Five key strategies for IoT success

There are five key strategies for success in projects using internet of things (IoT) technologies, according to Kent Eriksson, IoT business consultant at PTC.

“The first is to aim to start small, but scale fast,” he told attendees of PTC LiveWorx Europe 2015 in Stuttgart, Germany.

This starts by looking at what smart, connected products already exist in an environment and mixing those with better new technologies, while phasing out those that are becoming obsolete.

“Start where you are today and add value rather than starting a new isolated project or making changes for the sake of it,” said Eriksson.

At the same time, he said, companies should consider all opportunities available to them by identifying potential value and not be put off by new terms such as “IoT” or “smart, connected products”.

An example of starting small and scaling fast, said Eriksson, is John Deere, which started with a smart, connected tractor, but then quickly integrated that with tillage and harvesting equipment and external data sources such as good soil and fertiliser combinations or weather forecasting systems.

“Start with a smart, connected product the gives immediate return on investment by lowering cost and improving efficiency through IoT services, then build as many new added-value services as you can,” he said.

The common pattern, said Eriksson, is getting immediate value by monitoring a product so that it can be controlled, and then adding value by optimising performance and adding logic and analytics.

Where companies already have home-grown machine-to-machine (M2M) communications, he said they can add connectivity to existing products using a platform such as PTC’s ThingWork platform.

“This enables companies to connect to other products and systems that use different communication protocols as well as shorten time to market by building M2M and connectivity capabilties simultaneously,” said Eriksson.

The second important principle in IoT projects, he said, is to focus on value. This is particularly applicable to companies that see themselves as IoT companies from the start.

An example of focusing on value, said Eriksson, is All Traffic Solutions, which started by providing portable radar speed limit signs that could be mounted to existing signposts.

“They had a very specific value proposition to get an entry into the market that appealed to traffic police and construction firms, and then every new product they introduced added value to the existing products as well as having value of its own,” he said.

For example, by adding to a sign that reflects the time to arrive at a particular destination a product that measure the number of vehicles passing a particular point, the company was able to add value to the original sign by proving information about traffic congestion.

“This has enabled the company to evolve from providing just speed limit signs to providing a set of traffic management and safety services, which means they no longer sell products, renting them out instead because their customers are more interested in the outcome of managing traffic and are willing to pay a premium for All Traffic Solutions to deploy and maintain the signs,” said Eriksson, noting that value-added data services typically have a higher margin than selling products.

The lesson to be learned, he said, is that All Traffic Solutions has found new opportunities along the way by focussing on value and building an extendable product architecture so that each new product strengthens the overall system.

“Do not try to remove all ambiguity up front because thing will change depending on competitors and the market, and do not get complacent because if you stop innovating someone else will step in and take the value,” said Eriksson.