Companies across industries are shifting towards the process of digitalisation due to its enormous benefits, from improving their internal operations to introducing new service opportunities. And much has been written about these successes.
Still, many of the companies had trouble getting their digital projects off the ground and successfully reaching completion. Recent Beecham Research estimated that nearly three quarters of all digital projects aren’t considered a success. In fact, 96% fail to enable new business models and 60% have scalability problems. Those are sobering numbers!
Why is it so?
We believe that the high rate of failure is simply a reflection of the fact that digital transformation isn’t straightforward. Most of the key reasons revolve around issues such as technical complexities, poorly defined strategies and an unclear set of objectives.
What can be done about this?
There are many lessons to be learned to increase the level of success and therefore the ROI. To help you get fully prepared for your digitalisation journey, we’ve outlined 10 reasons why your organisation might get stuck and offered suggestions on how to find your way out.
1. Unclear Understanding of Business Objectives
One of the things that makes digital transformation so exciting is the wide range of benefits that can be achieved, from improving productivity and efficiency to enabling new business models. With so many options and pressure to out-innovate their competitors, many companies start their digitalisation journey without setting clear business objectives. They tend to focus on overall digital transformation instead of specific projects and business initiatives that move a company in the right direction.
Beecham Research singled poorly defined goals out as one of the most common reasons for project failure, which often leads to a lack of clarity in how to achieve them. Little wonder, then, that so many failed to realise their goals - just a quarter of the respondents reported a success.
As with any major investment in an IT project, it’s vital to set clear goals to help identify desired results and how to achieve them as well as targets to measure against.
How to Avoid the Mistake: Build a Strong Business Case
Don’t start with the technology, but with the business value you want to achieve! Instead of asking “What problems can the IoT technology address?”, you should say, “This is the most important benefit - how can digital technologies help achieve it?”. You should step outside your modus operandi to connect the dots between your goals and capabilities, and then realise how technology can help you solve key challenges you face.
Instead of focusing on digitising the whole business, companies should try to figure out which solution when applied to a certain area will bring the biggest benefits for a specific division. In this way, you’ll develop a method for success and help teams make a case for using the technology in other divisions. Trying to serve too many industries and business units worked against GE Predix, as described by Inc. Magazine. That’s why you should do small strategic upgrades and address solutions that support and enhance your core business purpose.
Taking the business-first approach helps you define the costs, expected benefits and risks, as well as measure success and ROI.
Find out how we can help you navigate and simplify your digitalisation journey across industries - from smart manufacturing to intelligent supply chain here.
2. Digitalising the Whole Business at Once
Enterprises that decide to digitally transform their processes usually follow this scenario: they want total control over the technology they deploy, so they hire experts to keep the project up and running. And too often they try to transform the entire business at once. Then what happens? By the time companies are deep into the development process, they realise that:
- It takes more money and time to digitise the entire business
- It takes more expertise to support the successful implementation
- They need to work with many vendors to stitch together a coherent end-to-end system
- The lack of industry standards creates confusion, complexity, risk and lock-in scenarios
Taking the digitalisation plunge when you don’t know what is working and what’s not or what other components you’ll need isn’t a way to go. On the other hand, connecting every device right away can cause high upfront costs without providing tangible benefits.
Creating a realistic timeline and budget requires a thorough evaluation of the need, the problem, and the opportunity. This is why you need to test to see whether your idea will work and if you’ve chosen the right technology suite. By starting with building a proof of concept (POC) you’ll:
- Get an insight into whether the solution meets your organisation’s needs and goals
- Determine what your customisation requirements would be
- Estimate the true time and the cost needed to develop the solution
- Get a clear picture of the partners’ capabilities and potential to bring polished, large-scale solutions to life
How to Avoid the Mistake: Think Big, Start Small, Move Fast
Start by dipping your toes into digital transformation by using IoT to tweak different parts of your business! Successful digitalisation initiatives start on a small scale, with one business unit or area, and then rapidly move beyond proof of concept (POC) to full production and scale.
