It’s no longer a matter of if, but when we’ll come to realise a fully connected future via the IoT for business operations. The pace of adoption will largely depend on the speed of transition from legacy infrastructure and processes to those that are equipped to handle big data.
However, the physical technology is only part of what’s needed for IoT success. As with any major technology overhaul, the human capacity to provide direction is an essential ingredient for successful migration.
Understanding the need for adoption
Firstly, business leaders must have a clear understanding of IoT and its advantages in order to create an IoT strategy that really works. Arguably, a lack of understanding in leadership teams is the biggest challenge to any IoT project – as many studies suggest. Without a sound understanding of what IoT is and what it can do for your business, it’s difficult to create a strategy that works, and even harder to get buy in from the teams that will be using it. Add to this the time and money needed to invest in the technology and its eventual implementation, and it’s no surprise that there’s trepidation in many businesses to properly invest in IoT – particularly if you’re operating in a sector where there is a lot of legacy infrastructure to take into consideration.
At Sensor City, we aim to provide the tools and support to equip business leaders with the understanding of what they need for successful IoT implementation. The key element of this is having a strong strategy in place from the get-go – so here’s how to create one.
How to create an IoT strategy for your business
Before you can implement IoT in your business, you’ll need to cement your understanding of what IoT can do and how best to approach it. At Sensor City, we believe a successful strategy should contain the following elements:
Setting out key objectives
Consider what your key objectives for implementing IoT are. Effective leaders will ask questions like:
- Will IoT provide strategic benefits, such as the ability to develop new business models, products, or services?
- Will it add value to your customer?
- What types of data will need to be collected, and how can it be used to reach key business objectives in the short and long term?
Assessing the ROI
According to the 2019 Microsoft IoT Signals report, IoT adopters are predicting a 30% ROI in two years. When you create an IoT strategy for your business, you’ll need to calculate your possible ROI. You should make sure to include:
- Direct and indirect costs and savings – i.e. will you be able to refocus workforce on more strategic or higher value operations, or reduce factory space?
- Value produced over time – as technology develops, how will you get better results?
- Cashflow and upfront costs – don’t just think about technology, but the people, skills, and training, that may also be needed.
- Net cash from the future investment, taking into account variables such as inflation, tax changes, non-cash expenditures.
- The minimum income, or ‘hurdle rate’, necessary for your company to be profitable.
A solid skills strategy
You will need to think carefully about the wider tech infrastructure need to accommodate IoT technologies, including the skills required to perform operations, monitoring, and maintenance of the infrastructure, and what implementation will look like across the whole businesses. You can read more about how to invest in the right skills in our 2020 guide to IoT adoption.
A technology roadmap
While considering the infrastructure and tech needed to implement your IoT strategy, you will need to plan how and when these changes will be made and communicate effectively to your team / workforce as regards implementation timescales. A technology roadmap is a great way to visualise what needs to be done and when.
A plan for operational implementation
Deploying IoT can be a complex task and won’t simply happen overnight. Once you have your technology roadmap in place, leadership teams need to build on it to carefully plan a phased transition to IoT connectivity to minimise disruption to normal operations. What’s more, you’ll also need to consider not just the physical implementation of the technology, but what aspects of monitoring will take place, including what data will be collected as part of operations, where it needs to be shared, and how it needs to be leveraged.
A communication plan
The implementation of IoT is not just about technological change – success relies heavily on cultural change, too. One of the biggest challenges facing leadership teams is gaining buy-in from the wider business. Consider your internal comms strategy – you will likely be asked whether there will be any changed to team structures, whether skills need to be replaced, reskilled, or recruited for, and/or how the change will benefit the company and the workforce.