Why 70% of the IIoT projects fail in the POC?

Alejandra del Mar Duque Mora
Alejandra del Mar Duque Mora

We spoke with the expert in IIoT and digital transformation, Jeff Winter, about his overview of this industry. He is one of the top thought leaders for Industry 4.0 and is on the board of about a half dozen industry associations and standards groups.

This article will focus on the importance of IoT, which is very useful in the industrial sector, especially in manufacturing.

Jeff Winter portrait
Jeff Winter

An overview of Data, IoT, and companies

Enterprises are waking up to the wider opportunities that IoT can bring to their organizations. Most companies within their industry include enterprise IoT initiatives in their strategic roadmaps, including those related to improving service operations.

According to Domo, it is estimated that 1.7 MB of data is created every second for every person on earth, and this amount of data is nothing compared to what a machine can generate.

Because of that,  if a company is not ready to handle and analyze this amount of data, it will never be able to fully appreciate the advantages of IIoT.

“IIoT generates a tremendous amount of data. This is why IoT and big data are so intertwined.  What does this ultimately get you? Faster and better decision-making.” – Jeff Winter.

With IoT, you will increase your productivity, improve process efficiencies, reduce asset downtime, improve product quality, reduce operational costs, and much more.

Discovering IoT

According to Analysys Mason, 24% of SMEs are unaware of IoT, and 36% are not interested, which is about half of large enterprises.

This is an opportunity for those companies that are hesitating. Did you know that incorporating IoT into your business doesn’t have to be expensive?

In fact, there are many ways of doing it. For example, utilizing the IoT platform, Thinger, allows you to develop your IoT project with all your specifications no matter the size of your project.

According to Jeff Winter, now is the right moment to start making these changes in your company: “IoT is here to stay, and the projects have a real ROI and payback, often within 6 months or less”.

Key aspects to consider that will impact costs:

The current network infrastructure ranges from Bluetooth and Wi-Fi to 4G and (soon) 5G networks. Can it handle the nodes or traffic?

Another key aspect is IoT security. Connecting a whole slew of new components to one another and to outside networks increases risks if not properly managed.

Some of the areas that companies need to consider include access management, secure execution environments, data encryption and validation, and authentication between sensors, gateways, and the software orchestration platform.

A final consideration would be cloud computing. In order to take advantage of analytics, most applications will require cloud computing.

According to Cisco, in 2017 nearly 70% of IIoT projects failed at the Proof of Concept stage, despite taking all these factors into consideration.

We asked Jeff why he thinks this happens. In his opinion, there are three main reasons: poor overall data strategy, cultural issues, and the wrong approach.

  • Poor overall data strategy: your company needs the skills and expertise to collect, aggregate, analyze, and integrate the data. Your standard IT data strategy won’t cut it for OT and the factory floor. You are now dealing with huge amounts of time-series data.
  • Cultural issues (Companies aren’t ready): They are too siloed and not integrated. If companies aren’t functionally fully integrated, their data won’t be either.
  • Wrong approach: IoT is an enablement tool, and you should focus on the opportunities it can provide rather than the infrastructure.

We agreed and would like to add one more reason: picking the wrong partners to develop your project or trying to do every single part on your own. That is okay if you are a huge company, but if you’re not, it can cost you the project.

If you need to start an IoT project, you should go with a company that fits your needs. In many cases, trying to do it by yourself is a waste of time.

Tips to start your IoT journey:

  • Start with business objectives: IoT is a tool. It is an infrastructure-type enabler that allows for many things to be done. So start by focusing on what needs to be done. Think about your business logic, and then plan on how you are going to achieve your objectives.
  • You need a digital transformation strategy where IoT will most likely be used as part of the method to achieve it.
  • Develop a data strategy: most companies aren’t prepared to have all the data that will be generated with IoT. They don’t know how to integrate it, and most importantly, they don’t know what their next steps should be.

“Your digital transformation should focus on the data. Most companies aren’t prepared to handle that amount of data” -Jeff Winter.

Facts that you can’t avoid:

The adoption of many IoT use cases is on the rise. According to a 2021 IoT analytics study, the average number of use cases per company is 8, with the exception of the oil, gas, and energy industries which are ahead with an average of 15 use cases.

Six of the top 10 IoT use cases today are related to making operations smart by improving companies’ production processes for manufacturing, enhancing maintenance operations, or advancing any other operations.

After having this insightful conversation with Jeff, we couldn’t agree more. If your company doesn’t have the capacity to process and analyze huge amounts of data, you’ll never see the full potential of these technologies.

But if you do and you are planning to work with IoT, you should also consider the costs and the optimal way to do it. We strongly recommend using Thinger as your ready-to-go scalable cloud infrastructure which will allow you to focus on the core of your business rather than reinventing the wheel.

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