You’re sold on the Internet of Things (IoT) and its benefits for your organization. But how do you get in the IoT “game”? Where do you start?
While there is a lot of information on the technology behind IoT, case studies, and visions of what it can do, there is not a lot of practical content on what you need to get started today.
One of the challenges of getting started is that the IoT technology and the use cases are still evolving. In this environment, it is advisable to start small with pilot IoT use case projects, experiment, build prototypes and expand as you develop IoT expertise.
Figure 1: IOT Innovation Approach, source: www.StrategyofThings.io
What are my options to pilot IoT use cases?
There are five approaches to start pilot IoT use case projects. Your specific situation will determine which of these are applicable to you. These options are:
- Internal Part-Time Project Team
- Internal Dedicated Project Team
- Internal IoT Lab
- Vendor IoT Lab
- Independent IoT Lab
These options assume that you have already identified a list of IoT use cases, and have budget to build a prototype as a pilot project.
Figure 2: Use Case Build Out Models, source: www.StrategyofThings.io
Internal Part-Time Project Team
This model consists of a small pool of internal part time resources that are assigned to the pilot project. External consultants may be included to supplement the team capabilities as required.
This strategy is ideal for organizations that do not have time constraints and/or do not have funding to support full time resources. Managers use this approach to get data to justify a larger and more ambitious IoT use case effort. The part time resources typically spend 10 to 20 percent of their time per week on the IoT pilot project.
The disadvantages of this strategy include a longer time to complete the pilot project. Without a firm schedule, these projects tend to get pushed out. In addition, internal teams, at this early stage of the IoT market, lack IoT expertise and access to the right tools and infrastructure to successfully build and test pilot projects. Some of this is mitigated by providing focused innovation and IoT training or leveraging external consultants as subject matter experts (SME) to guide the project team.
Internal Dedicated Project Team
This approach consists of a small pool of internal resources who are dedicated full time to the IoT use case pilot project. External consultants may be included to supplement the team as required.
This model is ideal for those organizations with specific use case applications, committed project timelines, and appropriate sponsorship and budget for dedicated full time internal resources. The main difference between this model and the part time model is the higher level of management commitment. This model you have a higher level of internal expertise, supporting data from earlier pilots, or a very specific use case that needs to be addressed.
The success of this strategy depends on the expertise of the internal resources assigned to the project. Similar to the part time resources model, this team would need their own set of tools and infrastructure to successfully build out and test out the use cases. External consultants and SMEs may be required to supplement the team’s expertise.
Internal IoT Lab
This model consists of a dedicated team of resources and infrastructure set up specifically to focus and pursue IoT projects on a wider scale. This team supports one or two large projects or multiple smaller projects. This approach is ideal for organizations with an established corporate innovation lab, and those committed to building long term IoT capabilities to exploit future opportunities. The knowledge gained is shared across various teams across the organization. This model requires executive sponsorship and a more generous budget allocated to the IoT Lab structure.
Vendor IoT Lab
This model involves partnering with an IoT platform vendor (e.g. Microsoft, IBM, GE, etc.) who has a lab to help your organization build out use cases. This model includes having a hybrid model of either part time or full time dedicated resources working very closely with the IoT vendor resources. The vendor IoT lab provides most of the infrastructure and processes. You access the lab remotely or physically through the vendor facility. Your specific access method will differ depending on the level of engagement and the stage of the use case build out process.
This model assumes that the vendor provides a significant portion of the expertise and resources. One major disadvantage with this model is that you are locked in to the vendor’s solution ecosystem suite with limited to no options to test alternative products that may be a better fit. It is also likely that you may have to use their preferred resources and/or integration partners for downstream implementation efforts.
Independent IoT Lab
This model involves partnering with an independent IoT Lab vendor who is not a solutions vendor. This approach provides the advantages of the vendor IoT lab model with the flexibility to work with multiple vendor solutions that best fit your needs. The Independent IoT Lab vendor offers multiple solution models for you to choose from. They have a SME network with both breadth and depth to cover a variety of use cases. This is ideal for those organizations with very industry or solution specific use cases that the vendor labs may not have the capabilities for. This model assumes that the lab provides a significant portion of the resources, expertise and the infrastructure.
