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Designing successful IoT for business



I was fortunate enough to land my first IoT project about 20 years ago. Back then, I was a young engineer, brimming with energy and enthusiasm, and ready to show my client - who manufactured cranes and lifting equipment - how this cutting edge wireless technology would help their business.


I'd love to tell you that this story ends well. The truth is that an incomplete understanding of their business, coupled with our client's unrealistic expectations of what tech could do for them, was a recipe for failure. We did not get any further than a proof of concept. Since then, we have come a long way. Although IoT is a well-known term by many, 74% of companies still fail in their IoT initiatives. (Cisco, 2017)


Despite these alarming numbers, a significant portion of organizations in the Manufacturing, Healthcare, Retail, and Energy sectors see IoT as critical in their overall success. It continues to rise in popularity, 90% in 2020 (Microsoft, 2020). Creating successful IoT solutions has become even more crucial today. The Pandemic is driving one in three organizations to increase investment in IoT, specifically safety and security. Efficiency, optimization, and productivity are still dominating the top reasons for adoption overall.


20 years may have passed, but we still have a lot to improve when it comes to developing and deploying successful IoT solutions. Research says that the main reason for the challenges and failures are the following:

  • Challenges: technical complexity in addition to lack of budget, people, and skills to implement and manage

  • Failures: almost a third of IoT projects fail at the Proof of concept phase due to the cost of scaling, lack of clear business value/ROI, or absence of necessary technologies.

There is a clear connection between the challenges with starting and actual reasons why companies fail in IoT. Based on research, companies perceive the right resources (human and financial) as their biggest challenge. Companies lack confidence in their abilities to acquire the necessary skills to create and operate successful IoT solutions. This limits their ability to fully see an IoT solution's true potential and restricts their ability to develop fact-based budget estimates. Based on the main reasons for failure, one of the root causes is the disconnect between business and technology, a situation that is eerily similar to my experience 20 years ago.


Two critical success factors of business IoT solutions

Two critical success factors of business IoT solutions and services to facilitate the deployment of successful IoT solutions exist. However, it's still a challenging task, requiring multiple integrations of several complex environments to connect different business processes with technical concepts. Unfortunately, the hype continuously focuses on the new (and expensive) technologies in areas like sensors and wireless-connectivity. Still, companies need to focus on generating value for the business with today's technologies. IoT requires a new kind of thinking and a holistic approach.


Creating IoT solutions that focus on the customer is crucial to success. Above all else, companies need to establish harmony between understanding the customer's needs, meeting the business objectives, and tempering their expectations of what technology can achieve. Building an IoT solution for your business should not only impact what technologies your company uses, but it should also affect how your company does business.


Build the right team to get started

Having a team with a holistic experience in business, technology, and design is extremely important for IoT success. Collaboration between disciplines ensures companies have enough information and perspective to reduce technological complexities. Often, the latest technology is not right for the IoT solution. If companies don’t have all the necessary skills in-house, they should partner with companies who can help them deploy IoT to ensure their business success.

The right tools and methods foster your team's and stakeholders' collaboration mindset and empower each of the experts with the mindset, process, and tools to come together and build a better product faster.


Service Design for IoT

Service design in this context is a holistic approach to creating value for the business. It prioritizes the solution first, then considers the processes, tools, teams, and technology to realize the service. Selecting the right methods is foundational. These steps will ensure your success with IoT.

  1. Research Identifying the right technologies which areas of your business to mobilize to deliver the planned product or service is fundamental to Service design. After all, you are building more than a product. You are improving the services your business provides. This is a bold undertaking, and relying on qualitative and quantitative research to deliver data-driven insights is the support you need to progress with confidence.

  2. Focus on value generation, not technology Technology is developing at a furious pace, and new technologies are continuously replacing one another. The latest tech comes with much hype but often under-delivers in added value. Instead of prioritizing tech, focus on the tangible value that your IoT Solution can deliver to your business.

  3. Don’t lose the big picture IoT solutions are part of your overall business, with digital and physical touchpoints. It is not enough to design a single feature or process, no matter how well. You must keep the bigger picture in focus during the whole design and development project and treat your IoT solution holistically.

  4. Take small steps Rome wasn't built in a day. In the same light, your IoT initiatives should develop at the same rate at which your business evolves. Be sure that any short-term solutions align with your long term plans to avoid heading down a path towards failure.

By achieving this, you will notice that IoT is serving your current business processes and generating new ways of working and growth opportunities. With holistic Service Design, you can innovate and evaluate those opportunities based on facts.


There's no reason to approach an IoT project differently than you handle your business. Short-term results are essential to garner support and keep momentum, but at the same time, you need a long term strategy to ensure you will be successful tomorrow. It is crucial to take small concrete steps to develop and deploy IoT to help your business today. And constant measuring of the IoT solution impact with corrective actions will ensure success for tomorrow. This long-term approach enables you to plan your investment and impact on business and how the technologies will evolve to keep you competitive. Like anything new, it takes time for the market to adapt, which is why those services and experiences need to be designed with intent and deliberate caution.


At Avalon CX, we can make IoT ultimately help your business by using agile methods to get short term results. We can also help you to embed IoT into your strategy to impact your performance in the long term. Especially this year, COVID-19 has accelerated the introduction of IoT as organizations are forced to adopt new technologies that help them solve new problems they have been facing. The faster organizations adopt IoT, the easier it will be to double down on adoption and build on existing efficiencies.


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