When I came across some Cisco research on the Internet of Things (IoT) the other day, it made me stop in my tracks. We all know that IoT projects are new and can be challenging – but really – 60% of projects never make it past the proof of concept stage and only 26% of companies have had an IoT initiative they considered a complete success?? Quoting Cisco’s press release, “Even worse: a third of all completed projects were not considered a success.” Wow. That’s a lot of failing.
So what’ the problem? Cisco identifies a number of things that are causing issues. One of these really resonates with me – lack of engaging the IoT partner ecosystem throughout the project. The thing with ecosystems is that everyone has to play nicely together for them to be successful. Partners need to have agreed upon business models, financial arrangements, legal agreements, data sharing policies and agreements, product/service offerings, and operational approaches simply to get a business going. And each ecosystem partner likely has multiple stakeholders they will interact with, so it’s a one to many web that gets large very quickly. It’s hard to make last minute decisions and bring new partners to the table late in the game with the level of complexity and cooperation needed to get an ecosystem-based service up and running.
This planning stage gets complicated, becomes hard to keep track of, and it takes a long time to herd the cats to agreement. So people skip steps or make seat-of-the-pants decisions. And the results are not good.
While we are all still learning about what works in IoT projects, slowing down and spending time to evaluate a project up front can help improve the success rate. Take time to work through a methodology that gets you to have a strong understanding of the value of the ecosystem to customers and all partners, the business structure and relationships, and the level of complexity and scope of the project.
Start by simply identifying all the parties needed at the table to create your ecosystem. Who do you need internally, who externally is a usual partner, and who are your new partners? You are probably doing a project not to just make something a little bit better, but to make a big difference. So, if you are not thinking of new partners, you are probably stuck inside your box. Expand your mind and think about who can contribute to, and benefit from, your ecosystem.
Next you need to think about value. If each stakeholder does not have a reason to come to the party and then stay engaged, they simply will not. How is each partner making money or saving money? Think about the interactions that will be financially driven. You need to understand this in detail. You need create a business model and examine it from multiple perspectives (yours and your partners’). You need to fully understand who is providing which product/service and operational piece of the ecosystem and what data is needed to enable the product/service to successfully operate. And finally, which financial and legal relationships need to be developed among the stakeholders? Creating these agreements can be the longest pole in the tent – and can make or break deals. Having an understanding of all of these aspects of your project up front – before you start designing the technical solution – can greatly increase your chances of success and get you out of the 74% of non-succeeders!
In TM Forum, methodology is what we do. Our members have thought about these challenges and have created approaches to tackle them. We have even created a tool, CurateFx, to help you do all of this in record time. You might have noticed that I am passionate about this space. I would love to share my enthusiasm. Just get in touch!