Which option is right for me?
Depending on your specific situation, some or all of these approaches are available to you. How do you narrow down which options are right for you?
Start with the following six criteria to help you assess and evaluate your options:
- Cost to Pilot IoT Use Cases
- Availability of Dedicated Resources
- Access to IoT Expertise/SME Network
- Access to IoT Infrastructure/Tools
- Flexibility to Assess Multiple Vendors
- Speed and Agility to Pilot Use Cases
The table below provides a framework to map the 6 criteria/considerations against the 5 models discussed to help you narrow down the options best for your organization. Start with this framework and customize it to your needs, culture, environment and circumstances.
Figure 3: Criteria to Assess Use Case Build Out Models , source: www.StrategyofThings.io
Practical considerations to guide your decision
The six criteria shown above is a general list. Consider adding in additional criteria, such as culture, strategic goals, internal capabilities and your past experiences to this list. This will allow you to create a set of criteria that is specific to you.
Speed, expertise and risk
If your goal is slow incremental research that moves the needle steadily then your best option is to use the “Internal Part-time Project Team” model or the “Internal Dedicated Project Team” model. The “part time” model is ideal if you want to build out your use case in a lower risk environment, or want to do something with minimal resources. The “dedicated” model is ideal if you have a firm idea of the IoT use case and a specific problem to solve. The internal project team approach is a good fit if you or your team have some expertise in innovation management and IoT.
The lab model (internal lab or external), is ideal if you don’t have the expertise, or want to innovate faster. It is less risky in that the lab provides the processes, infrastructure and expertise. However, this approach requires a larger commitment and more budget.
Within the lab model approach, consider setting up an internal IoT Lab only if your organization has the expertise, capabilities and past success in operating an innovation lab. Ideally, the IoT Lab is established within the corporate innovation or digital transformation center (if one currently exists). If your organization has not set up a lab before, then you should select the “Vendor IoT Lab” model or the “Independent IoT Lab” model. Both these lab models provide the ability to ramp up your IoT efforts quickly without having to invest substantially in IoT infrastructure or resources.
Flexibility and options
If you are already aligned with one of the major vendors with IoT solutions, it is easier for you to leverage their lab for your pilot projects. However, you are tied to their product suite and may miss out on solutions that may fit your needs better. With the lack of standardization and the continuing fragmentation of the IoT vendor market, it’s a good idea to keep your options open. One advantage with the “Independent IoT Lab” model is that you don’t need to be tied to any one vendor and you can negotiate your desire to assess multiple vendors in advance. The “Independent IoT Lab” model gives you the opportunity to test multiple solution approaches using multiple vendors to solve the same use case. This provides you with the ability to compare and contrast performance of the overall solution prototypes.
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Renil Paramel is a Senior Partner with StrategyofThings, has over 20 years of management consulting experience on solving complex and strategic problems. With deep experience in Internet of Things (IoT) and technology strategy, portfolio management and strategic planning, M&A Technology Integration, and technology and risk assessment, Renil is a trusted strategic advisor to C-level executives across Fortune 500 and public agencies in technology, finance, healthcare, retail and public sector. His clients include HP, Agilent Technologies, Sun Microsystems, Visa, American Express, Wells Fargo, Allianz, Berkshire Hathaway Homestate Companies, TD Bank, Chevron, Macy’s, PG&E, Kaiser Permanente, Counties of San Francisco, Santa Clara, San Mateo, and Solano.
Renil was most recently a Vice President of Consulting at Gartner Consulting. Prior to that, he has consulted at Accenture and Deloitte. In addition, Renil has successfully setting up a software development business unit with P&L responsibilities, and co-founded a multimedia startup. Renil holds a Bachelor of Engineering in Computer Science from the University of Mumbai and an MBA from University of Pittsburgh with focus on Marketing and Systems.