The process of building IoT hardware and software comes with risks at many levels. Technology limitations, cost overruns and project delays are just some of the challenges you need to deal with on this journey. This is why rapid IoT prototyping is crucial in reducing costs and time-to-market. By starting on a small scale, companies can gain valuable experience and use that knowledge to extend the level of deployment. At this step, it’s crucial to focus and prioritise your digitalisation efforts. This could involve choosing the project that promises the most immediate business benefits, or the most visible ones.
Quickly getting to a working PoC is the best way to find out what works and what doesn’t. Ask anyone who has successfully deployed one or more digitalisation projects for their advice and you’ll get the same answer. It’ll help your development team to determine whether they are heading in the right direction so they could work out the kinks at the beginning of the process and determine a more accurate budget and timeline for production and operation.
Afterwards, you need to bring your digitalisation initiative into the real world for identifying potential limitations and enhancements so you can take the best possible output to the market. Of course, you should work in iterative steps so you could detect issues at a small scale before rolling out broadly.
Finally, you also need to plan how to rapidly move from development to production.
3. Relying Only on an In-House Expertise
Although digitalisation may look easy on paper, there are a lot of moving pieces and a wide array of capabilities required to build a truly secure and scalable digital solution. It’s much more than moving your infrastructure to the cloud or building a customer-facing application. From DevOps and embedded engineers to business analysts and application developers, digitalisation requires specific skills and relevant expertise, many of which are in short supply.
In addition, the cost and time associated with building and maintaining all the pieces of the IoT solution in-house, which aren’t adding any differentiation to products or services, are substantial.
All of this is corroborated by the McKinsey research, which says that digital leaders who achieve cost and revenue gains of at least 15% build their IoT partner ecosystem faster than their peers.
How to Avoid the Mistake: Lean on Industry-Trusted Digitalisation Partners
While you should certainly rely on your in-house expertise and work with IT instead of around it, external IoT experience is invaluable. So don’t be afraid to ask for help! Combining in-house knowledge with external expertise will most likely lead to the success of your digitalisation initiative.
The right digitalisation partner can offer a support team throughout different phases of a project; from strategic planning to industrial network engineering, software or hardware design, and data analytics.
And when choosing a partner, remember to look to the future. Choose a provider that can help you develop a pilot and also move to full-scale deployments and project expansions. You might also want someone who can take some of the burden of day-to-day maintenance off your shoulders. And of course, don’t leave security to someone who’s learning on the job. Make sure that security is ingrained in every digital decision you make.
Finally, you should evaluate your partner’s network to source other capable partners for your solution and support your unique needs in hardware, connectivity, or solutions.
By relying on a proven digitalisation partner, you’ll be able to remove all barriers during the execution stages and shorten the implementation cycle.
To find out why leaning on external IoT experience is the right way to go, check out our blog Digitalisation Dilemma: Building an IoT Team vs Partnering with a Digital Expert.
4. Building an IoT Platform In-House
When you start down the digitalisation path, one of the biggest decisions you have to make is whether to build or buy an IoT platform - a full-featured infrastructure on which you can build your digital projects, products, and services.
A common thought process goes something like this:
We have most of the needed skills so why not have more control by doing it in-house? After all, we’ve built and maintained proprietary software, so it makes sense to assume that we’ll be able to build an IoT platform also. Right?
Well, not exactly! This is only a tip of the iceberg for what lies ahead.
The truth is that the most mature IoT platforms on the market, like WolkAbout IoT Platform, have accumulated over five years of development. They were built from the ground up to incorporate all the necessary features. Even mirroring their basic functionalities may take years, since building an IoT platform is a complex endeavor. It comprises lots of moving parts and requires a multidisciplinary team.
Unless you’re already an expert, there is a steep learning curve that will likely result in failures and delayed time-to-market. For example, if you haven’t done a few large-scale IoT implementations, you may not figure out all the possible pitfalls in time to avoid them. You’ll maybe run into problems as you scale your solutions, or as you try to make them interoperate with your future products and those from other manufacturers. Plus, you might face issues as digital technologies continue to morph and evolve. In this way, you risk having to rebuild your system in a mid-life cycle. It’s easy to conclude that time spent developing an IoT platform will most likely lead to delayed time-to-revenue and years of advantage for your competitors.
This is why we weren’t surprised by the Beecham Research data which points out that the majority of respondents that relied entirely, or almost entirely, on in-house resources said their projects had been unsuccessful.
