ensure that IoT’s huge potential inside their organizations reaches its full potential and a sustainable and successful IoT business will emerge.
Tom Canning is Global Vice President, Devices and IoT at Canonical, the company behind Ubuntu.