The benefits of IoT are evident. They are driving the creation of new startups and new revenue streams for mature companies and start-ups alike. Knowing this, both small and large businesses are diving into creating IoT solutions with the thought that return on investment will be worth it. But… IS it really worth it? Often times, IoT enablements are possible, and they are likely also super-cool ideas to consider. However, it just might not make sense for some businesses to make the investment in IoT development.
Here are 4 questions to ask yourself before you hop on to the IoT bandwagon:
Does hopping on the IoT bandwagon offer real value?
An engineer can embed IoT technology into almost any product (or “thing”). IoT enabling a product simply means adding sensing technology so the “thing” can track temperature, location, usage, or whatever data one might want to collect. The sensor communicates such data wirelessly to the cloud, and from there it is sent to other web and server based data sources. That information is then collected and analyzed and combined in ways that create information of value to subscribers. And then, voila! IoT magic has happened.
For example, engineers can embed sensing technology into something as simple and small as a pen. That pen can then let users know when it is almost out of ink. And while creating a pen like this is an interesting thought, there may not be any real value here to justify a whole development process. It may eat up time and money, while providing little return on investment.
Can IoT development be supported financially?
The high cost associated with IoT development is inevitable. It costs more to develop an IoT “smart” device than a “dumb” device. While costs for IoT hardware materials are decreasing, a more sophisticated product development process will surely increase costs. A successful IoT solution requires hardware technology integration, as well as significant software development and data analytics expertise.
Will this additional effort add enough user-value to balance out the price increase? Can a company’s financial state keep up with the cost and time required? Is the risk/reward worth it? It’s important to have answers to these questions.
Is there enough bandwidth to handle a new business model?
A pen company could very well find value in using IoT to track the amount of ink in their product. But is that company ready to accept a new business model? Is it ready to invest millions of dollars into product design and development? Will the company be ready to eat the cost if customers decide that this information isn’t valuable? It’s important to have these questions answered before beginning the development process.
I’m not suggesting that one should discount products from IoT enablement, but rather, that they consider the possibilities with great care. When done right, the IoT can be quite profitable. Click here to see how IoT products have benefited other companies with a little help from Intelligent Product Solutions.