How to Avoid the Mistake: Don’t Reinvent the Wheel
One of the most important pieces of advice that we can give to anyone considering digitally transforming their business is not to reinvent the wheel.
The key here is to find a middle ground where your company is getting its hands dirty developing some of the technology while also making use of the ever-expanding ecosystem of existing hardware and software platforms. This way your organisation can build up competencies in-house but still move fast enough.
For example, with a pre-integrated IoT platform, all the heavy lifting has already been done. Time-consuming and costly developments of functionalities like device connectivity, database integration, user management and rule engine are already built-in and “ready-to-go”. Having all the critical functionalities in place leads to ~50% shorter implementation cycle and reduced digitalisation costs by up to 80%.
Benefitting from mistakes paid for by IoT platform vendors is all the more reason not to follow the DIY track. Plus, they make sure your applications are well-tested, more stable and easier to extend.
By eliminating the need for custom development of generic IoT features, companies can focus on what they do best, building great products or services and finding more ways to use data. After all, building an IoT platform is not what generates ROI, but rather solving business challenges which put the company ahead of its competition.
Check out the questions you need to ask yourself before making a build versus buy decision in our blog “The IoT Dilemma: Build or Buy IoT Platform?”.
5. Being Stuck with the Major Cloud Vendors as Your Only Choice
Many organisations choose to purchase an IoT platform from a major cloud vendor like Microsoft, Amazon or Google. It may be because the purchasing department prefers to work with an approved supplier or there is an offer to add on to existing software services already purchased.
Even though these platforms offer a lot of capability and integration, using them as a foundation for your digitalisation isn’t as simple as it might seem initially. In reality, developing, maintaining and improving your solution on top of them is a rather complex and time-consuming process. For example, Azure, AWS and Google Cloud (GCP) require using a console for setup, and it takes pretty long to get yourself familiar with the platform. They require you to set up a full-fledged ecosystem of independent services to tackle your specific use case and be really good at DevOps if you need several. On the other hand, operational technology (OT) personnel, including people on the manufacturing floor, should be able to use digital technologies to connect devices, start consuming their data, and create integrations and analytics on their own - all without the help of IT.
Companies who have bought in spend a considerable amount of time engineering a complete customer-facing solution using the vendors’ service catalog. The worst of all, customisation is definitely not a strong suite as they practically offer none at all. And these are just some of the reasons why the gap between their disparate services and a delivered digital solution can be difficult and expensive.
How to Avoid the Mistake: Get the Best of Both Worlds
Choose a specialised application enablement platform (AEP) that will help you simplify issues that major cloud vendors overcomplicate!
AEP’s integrated and IoT-specific suite of components offers less complexity, increased ease of use, and reduced time engineers spend configuring a solution to meet unique business needs. It’s designed to provide all the required digital capabilities in one place and under a single UI as well as address an end-to-end digitalisation flow by default, from data collection to visualisation.
The best AEPs reduce the IT backlog and empower the “front line” workers to leverage your solution. While it’s necessary for developers to be involved in architecture decisions, faster time-to-value is achieved when non-techies also take part in developing the application’s business logic. Intuitive interfaces and developer tools are among the reasons why engineers, managers and operators prefer working with AEPs. They are able to find patterns within their data as well as to define rules to monitor and act on events in a point and click manner.
AEPs are also customisable up to the point where the developer creates a unique flavor of the platform that matches your functional needs.
Importantly, you don’t have to choose between AEP providers and major cloud vendors for your digitalisation. In fact, AEP’s portable deployment options allow it to be installed in your own cloud vendor environment. Many teams are already using AEP to expedite the development of digital applications on top of Azure, AWS, GCP, or IBM’s large catalog of services. This can significantly reduce the time engineers need to build a customer-facing solution.
So, the choice isn’t always between using the IoT platform of a specialised provider or a major cloud vendor. You can extend AEP’s built-in capabilities with additional services provided by the cloud vendors.
Check out our blog Digital Transformation Made Simple with WolkAbout to find out how to make your journey from idea to revenue smoother and faster.
6. Overlooking Scalability and Security
Needless to say that the architecture of a digital solution is complex. Figuring out which component is the best for any job under the hood is a challenging task, especially considering all the requirements your solution must meet.
