As with any emerging technology, fully leveraging the Internet of Things (IoT) requires a strategy that reflects the enterprise’s business goals and a realistic plan of action. Otherwise, you’re just buying stuff, as if that alone is a solution. Alas, it is not.
Done right, IoT can be transformational for an enterprise. Or as Benson Chan, senior partner at IoT research and consulting firm Strategy of Things, argues, IoT is an enabler of innovation. The challenge is to figure out parts of the business that can be innovated or disrupted through IoT.
Chan suggests five potential “paths to innovation” that enterprises can follow when devising an IoT strategy. These paths are not mutually exclusive; indeed, Chan says, the “more of these paths that the innovation occurs on, the more disruptive” an enterprise’s IoT initiative will be. The five paths are:
- Customer experience (through IoT-enabled services such as predictive maintenance)
- Product (enhanced features, different form factors)
- Technical (Augmented Reality, Virtual Reality, machine learning)
- Services (enhancing existing value or creating new value)
- Business model (to better align with customer needs)
These paths certainly intersect and run parallel, but approaching IoT with those in mind should provide some clarity for enterprise decision-makers interested in disruption, innovation, and transformation. (Which, one hopes, is all of them.)
So how do you decide which paths your enterprise should take without getting lost? Start by determining the organisation’s biggest pain points (such as inefficient business processes or low customer satisfaction) and greatest potential opportunities (cost savings, faster time to market, etc.).
To work well, this process requires a 360-degree view of the business. That means talking to employees, customers, and business partners — everyone in the value chain. Over time, an IoT strategy spanning multiple paths should emerge.
Yet as clear as decision-makers may be about their IoT strategy, long-term success requires a cautious roll-out. “Start with small projects and add an IoT element to it,” Chan says. “Create quick wins to gain experience, confidence, support, and knowledge of what is possible. Run small tests, measure and learn, learn, learn. Fail fast, learn fast, and try again.”
This entire process will be driven by data: data from an enterprise’s IoT devices, data from other internal sources, and data from external sources. Analyse, tweak, test, analyse, over and over and over again.
While this sure sounds more incremental than transformational, IoT programs that build upon small successes will, over time, see an acceleration of innovation as the early mistakes are left behind and a set of best practices formed and adopted across their various paths and business units.
So, has your enterprise begun its IoT journey?