Studies across the globe have observed that manufacturers are racing for innovation leadership in digital manufacturing. In this race, the internet of things (IoT) pilots initiated by manufacturers are at the forefront. However, all is not well with these pilots.
In the early days, the discussion about IoT was focused more on the vision and was short on details. Today, we are now at the end of Q1 2019 and things have started to change more or less. Markets are gradually becoming nuanced and detail-oriented. The focus is shifting more toward concrete use cases. Even if that’s the overall case, analysis of organizations that have taken steps toward digital leadership with IoT shows that many organizations that had started with IoT pilots, either have projects that were stalled or did not move forward.
To understand more about these pilots, we have gathered inputs on a few of these through interactions with our customers and partners, and through various published reports. We also asked the following questions: “what causes the IoT pilot purgatory?” “which symptoms could have acted as a forewarning about it,” and “what approach has worked to avoid it altogether?”
What causes “IoT pilot purgatory”?
The majority of cases revealed that the IoT pilot wasn’t part of the original business plan. Some became a part of the organization’s plan through IT or, in some cases, driven by the business teams that have the right intention to assess the use of technology but are often working in isolation and not as an integral part of the business processes. Companies are chasing technologies for technology’s sake. Instead of solving business problems – some isolated use cases were chosen for the pilot. Pilots were undertaken without properly considering the big picture. The absence of realistic end-to-end plans resulted in bad prioritization and misplaced goals. Hence, pilots either lost the direction, or lost the right management support towards successful completion.
IoT has the ability to impact a broad spectrum of business areas, but organizations often start with an initiative limited to small application areas regardless of what IoT is capable of delivering. With this approach, companies lose an opportunity to assess the fit and impact of IoT for the right set of use cases.
The IoT vendor ecosystem is developing and there are many startups in the markets who offer the complete ecosystem with the right partnerships. Often companies engage such vendors, but lack trust and are unwilling to let startup partners manage the whole project.
IoT touches many human aspects, but while planning pilots, business-wide factors such as company culture and employee mindsets are overlooked. It has been observed by many studies that end-users are not considered as stakeholders. This is odd considering that the end-users are the ones who will have a major impact on IoT in the way work is performed by them today. It was observed that this happens often, particularly when either a decision is taken without consulting business or the business team is reluctant to play the role of a consultant.
How ‘pilot purgatory’ can be beaten?
Thing big, act big – Successful pilots have shown that the pilot should be run as a big project from start to finish.
Human factors matter: IoT projects may sound like they focus on technology only, but human factors such as culture, organization, and leadership are critical. Collaboration between IT and business is the number one factor for successful pilots.
Company culture: Think holistically about what you are solving and don’t forget to think about your organization, your culture, and your talent. Organizations with a technology-focused culture from top-down leadership are important for deriving business benefits from IoT. Executive sponsorship is the key to success to provide the right investment approval and to manage the change that may span across multiple functions of the organization.
A separate business group: Some organizations have created separate business groups working under the central organization that looks to the future, incubates ideas and assesses viability. They have the group’s support to disrupt the ongoing projects if it makes sense in the long run for the business as a whole.
Don’t go at it alone: Our study found that the most successful organizations engage the IoT partner ecosystem at every stage. IoT expertise whether internal or external – through partnership – is important. It was observed that strong partnerships, throughout the process, can smooth out the learning curve. Every day we see some new things getting connected that we never thought would be connected, that have the potential to deliver and to create incredible new value for industries. Opportunity awaits for companies to work together with IoT vendors and create solutions that collect and share data from the connected things.
Share the data: Shared data is the basis of the digital industrial world. Sharing insights allows us to achieve tremendous gains for business and society and no company can solve this alone.
Reap the benefits: Globally, an organization with successful pilots didn’t stop there, but started to reap the benefits with smart-data insights. They have identified the top 3 benefits of IoT – improved customer satisfaction, improved product and service quality, and improved profitability. So pilot use-cases need to be ranked as per the quantum benefits and should have a plan ready to deploy and scale – as soon as the pilot is successful.
Learn from failures: Stalled or failed projects have helped organizations understand what works and what does not. This analysis has helped them accelerate their investments in IoT projects.
Finally, keep in mind, the remedy is continuous. Business-wide consultation is vital, and consideration is a Must from start to finish to avoid ‘pilot purgatory’, and to move beyond the pilot to the successful IoT deployment stage across the organization covering multiple use cases.
To learn more or to have a discussion on the subject, feel free to connect with me.