For example, security is a common concern for all new technologies. And IoT is no exception. Connecting devices and creating value from collected data can open up new security risks. As the attack surface is expanded, it’s necessary to evaluate potential risks carefully. A security incident could lead not just to the loss of critical industrial data, but also to the compromise of other systems and even downtime.
If you’re digitalising your own products or services, you have an even greater responsibility. Yet according to a recent report by Verizon, 51% of those developing IoT products said that “security is not a priority for version 1.0”. But in this case, it’s not just your own data and processes you need to worry about, but also the ones from your customers and partners.
In addition, many digital solutions fail because architecture and solution design is based on a proof of concept (POC) and neglect to determine what the architecture should look like when fully rolled out. Questions like - How big a project will become? Will the number of devices change over time? And the amount of data we need to collect? - usually aren’t addressed at the beginning of the digitalisation process. These unaddressed questions turn into issues when trying to scale from a small number of devices and sensors in PoC to full-scale solutions. For example, scaling from hundreds to millions of devices will require a corresponding increase in data processing and storage requirements. Organisations also have difficulty scaling from a single-tenant to a multi-tenant solution if they don’t plan for that evolution in advance.
You should be aware of the negative impact on business operations that can happen if an IoT solution is handling more data than it has been built for. The worst that can happen is that you are required to move all of the data to another platform that could handle the data without disrupting service.
How to Avoid the Mistake: Address Scalability and Security from the Start
Keep your end goal in mind and the architecture needed to get you there.
An IoT platform can make managing the security of your digital solution much easier. It can help you simplify the integration of new devices and enforce minimum security standards. It also lets you protect your data by implementing segmentation and encryption. These help to keep IoT data from prying eyes, whether they are hackers or other users.
Restricting access to data on a “need-to-know-basis” is a basic security principle. An IoT platform can help you implement role-based security. This makes it easier to manage what data different groups have access to and what they can do with it.
When choosing an IoT platform, make sure to choose the one with a scalable infrastructure that supports all your use cases across multi-regional deployments and that will not require your developers to rebuild it. Plan ahead for the best-case scenario - a widespread adoption of a solution with components that work from the start. In this way, you are reducing the risk of not being able to meet your or customer expectations along the way.
Thoughtful planning that accounts for long-term objectives will ensure your solution can organically and seamlessly grow to meet your business needs in a secure way.
7. Choosing a Technology that Limits Your Range and Reach
Want to doom your digitalisation to almost certain failure? One way to do this is to use proprietary software in which adding every new type of device or integrating with a new enterprise app is regarded as a new project which lasts for weeks, even months. Or even worse, use different software for every device type you are connecting.
Wondering why it is so? The IoT market is very fragmented as different proprietary platforms and systems are still not able to talk with each other. Each solution provides its own IoT infrastructure, communication protocols and data formats leading to difficulty in plugging IoT devices into different IoT platforms, or, even worse, vendor lock-in. This is why interoperability should be a priority when making the first steps on your digital transformation journey.
How to Avoid the Mistake: Create Joined-Up, Interoperable Solutions
Your decisions shouldn’t lock you into specific sensors, controllers, connectivity types, enterprise applications, cloud or storage providers. That would be short-sided.
Picture this: What if all sensors and gateways, regardless of the make, model, manufacturer or industry were compatible with a single IoT platform? You’d be able to automate the entire process and track performance against a common baseline without having to explore each fork on the road.
But your success isn’t just about having your options limited or avoiding the costs of being locked to particular vendors. It’s also about speed. Make sure you choose a platform that’s based on open standards, provides a bunch of libraries and is designed for rapid application development. This will enable you to connect new devices fast - often without coding.
Additionally, you need to choose an IoT platform that lets you use multiple connectivity types and manage them seamlessly. Your platform should also enable you to use the right compute and storage resources for you - be that at the edge, on-premises, or in the public or private cloud.
Finally, to unlock the true potential of data gathered by IoT devices, you need to be able to integrate your platform with the core systems that have run your business for years, and also with enterprise apps, cloud services and third-party systems. In this way, you can automate actions, workflows and processes spanning applications.
Check out our blog post Industrial & Enterprise IoT Platform which lists some of the attributes industrial and enterprise IoT platforms should have to enable the success of your digitalisation.
