In 2020, industrial IoT solutions have endless innovative mainstream commercial and residential applications that deliver operational efficiencies, create business opportunities and support competitive advantage in your domain. Yet, despite widespread IoT interest and debate, its rare to find industrial IoT projects that have reliably scaled.
In our experience of working with industrial IoT, the biggest challenge for scaling occur because most IoT trials and Proof of Concepts (PoCs) aim to only prove the promise of the technology’s capabilities. Most don’t seek to prove, validate or understand the business benefits that could be unlocked by the insights IoT solutions can enable across an organisation.
The foundation for successful fit-for-purpose industrial IoT solutions lies in deep understanding of the customer environment and clarity of the business problem to solve, or opportunity to capture. Sometimes that is a harder conversation than deciding which technology to use.”
Sam Sharief, Chief Operating Officer, Thinxtra
5 Key Considerations to Deliver Scalable Fit-for-purpose IoT Solutions for Business
The key to unlocking true business value at scale with industrial IoT applications lies in designing IoT solutions that are fit-for-purpose for your business. For success, effective industrial IoT solution design takes into account at least five key considerations.
1. The Business Problem or Opportunity
The cornerstone of every successful IoT solution is clarity on business problems or opportunities. Instead of seeking the latest bright new shiny technology to deploy, organisations need to start an IoT project by asking what business problems IoT technology can solve.
For example, is the customer experience or operational cost less than ideal because location information of owned assets while in the supply chain is unknown? Enabling insight to asset utilisation, that is, monitoring the efficiency of asset usage across a business, can drive valuable decisions about whether more assets must be purchased or leased to run business, or whether capex savings are possible by using existing assets more efficiently. Such insights help improve the customer experience and create differentiation in highly competitive markets.
Successful industrial IoT begins with an organisation defining a goal and working backwards to source or develop the best solution, without getting distracted by the hype around new, or different, technologies.
2. Data Requirements and Data Value
The IoT is more about data than the name suggests. Core to successful IoT is what the data generated daily across your organisation can tell you about your business. Data from connected devices help run and optimise a business by enabling faster, better quality decision-making. Monitored devices share updates on key tracking criteria, such as location, temperature or humidity, at regular, defined intervals.
Data produced from devices is used to trigger automated workflows or alert stakeholders to take action. For example, if a device monitoring temperature inside a truck transporting chilled goods between cities indicates the temperature is rising above approved levels, an automated alert notifies the Logistics Manager, or truck driver, of the problem. Corrective action occurs based on data produced from the monitoring device.
Clearly understanding the business problem is a prerequisite to defining the data needed to solve that problem. Similarly, understanding the data requirements is essential to identifying the relevant data sources and deciding the best device to produce, route and process data to enable action through workflows. Knowing which information can solve a business problem is critical to defining the end-to-end costs of managing and producing data within the IoT solution.
Once the data requirements, sources, production methods, processing and management costs are defined, the IoT solution provider can focus on designing the best fit-for-purpose solution, across devices, data, connectivity, digital platforms and support.
3. Fit-for-purpose Solution Requirement List
On the surface, solving business problems with IoT solutions may seem simple. The reality is that deep complexity is a fact of life in successful industrial IoT solution design. Although many business environments are similar, nearly every business environment is also completely different and features multiple use cases.
These differences mean it is rare to plug-and-play an IoT solution out-of-the-box. Successful IoT implementations are fit-for-purpose solutions that take into account the unique landscape of each business, the multiple use case requirements and the insights the business needs to unlock to solve problems and deliver value, at-scale, cost-effectively for the short and long-term.
Devices are one example of why the best industrial IoT solutions are fit-for-purpose. Devices must be placed on physical assets in a way that won’t hinder operations, which usually means the device must be a certain size or shape. The cost, and logistics, of placing hundreds, or thousands, of devices on physical assets also means the device must be durable and able to withstand different weather, temperatures, humidity and vibration.
Similarly, the cost and logistics of changing the batteries to run devices mean businesses need batteries with long life, ideally three to five years or more. Battery life has significant impact on ROI. Every business has different physical assets, from wooden crates, beer kegs, shopping trolleys, baggage trolleys, vehicles, even livestock. And each will need a fit-for-purpose, customised device, optimised for it. An out-of-the-box solution will unlikely work as well as a fit-for-purpose solution with these kinds of variables. Documenting the solutions requirements list is fundamental to designing effective fit-for-purpose IoT solutions.
4. Technology Agnostic Approach
Despite what some IoT engineers might claim, there is no single IoT technology, or standard, on the market able to solve the business problems in every organisation. In fact, the opposite claim is probably more accurate: many IoT solutions can solve many business problems but only if the solution provider has experience and skill to design a solution that is deliberately fit to your business to solve your unique stated problems.
The devices, connectivity options, digital and data management platforms included in each IoT solution bring different strengths and weaknesses, which emerge when applied to different business environments and requirements.
Although there are many IoT solutions available in the market, the unique landscape of each customer organisation means it isn’t fair to assume one solution will meet all business requirements. Successful industrial IoT projects are technology agnostic, designed to solve business problems regardless of the underlying technology and, as much as possible, integrating to the existing infrastructure in the business environment.
5. Total Cost of Ownership (TCO)
The Total Cost of Ownership (TCO) of an IoT initiative is a key decision factor for every organisation. TCO helps organisations assess whether the IoT investment is worthwhile for the business and if the return on investment is significant enough to embark on a transformation journey. A holistic approach is essential to include every cost, end-to-end, for the IoT project deployment, and on an ongoing basis. Critical to include in TCO calculations are costs of:
- purchase, or design and development of the right IoT devices to produce and route required data,
- quality, reliability and life of the battery to run the IoT device,
- installation, deployment and maintenance costs,
- customisation for efficient performance,
- communications, and making sure communications are available and reliable as needed,
- the digital platform enabling workflows which use the data produced to create operational efficiencies,
- change management to nurture and sustain adoption.
Successful IoT solutions create significant business value to justify the investment costs of transformation and beyond.