Building an enterprise IoT strategy: IoT platform, cloud TCO, and product lifecycle management
An IoT strategy encompasses technological, business, and expertise development factors for effective digital transformation with IoT. In an enterprise context, an IoT strategy is highly instrumental in successful adoption of IoT due to the inherent complexity of IoT implementation and its profound potential impact on vast majority of business processes within an organization. An IoT strategy is essentially a business plan that specifies directions of IoT adoption but also provides criteria for IoT technology selection, product lifecycle management, and further expertise growth.
A recent study by McKinsey in the field of IoT adds more weight to the importance of having an IoT strategy for enterprise. Their findings show that companies who pursue multiple IoT use cases achieve significantly higher economic success with IoT than those who dabble in it with a few pilots. There are several reasons for this trend. IoT solutions often work in synergy and have the power to transform and optimize company’s business processes when they become a distinct driving force. There is also a clear impact of improved learning curve over the course of IoT adoption and growing in-house expertise.
To make provision for such transformation and start at the right end of the IoT use case spectrum, an IoT strategy is extremely helpful.
IoT strategy outline
The best part about IoT is that you can start with something familiar and add “smart” features on top of it. It could be an upscaled device with a new-found “smart” selling point or an enhanced production monitoring system. That said, you will still need to strike a balance between such low-hanging fruit and more complex IoT solutions that will give a greater momentum to your business operations in a bit longer run. If your goal is strategic IoT adoption then your IoT strategy should take a broad, far-reaching perspective on your business transformation.
Some key elements of an enterprise IoT strategy go below:
It is wise to start with some clear business strategy on which use cases to implement first and which ones may be due in a longer term. Good understanding of the initial scope of required features and capabilities will save you the cost of implementing unnecessary functionality. At the same time, a clarified long-term strategy will let you minimize the risk of lock-in with some limited or vendor-specific IoT technology later on. Finally, clearly defined business requirements will let you get fast through implementation and display better ROI for your investors.
On the technical side, business requirements must be in-depth enough to outline key IoT technology for your initial and long-term IoT initiatives. Among the major technology parts are an IoT platform, hardware, user devices, on-premises and hosted infrastructure, data processing and analytics systems, business backend applications. Make sure every component is on the list so that their interoperability and integration is figured out, or at least validated, early in the design.
IoT platform selection
As a central part of the IoT technology stack, an IoT platform should provide commonly used IoT features and integration options in the first place. But it is also important to verify those capabilities of the platform that go beyond the needs of your initial IoT project. Odds are there will be more projects to come whereas switching platforms on the go bears great cost and operational troubles.
Providing basic building blocks for IoT application development, top IoT platforms go further into rapid application enablement for common IoT solutions. For this purpose, many come with out-of-the-box data visualization dashboards and widgets for user interface development. Also, the flexibility of customization is another important selection criteria, which defines how adaptable the platform’s functionality is for a variety of potential new use cases.
Business backend integration
IoT-enabled devices and sensors allow companies to gather incredible amounts of new data, but many of them fail to create value from that data. If considered apart from key business processes of the company, the potential of IoT is severely crippled. IoT implementation can and should support all money-making operations of the company as well as be extensively used for delivering personalized customer experience, which enhances brand recognition and promotes loyalty. For this purpose, the utilized IoT technology must be built upon an extensible architecture that provides straightforward integration with data processing, analytics, and other systems. In this case, it will be much easier to bridge new, IoT-enabled sources of data with the existing business development strategy and key enterprise applications.
The rapidly expanding universe of IoT-primed hardware, connectivity protocols, and purpose-built smart devices poses a significant test to an enterprise IoT strategy. In most cases, companies will expect their IoT ecosystem to grow in scope and variety, so the issue of interoperability may become a perennial overhead unless taken into design from the beginning. This is something which is not too difficult to verify during the IoT technology selection process — by judging how open the selected IoT platform is for custom integrations and what type of hardware it already supports.
According to numerous market researchers, security remains a top concern among executives that inhibits their IoT ambitions. A large majority of those who already started with the IoT admit existing vulnerabilities and security breaches in their IoT infrastructure. To effectively minimize the risk for data-sensitive and mission-critical applications running on IoT devices, it is necessary to ensure that a secure IoT technology, data encryption mechanisms, secure cloud deployment, in some cases even a private cloud infrastructure, and corporate security policies are all in place.
Product lifecycle management with IoT
IoT makes your products smarter and gives you a variety of new capabilities for effective PLM. This includes continuous user data analysis, split testing, over the air software updates, remote maintenance, etc. By using IoT you can extend useful life of your existing products by upgrading them with modern features; you can implement subscription-based services on top of your smart devices and tap into new monetization strategies for your business; you can continuously enhance your products throughout their lifecycle by delivering new features and testing which ones your users like the most. As a part of an IoT strategy, a PLM strategy can help you clarify your requirements to an IoT platform vendor or your R&D team.
By every forecast on how the IoT revolution is going to develop, what we observe right now is just a tip of the iceberg. Since the IoT increasingly becomes a strategic asset for every modern company, the need for its continuous enhancement and adjustment to new business requirements is front and center of corporate planning. There is a number of ways to ensure your IoT technology can keep up with the pace of IoT evolution — support of modern standards, open architecture, flexible customization, enterprise-grade feature set — and it is important to validate them right from the start.
TCO analysis and cloud strategy
Finally, you need to figure out which cloud deployment model works best for you and which cloud infrastructure is most cost-efficient. This analysis may also include your IoT platform TCO as a part of cloud environment. Apart from direct cost of running devices in the cloud consider potential additional expenses on customization, DevOps, scalability, and production support.
Another important consideration for TCO is availability of engineering and professional services from the cloud / platform vendor because it may have a huge impact on your time to market and product quality. Make sure that engineering support will be available and reasonably priced when the need arises.
Making IoT your core expertise
The growing impact of IoT on every sector of economy makes it indispensable for a majority of companies, if not now then in a very close future. And it may ask for even more organizational commitment than investment in technology. An essential part of every enterprise IoT strategy is taking ownership of your IoT projects and incorporating acquired expertise into further innovations. However good your IoT platform or engineering service provider may be, it is up to you to execute your company’s ongoing digital transformation. Be an IoT champion, because everything else won’t do.