8. Choosing a Partner Who Will Leave You in the Dark
Once you step on the path of your digital journey, you’ll realise you have to keep up with innovations. This is why your IoT vendors should provide regular platform updates driven by their documented product roadmap and customer feedback. Importantly, their roadmap should be in line with your organisation’s goals.
IoT companies need to generate a turnover, of course. But from experience, it’s annoying when the product you’ve just purchased costs you further to access all of its functionality. Additionally, paying a full price for every update or additional service will significantly impact your digitalisation budget, especially if you don’t have a clear picture of their price upfront.
You also need to pay close attention to the licencing model. If you decide to build your solution on top of an IoT platform as a service (PaaS), it’d be challenging to estimate daily or yearly expenses. Your costs would include payment per functionality, connected devices, added users, sent messages or API requests, and more. The complexity means that your expenses will increase as your solution scales, raising the question: how much will you charge your customers if you’re not sure how significant your costs will be tomorrow or in five years? The widespread PaaS adoption is actually being blocked because cloud architects can’t wrap their minds around reliable cost estimation.
Finally, make sure your platform vendor provides you with clear support plans so you can choose which one suits your needs best. It’s all well and good if you have the world’s best IoT solution but without the appropriate platform vendor’s support, you (and your customers) will feel abandoned and unsupported. This is why you need an allocated team of people ready with the answers to questions you and your customers will undoubtedly have. They need to be prepared for every question under the sun, from “Why won’t it turn on?”, to “How can I use the rule engine to automate my processes?”.
How to Avoid the Mistake: Opt for Transparency in All Things - from Technology to Pricing
To be able to estimate the cost of your digital solution, you need to do an in-depth analysis of platforms and clearly define the current and future needs. Ask your vendors about their product roadmaps and the prices of the additional features and updates. Importantly, keep in mind that their roadmap needs to be aligned with your vision. A pilot, or small rollout, can help you avoid surprises during production and estimate cost precisely.
As the engine that sets your digital solution in motion, your IoT platform should provide you with complete control over your digital ecosystem, data and future expenses. That’s why you should choose an IoT platform as a product (PaaP) model - a fully transparent perpetual license that allows you to calculate the total cost of ownership easily. It gives you the freedom to scale without worrying about hidden fees or complex calculations. In this way, you can predict your future expenses easily.
Finally, it’s also important to consider the cost of the vendor’s additional services, starting from premium support. Providing a reliable and sound customer relation is definitely an imperative, so you need to choose the appropriate support plan. Many providers of IoT services will overlook this aspect of digitalisation. But just a detailed user guide won’t cut it, especially not for your customers. You have to support technical queries as quickly as possible. Customers love a hand to hold, and rightly so.
To learn how Platform as a Product model can help you gain complete control over your future costs, dive into our blog Five Reasons Why You Should Choose IoT Platform as a Product.
9. A Lack of Effective Leadership
Before the digital transformation era, new technologies were introduced to the industry through the IT department. As the adoption cycle has inverted, and CEOs became responsible for the digitalisation, the risk now is that many of them seem to be asleep at the need for change. There are those who, because of digital threats, don’t see the massive disruption quickly heading their way or they don’t see the immediate benefits of digital transformation. On the other hand, there are business executives who are just experimenting here and there with the digital technologies. But that is not enough.
A lack of leadership may be a serious threat to the project’s success. Based on the findings of the recent Forbes Insights survey, almost a third of companies which weren’t so successful with their digital initiatives reported that either a small team was in charge of building a solution or that there was no individual with a day-to-day authority. The survey also points out that a strong leadership by the C-level employees or senior leaders, assisted in daily operations by internal project managers, is the building block of a digital project success. The fact is that due to the complex nature of the project, the greatest contribution is given by IT which explains why the CIOs, with a high authority and extensive technical expertise, could be the logical champions on this digital journey.
Additionally, different company departments have different goals and different ways of thinking. Given that digitalisation projects often span functions and need all concerned to work together to make the project a success, the lack of cross-departmental cohesion is one of the major contributors to a project failure.
