IoT projects open up new opportunities for companies to adapt their business models and to develop new solutions or optimize products. However, this is not always possible. Here are the five most common factors that cause IoT projects to fail – and tips on how companies can make their initiatives a success
In complex IoT projects, it often happens that the technical requirements receive more attention than the customer needs. The focus on customer benefit is lost because too much time is spent on technical aspects. However, the decisive factor for the success of IoT projects is the added value of the product. An IoT project can only be successful if all project participants work towards a common goal and have a concrete idea of the result – i.e. the business value is clearly defined.
What problem do we solve with our product? What is the benefit for our customer? Project managers should ask themselves these central questions again and again during their IoT project so that the focus on the essentials is not lost. If concrete optimizations are made based on the needs of the customers, applications are designed to be more user-oriented and the customer perspective actually plays a central role, the basic prerequisites for success are in place.
Extensive IoT projects often involve many participants from different fields and specialist areas. In complex and technical fields of application there are buzzwords that generate different expectations among the various parties.
In IoT projects, there are numerous dependencies between digital and physical systems. Accordingly, it is important that requirements and goals are formulated clearly and unambiguously so that they can be understood by everyone. A successful result can only be achieved if all project members pursue the same goal. Simple and easy to understand formulations without unnecessary buzzwords are the best way to a common target image. Unnecessarily complex formulations and buzzwords without a clear definition only confuse and represent an additional danger for every IoT project.
Strong partnerships are essential for the success of digital projects. Due to the scope of IoT projects, a wide variety of specialists are required in order to be able to meet all requirements. Accordingly, numerous parties from a wide range of task areas come together. It is all the more important for management to inform all stakeholders regularly and in good time. Partners should be involved in all decisions at an early stage so that there are no gaps in knowledge or even missed opportunities.
If everyone is always on the same level of knowledge and partners can contribute their expertise in good time, the chances of success of an IoT project increase many times over. Project managers can also prevent misunderstandings and ultimately optimize the project process and save time and money for unnecessary loops.
At the beginning of an IoT project, it is therefore advisable to define a topic checklist that serves as the basis for the cooperation between the partners. The planning and conception of IoT projects is already very complex in the initial phase and in practice it is not uncommon for things to be forgotten or for resource and project setup to be misjudged. Equal partnerships are all the more important.
In practice, IoT projects are much more dynamic than companies are familiar with from previous projects. A linear budget progression is simply not possible for innovative IoT projects. Due to the clash of different stakeholders, a realistic assessment of existing application examples is often difficult – especially at the beginning there is usually a lack of common understanding.
If technical aspects are in the foreground, a lot of money and time is invested in the implementation of different software and hardware. With such an approach, those responsible ignore the fact that operating and implementation costs differ significantly. Market success depends crucially on illuminating the entire project life cycle of an IoT solution and its interfaces.
The success of IoT projects also depends to a large extent on the prevailing corporate culture. If this is unclear or too closely aligned with traditional project expectations, this will also have a negative impact on the communication structure and the handling of innovative approaches.
The essential success factor of an IoT project lies in its management. In the course of the project, those responsible have to face new challenges and complexities again and again. In order to do justice to their tasks, they should therefore involve all partners in decision-making processes at an early stage and rely on a constructive error culture. Through decisive management with clear communication channels, the employees are made aware of the needs of the customers and the added value of the product. When everyone is in the same boat, not afraid of failure and concentrating on customer benefit, IoT projects succeed much more easily.
IoT projects pose challenges for those responsible at various levels. Transparent decisions, clear communication structures and flexible reactions to unforeseen developments are important success factors. In addition, innovations can usually only be advanced efficiently with strong partner networks. In particular, less experienced companies are well advised to treat IoT projects as separate companies due to their complexity in order to better deal with their high dynamics and low predictability. (mb)