The Challenge of reaching scale in IoT Use Case Deployment.
The recent downfall of the IoT pioneer Sigfox underlines that the IoT industries analysts and investors have underestimated the time and effort required to develop and roll-out scalable IoT Use Cases. The mobile operator credo “if you build it, they will come” does not apply in the IoT world.
Competence gaps and Business Process Integration challenges, Hardware availability and a lack of IoT Hardware Operations Know-How often form barriers that need to be overcome before IoT Use Cases can scale. Nurturing these new disciplines takes time and is part of a larger strategic organisational transformation effort. As a result, many IoT projects are still stuck in the innovation lab.
The example of Smart Meter Roll-Out illustrates very well what a scalable IoT Use Case can look like. Meter roll-out and metering related data processing is at the core of any utility business operations. With the help of Maturing IoT Technology and accellerated by a number of legislative compelling events, utility driven smart meter roll-out leads the global IoT Use Case Ranking (Remote Asset Monitoring – Read Only). From all the challenges listed above, only the IoT Technology Competence Gap is something Utilities have been forced to deal with.
FIG 1. - Top 10 Use Cases - IoT Analytics 2021
For most other other Enterprises, the challenge is more serious.
- IoT Competence Gap
- Missing IoT Hardware Operations Concept / know-how
- Availability of High Quality IoT Hardware Components
- Business Process Integration
Cheap Data - IoT Hardware Operations
Many IoT Projects never scale, not because the underlying technology isn’t good enough, but because the sheer operational burden makes the return-on-investment not worth the effort.
Cheap Data is an essential component of any IoT Business Case - however, if you are NOT a utility, connecting your business processes to a datastream of distributed devices can become a serious challenge. This IoT Hardware Operations challenge occurs both during the roll-out as well as along the lifecycle of the connected devices that need to be maintained through a network of service partners.
The Mouse Trap: It is easy and cheap to equip a mouse trap with a sensor and create a data event once the mouse is trapped. The challenging part is to onboard anad manage datatreams coming from 10.000 mousetraps cost effectively. A new process ecosystem needs to be created that automates the registration of each mousetrap, plans roll-out and repair as well as material logistics, These processes need to run seemlessly at all phases of the lifecyle of the installed hardware to guarantee cost efficient device operations.
FIG 2: Process Ecosystem efficient IoT Hardware Operations
Pen and Paper often represent the status quo of IoT Hardware operations. Significant effort needs to be put into professionalising IoT Operations in order to meet the challenge of cheap Data.
A 2nd component in moving IoT Projects out of the lab is strategic alignement. In order to have a scalable IoT pilot, strategic objectives needs to lie at the core of the activity. Only strategic intent justifies the cost of re-designing business processes and changing the way organisations work.
Digital Alignement - Strategy First
Embracing the possibilities that emerge in the increasingly digital environment we live in does not come natural for most organisations. It is a change management programme that affects all parts of the organisation and starts with a digital strategy. The “Digital” opportunity associated with doing this is to create an agile organisation with short decision cycles based on data insight. Aligning the organisation with this approach is a challenge but essential in reaching a scalable digital / IoT Business. The figure below demonstrates what this means for asset management operations and information flow Model (based on ISO 55000 / PAS 192-3).
FIG 3: Digital Transformation applied to Asset Management Environment
In setting up successful scalable IoT Pilots, only a top-down approach (green arrow in Fig 3) makes sense. An IoT pilot driven by the IT department, not aligned with the business strategy, almost certainly does not scale and often is the result of technology push in combination with subsidies (red arrow in Fig 3).
In the absence of Strategy, regulatory changes can take up the same role. Compelling events in the regulatory environement have the same power to re-shape the business processes.
Bottom Line: In many cases, IoT might be stuck in the lab. The ingredients required to succesfully scale beyond the lab are known: Strategic business process alignement and IoT Hardware Operation Competence. Considering the size of these challenges and often the lack of a strong compelling event in the market explains why IoT driven market propositions take more time to establish. That will continue to be the case for the next few years, creating hardships for the IoT Start-Up Community.
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