The business of IoT: Think before you leap

In our conversations with potential customers and partners, one theme seems to recur more and more often. They’ll have a good understanding of what IoT is but struggle to map the potential for leveraging IoT to improve their business. Someone higher up in the organization starts asking if they’re “doing anything with IoT”? They haven’t figured out a business model yet, but they’ll start developing a new product or planning an IoT solution.

The business model comes after the fact. There are a lot of external pressures to just “do something” with IoT! This is a common cause of why IoT projects fail: the business model doesn’t work (or doesn’t exist), so they simply don’t see any return on their investment. Doing IoT just for the sake of having done it will never be a good reason to sink the time, money, and resources into implementing an IoT strategy for your business.

In this blog series The business of IoT, we’ll walk you through the factors you should consider prior to starting your IoT project, including potential stumbling blocks and ways to monetize your solution or project.

Mapping your IoT project to your business

As mentioned above, some of the most common conversations with potential customers start with these basic statements of intention. It’s critical to take the time prior to kicking off your project to consider exactly where (and why) you can leverage IoT to greater impact. The most successful models we’ve seen start from fully integrating IoT from the beginning, instead of as an after-thought. For these customers, now is the time they’re creating a solution/product, so they’re already asking how they can use IoT to enhance their plans and improve their business. We’ve also seen digital transformation efforts really kick off in quite a few industries as a result of the Covid-19 pandemic, exacerbated by the enormous pressures to move faster and do more.

By considering their end goal, they’re already thinking about their top line objectives and preferred outcomes and that drives the technical decisions they’ll need to make. Asking themselves what they’re trying to achieve, when do they want to achieve it, helps them evaluate where the potential lies, as well as the challenges they may face.

Are they looking to position their service in a new market or at lower cost? Or to harvest data from “dumb” sensors located on a machine to enable predictive maintenance? Or to develop an innovative new product that uses IoT for better results, creating new revenue streams?

You’ve got the “why”, what’s next?

“I’m going to build an IoT product... I’m going to re-invent my service and use IoT in my business!”

Once a rough plan of “why IoT” is in place, the next challenge is tackling the “how”. Having a good understanding of all the different bits of the IoT puzzle match to you seeing better results from your transformational investment into IoT. Try mapping out the limitations and creating a framework of how you’ll deploy, not only externally but also within the business.

It’s important to keep in mind that you’ll need buy in and agreement within your organization to drive any substantial change to your business strategy.

We’re also seeing a lot of uncertainty externally in the market, with customers not sure where to even start with their solution or product. Software engineers are burnt out working from home, supply chains are disrupted. Sometimes our role is to help customers realize that it can be quite difficult to do what they want to do and offer a better understanding of the supply chain. The IoT ecosystem is complex, and it can be difficult for innovators to navigate and understand who they need to speak to for which piece of the puzzle.

Build or buy?

This is when you might come up against your next consideration: Build vs buy. Once you have your goal in mind, you’ve recognized the opportunity and gained support within your business, do you build or do you buy?

Building your own device, and doing all the development and testing yourself, is incredibly difficult and costly. You might not have the right competencies or skills available in house. Or maybe the supply chain is just too complex to navigate, so you look into buying something off the shelf instead.

But then how do you fully integrate this new device into your businesses IoT strategy? This is often where Pelion steps in to help guide customers to the right connectivity technology decisions to make in their planning process.

Some of our most successful customers have been led entirely by their drive to innovate within their market and be one of the first to offer IoT-enabled services and products. They quickly move to build a prototype, then work on polishing and refining it. This has enabled them to take more risks and move faster to win business.

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Stay tuned for the next installment of this series, "Make the right technology decisions".