While the potential use cases for IoT projects may seem infinite, Cisco revealed in a recent report that 75 percent of all IoT initiatives are “failing.”
Why IoT Projects Fail
According to Cisco’s survey, some of the top reasons for IoT development failure included:
- Lack of internal expertise
- Slow time to completion
- Budget overruns
While these challenges seem persistent, they’re not unavoidable. That being said, you can’t fix them by simply asking your development team to “go faster,” or by compromising important parts of the project to protect the budget.
In this post, we’ll explore how you can prevent problems with time and budget by defining a better product strategy.
Before You Begin: Aligning Goals & Communicating
In addition to identifying time, budget, and expertise challenges in IoT development, the survey from Cisco also found that business and IT executives often have different ideas about what makes an IoT initiative successful.
Business executives typically focus on overall strategy, satisfying the business use case, and creating processes to reach milestones. IT leaders, meanwhile, may zero in on the technologies themselves, and whether they have the organizational culture and expertise available to deliver the desired products. If IT needs additional resources, they’ll likely also make vetting and managing outside vendors a priority.
While all of these aspects of an IoT project are important, both leaders will need to communicate and come to a mutual understanding about what the goals of the project are, how they’ll measure success, and what realistic deadlines look like. If they don’t, the lack of alignment will likely lead the project to a crashing halt — often after a lot of time and money have already been invested.
After securing executive sponsorship on both sides of the company, you’ll also want to designate an overall product manager who can look at your entire project holistically and drive communication across business lines. This person provides unbiased product development insights, manages integration between software and hardware development teams, and helps you determine when to involve different groups in the business (in general, the earlier the better).
Building the Right Product for the Right People
Say you’ve got a great, new, innovative idea for an IoT product that you know will take the world by storm. While there’s nothing more exciting, there are several steps you’ll want to take to make sure that your efforts to develop and release this product will be fruitful.
1. Understand Your Market.
Your idea might be amazing, but you don’t want to fall into the trap of creating a solution that doesn’t have a problem to solve. Begin your research by working with your marketing and sales teams to determine if there is a market for what you want to build. They’ll also help you figure out if there are other companies pursuing the same piece of real estate in the market as you are.
If so, consider how long it might take these other businesses to launch a competing product (if it doesn’t already exist). Large legacy enterprises may take longer to innovate, although they might have more resources at their disposal. Newer, more nimble companies can move more quickly, but they could be strapped for funding. After evaluating the market, you can decide whether this venture will be worth your investment.
2. Define Your Minimum Viable Product.
Whether you’re developing your product to sell or to increase your organization’s operational efficiency, you’ll want to make sure that it meets the needs of your users — and, of course, that it actually makes it into their hands in a timely manner.
The easiest way to do this is by defining your minimum viable product (MVP). The MVP is an initial proof of concept that demonstrates the viability of your idea. It provides a sounding board for user and client feedback.
Keep in mind that this doesn’t mean you should focus only on delivering the smallest amount of functionality possible. Rather, zero in on what features will be absolutely necessary for the product to be viable for the business. Then, you can focus your time and budget on those pieces, adding auxiliary features later.
3. Assess Your Capabilities and Experience.
This step requires some honest evaluation of the resources you have on hand to determine where you need assistance. Your IoT project may require expertise in software development, mobile application development, hardware development, machine learning, IoT security, and more.
As you’re deciding how to staff and resource your project, consider shifting your perspective from asking “Can we do this?” to “Have we done this before?” If this is your organization’s first foray into IoT, it makes sense to pair up with partners and vendors with significant skills in the field. They’ll help you unlock insights that you might never have considered, having not encountered a situation before.
Finishing Your IoT Development Project on Time
Why do IoT project timelines so rarely go as planned? A couple of common mistakes occur in the strategy phase, including:
Overcommitting and Underperforming
This point goes back to the discussion above about defining your MVP. While it can be tempting to create a product that tries to solve multiple problems at once, this approach is not feasible.
Products with lots of bells and whistles not central to the core value prop can get stuck in long development processes that never seem to end. IoT applications, in particular, have more integration and interaction points than regular software, which means that more things can go wrong.
The more complex features you add, the more testing you’ll need to do. If you end up cutting corners to deliver something on time, the product is not likely to live up to the high expectations you set in the planning and strategy phase.
Failing to Identify Potential Roadblocks
Do you have a strategy for managing the multiple vendors creating the hardware components for your device? Does your project require machine learning? Have you consulted with your managed services team to confirm you have the infrastructure available to support your product?
In software development, you’ll often hear the phrase “fail fast.” In IoT, you can still fail fast, but you have to be more strategic about where and when you fail.
If you’re going to fail on something, fail in conceptual design or market analysis, when you have the time and resources available to go back to the drawing board. Avoid failing when you’re halfway through IoT device production.
Determining Your IoT Project Cost
Underperforming and going way over budget on your IoT project can sideline your entire career, so this topic isn’t to be taken lightly. There are multiple factors that can influence the cost of your IoT initiative, and leaders need to take specific steps to mitigate risk.
Don’t begin your IoT project without knowing your financial targets — the price point you can go to market with if you’re planning to sell the product, for example, or target efficiency gains for an internal system. Involve your finance team early on and use a scenario-based, end-to-end financial model to eliminate surprises. This approach will help you account for:
- Non-recurring and recurring expenses, and projected recurring revenue and/or operational savings
- Known and unknown costs
- Make assumptions for unknown costs and recalculate as they become known.
- Include costs for human capital for post-launch operations and support.
- The cost of each phase of the project
Using this model, you should also run worst-case, best-case, and most-likely-case scenarios and review these regularly with key financial stakeholders.
Achieving IoT Development Success
It’s time to start slashing the 75% failure rate for IoT projects down to zilch. By addressing potential challenges with product scope and available resources upfront, you’re more likely to avoid the most common pitfalls.
If you’re eager to learn more about the basics and nuances of IoT development, check out our free comprehensive guide to IoT development here.