A 2017 survey conducted by Cisco, engaging with 1,845 business IoT leaders, showed that 60% of IoT initiatives never passed the Proof-of-Concept (PoC) stage⁽¹⁾. This correlates with the findings of the consulting firm Capgemini’s Digital Transformation Institute, highlighting that – on average – only 36% of the companies deployed IoT solutions at full scale⁽²⁾.

This is a pretty low success rate, which raised the question: why are these initiatives stalling instead of scaling? What leads a decision-maker to halt and completely stop an innovative project?

Technology capabilities? IoT maturity? Lack of standardization? These are surely wrong answers. CEO’s and board members, tech-savvies or not, have a primary duty to protect and preserve the interests of the shareholders – which equates to maximizing the value of the entity of which they are in charge⁽³⁾⁽⁴⁾.

Simply put, the decision makers care less about the latest technology breakthroughs or an extensive list of product features than they care about their bottom-line. As such, PoC is a major disservice for both seller and buyer, as it inherently fails to demonstrate the value generated by the IoT project, to focus on proving the technology works.

There is a need to change the paradigm.

As Deloitte’s Chief IoT Technologist Robert Schmid explained at LiveWorx19⁽⁵⁾, one must kill proof-of-concept and replace it by a proof-of-value (PoV). The latter shall explicitly articulate value (especially the dollar value – most tangible return among all), mostly using common indicators such as Return on Investment (ROI) or Net Present Value (NVP).

This is not to say that technology aspect and its challenges have to be neglected, but this should come in the discussion at a later stage, as one (or several) item during the risks assessment review. This discussion will even be easier to have if the customer is sold on the value the project brings, and you can demonstrate maturity and expertise in this space (backed up by previous successes, possessing strong know-how or engaging with an expert IoT partner).

To successfully sell an IoT project at scale – as any complex B2B Digital sale (ERP, CRM, desktop virtualization, etc.), one must adopt a value-based approach, not a transactional-based. As stated in many complex solution sales analysis, push of pre-packaged bundles of existing products and services is an increasingly losing proposition in a competitive environment with a cost-down approach.⁽⁶⁾

“Price is what you pay. Value is what you get.” – Warren Buffet

If price is immediately clear to anyone, value (and outcomes) remains hard to comprehend, so once the PoC is done and comes the time to decide whether or not to roll-out at scale, it is impossible for executives to justify a (high) price in the absence of clear understanding of the value.

Similarly, arguing that you have the best product or solutions based on XYZ features to solve a problem is pointless if you haven’t demonstrated that this is a problem your prospect is really facing and that it is worth solving.

Listening to your prospect and understanding what are their pain points and how it impacts the company is the first step to quantify value. What are the benefits of solving a problem should always come first in your analysis – prior to how to solve the problem. Don’t confuse your discovery phase with solutioning.

At a high level, benefits can always be sorted into two categories:

• Decrease of costs (leading to higher profits with increased margin)
• Increase of revenue (leading to higher profits with fixed margin)

The second category is often disregarded by C-levels, as they prefer the certainty of the first. For instance, capturing more market share due to better customer service (increase revenue) cannot be as easily quantified (at least not without extrapolations and market surveys) as a net reduction of your freight expenditure (decrease of costs).

Once the benefits quantification is reviewed and acknowledged by your customer, demonstrating the theoretical worth of the project, you now have a solid basis to continue building your business case and move to the second step of value quantification: establish how to solve the pain point and establish the Total Cost of Ownership (TCO) of the solution. More often than not, you don’t need to be accurate to the penny, as several unknowns might remain – nonetheless, IoT is no different than other complex projects (for instance, TCO calculation for cloud deployment is widely understood now⁽⁷⁾⁽⁸⁾) and, for a given industry, recurring patterns (e.g cost centers) are emerging, enabling organizations to be able to calculate TCO repetitively.

