While some organizations have begun to create tremendous value from the Internet of Things, data shows that a majority are still struggling to get started.
IDC research found that while 66% of discrete manufacturers are actively pursuing IoT initiatives, less than half (40%) of those discrete manufacturers have even begun a pilot. Why the delay?
There are four common challenges that slow the progress in creating and capturing IoT opportunities:
- Unfunded Organizations that struggle to define and prioritize IoT use cases and develop a business case to fund initial investment.
- Technology driven Organizations that define their strategy based on technical capabilities instead of a clear value proposition and monetization plan.
- Narrowly focused Organizations that are only exploring IoT in one business function, and have not evangelized the opportunity across the organization.
- Poorly aligned Organizations that have not linked their IoT initiatives with corporate value drivers, such as reducing costs or enabling new revenue streams.
In response to these common challenges, PTC has developed a new program to help companies define their own IoT strategy in an interactive, half-day workshop, facilitated by IoT business experts from PTC. These complimentary Innovation Workshops are fast and productive; participants exit with prioritized IoT use cases and an actionable strategy.
Whether you partner with PTC in an Innovation Workshop or lead a workshop within your own organization, these are the three key steps to accelerating your path to IoT success:
Assemble Cross-Functional Team
There are two critical reasons to begin your process with a cross-functional team, including representation from Product Management, R&D, IT, Sales, Marketing, Finance, Operations, and Service/Support. First, the value of the IoT comes in connecting things; products, enterprise systems, operations, and customers. As a result multiple functions in the organization will need to participate to make these connections or provide guidance in how they should be made. Second, is that the data generated insights about how the product is performing or how it is being used by the customer creates opportunities for all functions across the organization to improve operational effectiveness or create strategic differentiation.
Identify and Define IoT Use Cases
While there are an infinite number of things technically possible, the only projects worth pursuing create real value for the business or customer. Identifying a specific IoT use case for a defined stakeholder is the best way to define and achieve that value. Start by examining IoT use case examples from a variety of industries. Discuss how the capabilities and data generated by smart, connected products can create new opportunities to capture value. Then select a specific product, identify the relevant internal and external stakeholders for that product, and explore how the new capabilities or data generated could address each stakeholders needs. For example, if the Product Management leadership knows which product features are being used and which are not, they can better prioritize future R&D investment and improve product packaging and pricing.
Prioritize Projects and Build Practical Action Plans
Evaluate use cases against a consistent framework that defines the required resources and identifies pilot project milestones. Include customer (e.g. which new capabilities create value), strategic (e.g. should we change our business model), organizational (do we establish an IoT Center of Excellence), and technology (e.g. cost and risk associated with capturing product data) considerations in this analysis. At this time it is also critical to identify and define metrics for the specific use cases and goals, for example, to prove reduced service costs via a Remote Service application consider traditional metrics like mean time to repair (MTTR), but also define new connected metrics like the remote fix rate, or number of service trips avoided to capture the extent of the value created. Establish baselines to validate future cost savings or revenue gains.
Defining and prioritizing IoT use cases to pilot is the clearest path to creating value. If you’re ready to go from thinking about IoT to winning in the new competitive environment of smart, connected products, schedule an Innovation Workshop today.