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Future-Proofing Your IoT Infrastructure

For all the value and disruptive potential that Internet of Things (IoT) solutions provide, corporate buyers face a dilemma. Today’s IoT technologies are still immature point solutions that address emerging use cases with evolving technology standards. Buyers are concerned that what they buy today may become functionally or technologically obsolete tomorrow. Faced with this dilemma, many defer buying even if the IoT solutions they buy today offer tremendous value to their organizations.

This post describes a planning strategy called “future-proofing” that helps managers, buyers, and planners deal with obsolescence.

What causes IoT solution obsolescence?

An IoT solution, whether you buy it now or in the future, can become functionally obsolete for several reasons, as described in Figure One.  Unlike more established technologies, today’s immature and fast evolving nature of IoT solutions, amplifies the risk of early obsolescence.

For example, today there are multiple Low Power Wide Area Network (LPWAN) connectivity options – SigFox, LoRa, RPMA (by Ingenu), Symphony Link (by Link Labs), NB-IoT and LTE-M. While each option has advantages and disadvantages, a subset of these will eventually “win” out as technology standards, business models and use cases emerge.

Similarly, there are 350+ IoT platforms in the marketplace today (source: “Current state of the 360+ platforms”, IoT Analytics, June 9, 2016). While many of these platforms target specific applications and industry segments, consolidation is inevitable as there are more vendors than the market can eventually support. The major IoT platform vendors (Amazon, Microsoft, Google, IBM, GE, et al), currently on a market share land grab, will drive consolidation when they begin to acquire select vertical platforms to gain rapid access to those markets.

What is Future-Proofing?

According to Collins English Dictionary (10th edition), “future-proof” is defined as:

“protected from consequences in the future, esp. pertaining to a technology that protect it from early obsolescence”

Because of the high cost of enterprise technologies, many buyers perceive obsolescence as bad. To them, future-proofing means keeping the technology as long as possible in order to minimize costs and maximize return on investment (ROI). Their companies have standardized their business processes, policies and even their technical support on the technologies that they have bought. When a solution goes End of Life (EOL) and transitions to a newer version, it means that managers will have to recertify and retrain everyone on the “new” solution all over again. In general, transitions happen over a period of months (and sometimes years) in large global companies. During this time, multiple generations of the solution will co-exist, with each requiring different processes and policies.

In today’s fast moving IoT market, planned and unplanned obsolescence will be the norm for the foreseeable future. The traditional concept of “future-proofing” doesn’t apply, and can lead to significant, adverse business disruption.

In the era of cloud based solutions and IoT, future-proofing is not about outguessing the future, and choosing the “right” solution so as to never have to “buy” again. Nor is it overbuying technology now to avoid buying in the future. Finally, future-proofing is not about avoiding change. Future-proofing is a solution lifecycle management strategy. It is a continuous process to maximize solution flexibility and options, while making deliberate choices and managing risk.

What does a future-proof IoT infrastructure look like?

In planning the future-proofed IoT infrastructure, managers must first understand its key characteristics, and then define specific requirements for each of those characteristics. At a high level, these characteristics include:

  • Usable– the infrastructure and solutions achieve all functional needs with no loss in performance, security, service level agreements (SLA) over the desired time period.

  • Scalable – supports future needs, applications, devices

  • Supportable – resolves technical, performance, reliability, SLA issues

  • Changeable – addresses “lock-in” and facilitates migration to updated solutions on your schedule based on your needs

  • Economical – the total cost of ownership of the solution stays within forecasted ranges

A framework for future-proofing your IoT infrastructure

Change is constant and cannot be avoided. The driving principle behind future-proofing is managing change, not avoiding or preventing it. This principle recognizes that every solution has a useful functional life, and that what is functionally useful today may be obsolete and discarded tomorrow.

A properly designed future-proof plan provides the organization with options and flexibility, rather than lock-in and risk. It prevents suboptimal decision-making by managing the infrastructure on a system level, rather than at the individual component level.

Future-proofing your IoT infrastructure is a three step process (Figure Two). It is not a “once and done” exercise but must be done annually to remain relevant.

Plan and Design

The first step of the future-proofing process is to identify and place the various IoT infrastructure, systems and solutions into one of nine actionable categories. These categories are shown in Figure Three. The horizontal rows represent the “change” category, while the vertical columns represent the timeframe decision timeframe.

