Digital transformation is becoming fundamental to a change that’s necessary to effectively compete in the global marketplace. However, this transformative change has led some non-digitally native companies to over-extend themselves and opt to travel the digital journey by building, instead of buying.
Research has shown this path is not as effective for industrial companies. Instead, partnering with digital companies accelerates business value capture, while still leveraging the native expertise industrial companies have of their products, processes, and people.
The Internet of Things is a crucial part of digital transformation and 45% of McKinsey survey respondents would agree, citing successful transformations through adopting IoT.
However, that’s not always the case. Research is finding that some approaches to IoT solutions are not as successful. Three out of four self-initiated or ‘do-it-yourself’ (DIY) IoT projects – where the development of an IoT solution is done in-house – are reported failures, many of which cause rippling effects throughout an organization. The challenges that cause these failures span from rapid culture change to total cost of ownership and present significant organisational hurdles.
In today’s competitive environments business executives demand project investments that generate quick, short-term wins, measurable ROI, and scalable use cases that will sustain long-term growth and benefit the bottom line. In many instances, homegrown IoT deployments have spiraled into massive cost centers with no clear reward or future benefits in sight. There are three distinct downsides to DIY IoT solution from a budget perspective:
While the investment in an IIoT platform or solution may seem higher in comparison, DIY project’s total cost of ownership can be almost 4x greater in a factory setting when compared to adopting a third-party IIoT platform. Similarly connected products come with hidden and ongoing costs for developing, testing, and maintenance. A company must be financially capable and willing to commit to this massive expenditure if it’ll ever come close to matching the functionality IoT platform providers are able to offer having committed billions of dollars to product development.
Costs for sustaining the DIY initiative can spiral with required continuous investments in the IoT system’s security, resiliency, scalability, and development of new features. Locking in to this on-going expenditure can quickly run into the millions, resulting in bloated annual expenses and recurring negative annual outcomes. An IIoT platform provider with knowledge of agile software development processes is better suited to quickly roll-out innovative applications on its roadmap than an industrial company.
‘Time is money’ for any organization and developing a software solution is a time-intensive and therefore costly endeavor. The process lengthens exponentially for non-digitally native companies who may be experts in engineering heavy-industrial equipment, and lesser so in agile software development and programming.
Developing an IIoT solution internally can take approximately 2.5 years when adding up the time it takes to build and orchestrate a team, develop the application, and move it into production. Whereas partnering with a software provider who offers a leading IoT platform is estimated to take half of that time to boost proof of concepts (PoCs) into production and even quicker than that in some instances -- 89% of PTC’s IIoT survey respondents expect to transition use cases to production within a year of purchase.
With competitive pressures mounting, the time-crunch to adopt IoT grows two-fold where industrial adopters of third-party IoT solutions are outpacing the market. Industrial companies without IoT in production are quickly becoming the minority; IDC predicts by the end of 2019, 75% of manufacturers will have integrated IoT into their operations. With the current speed of change and innovation in the marketplace, that means ultimately falling behind the competition.
Corporate cultures are changing out of necessity in industrial companies, as operational technology (OT) and informational technology (IT) groups increasingly work together to make digital transformation initiatives, including IoT, a reality. Gartner supports that this culture change will require a hybrid of traditional IT and OT skills. Download the check list below to discover the key people and skills you need to have on an IoT project.
We’ve taken 7 key IoT players and matched them with relevant skills to help you build your IoT Dream Team. No matter what your IoT objective is, possessing excellent talent in these areas will guarantee the success of your initiative.