74% Of Companies Are Unsuccessful With IoT – Beecham Research Investigates ‘Why IoT Projects Fail’

Although those in the know have seen real improvements, a shockingly large amount of companies have seen no success with IoT projects. Despite the fact that the IoT has been around for decades, there is still a gulf between what people expect from IoT, and the capacity of businesses to actually use and benefit from IoT connected devices.

Beecham Research’s ‘Why IoT Projects Fail’ summarizes the findings of other industry research from the likes of McKinsey and CapGemini to provide a high-level view of how companies fare with IoT technologies. The report then delves deep into interviews and surveys with vendors, end-users and successful and unsuccessful companies, to figure out what exactly makes innovative IoT projects fail.

Breakdown in IoT communication

Probably the biggest takeaway from Beecham’s report is that the majority of IoT projects are still in their infancy, and people are still not sure about how exactly to implement, operate, or manage IoT projects. On the whole, companies surveyed in a variety of reports seem to have positive ideas about IoT (Microsoft found that 94% of companies will be using IoT by 2021) and those that have had projects come to fruition have seen real benefits from their solutions (Vodafone found that 95% of companies currently using IoT had seen measurable benefits).

Amongst the majority of companies there is a general lack of understanding of the scale and complexity of the IoT, however, and McKinsey found that 70% of companies have trouble integrating IoT projects into existing workflow, and 48% struggle to manage the data involved. There are also significant concerns about cybersecurity and data privacy (Capgemini found that these were the top concerns of 62% of business leaders), which is understandable considering the security risks and data privacy legislation involved, but also indicates a lack of understanding of how to properly implement a secure and trustworthy IoT project.

What do IoT solutions providers think?

After summarizing the findings of existing research, the report goes into depth with interviews from seven IoT products and services vendors – all of which have surprisingly similar insights on what their customers want and expect from IoT projects. Every solution provider cited ‘unclear objectives’, ‘lack of specific IoT skills & knowledge’ and ‘unrealistic expectations’ as the most common issues with customers’ projects, and most said that the vast majority of their clients (some up to 80%) came to them for professional help after already having tried and failed to implement IoT on their own. IoT ‘quick-wins’ are harder to achieve than many expect and adopting IoT devices into complex environments requires careful planning and consideration.

These insights from IoT vendors are generally quite consistent, but there are differences in how IoT end-users measure their successes and failures. Companies often expect a faster return on investment (ROI) than is possible with IoT, and measure success based on immediate gains with ‘[projects] perceived to fail if they are too lengthy and do not generate a lot of revenue.’ This stems from a fundamental misunderstanding about the benefits of IoT, with many aiming for instant profit rather than long-term efficiencies and useable insights that IoT devices can facilitate.

Despite this apparent misunderstanding of where and when companies can reap the benefits of IoT, every single end-user across a multitude of industries said that the IoT was important to their business now and in the future. Seeking out expert help at an early stage would help to explain some of the more complicated aspects of the IoT (such as navigating different network architectures, and making sure SIMs are compatible with different devices) so that users understand the intricacies of the IoT before issues occur. 

IoT winners and losers

Whether projects were successful or not, there were some common threads running through the results of end-user online surveys. Successful and unsuccessful projects both saw very similar challenges and concerns, primarily around security, technical expertise and staying within budget, but they differed massively in their expectations. 58% of projects were deemed mostly or completely unsuccessful despite 85% of projects being in pilot or early deployment phase, suggesting that those without much experience in IoT might abandon projects too soon.

By far the most noticeable difference was the use of outside solution providers and experts compared to trying to complete projects in-house. Successful projects had a healthy balance of in-house resources and solutions providers, with 38% using a mix of resources to complete the project. Unsuccessful projects, however, attempted to complete projects completely in-house in 62% of cases, and only 18% of cases brought in solutions providers to help in-house staff. 

Positive mental attitude

Working with a trusted IoT expert is one of the most important factors towards the success of an IoT project, and challenges and concerns such as security, scalability and budgets can be overcome if proper advice is sought.

Pod is one of the most experienced IoT connectivity providers on the market, with 20 years of expertise in the IoT. We can guide you through the maze of connectivity without steering you in one direction (we work with any provider and all connectivity technologies) and have everything you need to support your application from POC to enterprise-wide deployment. Our modular platform also gives you complete insight into your SIMs, accounts and analytics, so you can learn more about the IoT and your own application.

To make sure your IoT project doesn’t fall at the first hurdle, consult Pod Group, the experts in IoT connectivity, and let us guide you to success.