Do you have a strategy for IoT?
Many companies have today insight that Internet of Things (IoT) has a potential to dramatically change our product offering, our services delivery and our way of work in the future. However, what we can´t answer is: how and when? IoT is both an opportunity and a threat for most businesses today. But if you are an average medium-sized manufacturing company, what would be the right strategy? In this article I have shared my personal views and thoughts on the potential of IoT.
Wait and see
Let's start with the most common strategy, one we can call wait and see. It is quite simply to let competitors make the first mistakes and only invest when there are established solutions on the market proven by other companies. With history in mind, it is far from obvious that this is a bad strategy. The risk of the strategy though, is that one may remain stuck in this position whilst competitors find successful concepts and are gaining market share.
The next type of strategy is one we could call strategic projects. The idea is to simply decide that IoT is a great opportunity and invest in both technology and marketing to launch "digitized" offer. The big advantage of this is that no matter how successful we are (or not) to actually sell the digital service to customers, the project will contribute to market awareness for our company as an innovative company with a determined leadership.
The disadvantage of strategic projects is that it is difficult to find the right offer at the first attempt. Companies are usually good at estimate investments and selecting projects based on profitability and risk. Truly new ideas typically have high risk, and it´s difficult to assess their commercial potential. Projects are likely to seem a failure and if carried out, investment ends up on a project that many can agree on - the low risk, obvious projects.
Experimental innovation strategy
In recent months, I have met with a number of department managers who have ideas they would like to try out, but their project proposals are pending as corporate IoT is driven as a central function. I am increasingly convinced that many companies could achieve success with what we could call an experimental innovation strategy. The management function is then not to choose and evaluate individual projects but rather to ensure that the organization and the different departments are actively experimenting. That they explore and evaluates ideas in their respective areas. In this way the company can acquire an ability to test many ideas in the same time. Systematically evaluate the demand and be able to quickly react to changes in the market and by competitors.
One of the reasons that above is not happening is the old fashioned view on systems. We are still stuck in an age of “a few major systems will dominate the enterprise”. With modern IoT we can deliver mock-ups of solutions, market test and evaluate ideas in a way we have never done before. At a much lower cost. Regardless of system boundaries. This will in itself create experimental lust and drive innovation.
In conclusion, IoT is a completely different kind of phenomenon compared to what "lean" was for manufacturing companies. For IoT there is no complete plan with features and concepts, it does not require certain software or hardware, it’s about innovations around the product from all departmental perspectives. An experimental innovation strategy for IoT would give companies the ability to systematically evaluate multiple concepts in the same time instead of focusing on one or a pair of centrally managed projects. It would lower cost of IoT investment and yet increase competitive advantage and profitability.
Whatever strategy you choose, we at PDSVision can help you evaluate concepts and technologies around IoT. Please contact us and we'll discuss. Strategically or just practically ...