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CDO, CIO, CTO or CEO – Who will make connected services successful? (2nd part)

15 Jun 2021

2 – Organizational issues

a | Wrong organizational set-up – no enablement to deliver fast and regular results!

IoT projects are complex and require collaboration between different departments including electronics, cloud computing, data science or frontend and backend development. Traditional operating models with clearly separated units often create silo mentalities that hinder or at least slow down efficient cooperation. Such silo structures are often combined with a milestone-based project organization which does not suit the characteristics of software development. Such structures may work for traditional, not connected products. However, our experience shows that flexible, agile operating models support a quicker realization of products by enabling close collaboration between capabilities in short development sprints. To keep up the pace it is important that the team size is limited. We also strongly recommend setting up the operating model in such a way that all these agile teams are coordinated by the overall initiative that keeps track of the bigger picture and enables collaboration between the individual teams. This may for example be achieved by implementing an operating model based on the SAFe framework.

b | No acceptance in the organization

Connecting hardware products through the Internet of Things often initiates the company’s transformation from selling products to selling services. Most traditional hardware manufacturers do not possess the right skills for this transformation and lack acceptance inside the organization. Such a shift of direction significantly changes the company’s identity which often creates resistance. The negative attitude towards new strategic directions is further enhanced by the employees’ fear of losing their jobs. Even though the firm will most likely continue its existing business, the required skillset the company seeks in its employees will drastically change. Also, a turnaround in the company’s business strategy puts its financial health at risk.

Convincing the whole company of the necessity and benefits of the planned strategic evolvement might be one of the toughest and most underestimated challenges along your transformation journey. We strongly recommend including change management and communication aspects in the strategy-making process. It is also a good idea to involve professionals in this endeavor. Furthermore, it is important that all required skills are available. If these capabilities cannot be found inside the organization, it may be worth to think about creating a spin-off that bundles new digital capacities.

The operating model is now set up in a way that facilitates flexible collaboration between multiple teams. Also, existing staff knows about the benefits of the new strategy. However, to sell valuable services, selecting or building the right platform is key. Watch out for the next part of our blog series, where we will share our experience with technological issues in IoT projects!

Check the article published in Linkedin!