IoT is no longer a vision of the distant future – it has arrived and is growing rapidly. In 2017, the number of connected devices overtook the world’s population of 7 billion. It is projected to reach 20.4 billion by 2020. This brings the IoT market worth from $157 billion in 2016, to $457 billion over the span of less than 15 years.
This strong growth trajectory makes it a market that cannot be ignored – but with the potential of high rewards comes the potential of high risk if projects are not executed with care. To quote one of Gartner’s Principal Research Analyst, Ganesh Ramamoorthy, “ 8 out of 10 IoT projects fail even before they are launched.”
Based on the high failure rate, it’s paramount for organizations and IT professionals to understand the key challenges of bringing IoT products to market while also knowing the timeline and processes for success.
Regardless of industry, product development is an iterative process, each stage presenting its own set of challenges. Some of the key challenges of IoT projects cited by IT professionals today are listed below.
The cost of an IoT project can vary from thousands to millions of dollars, depending on the scale. There are a lot of moving parts and components that make up the final product, and each needs to be managed strategically.
Hardware: The development of hardware usually amounts to about 70-80% of the total project cost. The costliness of hardware development is a big reason why most tech startups you see today are software focused. In addition to the obvious design cost of analysis, modeling, prototyping, and testing, another major cost contributor is the hardware certification. After taking into consideration regulation categories such as environment and electrical safety, communication protocols, and other product-specific requirements, the certification price could easily come to $10,000 on the low end.
Software: Your software costs will comprise of infrastructure and application costs. In terms of infrastructure, your IoT product will require a highly scalable wireless network infrastructure, cloud-based or data center infrastructure, and potentially middleware if you will be incorporating a ready-made third-party gadget into your ecosystem. As for application costs, it can vary depending on the number of supported platforms, integration of third-party solutions, data ingestion sources and requirements, as well as security standards.
A more efficient approach is to build a prototype that will be sufficient to build a business case, and then spending time after to build out a cost reduction plan. This will enable you to get your product in front of potential customers to receive feedback which will shape the product release roadmap. The IoT market waits for no one – any extra step you take in getting this feedback cycle will increase your time to market.
Before diving into your IoT project, it is important to have a full overview of the entire product development roadmap. An understanding of what each stage entails will prevent unexpected setbacks down the road that could drive up costs and slow down time-to-market, which could lead to project failure. Below is a full run-down of the IoT product development roadmap.
Product development begins with customer needs and new functionality, and then finding the right technology to address them. Before even touching the planning phase, determine the requirements and functionality of your product, and be specific. This foundational step, if not done with due diligence, will set back your project timeline. IoT projects are unique in the sense that a certain project toolkit is meant to solve specific problems with specific conditions. Discovering you need something down the road that you did not pre-determine, will require significant retooling. To preempt this, determine from the beginning what your product needs are in terms of data requirements, size, format, ecosystem, and the likes both from a hardware and software standpoint.
Once you’ve established your product requirements, you should be able to identify project areas that will place too much weight on your internal team’s shoulders. In those areas, instead of straining your internal team, look to outsourcing. Commonly outsourced services are manufacturing and IT. Be sure to properly vet your potential partners to ensure they have a successful track record and the capability to meet your project requirements. You’ll also want to ensure you and your partner both have an understanding of your project’s goals and have a clear communication process.
This stage entails defining the architecture of the overall system with two key activities. The first activity is identifying and assessing risk, which means anticipating potential points of failure within the project. By taking into account product requirements and the risk assessment, design the product development plan to map out project roles, tasks, budgets, constraints, and timelines. This is also the stage where you’ll want to engage key stakeholders namely the CEO, CFO, and CMO to get their buy-in as well as input. Your plan should include conceptualizing your product to give your entire team a clear picture of what the end product should look like.
The development phase is the execution of the product plan which takes into account the requirements established and system architecture designed to realize your IoT product. This stage is where detailed engineering comes in by first creating 3D designs of your product, validating and refining primary product features, and finally developing the prototype.
While your prototype may not quite be market-ready, you should get it into the hands of users early and often to get feedback. Test setup and installation, user experience, design, and usability. Use those findings to fine-tune features for mass production. Another step in this testing stage is also to validate your network of components and production suppliers. Doing due diligence in this stage will add to cost, but nearly as much as a product recall can. Your end goal here is to have production-ready prototypes.
The key goal of this phase is to get the first batch ready to ship. Your design and firmware should be set in stone at this point to allow your manufacturing team or partners to load and test them before they are assembled into the final product. Given that production bottlenecks and setbacks are common in this the mass-production stage, monitoring and tracking of the production line are crucial.
The final stage in product development itself is the logistics support. This usually entails transferring most production responsibility to manufacturing teams. This includes quality control processes, documentation control, and the production planning.
Now that your product has been released into the market, you need to monitor and analyze product data generated through your IoT platform to improve the next iteration of your product. This stage also entails handling product updates in a manner that will not disrupt usability. Your IoT product lifecycle management should be conducted through a single, centralized platform to ensure smooth sailing in your product launch.
Rolling out a successful IoT product is no easy feat. From the ideation stage, all the way to production lies multiple points of potential failure, hence why eight out of ten IoT projects fail even before launch. To attain success that has eluded many companies, you’ll need to be strategic in your approach. Recognize that there are too many moving parts within an IoT project and that it is improbable that your IT team will be able to take on everything. Set yourself up for success by establishing an IT partnership to transform your ideas into a tangible, market-worthy product.