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What’s the most important element to build into your 5-year IoT strategy?
The most important (and most often overlooked) element in building a 5-year IoT strategy is the business strategy itself. Most recent data shows that the success rate in achieving expected business results from IoT is 16%. What are the forces that are pushing on your business today but, more importantly, could disrupt your business in the next 5 years? How can your company positively disrupt/reinvent the industry? A well thought out IoT strategy will include decisions about telemetry hardware, data structure and models, cloud structure, cybersecurity, etc. These are all simple “technical” decisions:
- Telemetry Hardware – Find a piece of hardware that will last the life of electronics (5-7 years) and make sure the telemetry does not require more service than the “thing” you’re leveraging. Make sure you can remotely update firmware/software as your strategy morphs.
- Data Structure – Decisions here are raw vs. processed data. Raw data can be big and expensive but, with the right data compression algorithms, raw data is the right decision to allow you limitless possibilities in data modeling for the next 5 years.
- Data Modeling – Apply a broad data model across a spectrum of “things” and the possibilities can be limitless. For instance; model raw data from different machines and/or different OEMs of machines and apply analytics to create a more robust business application that provides predictive maintenance superior to the OEMs.
- Cloud Structure – Make sure you’re not locked in to a sole source and that your data is easily portable. There are a lot of choices today and there will be even more tomorrow. If first starting out, try to leverage a cloud structure that gives your developers a lot of easy-to-use integration tools to get up and running quickly.
- Cybersecurity – Secure the crown jewels in terms of intellectual property, make sure the outcomes that your IoT solutions deliver don’t land your company on the front page of the newspaper, and don’t sweat the rest. You can’t afford to lock down everything.
So now that the easy stuff is out of the way, the most important element is the strategy itself. The core of this means that you have a good feel for the direction your competitor’s will be headed. While that seems like a difficult chore, you’d be surprised at the picture you can paint with a team of your people who battle the competitors daily. To get a picture of the competitor’s future, monitor their IT investments and product offerings. Also, if your industry has a low barrier to entry, what is the value statement for your 5-year strategy, and will that make new entrants immediately irrelevant?
Beyond the competitor are where the crystal ball has to come into play but you must have the discipline to put a stake in the sand and anchor your strategy. Do you foresee your suppliers and supplier relationships changing? Are there technologies that are being talked about in a loose sense that might cause your product or service to be replaced? With changes in suppliers and technology, can customers recognize these changes and apply more purchasing power to drive down margins?
In closing, most of my clients call after they’ve already got a manufacturing cell sending data to the cloud. On the initial call I ask, “Great, what’s your revenue model for the next 5 years”. In most case I hear crickets. A comprehensive business strategy is the most important element in a 5-year IoT strategy before you spend millions.
Scott is a transformative global business leader with extensive international experience at the C-Level who strategically takes companies to the next level. Scott’s most recent IoT implementation was at Thyssenkrupp Elevator with over 60,000 connected assets in the U.S. A natural change agent, he has been tapped repeatedly for turn-around, start-up, or digital transformation situations where complex change management leadership is required.
Scott is the CEO/President of Transformational Strategies LLC, a company that specializes in strategy development and deployment in IoT with a specific focus on field service management applications. Scott has maintained a technology edge and is recognized for his thought leadership in cross-industry IoT and field service management conferences in North America over the past several years. This extends to through various speaking engagements and authorship in top technology publications such as Field Service Technologies online, CIO Review, and CIO Assessment publications.