Internet of Things Success is not Guaranteed

Stephen DeAngelis

February 27, 2019

Reading today’s headlines one might conclude the Internet of Things (IoT) — sometimes referred to as the Industrial Internet of Things (IIoT) — is a mature technology providing organizations with valuable and reliable service. One would be wrong. The IoT remains in its infancy and suffers the occasional growing pain. A couple of years ago, a Cisco study found, “Nearly 60% of IoT initiatives stall at the Proof of Concept stage and only 26% of companies have had an IoT initiative that they considered a complete success.”[1] With over 20 billion devices (aka things) predicted to be connected via IoT by next year, successful IoT implementation is essential for both industry and consumers. Although discussions about IoT make it sound like a single network connecting all things, it’s not. The IoT is a network of ecosystems with each ecosystem consisting of sensors (the things) that generate and transmit data via the Internet (the IoT) to analytic platforms (cognitive systems) where the data is analyzed for insights and, when necessary, initiate action. The Internet and World Wide Web have been around for a few decades now. So why are organizations having difficulty implementing IoT projects? According to the CISCO study, “The top five challenges across all stages of an IoT implementation included time to completion, limited internal expertise, quality of data, integration across teams, and budget overruns.” I find it interesting that none of those challenges really involve technology.

 

IoT implementation challenges

 

In addition to challenges noted by Cisco, W. David Stephenson (@data4all), principal of Stephenson Strategies, insists having the right attitude is essential for successful IoT implementation. “No matter how much IoT technology you buy,” he writes, “if you don’t make significant attitudinal changes, you can’t realize its full potential.”[2] The more I read about barriers to IoT implementation, the more I realize technology is not the main concern. Like Cisco analysts and Stephenson, Dan Yarmoluk (@YarmolukDan), business and market development lead for ATEK’s IoT products, believes most IoT implementation challenges don’t involve technology. In fact, he insists, there is “too much attention on the technology stack or informational technology.”[3] The big lesson to be learned is that technology is not the cause of most IoT implementation failures. “Technology may be ready for the enterprise,” writes Justine Brown, “but is the enterprise ready for technology?”[4]

 

Setting your enterprise up for IoT Success

 

To ensure the enterprise is ready for the IoT, Tanja Rueckert (@RueckertTanja), President of the Internet of Things and Digital Supply Chain Business Unit at SAP, recommends business leaders seriously assess their organization’s vision, personnel, and technology. She writes, “Many executives simply don’t realize how complicated and far-reaching an IoT transformation will be.”[5] Below are considerations she believes executives must take into account before embarking on an IoT project.

 

  • Vision, strategy, and leadership: “An IoT deployment will link many functions and fiefdoms within an organization; to make sure that connection leads to collaboration, senior executives must offer strategic guidance and commitment. That’s a problem at most companies, because only 11% of manufacturers have implemented an IoT strategy for operations. Even worse, 10% of manufacturing executives ‘don’t know’ who leads their company’s IoT strategy. It’s no wonder that the biggest IoT challenge in operations is ‘identifying opportunities/benefits of IoT’.
  • Skills and experience: “Industries as diverse as consumer goods, chemical processing, and textile milling can leverage the IoT — if they have the smarts to do so. The IoT requires new skillsets within plants and among suppliers. The ability to incorporate high-tech electronics into products — including commodities such as concrete, fabrics, rubber, etc. — will be new to most manufacturers. More than a third of manufacturers report that skills/talent to leverage data/intelligence is an IoT operations challenge.”
  • Network capabilities and capacities: “Antiquated technology is the biggest IoT headache that manufacturers encounter in capturing, communicating, and leveraging data from operations. Only 10% have network infrastructures capable of machine-to-machine communications, and just 13% have networks capable of machine-to-enterprise communications. A quarter of manufacturers report that network capacity is a problem, too. And even when technology and bandwidth are available, cooperation among operations technology staff in the plant and IT staff in the business is often limited, hindering transfer and optimization of IoT data.”

 

Rueckert concludes, “Manufacturers can achieve game-changing competitive advantage with the IoT — but few are ready.”

 

According to Yarmoluk, there is nothing wrong about thinking big; but, you should start small when it comes to IoT projects. He explains, “A straightforward and practical approach should be used when embarking on an IoT project. This should not be viewed as a massive, company-changing effort, but rather a series of small projects or digital test beds that have the potential to increase revenue, improve the bottom line or boost customer retention. While we all recognize the opportunity for success, realize that not all IoT initiatives will succeed, some say that about half will fail. If you have that in mind (failure on some trials or projects will happen) then company expectations about success are reasonable.” A few years ago, Harvard Business School professor, Michael E. Porter (@MichaelEPorter), and James E. Heppelmann (@JimHeppelmann), CEO of PTC, recommended a staged approach that can help business executives go from small projects to big visions.[5] The five stages are:

 

Stage 1. Identify the thing or things. The “thing” is something you want connect to an IoT ecosystem. It could be a piece of machinery or a consumer product. Identifying what you want to connect is the first stage of achieving a greater vision.

 

Stage 2. Choose appropriate sensors. In order to make the “thing” smart, you need to decide what information you want it to generate and what type of sensor will provide you with the information you require.

 

Stage 3. Understand what kind of connectivity you require. At this stage you begin thinking about connectivity and, just as importantly, cybersecurity. Porter and Heppelmann note, “Connectivity components comprise the ports, antennae, and protocols enabling wired or wireless connections with the product. Connectivity takes three forms, which can be present together.” Those forms are: One-to-one (an individual product connects to the user, the manufacturer, or another product); one-to-many (a central system is continuously or intermittently connected to many products simultaneously); and, many-to-many (multiple products connect to many other types of products and often also to external data sources). Concerning security, they write, “Smart, connected products create the need for robust security management to protect the data flowing to, from, and between products; protect products against unauthorized use; and secure access between the product technology stack and other corporate systems. This will require new authentication processes, secure storage of product data, protections against hackers for both product data and customer data, definition and control of access privileges, and protections for products themselves from hackers and unauthorized use.”

 

Stage 4. Perfect the ecosystem. As noted at the beginning of this article, the IoT is really an ecosystem. All parts of the ecosystem need to work together to achieve desired results.

 

Stage 5. Leverage a system of systems architecture. One of the current challenges facing both industry and consumers is a lack of standards. The consumer case is the easiest to explain. Consumers today can buy all sorts of smart home devices. Unfortunately, they often require several different apps to control those devices because the devices are not interoperable. This can lead to frustration and dissatisfaction.

 

Following Rueckert’s advice and mastering Porter’s and Heppelmann’s five stages of development are the best ways to foster successful IoT implementation. But remember: Nothing is guaranteed.

 

Footnotes
[1] Justine Brown, “Cisco: More than half of enterprise IoT projects unsuccessful,” CIO Dive, 12 June 2017.
[2] W. David Stephenson, “Four Essential Truths for IoT Success,” IndustryWeek, 4 January 2019.
[3] Dan Yarmoluk, “Top 5 Barriers to IIoT Adoptions and How to Overcome Them,” IoT World Today, 1 February 2017.
[4] Brown, op. cit.
[5] Tanja Rueckert, “Building An IoT Foundation For The Future,” D!gitalist, 7 December 2017.
[6] Michael E. Porter and James E. Heppelmann, “How Smart, Connected Products Are Transforming Competition,” Harvard Business Review, November 2014.