The uncertainty among German companies about the implications of the Internet of Things ( Internet of Things , IoT medium) long term for their own business model brings up, is great – especially in so far affected by the digitization only marginally industries such as the mechanical and plant engineering. Almost every major company is currently working hard on an IoT strategy or even implementing it in the first pilot projects.
There is no shortage of large numbers – almost weekly, new studies with estimates of the general economic potential of the IoT appear . But what is missing, are sound practical experience with the conception and implementation of large IoT projects. Only a few big “lighthouse projects” of some innovative IoT pioneers are quoted time and again, for example Trumpf, Kaeser or Miele. But how do you actually approach such projects?
Here are the experiences gained on the basis of more than 30 IoT implementation and consulting projects on the central five success factors of such projects:
1. “Customer first” – the customer needs in focus
Actually, an old hat would like to think: For years, consultants and corporate leaders postulate the maxims of “customer centricity” so inflationary that one would have to consider a customer-centered approach actually the standard in German companies. This has been further fueled by digitization: Hardly any talk can be said today without mentioning the extreme user orientation in Silicon Valley.
Actually, it is quite simple: the needs, pain points and so-called use cases of the target groups of a company should be analyzed in depth and form the basis for the development of relevant digital offers. But the reality is bleak: Experience shows that more than 90 percent of IoT projects are primarily based on the technical capabilities or the strategy or corporate planning of the provider, not from the customer’s point of view. This often results in unnecessarily complicated, impractical or simply superfluous products and services that do not prevail on the market.
A common misunderstanding in this context: The creation of a deep understanding of the customer can not be delegated to market research companies. Instead, design thinking and similarly powerful tools should be used to iteratively develop ideas and prototypes close to and together with customers – and consistently involve all those involved in the company.
2. There is no lasting competitive advantage “off the peg”
Anyone who deals with IoT quickly realizes that the whole thing can sometimes be complex and time-consuming. It makes sense to look for horizontal and vertical standard solutions that can be bought “off the peg” and implemented with little effort.
But to look at such “make-or-buy” decisions only on the cost, would clearly fall short. While smart operations, ie networked production and logistics as well as secondary corporate activities, are all about increased transparency and efficiency, Smart Products & Services is creating the differentiation and monetization approaches (for example, pay per use) for the future. It is obvious that the latter have the highest strategic relevance for a company and the purchase of a standard solution would lead directly into the commoditization trap.
However, that does not mean that you have to create an individual IoT solution completely from the ground up. The key is to intelligently put together the right technology components and to design the IT architecture in such a way that competitive-critical aspects are protected. The most important of these technology building blocks is the IoT platform.