How to Avoid the Mistake: Designate the Right Person to Lead the Change
Since digitalisation touches many parts of the business and requires coordination and collaboration between both internal and external parties, having a dedicated leader and effective cross-functional teams is crucial for success.
Develop a clear idea about digitalisation opportunities and align a group of people within the organisation toward a common set of goals. Depending on the project, a roadmap will need to be defined, a team of vendors will need to be managed, and updates will need to be shared. That’s why you should designate a leader with capacity as early as proof of concepts are being developed and start having conversations around future-state technology needs.
Once the project becomes an initiative, a person in charge will have to clearly define how digital technologies will create value and move barriers and roadblocks to keep digitalisation programs moving forward. With no such person on board, the project is doomed to fail.
10. Collecting Data without a Plan
During the pre-IoT age, enterprises extracted the data from machines in the field manually or by using legacy SQL databases. This allowed only a few people with SQL knowledge to interact with that data. But industrial transformation requires data to go beyond the machine to cloud pipeline so you could harness the power of visualisation anytime, anywhere, on any device.
Nowadays, connected solutions powered by IoT platforms let enterprises achieve business outcomes by combining and re-combining data coming from machines, sensors, third-party sources (weather forecast, commodity pricing) and enterprise systems (ERP, SCM) and storing it to the cloud. In this way, data is accessible across departments.
But adding analytics makes the project an actual game changer. In Harvard Business Review, Edd Wilder James, a strategist for Google’s TensorFlow machine learning project and former VP of Technology Strategy at Silicon Valley Data Science, points out that once organisations overcome technological hurdles of data collection, they fail to build systems capable of using that data to drive business forward. On average, between 60% and 73% of all data within an enterprise goes unused for analytics. So, unless you build a system to tag, clean, process, refine, store and model data for specific purposes, and combine it into new formats, you haven’t eased your decision-making process.
How to Avoid the Mistake: Unlock the Insight in Your Data
To implement a digital solution which brings real business value, start by creating an IoT data management strategy. This requires careful planning, domain knowledge and rigorous implementation.
Here are the top five requirements to effectively access IoT data in real time:
- Data Ingestion - collecting and interacting with data from multiple sources
- Data Processing - transforming, enriching and preparing machine and sensor data for further analysis
- Streaming Data Visualisation - Visualising critical business events as they happen
- Time Series Data - Continuously monitoring sensor data by the second for complete situational awareness
- Geospatial Analytics and Visualisation - Analysing real-time geospatial data from multiple sources and exploiting geofencing
Once you’ve collected the data, analytics helps you act on it. At this moment, you should work backwards from the business need to identify a problem where data could bring tangible benefits and the way to model it appropriately. Also, make sure to identify the future opportunities and how the data you are gathering can help in other ways, as well.
Be aware that IoT data can have multiple uses. For example, data from smart factory equipment might help improve maintenance routines as well as automate production. And not only that. The same equipment data combined with employee schedules could identify the employees who might need additional training.
Finally, if you lack the necessary integration and analytics expertise required to get the most out of your data, you should leverage external partners. This could be much easier than trying to recruit and retain those skills internally.
When you consider your IoT data as a long-term asset rather than a perishable one, you’ll add much more value. You’ll derive insights and spot trends. And you’ll be able to take proactive and preventative actions.
Watch this video and discover how our industry-ready technology helps you be in full control of your data.
Everything You Need for the Most Successful Digitalisation
So, what’s your next step? Whether you are looking for a way to avoid notorious scope creep or searching for a team of experts to help you build a digital solution, schedule a consultation with one of WolkAbout digitalisation experts.
As a strategic partner, WolkAbout provides an industry-proven IIoT platform and all professional services you need to drive your digital transformation forward. Whether you’re an enterprise focused on an internal digital transformation or an OEM tapping into new market opportunities, we can help you digitise your business within 5 to 25 weeks. With our support, you can easily start with a proof of concept, enter the market quickly with an MVP, and operate your digital offerings in a scalable and secure manner.
Reach out to us to discover how to develop a solution that meets your business needs around an IIoT platform built with industry in mind. In the meantime, learn about WolkAbout IoT Platform functionalities and the value it can bring to your business by trying it for free.
The synergy of our industry-proven IoT platform, help from our digitalisation experts and complementary skills of our partners will get your digital solution to market faster.