The actual classification of the IoT infrastructure solutions into one of the categories is determined in conjunction with IT, operations and the business units. Key considerations for determining the “future-proof category” include:

  • Usability/functionality – functional utility, compliance with standards, performance against needs, SLAs, and performance

  • Scalability – ability to meet current and future needs, anticipated change in standards

  • Support – resources, expertise, reliability

  • Ease of transition –contractual agreements, technology interdependence/dependence, specialized skills

  • Economics – maintenance costs, licensing/content/subscription fees, utilities, new replacement costs, transition costs

Source and Build

Once the proper categorization is completed, the second step is to procure the necessary solutions, whether they are hardware or software. This requires that a sourcing strategy be put into place over the desired time period. The terms sourcing and buying are sometimes used interchangeably, but they are not the same. Sourcing is about ensuring strategic access to supply while buying is more transactional. In executing the future-proofing plan, procurement managers must understand the supplier product lifecycle, and develop specific tactics.

As an example, a large global company decides to standardize around a specific IoT edge device (and specific generation) and technology for the next five years. In order to maintain access to this supply during this time period, it employs a number of tactics, including:

  • Stocking of spare units to be deployed in the future

  • Placing large “Last time” orders before that version of the solution is discontinued

  • Sourcing refurbished versions of the technology

  • Incorporating leasing as sourcing strategy

  • Negotiating contractual arrangements with the vendor to continue the solution line

Support and Monitor

The third step in the future-proofing strategy is to keep the IoT infrastructure and solutions operational over the desired time period. This is relatively easy when the solutions and technologies are being serviced and supported by the vendors. However, as vendors transition to newer technology and solution versions, buyers may find limited support and expertise. This problem is amplified the further you are from the original end-of-life date.

To keep the infrastructure and solutions fully operational during this time, companies must employ various reactive and proactive tactics. Some of these include:

  • Incorporating and installing vendor firmware updates to maximize functionality, apply bug fixes and extend useful life. Vendors may issue firmware updates on both End of Life and current generation solutions.

  • Purchase warranty and extended warranty and maintenance service contracts to assure access to support

  • Develop in-house maintenance and repair capability

  • Negotiate special one-off engineering support services with the vendor or their designated contractors

About:

Benson Chan is an innovation catalyst at Strategy of Things, helping companies transform the Internet of Things into the Innovation of Things through its innovation laboratory, research analyst, consulting and acceleration (execution) services. He has over 25 years of scaling innovative businesses and bringing innovations to market for Fortune 500 and start-up companies. Benson shares his deep experiences in strategy, business development, marketing, product management, engineering and operations management to help IoTCentral readers address strategic and practical IoT issues.

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Most IoT projects today are unsuccessful

A recent Cisco survey of 1845 business and IT decision-makers in mid market and enterprise companies, conducted in April 2017, found that nearly three quarters of Internet of Things (IoT) projects were not successful.

The top five reasons include:

  • Long completion times,
  • Poor quality of the data collected,
  • Lack of internal expertise,
  • IoT integration,
  • Budget overruns.

These results are not surprising given the immaturity of the IoT solutions, evolving technology standards, and limited expertise among the IoT community.

In light of these survey results, how do you ensure that your first IoT project implementation will be successful? In this post, I’ll share ten best practices for managers planning their first IoT project.

Best Practices for IoT Projects

Best Practice #1 – Solve a problem that someone cares about. Whether it’s a pilot project, or a mini IoT project added to a larger non-IoT project, make the project relevant by addressing a real need. This ensures visibility and support from the organization, whether it is something as simple as time to answer your questions, commitment from management, or contribute resources. Equally important, it gives you a foundation from which to build follow-on projects.

Best Practice #2 – Plan conservatively. As an early IoT adopter, your organization’s capabilities will be limited and the learning curve will be steep. Managers must plan for this in several ways. Don’t try to “change the world”, but instead focus on doing one or two things well. Define the requirements well and resist scope creep. Build in a larger than usual contingency for schedule, resources and cost.

Best Practice #3 – Fix outdated processes and policies. IoT solutions can disrupt existing organizational processes and policies. If you fix the technology but not the processes and policies, you will just get “bad news faster”. Implementing the technology side of IoT is only half the solution. Realize its full potential by updating affected, or in some cases, creating new processes and policies.

Best Practice #4 – Partner for success. IoT solutions affect multiple teams within the organization. Partner with these affected teams early in the planning process to get their requirements, gain their support (knowledge, resources, and budget), and leverage their influence to remove barriers during the execution stages. Partner with your organization’s digital transformation or innovation office, if one exists.

Equally important, partner with IoT solution vendors throughout the process. At this stage of the market, their solutions are still evolving. Work with your IoT vendor at a deeper level than you would with other vendors. Stay in close contact and leverage their product management and technical support teams throughout the project.  Co-design the solution and project with them – tell them what features you like to see, report bugs, and test updated versions of the product.

