An estimated 58 percent of IoT projects for businesses fail, according to a 2020 study from Beecham Research. Only 12 percent of respondents claimed to be fully successful. The key to success points to working with IT personnel who keep learning about new technology. Here's a close look at why so many IoT projects in the business world turn out to be unsuccessful.
Main Causes of IoT Failure
About a third of all completed IoT projects have not been considered successful by business owners that implemented them. According to a 2017 study by Cisco, sixty percent of IoT projects stall at the Proof of Concept (POC) stage. The following are some of the specific reasons why projects fail at this stage.
1. Unclear Business Goals
If a business has not mapped out its goals, it's difficult to make a difference with technology. But if the company has clear goals, such as speeding up the shipping process, it can embrace specific technology such as automation. While it's important to develop big ideas, it's practical to start small and move at the fastest pace possible.
A business manager that wants to impress an owner must show improvements in profit margins over time. It's important for a manager to know the key metrics that are most important to an owner. IoT devices can help a manager focus on improving specific metrics that affect productivity and production efficiency. A company aiming for sustainability can set clear goals achieved through IoT monitoring.
2. Organizational Weaknesses
When an organization has a weak structure, to begin with, it can make an IT infrastructure difficult to mirror. Modern digital infrastructure calls for greater network efficiency. One way to get the most out of your network is to segment it into sections, giving everyone involved access to a section. Your IT team should take the full organization into account when setting up IoT devices to measure production processes for various business segments.
An organization can strengthen the more team members collaborate through data sharing. Collaboration and other forms of team interaction help make an organization more cohesive. Data sharing should be seamless on a business network. If too much big data is pushed through a network, but the data isn't being utilized by the organization, it may do more harm than good, using up precious bandwidth.
3. Unprepared for Technical Issues
When setting up a digital infrastructure, you need to plan for technical problems from the start. Every IT infrastructure has unique nuances that are typically too complex for people without proper IT training to understand. That's why you need a professional tech support team you can turn to for resolving technical problems in a timely manner. It's advantageous to work with an IT team that's already familiar with your technology.
Deploying IoT devices can require multiple configurations, in which an inexperienced technician can lose focus. Some companies, such as factories, set up thousands of IoT devices on their networks. These firms definitely need to work with certified IT specialists rather than just people who say they know about IT.
4. Customer/Vendor Issues
Resolving customer and vendor issues should be a top priority throughout your organization. Any type of slowdown involving suppliers can directly impact customer expectations. These days consumers expect websites to be on top of technical issues, particularly involving cybersecurity. All it takes is one late shipment or wrong order fulfillment for customers to start looking for competitors.
Consumers don't care about why their product arrived late. Many times, it's because a store or warehouse did not estimate demand accurately. The most modern IoT systems can integrate with machine learning programs to improve demand forecasting.
Taking the Human Factor Into Account
Cisco's survey that found nearly three-fourths of IoT projects are failing pointed to the human factor. Even though IoT seems like it's just about technology and data collection, it deals closely with people and relationships. It may involve collaborations between an IT team and financial staff members. In that sense, IoT expertise is of major concern, as you want to get sound advice from experienced experts when dealing with a high volume of confidential data.
So, is it possible for an IT team to lead a company into chaos? Yes, if it's an inexperienced team such as a fly-by-night operation just trying to get quick business. Not all IT teams are created equal, especially with the rise of IoT devices, which create a modern class of businesses that have access to valuable real-time data. What analysts and decision-makers do with data is just as crucial as technology.
Why You Shouldn't Venture Into IoT Alone
The IoT revolution has created a wave of new developers serving a wide range of industries with smart devices that collect vast data. Since IoT is becoming a complex topic, it's best to work with an IT team that stays on top of the latest smart technology. Implementing an IoT project is often too complex for in-house inexperienced IT personnel to handle, as many such employees aren't expected to keep up with new technology.
Relying on an in-house IT team can hold your company back in multiple ways unless the team is constantly testing new technology. It's more efficient to outsource to an experienced IT team full of skilled technicians who have the training and knowledge to resolve technical issues quickly. An outsourced IT team that specializes in modern solutions is more likely to deploy a new computer network with IoT sensors correctly and quickly.
Since IoT is a relatively new technology, it's best to learn as much about it as possible through the help of IT experts. IoT is valuable because it provides real-time data that can cut losses and waste quickly. Sharing insights within an organization about its operational performance can instantly pinpoint areas that need improvement. That's why companies with digital infrastructures are improving efficiency at a rapid pace.
Microsoft Study on IoT
An IoT study published by Microsoft in 2019 revealed many fascinating insights about IoT projects. The study partnered with the design agency Hypothesis Group, surveying over 3,000 business and IT decision-makers around the world. One of the eye-opening findings was that 88 percent of IoT adopters believe smart technology is critical to their company's success.
Many decision-makers now expect their companies to explore new technologies such as edge computing, AI and 5G as part of an IoT ecosystem. Edge computing is of major importance to any business that wants to use IoT sensors for generating real-time data. Instead of sending vast amounts of data to the cloud for computing, the computing is done at or near the IoT device. Then it's stored in a nearby resource, which reduces the amount of big data transmitted over limited bandwidth.
Another interesting finding is that different industries use IoT for different reasons. Manufacturers commonly embrace IoT for automation, quality, compliance and production planning. Industries that use heavy-duty equipment use IoT to create safer workplace conditions.
In many different environments, IoT is useful for tracking people, places and products. The transportation industry uses it to track fleet vehicles carrying items shipped to retail stores and customers. The healthcare industry uses wearables to track the biological data of patients. IoT sensors are extremely useful to large warehouses for tracking inventory.
The study found that the main reasons for IoT adoption included optimization of operations, improvement in employee productivity and safer conditions. Other leading reasons dealt with supply chain issues, quality assurance and asset tracking. Meanwhile, retailers focus on using IoT to optimize their supply chains and inventory management.
Conclusion: Challenge to Embrace Edge Computing
Staging IoT projects is widely supported by today's business community, but deployment is often rocky without the help of IT experts. An IT team that understands edge computing can streamline an IoT system quickly, cutting costs and speeding up data transmission. Working with IT experts will help your business get past technical mysteries and move more quickly toward company goals.