Why 75% of IoT initiatives fail: The harsh reality of building spec sheets without understanding end-users

If you’re reading the headlines, you know that companies across all types of industries are quickly moving to embrace what has been vaguely called digital transformation. This shift among companies is to stay relevant in a digitized world and includes things such as: adjusting business & manufacturing, processes, teams, marketing & sales tactics, developing digital strategies, and deploying devices, technology, and cloud-based solutions to their customers. But as you dig a little deeper, you also find headlines, including the one above, calling out a harsh reality: the significant failure rate of internet of things (IoT) initiatives (the seamless integration of device design, connectivity, desired and actionable data, and user experience) in pursuit of digital transformation.

Our belief is IoT initiatives in that 75 percent figure could, and should, have been prevented.

That is not a bold or controversial statement. It’s simply rooted in strategy and the discipline to execute on it. Nobody argues that strategy isn’t important. It is baked into every successful business. And if it applies to business in general, it must also apply to IoT initiatives for the business.

Where Businesses Fail with IoT Initiatives: 

  • Watching the competition accelerate their efforts and being caught flat-footed.
  • Feeling the pressure to replicate similar solutions – and fast.
  • Not understanding the time needed or talent required to build a successful IoT solution.
  • Building a spec sheet without understanding what the business and end-users want or need

Among these missteps, the number- one reason for failure is the last point: Building a spec sheet without understanding what the end-users want or need.

The good news is that there is a process & methodology to understanding those wants and needs, and starts with asking one important question.

What deserves to be built? 

Most companies embarking on IoT initiatives typically don’t ask this – or don’t know to ask this.

It is a vastly different question than what most companies ask, which is: what can we build? By asking what deserves to be built keeps companies and development teams focused on what will provide the greatest value to stakeholders and end-users. It eliminates a guessing game of what companies think would be worthy versus actually knowing what is desired. Knowing what deserves to be built also keeps teams from being distracted by shiny new features that can take them off course and prevent them from realizing the solution as intended.

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How to build what is deserving of your effort: 

Success awaits any company that is willing to answer the question – what deserves to be built? – and is then willing to follow a strategic process that is both practical and effective. But it requires being open to applying new processes and doing the critical preliminary work before running forward and developing solutions.

A shift in thinking is required. For decades, human-centered design (HCD) or design thinking has helped design-minded professionals pioneer new products. Herman Miller and Apple are well-known examples of companies that lead with HCD and also lead their industries. Likewise, for decades many business leaders, especially those in manufacturing sectors, have been operating on Lean Manufacturing principles that preach a production and efficiency-driven approach to business management and growth.

Now, in a burgeoning digital economy, leaders are quickly recognizing the need to create entirely new solutions alongside and, in some cases, in place of legacy products and production processes. HCD is the catalyst and proven process to help realize those new solutions.

HCD is a four-part strategic process that requires teams to: Discover and learn through data and stakeholder research; Analyze and identify pain points & opportunities; Create concepts and evaluate if they are deserving; and Decide on the right concept or revisit earlier steps in the process. Through the HCD process teams determine if an opportunity meets three basic principles – is it desirable, is technically feasible, and does it have business viability – before moving forward and making any significant investment in IoT initiatives.

Balance desirability, feasibility, and business viability: 

1. Desirability: understanding what stakeholders want and need. Users of your product or solution have the greatest say on what your IoT solution will become. It is their collective pain points you’re trying to solve and user experiences you want to enhance – and you need to hear from all of them. By getting into the field and immersing a team with your users and stakeholders in their world is where some of the most insightful discoveries on desirability emerge. Different stakeholder groups have different roles and needs. Sales professionals and service technicians will access the same IoT solution, but what’s important to each of them will differ and drive their unique experiences. Knowing what is desired by all stakeholders informs what ultimately gets built.

2. Technical Feasibility (weighing what’s desired against what’s technically required) Listening to and assessing the varied 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.

3. Business Viability (determining if there is value in the effort): Without HCD as a guiding strategy, desirability is subjective, technical feasibility is guesswork, and business viability is nearly impossible to tell. But through the lens of HCD, we can continuously weigh viability against desirability and feasibility. Is it what stakeholders desire? Technically can we build it with an appropriate level of effort? Is this the right decision and direction for the business? This is viability is determined. With all of the necessary information in plain view, the business has to decide if the effort is worth it and if the juice is worth the squeeze. For those who follow HCD, the answer will be clear.

Smart IoT Initiatives Start Here:

Applying a human-centered design approach to any IoT initiatives is a smart strategy and a smart start to any IoT investment. By figuring out what deserves to be built, companies will invest a fraction of their overall IoT solution cost and have peace of mind knowing what’s desired, what’s feasible, and what has business viability. That initial investment provides a clear roadmap with guardrails for the work ahead and plays a key role in reversing an unnecessary failure trend with regard to IoT initiatives. Based on experience, this should be a standard operating procedure as it is part of what all successful IoT solutions have in common.

Finally, if we are to believe the statistics, only 25 percent of companies are succeeding with their IoT initiatives. That also means those companies are operating at a significant competitive advantage. To that, we say, good for them. But it also can be good for any business that is willing to lean in and discover what IoT success looks like. It is not as foreign as it might seem. Rather it is all about implementing a solid business strategy and following a proven process.

Download this case study to see the full step-by-step process of how we recently helped an industrial manufacturer embrace IoT to improve productivity, increase operational uptime, and enhance user experiences – all by applying HCD.

Twisthink is a professional services firm that partners with companies to develop digital strategies and solutions that create impact.

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