Businesses and organisations are always keen to get ahead by integrating the latest technologies.
There are many IoT technologies that can maximise efficiency, minimise costs and improve customer experience.
While the prospect of implementing IoT technology into an organisation is novel and exciting, in order to be successfully integrated it requires a solid understanding of the problems it can resolve.
This is compounded by the fact many IoT solutions require integration with a stack of existing technologies.
This article will explain some of the common pain points for businesses considering adopting IoT technologies and how to build a comprehensive and effective business case for IoT.
Why you need a business case for IoT
IoT is a strategic, focussed investment, but implementation requires buy-in from multiple stakeholders. This is why it's crucial to have a comprehensive plan in place before pitching your ideas.
The most effective way is usually to focus on the actual issues that can be addressed and what improvements you can demonstrate on deploying IoT solutions.
For example in a general manufacturing or factory context, there are several common pain points:
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Energy usage
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Material wastage
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Downtime and disruption
Each of these points can be tied to specific IoT solutions. Energy usage can be monitored and recorded using advanced sensors. As can the usage and wastage of materials.
Downtime can be minimised through using the data acquired in these processes to identify when resources need to be deployed and at which point in each process. Furthermore, IoT can assist greatly in logistics, distribution and fleet management.
In a different context, such as an airport or transport hub, the pain points can be inefficiency, safety and customer frustration. For example:
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Baggage handling
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Security
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Managing footfall and traffic
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Cleaning and janitorial responsibilities
IoT technology can be used as a great solution for many of these responsibilities. For example, through the use of sensors which provide real time mapping of foot traffic. This can allow additional staff to be deployed and crowd management devices to be utilised to reduce bottlenecks.
In order to properly build a business case, you need to effectively target these pain points and demonstrate the actual cost to the business. These costs could be financial losses, compliance with safety and legal commitments, and even reputational loss.
For example, poor management of material usage in manufacturing directly contributes to reduced profitability. Whereas poor crowd management in a transport hub can cause safety concerns and reputational issues.
Define the problem, not the technology
Defining the problem that needs to be solved is key to securing any IoT related technology in an enterprise.
The installation and utilisation of the technology needs to be discussed after the problem has been firmly outlined and established.
If we lead with the actual components of IoT, such as:
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Smart sensors
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Security devices
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RFID tags
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Cloud integration
These are unlikely to inspire much action and can seem almost abstract as concepts. Instead we must first outline the problem, then present IoT as a sensible, practical solution. The finer details can be discussed further down the line with operational teams.
If you create any business case leading with technology, this crucial point will get lost in translation. Consider how both of these statements will be received at board level:
“We need to utilise IoT linked sensors”
Or
“We need to manage overcrowding and bottlenecks. Without action, this will cause reputational harm and potentially compromise security protocol. I would like to present an IoT solution for this”
By leading with the issue and then presenting the solution through technology, there is a much better chance of getting buy-in from stakeholders and actually implementing the relevant IoT solution.
Key components of an IoT business case
In order to present the business case for IoT technology, clear measurable goals need to be outlined and adhered to. In addition to outlining and explaining the problems, the next step is to tie these issues to establish measurable KPIs.
Firstly, a control group of data has to be collected. For example, calculating a figure of energy wastage, or assessing where pedestrian bottlenecks are at a certain time of the day.
Once the correct IoT technologies which will help these areas have been confirmed, the effect on the desired KPIs can be measured against the existing control group of data.
Agreeing and establishing clear business goals that have a measurable effect is paramount to assessing the efficacy of any IoT related technology that has been implemented.
What does IoT ROI look like?
The ROI of integrating IoT technology into a business or organisation is demonstrated when improvements are measured through the agreed KPIs and reporting.
If the control group is set up correctly and the technology is deployed in a manner that is conducive to a good result, the reports should show a positive return on the initial investment.
Building stakeholder buy-in
Getting buy-in for implementing IoT technology depends on several different groups, especially with larger enterprises and organisations.
This could fall under several different categories:
C-suite and directors
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Establishing existing issues (such as the example in “define the problem, not the technology”) and why they are mission critical
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What are competitors doing with this technology?
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Could we be left behind if we don’t employ this technology?
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Is this a chance to innovate
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Estimated budgets and project timelines
Finance department
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What is the estimated ROI for implementing this technology
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How will progress be recorded and reported on
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Forecasted wider economic risks, such as reliance on goods from overseas (chips and hard drives for example)
Operational and technical
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How will this be implemented?
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What are the technical hurdles and roadblocks
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What physical aspects do we need to consider
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”Retrofitting” considerations for existing infrastructure
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What are the security considerations
Marketing
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Is this use of technology innovative?
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Is there a benefit to customers/users of the service?
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Potential media interest in the use of new technology/PR aspects
At director level, there needs to be a mixture of focus on addressing the business critical issues at hand (material wastage, overcrowding etc.) as well as a focus on top line figures.
Companies are always looking towards the future and how they can provide growth through capitalising on new technology. IoT provides a unique advantage in that it can be an excellent gateway to different cutting edge AI technologies and digital transformation.
There is a general feeling across many industries that technological innovation is the main way forward. Several statistics confirm this, such as a recent study conducted by Deloitte that stated “Ninety-two percent of manufacturers surveyed said they believe smart manufacturing will be the main driver for competitiveness”.
C-suite personnel are always laser focused on their competition and don’t want to be left behind in the race to innovate, so this can be a great additional angle to use when stating the benefits of IoT.
In terms of financial staff, this is where we can utilise the reporting benefits offered by IoT technology to our advantage. By outlining clear budget expectations along with the expected returns.
Getting operations and technical departments on board is a key aspect to ensuring any IoT project is a success. To maximise chances, explore any potential pitfalls and crucially with any internet linked technology, security considerations.
Finally, identifying any potential marketing hooks could be the aspect that gets the project over the line and approved. Considering the external facing elements of the project also demonstrates that all aspects and details have been observed carefully, and will increase the chances of approval.
Explore IoT solutions with Three
At Three Group Solutions, we have helped many businesses build a robust case for integrating innovative and forward thinking IoT solutions into their organisations.
For support on creating a comprehensive IoT business case for your organisation, that clearly shows ROI and value for all stakeholders, get in touch via our contact form below.