With the quantified benefits and the estimated TCO, it is now possible to start evaluating whether or not the IoT initiative should be considered. Not only this approach does benefit the customer, but also the solution provider – as nobody wants to invest resources and time in a project that will never scale due to lack of economic viability. This first high-level analysis provides a clear and timely “GO/NOGO” gate, does not require lengthy in-field technical evaluation, can be done repeatedly with different prospects or on different problematics (provided that you possess the adequate expertise) and in-time will reinsure all stakeholders to move forward.

In our next article “Find Value in IoT – Part 2”, we will discuss how to validate theoretical value quantification (both benefits and TCO).

 At OneSimCard M2M, we are constantly thinking about Value and how we can improve the value of services to our customers. This can take the form of offering 24/7 Tech support for life, outstanding levels of Customer Support, a team of experienced sales team and a service that works across the globe so you only need to deal with one provider instead of numerous local providers in each country where you operate. We welcome the opportunity to have a conversation about your project and discuss options for connectivity with no obligation. Hopefully you will see the value in this discussion!

References:

(1) – The Journey to IoT Value: Challenges, Breakthroughs, and Best Practices – May 2017, by Cisco

(2) – Unlocking the business value of IoT in operations – October 2017, by Capgemini

(3) – Definition of Chief Executive Office, Wikipedia

(4) – Financial Definition of Chief Executive Office, by Merriam-Webster

(5) – Deloitte moving from proof-of-concept to proof-of-value with IoT, 24 June 2019, by Nick Ismail (Press Article from Information Age)

(6) – Giving Customers What They Want: Growth and differentiation through selling business outcomes, 2014, Accenture Strategy

(7) – Cloud Economics: Making the Business Case for Cloud, 2014, KPMG

(8) – Key questions every IT and business executive should ask about cloud computing and ERP, 2011, Accenture

Wireless Connectivity – History and Trends

Most of us remember the time when we had to wait for an annoyingly long time for data to load over our internet connections. Even simple text would sometimes take a minute to load, because we only had dial-up wired/cable internet. However, technology and speed changed at a rapid pace. Now, we have high-speed internet running on our cell-phones 24 hours a day. So, let’s cherish this growth by discussing how we got there and what are the latest trends in the industry and IoT.

Wireless Connectivity:

Most of the wireless networks today use radio communication to connect two or more nodes (devices) together. This includes Cellular Networks, WIFI Networks, Satellites, Bluetooth and more. Wireless connectivity is the design and installation of devices that will be transmitting and receiving signals for much of M2M (Machine to Machine) connectivity.

The new Trends:

With the evolution of technology, wireless connectivity is gaining popularity day by day. A big chunk of the networking is now wireless. Our cellular systems started with1G and now 5G is beginning to be deployed. At this time most of the cellular companies are offering 2G, 3G and 4G technologies.

2G (second generation):

Launched by the Finish company Radiolinja, now Elisa, in 1991, it was the first time that digital encryption of our phone conversations became possible. Also, it offered SMS and MMS technologies that were not present in the earlier generation.

Due to its high efficiency, 2G allowed greater mobile phone penetration (number of sim cards/ phone numbers)

2G originally had a speed of 128 Kbps. Later, it was updated to 2.5G at 256 Kbps. 2G is still being widely used around the world.

3G (third generation):

3rd generation networks emerged in 1998. It brought along faster transmitting speeds that allowed internet access and video calling features.

At this time we also started to see the adoption of IoT solutions like GPS tracking on 2G and 3G networks.

With the max speed of 3Mbps for non-moving and 384 kbps for moving devices, 3G was the first to introduce the term “mobile broadband”. Some later version of 3G could provide the speed up to 10 MBps for download and 5 Mbps upload.  3G provided “all-in a mobile environment” by allowing Internet access, voice and video calling features and streaming content on mobile devices.

All cellular networks are also better in terms of the security they offer. The UE (user equipment) ensures that the network connections are validated and verified before establishing a connection.

4G-LTE (fourth generation):

4G networks are also called Long Term Evolution (LTE); it is a single platform for many wireless networks. Released in 2008, 4G networks support internet access and high-quality video and live streaming.

