How to ensure IoT delivers value

Tiaan Coetsee, Co-Founder and MD at IoTdc.

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The internet of things (IoT) can deliver massive value – improving savings and processes, enhancing safety and maintenance, and much more. But businesses are starting to realise that IoT only delivers the expected value when projects are approached strategically – not tactically.

In this context, deploying IoT strategically refers to a comprehensive, long-term approach to IoT implementation. A strategic IoT project involves careful planning, alignment with overall business goals and a focus on delivering sustained value over time. It emphasises the need for a deep understanding of current business processes, potential improvements and the integration of IoT into the broader organisational strategy.

Deploying IoT tactically is a more immediate, short-term and possibly isolated approach to deploying IoT. Tactical IoT projects may target specific processes to achieve quick wins or address immediate needs. However, the text suggests that relying solely on tactical deployments without considering the broader strategic context may lead to unrealised potential and challenges in delivering long-term value.

We commonly see several hurdles in the way of achieving full IoT value.

• Considering the broader organisational context

These include responsibility and resources allocated to the IoT ecosystem, misalignment between the business strategy and the IoT implementation, and unrealistic expectations around exactly what IoT can do for the business. In the early hype phase around IoT, we saw many claims that IoT would guarantee savings, for example. As the industry continues to mature, it’s becoming clear that you cannot guarantee anything without understanding the business processes and the unique environment it operates in. Success for one customer doesn’t always mean you’ll get the same result for another customer in the same sector.

• IT and OT collaboration

A major IoT hurdle preventing businesses from deploying IoT projects successfully is confusion and or conflict between what IT wants to achieve and what operational technology (OT) heads are responsible for. As IT and OT converge, it often occurs that OT heads determine the strategic imperative behind the IoT initiative, go to procurement and start implementation. But at this stage, when IT, security and governance come aboard, the process may be delayed or must start over. Collaboration between IT and OT teams is vital, as their convergence is common in IoT projects. Involving all relevant stakeholders from the outset helps avoid delays.

• Responsibility and resources

Another hurdle we see is resourcing: in many cases, because IoT is still a fairly new subset of technology, IoT may be given to just one person (or a handful of people) who is already filling another role, to deploy and manage projects across the whole business. Implementations and securing buy-in are challenging, so deployment teams need to be properly resourced.

• IoT can’t fix a broken business process

It is important to note that the IoT technology being deployed must overlay current business processes. If the process is inefficient, technology won’t solve the problem. For example, a commercial bakery deploying IoT to reduce energy costs by turning on ovens only as needed won’t see the expected value if the staff manually turn on the ovens.

There are many opportunities for short-term wins where IoT is deployed to digitise certain processes as isolated, tactical projects. However, organisations planning a broad IoT project for visibility and control over assets need to embark on a far longer-term, more strategic project.

In these strategic projects, you can’t jump straight to value – it is important to go through the right steps. First, you need visibility of the current environment. An organisation seeking to reduce consumption or improve performance of assets needs to understand what their current state is, by monitoring it. Only once they have confidence in the integrity of the data from the monitoring solution can they plan their next step.

Performance or consumption data overlaid on current business processes informs opportunities for improvement, and where IoT controls will deliver value. Also, change management is a critical part of an IoT strategy or plan, particularly when it impacts established processes.

IoT projects must align with business processes and strategy to generate a return on investment. Where processes are inefficient, they need to be improved before implementation, and organisations must quantify the potential value of their IoT project. At the same time, new rules and parameters must be introduced and followed to support the goals of the implementation. This may sound complicated, but can be a smooth process with the right technology partner. Because IoT integrates with, and impacts, various divisions, all those impacted must understand the potential value and buy into it. This includes IT, OT and finance.

Any IoT project has to be flexible and adaptable to overcome incorrect assumptions or unforeseen challenges. For example, certain processes might not be possible to change. We see instances where turning certain legacy manufacturing equipment on and off could be harmful to the equipment, and we may have to change the project plan. We may need to implement load reduction or focus on other aspects of the deployment instead. It is a dynamic environment that must be constantly reviewed.

Once the IoT project has been deployed, it is important to keep developing and reviewing the outcomes. Managerial oversight is required to assess the results, review savings or performance changes, and – if it is not delivering the expected value – understand why. IoT that delivers real value is never a quick fix, but rather the start of a longer-term initiative to constantly improve and deliver increasing value, which will fundamentally make businesses better by having more information to make informed decisions.