Insights from Twisthink’s CTO on IoT’s current challenges and untapped opportunities
The Internet of Things (IoT) as a digital solution isn’t new. In fact, people all over the world rely on IoT digital solutions every day – even if they don’t realize it. But for many businesses it is still new and unknown territory, even as more and more businesses embrace the idea that their future is digital.
Our Chief Technology Officer Kurt Dykema shares his thoughts on some common questions he hears from business leaders, as well as the challenges he and the Twisthink team face in helping leaders rethink antiquated business models and strategies in a digital-first economy.
What is the number-one reason you hear from business leaders about not pursuing IoT – or why they didn’t pursue it sooner?
As we see it, risk tolerance and having the right people in place internally go hand-in-hand.
If IoT is new to an organization and there aren’t any internal champions who know it and can validate its worth, it can be a tough sell. Imagine a large industrial company with a core team that is literate in IoT. If they approach leadership with an opportunity to build something new and earn a return on that investment, I’d put the risk level at 5 out of 10 – based on risk tolerance alone. But if someone from the outside, like Twisthink, says the same thing, that risk level elevates to an 8 or 9 because the necessary skills and expertise don’t exist internally to gain traction. That makes it nearly impossible for IoT to be driven and managed solely from the outside. It is why literacy and experience with IoT can become a competitive advantage for any organization.
In your opinion, has the pandemic helped business leaders think more openly about IoT?
Entire markets and individual businesses feel like they need to play catch up from all that’s happened because of covid. There seems to be a clear sense of urgency among business leaders we talk with, but deciding to pursue IoT isn’t circumstantial. It comes down to clarifying the business strategy against the IoT opportunity, determining if the numbers make sense, and then believing in and adhering to the HCD process to bring something entirely new into existence. Investing in and trusting a process that leaders haven’t already experienced before can be really difficult for them to embrace.
What are some of the biggest challenges companies face with IoT?
There are many challenges with IoT, but we have encountered these two themes most frequently:
1. A desire for a healthy, short-term ROI on building the solution. It is difficult to build a scalable solution in 9, 12 or even 18 months. But even when it is built and you go to market, revenue often remains low until the volume can ramp up. And that can be discouraging for leaders who take a short-term, bottom-line perspective. If a company can leverage an existing physical device they’ve deployed into the world, and leverage it at scale, that’s a game-changer. But that also isn’t typical. Most businesses find they need to design and deploy a new physical device, and that impacts design, feasibility, technical complexity, and timelines. Put another way, IoT is not a short-term solution, it is a part of a longer term business transformation where results become undeniable over time.
2. Organizational chaos that IoT causes inside a company. I’ve read where corporate structures are designed assuming that you gain efficiency by specializing in different types of tasks – work that we might categorize as being in its own silo. IoT cuts across all these specialized tasks and requires input, thinking and alignment across various disciplines to make it work. It’s a matter of seeking new efficiencies in a collaborative manner rather than in specialized ones. For many conventional businesses, there isn’t an organizational framework or communication linkage to accommodate this required collaboration, which causes a huge disruption to business as usual.
Which industries can benefit from IoT?
The easy answer is – all of them. All companies currently exist and operate in a digital and data-driven economy. Whether they chose to engage it or benefit from it becomes a matter of choice. However, paradigm shifts, like the one we’re experiencing with COVID and the way it impacts how and where we work (remotely), can serve as a catalyst. We see industries and businesses leaning into what digital and IoT can mean for them. For some, being disrupted is proving to be a motivator for embracing emerging technologies such as AI and IoT.
Where do you see untapped value with IoT?
One example is with municipalities that can deliver goods and services at a massive scale. Take for example traffic signals that still run on antiquated timers. They don’t account for real-time traffic flow. Have you ever sat at stop light for minutes at a time when there was no other traffic, or waited in a left turn lane that allows only three or four cars through regardless of the time of day? These waste time and energy, as well as people’s patience, when smart sensors could monitor and regulate a smoother flow of traffic citywide. Also consider municipalities that experience seasonally cold temperatures. There are blocks of older neighborhoods and homes built prior to the 1980s that leak and waste heat (energy) and deliver no lasting value. The data tells us there are real opportunities, at scale, to incentivize energy-savings investments to make the lives of residents better and more cost effective. This can be achieved by investing smarter solutions that yield results – for home owners and the municipality.
How can you tell if a client has a potential IoT solution worth pursuing?
It is important to know that innovation with IoT has nothing to do with guesswork or gut intuition. It is about applying strategic due diligence. Regardless of a client or potential solution, we approach every situation knowing we must get answers to three questions to determine what deserves to be built:
1. Is it desirable? Understanding what stakeholders want and need will drive what any IoT solution becomes. By connecting with stakeholders in their environment is where some of the most insightful discoveries emerge as it is their pain points that need to be solved and user experiences that must be enhanced. Different stakeholder groups will have different desires and specific needs, but knowing what is desired by all stakeholders informs and prioritizes what ultimately gets built.
2. Is it technically feasible? Assessing the various desires of stakeholders must translate into technical requirements. This requires figuring out everything necessary to bring a concept to life, including what technologies and skillsets are needed to build it, the level of effort and expertise the project demands, and if it will truly solve their challenges – as desired.
3. Does it have business viability? Without HCD as a guiding strategy desirability is subjective, technical feasibility becomes guesswork, and business viability is nearly impossible to tell. But through the lens of HCD, we can continuously weigh viability against desirability and feasibility. Does it address stakeholder desires? Technically can we build it with an appropriate level of effort? Is this the right decision and direction for the business? With all of the necessary information in plain view, the business can decide if their efforts and the resulting ROI are worth it.