By 2020, global IoT spend is expected to reach $1.29 trillion, and the manufacturing industry is expected to account for 15% of all IoT spending in the U.S. While the costs of implementing IIoT solutions have fallen to more affordable levels, companies run the risk of exceeding their budgets and falling short of executive expectations if solutions are not implemented correctly.
Implementing new technology doesn’t need to be expensive. By starting small and keeping business objectives at the forefront of every decision, leaders can dramatically reduce the inherent risks in IIoT implementations. That said, manufacturers need to consider the following points in order to maximize ROI:
Focus on outcomes, not timelines.
Start with what you want to accomplish—not when it needs to get done. Every executive will ask for hard deadlines, but an outcome-driven dialogue needs to ground the discussion from the very start. Hold facilitated workshops with a cross-functional middle leadership group to surface a series of outcome metrics that either trigger movement to subsequent stages, or reset the process dispassionately. When implementing new IoT concepts and moving into pilots, re-pilots and, ultimately, scale, expectations of flawless results can mislead KPI tracking. Build an executive dashboard using a two-way dialogue that surfaces learnings from killed pilots clearly and promptly, while demonstrating immediate implementation of learnings. This will help senior leaders confidently track toward a set of clear business goals and show continual progress.
Get buy-in from executive leadership
IIoT implementations are not only a financial investment, but they also are disruptive to the manufacturing facility. Executive support will help break down cross-departmental barriers and allow implementation teams the time to take machines offline and work with frontline employees to minimize workflow disruption. To avoid gridlock, managers should meet with executives on a regular basis to discuss challenges and collaborate on solutions.
Get early feedback from frontline employees
Listening to your frontline employees may be the most important thing you can do. By taking the time to identify their pain points before implementation, you will be able to strategically target which IoT solutions are of greatest value to your organization. Remember, if your frontline employees don’t adopt your new solution, your investment will be wasted. To be successful, IoT solutions need to both provide value to the organization and value to the frontline employees who will be using it every day. If your proposed solution doesn’t check both boxes, you should reconsider the investment.
Once you’ve accounted for your employees, communicate the value of IoT early on and engage all levels of the organization at each stage of the implementation process. Employees will be more susceptible to learning how to operate the solutions if they understand how the technology will directly benefit their jobs.
Incrementally invest in building multiple product iterations. Before jumping into a solution, evaluate whether it solves the correct problem and achieves the desired results. Identify an area in the company that has an isolated, high-value problem and assemble a team of actual users to test. With each product iteration, your goal should be to build the lowest-fidelity concept possible to validate the riskiest assumptions.
By now, most companies have heard the term “minimum viable product” (MVP), and know it’s better to spend weeks building an MVP versus months or years building a full-scale product littered with unvalidated assumptions. Again, it’s virtually impossible to get every detail perfect out of the gate, and it’s much easier to pivot on a lean MVP than it is to pivot on a full-scale solution.
If a company is truly interested in accelerating speed-to-market, an even leaner approach is advised. For example, rather than starting with an MVP that takes eight to 12 weeks to build, we often will sketch a dashboard or a mobile app schematic, then pass it along to a set of users to see whether our vision fits their needs. We can do multiple iterations with these users in real time—moving graphs, adding information boxes—to perfect the design before writing a single line of code. This process allows us to cut down on build time and improve the accuracy of the finished product.
Mix internal and external resources to achieve scale. Manufacturers embarking on IIoT initiatives for the first time need to generate proof points for opening new value streams—and fast. At the same time, these efforts need to be executed in a way that grows their organizational capability around building pilots and new business models. Early stages of this work, where new value concepts and business model change frameworks are built and tested, can benefit from external partnerships that accelerate movement rapidly (especially given that internal resources face dual responsibilities with existing and new business demands.) Adjacent testing and scaling stages, however, should move smoothly into hybrid (and, ultimately, fully internal) models, where knowledge is actively transferred through embedded vendor teams to fully autonomous internal resources.
IoT has the potential to transform how manufacturers operate and gain unprecedented competitive advantages in the market. But to capture these values, companies must commit to doing more than buying the latest technologies. With implementation strategies for both the technology and the humanity inherent in IoT, businesses can make the most out of their investments and confidently enter the era of Industry 4.0.
Derek Chin is director of innovation strategy at Nerdery, a digital business consultancy centered on strategy, design and technology.