Best Practice #5 – Augment your capabilities with outside resources. Address gaps in your internal capabilities by leveraging outside resources. Build your IoT knowledge through information shared on industry blogs, publications and analyst reports. Augment your project planning and execution capabilities by contracting with subject matter experts, IoT consultants, and innovation labs.

Best Practice #6 – Address resistance to change. The more disruptive the IoT solution is, the more likely you will face adoption resistance both internally and externally. Whether the changes are small or large, ensure IoT project success with a change adoption plan early on in the project. Identify who is affected and how they are affected, then understand their objections. Craft a plan to address these objections, be transparent and communicate regularly, and implement well before the solution goes live. Be responsive and act with a sense of urgency to any concerns raised during the project.

Best Practice #7 – Define extended project success and goals. During the project planning stage, identify the key success outcomes of the project. Beyond the goals directly enabled by the IoT solution, consider goals around internal capabilities development, gaps identification (processes, policies, technologies, resources, etc.), organization readiness, channel and customer acceptance. Treat your early IoT projects as learning experiences, and use these projects to learn, experiment, uncover challenges, develop the organization and go faster on future projects.

Best Practice #8 – Drive shared ownership and accountability. IoT solutions affect multiple teams across the organization. Because of this, you must establish a structure of shared ownership and accountability to drive project success. Identify and secure the commitment of the critical executive sponsors and  business unit owners. Align the value and relevance of the IoT solution to their team’s goals and needs to drive their ownership.

Best Practice #9 – Establish a learning culture. To ensure that your subsequent IoT projects are successful, you must establish a rapid learning culture right from the start. During the project, establish a process for experimenting, prototyping and problem solving. At the end of the project, document the knowledge and expertise gained, and then develop a system to retain and transfer that knowledge. Identify who the “experts” are, the lessons learned, and project debriefs. Develop a system to share that knowledge across the organization, with solutions vendors, consultants, and other resources.

Best Practice #10 – Be flexible and adapt. Despite careful planning and risk management, your first IoT projects will still be significant learning experiences. You know what you know, but you don’t know what you don’t know. Your planning and risk management is based on what you know. Unforeseen things happen because of the things you, your consultants, or the vendors don’t know. In this type of environment, the project teams should be nimble and agile to respond to the unplanned. Incorporate larger contingencies in project plans. Prepare your sponsors and owners to expect change. Select your project team members for their ability to quickly adapt and learn, as well as for their knowledge and execution ability.

About:

Benson Chan is an innovation catalyst at Strategy of Things, helping companies transform the Internet of Things into the Innovation of Things through its innovation laboratory, research analyst, consulting and acceleration (execution) services. He has over 25 years of scaling innovative businesses and bringing innovations to market for Fortune 500 and start-up companies. Benson shares his deep experiences in strategy, business development, marketing, product management, engineering and operations management to help IoTCentral readers address strategic and practical IoT issues.

Read more…



Internet of Things (IoT) solutions offer tremendous and disruptive value for customers, but sometimes have the unintended effect of adversely impacting the channel that it is sold and serviced through. This results in slow adoption of IoT solutions, even if those solutions have significant and tangible customer value.


Common product-market fit mistakes

While many IoT vendors understand the concept of product-market fit, a common mistake that many product managers make is to overlook or understate the impact of the solution on stakeholders that “touch” the solution (Figure One) beyond the end user customer. When the needs of all the primary and secondary stakeholders are aligned with the solution, market adoption is facilitated. When the needs of these stakeholders conflict, market adoption is slowed or even stopped. 

One example of an external stakeholder is the channel reseller. Many manufacturers incorporate a channel strategy to market, sell and service their products in order to scale the business. The channel can be an one tier channel (manufacturer sells direct to reseller, who then resells it to the end customer) or a two tier channel (manufacturer sells to distributor, who then resells it to reseller, who finally resells it to the end customer). 

Consider an IoT based predictive maintenance solution for commercial heating, ventilation, and air conditioning (HVAC) systems. With this solution, the channel resellers will now know when the parts in the HVAC system are wearing out and a proactive service call is needed. While this assures the customers that their HVAC system will have minimum downtime, it may not be so good for the reseller. Prior to the incorporation of IoT into an HVAC system, channel resellers may have set up a service agreement with the end user where they would perform routine maintenance four times a year. With the IoT solution in place, it may reveal that they only need to come out once or twice a year to do maintenance. The reduced number of visits mean that their revenues from service calls is also reduced. Given this reality, the channel resellers have no incentive to adopt the predictive maintenance solution. 

