Understanding the Reasons Why Enterprise IoT Projects Often Fail

Understanding the Reasons Why Enterprise IoT Projects Often Fail
Internet of Things or IoT is being used to enable new functions in companies. AT&T recently used an IoT solution to help keep beverage coolers stocked and chilled around the world. The end-to-end solution connects up to 1 million Red Bull beverage coolers in many locations, without significant trouble or a big investment.

Even with so many benefits, IoT is bringing to the table, there are still projects failing to meet their goals or completion dates. IoT projects can be very difficult to manage and there are some prominent reasons that often cause such projects to fail.

According to a survey conducted by Cisco (involving 1.800 IT and Business Decision Makers in the US and UK)*, up to 60% of IoT projects that respondents started stalled at the proof of concept phase. Just 26% of respondents said they had what they considered a successful IoT deployment. Cisco found that in most cases, it was not a technology problem but rather problems coming from company culture, organization and structure…


The main challenge of starting and completing an IoT project is always budget. While the benefits of Internet of Things are apparent and can be measured, not all companies are willing to invest in small, smart devices with specific functions. The lack of budget causes many IoT projects to fail before they even start while going over-budget is still the most popular reason why IoT projects have to be cut short.

In an enterprise environment, going over-budget is a serious problem. The Northeastern University AACSB online MBA department ranked going over-budget as among the top 10 serious company management mistakes that can bring a business down. Students who are pursuing an online MBA degree today are taught how to set budgets to avoid this very problem.

Unclear Project Scope

IoT devices tend to be very specific. The previous example of using IoT to monitor beverage quantity and temperature showed the effectiveness of custom solutions developed for the specific needs of the company. You can’t expect one IoT device to do everything, so setting a wide project scope is certainly not wise.

Unfortunately, many IoT projects still try to do too much. This is the wrong approach to take if the goal is to produce a solution that does things really well. Instead of trying to do everything at the same time, it is much more effective to divide the wide objectives into smaller IoT projects that are more focused and target-oriented.

Another problem with a confusing project scope is changes that happen along the way. It is not uncommon for management to ask for new features or make changes mid-project. Things like this are supposed to be handled as possible future updates, not actual changes made to the initial IoT device.

Development Time

The mid-project changes we talked about earlier also have the potential of causing another problem: lack of time. IoT projects that take too long to complete aren’t the most effective ones to have, so always make sure you have a clear and specific project scope in order to deliver the IoT-based solution in a timely manner.

As identified in the Cisco survey, excessive time to completion can also be the result of a lack of internal expertise to run the IoT project smoothly. In this matter, the latest IoT platforms and kits available on the market can be a precious help to reduce complexity and time to market.

Quality of data

At last, Cisco adds to the list of possible causes for IoT projects failure, the poor quality of the data collected. A significant part of the value creation resides indeed in the exploitation of the data sensed from the field. To allow relevant automated or human actions and smart business decisions, special care must be taken when defining the data sets to be collected and to guarantee efficient and secure transmission of this data.

As we can see, there are several reasons why enterprise IoT projects may fail. But even in failure, opportunities arise: 64% of the respondents to the Cisco survey agreed that learning from stalled or failed initiatives helped in the end accelerate their IoT investments !

In IoT, as in many other domains, failing does not necessarily mean giving up…

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