20 Apr Industrial IOT: How to avoid Pilot Purgatory (71% is stuck)
Industrial IOT is the area within Internet Of Things where it’s easiest to make a business case, and forecasters predict some $3.7 Trillion in value to be created here in the next 7 years. But adoption in the field is not going nearly as fast as this sizeable carrot would seem to justify.
41% of firms are in limbo in the pilot stage, and 30% are still discussing how to start, adding up to 71% of industrial firms still stuck in Pilot Purgatory. And these are all firms interviewed by McKinsey, so I assume large firms with big budgets, otherwise I rather doubt the firm would be talking with them.
The solution, according to McKinsey and Cisco, is of course to hire more consultants. It sounds very self-serving but I do think they have a point: in my experience factory engineers tend to be very busy people. Developing new industrial IOT products from scratch is generally not what they focus on, their skill is in tweaking and optimizing the designs they are given. An internal IoT project is also likely to be instantly paused when yet another fire from a major paying customer needs to be fought. As a result, IMHO chances are low that internal engineers will be the hell-bent evangelists, who are going to win over the always present resistance to change.
No wonder “lack of resources / knowledge to scale” is listed as the No. 1 problem. As a result, most pilots last well over a year, and by that time likely an even better technology has come out, which also needs to be piloted… Keeping abreast of all the latest developments is a full-time job, and shortening the learning curve by working with consultants who have a broad experience seems well worth the money. Cisco reported that only 26% of projects survived the IOT pilot stage, but most companies agreed that learnings from stalled or failed IoT initiatives have helped accelerate their investment in IoT. Nothing new there, quick iterations are key in all product development, few prototypes work 100% the first time around.
Consultants also have the befit of thinking outside of the corporate box, it’s often in sharing data with other companies across the supply chain that the biggest benefits can be gained.
I am not a pilot consultant (we focus on design for mass manufacturing of electronics in China), so I consider myself fairly objective. For quick iterations, and dealing with company politics I do feel it’s much better to have an experienced local IOT consultant manage and tweak a pilot. This article first appeared on LinkediN, and a great many IIOT consultants and industry insiders contributed their tips on how to avoid trouble:
Abid Hussain nicely described how an IOT Pilot From Hell typically goes down:
- Top management says: “We must get into IoT!” Budgets are approved and business units get money earmarked for pilots.
- Pilots are often designed around ‘showcasing’ the IoT provider’s capabilities/distinguishing features, not necessarily solving the customers’ problem. This may be due to the vendors’ own agenda, or the fact the customer may not even have an identified problem – the biz unit was just told to do “an” IoT pilot.
- IoT program never gets rolled out because biz unit sees no value and is not willing to spend.
Technically it’s all doable, especially when using tried and tested hardware and platforms. The issues tend to be on the business case and the human side of things. Looking back many pilots should never have been started. With a very big thank you to all the professionals willing to share their experience, earned often the hard way.
Here’s my summary:
Avoiding Industrial IOT Pilot Purgatory: tips for Businesses implementing IIOT
1. Solve a problem worth solving
- There is no point doing “something” in IOT just to show you can. Pilots which do not have a profitable business case just waste everybody’s time, and will poison the well in a company for years.
- Michael Riemer: Deliver an outcome not just information. Make sure the data is acted upon, leads to measurable benefits, increases company profitability and growth.
2. Keep it quick and simple
- Start with existing hardware and platform as much as possible. Remember this is just a Proof Of Concept (PoC), a quick win to build support and get the ball rolling. Once the business case is proven it is much easier to justify the additional budget to further optimize the solution for a full roll-out.
- Use an experienced consultant. Your own manufacturing engineers are already pretty busy making sure the paying customers stay happy, and are unlikely to give priority to an internal project. It’s not easy to keep up with all the developments in this field, and solid implementation experience does help.
3. Manage the Human Factor
- Avoid using trendy buzzwords such as Industrial IOT, AI etc. Simply talk about the “Increase Up-time to 99.9%” project, and you sidestep a lot of resistance.
- Assure the support of the workers in the unit involved, what’s in it for them? Especially for a first project, it makes sense to pick a problem everybody wants to see solved.
- Before kickoff make sure all stakeholders agree on how to measure success: have clear primary objectives and a strong verification strategy for each objective.
- Clearly define roles & responsibilities. Have a C-level exec put his name on the line. Ahmed Sharaf: Without an executive evangelist you have no one to communicate the success of the project to the rest of the business. Put responsibility with the head of the unit concerned, not with IT or some “Chief Digitization Officer” who may be perceived as pursuing a hobby.
Avoiding Industrial IOT Pilot Purgatory: tips for IIOT Solutions Providers
1. Don’t do pilots for free
if the client is not willing to pay at least something then you have not found a problem they feel is worth solving, and you’re unlikely to see money even if the pilot is successful
2. Qualify the opportunity
learn to say no. Samir Djendoubi: Do not launch a pilot if there is no top management support and budget for the real project. Letha McLaren: The PoC should be simply a “gate” to moving forward with the rest of the business plan.
3. Define success criteria upfront
set a time frame and get a volume commitment upon success.
4. Focus on smaller clients
Nick Pummell: In our experience, the SME companies are much more prepared to push ahead with disruptive technologies, are focused on growth and have a lot fewer decision makers to overcome. The bigger companies tend to be more difficult due to the sheer number of stakeholders – everything takes forever to get sign off – if ever.
5. Focus on a specific vertical / building block
As a fresh start-up desperate to prove yourself you may have to accept to do a pilot for little money, but then at least make very sure the learnings will strengthen your expertise. Philippe Lambinet: Reject pilots that are too specific to a customer or that are outside of your main market focus. Don’t spread yourself too thin.
This article got lots of discussion going on LinkedIN, I was really amazed by the collective wisdom of the crowd was willing to share. For further tips on how to get an IOT Pilot moving quicker have a look at the full discussion on the LinkedIn article: Lessons from the field. You’re also welcome to link with me at Keesjan (Case) Engelen