The maximum speed of a 4G/LTE network is 150Mbps. And if the user is moving then the speed could be as high as 100 Mbps. Globally today, 3G and 4G technologies are most widely used technologies.

LTE provides the ultimate internet experience with IP packet delay being less than 5 milliseconds somewhat similar to wired broadband internet.

LTE was introduced with the purpose of increasing the capacity and speed of wireless networks.

LTE CAT M1

LTE CAT M1 is the standard developed specifically for M2M, IOT applications.  This standard uses only small part of LTE channel bandwidth -1 MB and as such allows better utilization of it. CAT M1 also allows for a lower power consumption of the devices. LTE CAT M1 can be used for the tracking of moving devices or assets as the latency of the mode is still low. The devices using LTE CAT M1 standard generally offers lower manufacturing cost due to lower module costs. LTE CAT M1 will be the most widely used standard in IOT for the tracking of moving assets.

NB-IoT:

Like LTE-CAT M1, this standard was also developed by 3GPP (3rd Generation Partnership Project). NarrowBand-Internet of Things uses LPWA (low power wide area) technology. It improves the spectrum of services and devices, especially focusing on indoor and deep coverage, and improved battery life of devices. NB-IOT uses even less bandwidth than LTE CAT M1 – only 100 KHz and as such can transmit data at very low speed of 250 Kbits per second. The latency (delay) can be as large as 10 seconds and because of it, this mode is not recommended to be used with the tracking of moving objects.

Because Narrow Bank IoT technologies- NB-IoT and LTE CAT M1 -IoT are able to conserve battery life by utilizing a small, highly efficient segment of bandwidth, the device battery life can be increased up to 10 years. The increase in battery life enables developers much more flexibility to deploy devices in more and more remote locations and increases the ways M2/M/IoT is being used. There are a variety of use cases for NB from smart cars and bicycles to controlling appliances and smart meters.

Image Courtesy GSMA.com

Benefits of Narrow Band Technologies:

• Low Power Consumption:

All IoT technologies consume low power when they are in operation. It was one of the goals of LTE CAT M1 and NB-IoT to save power consumption and improve the battery life of the devices connected to it.

• Cost Efficient:

The components required for NB are less expensive, in comparison to just LTE chipsets, IoT chipsets are uniformly priced and cost effective as they are easy to manufacture. Processing a simpler waveform is also much simpler to create.

• More Cellular devices:

Narrow band devices use less bandwidth  allowing the network to support many more devices at the same time. This is a critical factor as the growth in M2M/IoT is exploding with no signs of slowing. According to a McKinsey study, the number of connected devices by 2023 will grow to 43 Billion – 10 times the number of connected devices in 2018.

In addition due to the lower transmission speed, Narrow Band devices allow more penetration indoors or inside basements. It also offers a more secure connection. Moreover, the deployment is easy and due to its wide range, this technology has grown popularity.

NB-IoT  vs LTE CAM M1:

• NB-IoT is a full-time commitment:

The hardware and Software both are made use of in the NB-IoT so it is not possible to take a middle route and use NB-IoT with a combination of other technologies. However, there are a few chips that allow this but are relatively expensive. So if you decide to deploy NB-IoT, you’ll have to rely on it completely.

• Suitable for Stationary Assets:

Assets in motion don’t work as well with devices other than the ones that are fixed at a point. An asset using NB-IoT that isn’t stationary does not behave well and can only be improved by installing more towers.

There are very few NB-IOT networks yet:

Roaming across networks is also an enormous challenge and some device manufacturers are making NB-IoT devices that usually do not fall back to 4G and thus will not be able to work outside of the country.

LTE CAT M1:

1.  There are many more LTE-CAT M1 networks today being rolled out in the world.
2. This technology can be used both for moving and stationary assets.
3. Devices crossing the country border will have better coverage and options for roaming.

Finally, these technologies are constantly improving and we see new releases every few years. These developments are beneficial in M2M wireless communication.

Further work is being carried out to improve wireless connectivity with the development of 5G technology. It is expected to be released more wide-spread in 2020.