Success or failure?
Some important statistics from a Cisco survey in 2017:
- 60% of initiatives go no further than a proof of concept;
- 75% are considered a failure;
- 33% of the projects finished are considered a failure;
- IoT initiatives are perceived more successful by IT (35%) than the business (15%);
- Only 26% of the companies surveyed declared their IoT initiatives as a success.
However not everything on IoT is on the dark side. Companies and organisations learn from their mistakes – 64% of the companies learn from failed iinitiatives.
There are some major reasons for these statistics and a good approach taking these causes into account can be a remedy.
Reasons for failure
A narrow, technological approach maybe the road to failure. A holistic approach is needed.
- Alignment business and IT
At the start of an initiative it is mostly obvious that the alignment with the business strategy is poor. Every project should introduce a change in behaviour of the organization and thus helping in realizing the strategy. If the contribution isn’t clear, don’t start the project. Desillusion will follow and technology and even you will (wrongly) get the blame. The business case should establish the contribution to the strategy and during the project you need the full support of the senior management.
- No clear outcomes
Like most IT related projects, the output (the information system, the IoT system) is defined well. Outcomes on the other hand, the benefits are seldom seen and if they are, they lack follow up through realisation. No benefits and outcomes related to the strategy, is a road to failure.
- Complexity overlooked
IoT technologies are mostly not as thoroughly known by IT people as other technologies. IT people are over-optimistic and this attitude is human but risky. You will have to take measures to remediate these risks rooted in the under-estimated complexity.
- The human factor is overlooked
IoT initiatives require a broad approach covering skills, collaboration, change management, ethics… If these aspects remain uncovered, you will risk failure. Every initiative invokes a change (minor or major) in the business. Doing only the technology stuff will lay out the road to failure. Don’t limit your actions in change management on organizational structure alone, focus on people as well. Technology is an enabler for the business change, nothing more, nothing less.
- Data in stovepipes
IoT produces a lot of data. However data is not owned by the IT (here in the IoT solution). It has to safeguard data, make the data usable for the business. Data belong to the company as a whole, crossing all organizational borders. The business unit owning the IoT is also owning the data but this a responsibility, a duty not a right. They have to share the data. They have to assure quality, accuracy, accessibility, timeliness, availability…. The data policies must enable the benefits and outcomes.
These are only some very important causes. Good project management has to provide answers to these problems.
Every IoT project must assure that:
- A business case is formulated and shows the strategic contribution. To be sustainable you must go beyond the iron triangle (cost, time, scope) and take a holistic approach.
- Clear outcomes and benefits. How will the business look like when the system is realized? What benefits will become available? How and when do we measure we have reached the outcomes? How and when do we measure the benefits? You may miss the targets proposed but why is that and what will you do about it? Clear outcomes and benefits without proper follow-up are useless.
- Be sure you can deliver. Underestimating the complexity is a big risk (maybe almost a certainty?). Have the right people trained on the right time. Get extra (external) resources if needed. You can’t afford to take these risks.
- Don’t underestimate the human aspect. Technology may be wonderful but if people aren’t capable to handle it properly, technology becomes a cost, not an asset. People must be trained, their jobs may change which requires them to be prepared, new organizational structures may emerge. Neglect this and failure is around the corner.
- IoT systems produce a lot of data. What will these data be used for? When? By whom? What decisions will be supported? What quality characteristics should the data have? Remember data isn’t owned by no one, at least not in proprietary senses. It’s owned by the company as a whole. Not knowing what data will come out, who will use them to do what may result in zero benefits and a total lack of outcomes.
Outputs aren’t outcomes
A system is an output and has almost no value on its own. Only when the results of the system (e.g. the data) are used by the business, value is created. A more efficient process, optimizing the process (using AI), making the process more safe for humans and environment, using less power, water… are outcomes that should be looked for. These outcomes will lead to benefits and that’s what the business is after. So, focus on outcomes, not on outputs. Outcomes and the associated benefits define the project success. Being on time, within budget and respecting scope is no success if the desired business outcomes and benefits aren’t met.
Every project must be executed, the system designed and implemented. How that could be done is not handled here, it out of scope of the business related issues.
Ing. Rik Manhaeve (°1952)
Master Chemie (PIH Kortrijk)
Master IT (VUB)
Master IT Audit (UAMS)
Master Project Management (George Washington University New York)
Member of the Board of Directors ISA Belgian Chapter
ISO Consultant (ISO 9241) on human factor issues