A second common mistake is to look at product-market fit from a static perspective. In fact, the product manager must look at the product-market fit over the solution’s entire lifecycle from purchase to retirement (Figure Two). At each of the stages over the lifecycle, there may be different people or organizations “touching” the solution and performing a slightly different task in support of common activities. Problems arise when the needs of each party are inconsistent or misaligned.

Conflicts, or friction arise between the buyer, the vendor and the other affected stakeholders when there is misalignment of their needs. These needs may include performance, cost, revenue, operating efficiency, roles and responsibilities. Some of these misalignments may be managed, while others may be more severe and require a solution redesign.


Best practices to remove the friction points


Practice#1 - Expand your product-market fit analysis over the entire solution lifecycle.

As you design your IoT solutions, map out the different stakeholders that touch your product, from the time it leaves your hands delivery to the time it is retired from use. Identify who they are, why the customer buys from them, the tasks they do, the value they add, and how they make their money.

 How does your solution impact the services the channel provides, their value, and their financials?  What is changed and disintermediated?

It is not always possible to avoid disintermediation. But with this understanding, work with the channel to co-create a solution that removes the friction points, creates new value and opportunities.


Practice #2 - Create new value beyond product innovation.

Product managers must think beyond product and technology innovation. IoT solutions can also provide business model, service, and customer experience innovation. When designing the IoT solution with the channel needs in mind, look for opportunities to create these forms of innovation that will provide significant value for all stakeholders.

Customer experience innovation transforms the “customer journey”. It re-imagines how a customer uses a product or service. It uses data collected to create new processes, business partnerships, organizations and technology to support the new journey. Examples include Apple iPod/iTunes changes how we buy and listen to music, Uber changes how we go from one place to another, Netflix changes how we watch television, and Amazon Echo ((“Alexa”) changes how we control devices.

Services innovation transforms how, what and when a service is rendered, and who it is being offered to. It enhances a current value, or creates an entirely new value that was not possible before. A product can also be transformed into a service (e.g. car rentals). Some examples include Software-as-a-Service changes how we buy software, Uber changes how we go from one place to another, and Amazon Web Services changes businesses use IT infrastructure.

Business model innovation. A business model describes how an organization creates and delivers value to its customers. It is defined by nine parts – customer types, value to customer, sales channels, customer relationship types, revenue sources, operating resources, operational activities, key partnerships, and cost structure. Business model innovation transforms these nine parts to create to enhance or create new value to existing customers or to an entirely new customer base. Some example include Amazon Web Services “IT pay for you use” model, ZipCar’s “car sharing” model and Apple iPhone’s app ecosystem model.


Practice #3 - Develop marketing programs that incentivize the channel to pursue “green field” opportunities.

It is not always possible to redesign the solution to eliminate the misalignment between the stakeholders. In this type of scenario, develop marketing and channel programs that allow the channel to target new opportunities where the solution provides a significant competitive advantage. This will allow them to create new revenue streams that will offset any loss of revenues from the current business.

Recalling the predictive maintenance example in which the reseller is reluctant to offer the IoT based solution because their services revenues would decrease. However, the reseller can offer the solution to new customers (those it never had, including those customers who use a competitor’s solutions). The new solution may give them an unique compelling competitive advantage and offset potential revenue decreases when their customers convert to the new IoT solution in the future.


Practice # 4 - Help your channel identify suitable niches within their existing customer base.

While the channel may be reluctant to offer your IoT solution to all of their existing customers, there may be pockets within their base where your solution is in alignment with the reseller’s needs. They may have existing customers where the cost to service them is high, or the revenue impact is minimal, or are considering alternative offerings from other vendors.  Help the channel understand what these opportunities are, identify the target customer profiles, and develop conversion campaigns that allow them to sell to these customer niches.

About:

Benson Chan is an innovation catalyst at Strategy of Things, helping companies transform the Internet of Things into the Innovation of Things through its innovation laboratory, research analyst, consulting and acceleration (execution) services. He has over 25 years of scaling innovative businesses and bringing innovations to market for Fortune 500 and start-up companies. Benson shares his deep experiences in strategy, business development, marketing, product management, engineering and operations management to help IoTCentral readers address strategic and practical IoT issues.

Read more…
IoT or Internet of Things solutions, built on a cloud-based infrastructure, create opportunities for new business models and value delivery methods. While many IoT solutions are usually sold as a “product”, many vendors are now beginning to offer IoT “as-a-service”. But selling a recurring revenue solution is not the same as selling an “one time” sale product. This post highlights seven best practices for selling an IoT as a service solution.
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