Building a Foundation for the Internet of Things

Daniel Elizalde, Ericsson

An article by Daniel Elizalde, Vice President, Head of IoT for North America at Ericsson.

The Internet of Things (IoT) was promised as a transformative tool that would fundamentally change the way businesses function and people live their daily lives. But so far, this promise has been largely unmet, especially in the industrial space, where innovations like increased factory efficiency are yet to materialize.

One thing holding back the wide-scale adoption of IoT in the manufacturing industry is the issue of the projects failing in the proof-of-concept (POC) stage – let’s call it, “pilot-itis”. For example, a recent survey found nearly 30% of all enterprise IoT projects fail in the POC phase.

Some businesses are looking to emerging technologies like AI, blockchain or the arrival of 5G with its reliable connectivity and low latency to bridge many of the gaps in the Industrial IoT. While it’s true that these technologies are important to bringing about a fourth Industrial Revolution, it would be naive to believe that these solutions will solve all issues associated with “pilot-itis”. Because the problems aren’t just technical – they’re cultural.

New technologies will help, but in order to take IoT to the next level, we need to move away from treating IoT as a flashy buzzword. It needs to be, first a foremost, seen as a potential solution to a business’s problem. Otherwise, businesses will continue to create IoT projects that aren’t grounded in the real issues customers need to solve, and the projects fail when they do not demonstrate value by the end of the pilot. We need to move away from the notion that the IoT is the solution for everything, and instead focus on how it can provide business solutions in a faster, cheaper and more efficient way.

To unlock the IoT’s potential in industry and end “pilot-itis” once and for all, businesses need to treat the IoT as a tool and evaluate it as they would any other investment. They need to identify pain points, determine how an IoT solution could fix the problem, model the scaling of the solution and decide if the investment in the project is worth the ultimate pay-off of the solution.

An example of this approach in action: The Denmark-based water pump manufacturer Grundfos identified their customers were experiencing problems with their water pumps. When the pumps malfunctioned or stopped working, customers would lose valuable time and profits while they were waiting for the pumps to be repaired. To combat this, they installed IoT sensors to collect data and predict when the pumps would need maintenance, allowing customers to continue to use the pumps without losing time or profits.

This approach – linking the IoT solution to a clear need rather than seeing it as a new technology for technology’s sake – leads to IoT networks that can help a business become more efficient and cost-effective.

Connecting IoT solutions to the right audience is also critical. For example, the car company Borgward identified customers in Europe who had a strong desire for connected vehicles, so they partnered with Orange Business Services to create a car with various IoT solutions, including remote tracking and control capability and in-car internet connectivity. This solution was so successful it expanded beyond Europe and is now available globally.

Treating IoT as a buzzword has limited what the technology can do for industry, and has led to the phenomenon where pilot projects haven’t delivered tangible solutions for customers and fizzle out. And it’s not an issue that can be solved solely with technology. But we are at a critical juncture – powered by 5G, IoT networks have the security, reliability, low latency and data capacity to solve critical needs. All it will take is a shift in culture and approach, a sharper focus on connecting the technology with specific challenges, and we can cure “pilot-itis” for good.

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