{"id":6,"date":"2019-09-30T16:17:33","date_gmt":"2019-09-30T16:17:33","guid":{"rendered":"https:\/\/travel.onesimcard.com\/m2mblog\/?p=6"},"modified":"2025-06-11T11:10:11","modified_gmt":"2025-06-11T11:10:11","slug":"finding-value-in-iot-part-1","status":"publish","type":"post","link":"https:\/\/travel.onesimcard.com\/m2mblog\/finding-value-in-iot-part-1\/","title":{"rendered":"Finding Value in IoT – Part 1"},"content":{"rendered":"\n
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A 2017 survey\nconducted by Cisco, engaging with 1,845 business IoT leaders, showed that 60%\nof IoT initiatives never passed the Proof-of-Concept (PoC) stage(1)<\/sup>.\nThis correlates with the findings of the consulting firm Capgemini\u2019s Digital\nTransformation Institute, highlighting that – on average – only 36% of the\ncompanies deployed IoT solutions at full scale(2)<\/sup>. <\/p>\n\n\n\n

This is a pretty\nlow success rate, which raised the question: why are these initiatives stalling\ninstead of scaling? What leads a decision-maker to halt and completely stop an\ninnovative project? <\/p>\n\n\n\n

Technology\ncapabilities? IoT maturity? Lack of standardization? These are surely wrong\nanswers. CEO\u2019s and board members, tech-savvies or not, have a primary duty to\nprotect and preserve the interests of the shareholders – which equates to\nmaximizing the value of the entity of which they are in charge(3)(4)<\/sup>.<\/p>\n\n\n\n

Simply put, the\ndecision makers care less about the latest technology breakthroughs or an\nextensive list of product features than they care about their bottom-line. As\nsuch, PoC is a major disservice for both seller and buyer, as it inherently\nfails to demonstrate the value generated by the IoT project, to focus on\nproving the technology works. <\/p>\n\n\n\n

There is a need\nto change the paradigm. <\/p>\n\n\n\n

As Deloitte\u2019s\nChief IoT Technologist Robert Schmid explained at LiveWorx19(5)<\/sup>, one\nmust kill proof-of-concept and replace it by a proof-of-value (PoV). The latter\nshall explicitly articulate value (especially the dollar value – most tangible\nreturn among all), mostly using common indicators such as Return on Investment\n(ROI) or Net Present Value (NVP).<\/p>\n\n\n\n

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

To successfully sell\nan IoT project at scale – as any complex B2B Digital sale (ERP, CRM, desktop\nvirtualization, etc.), one must adopt a value-based approach, not a\ntransactional-based. As stated in many complex solution sales analysis, push of\npre-packaged bundles of existing products and services is an increasingly\nlosing proposition in a competitive environment with a cost-down approach.(6)<\/sup>\n<\/p>\n\n\n\n

“Price is what you pay. Value is what you get.\u201d – Warren Buffet <\/p><\/blockquote>\n\n\n\n

If price is immediately clear to anyone,\nvalue (and outcomes) remains hard to comprehend, so once the PoC is done and\ncomes the time to decide whether or not to roll-out at scale, it is impossible\nfor executives to justify a (high) price in the absence of clear understanding\nof the value.<\/p>\n\n\n\n

Similarly,\narguing that you have the best product or solutions based on XYZ features to\nsolve a problem is pointless if you haven\u2019t demonstrated that this is a problem\nyour prospect is really facing and that it is worth solving.<\/p>\n\n\n\n

Listening to\nyour prospect and understanding what are their pain points and how it impacts\nthe company is the first step to quantify value. What are the benefits of\nsolving a problem should always come first in your analysis – prior to how to\nsolve the problem. Don\u2019t confuse your discovery phase with solutioning.<\/p>\n\n\n\n

At a high level,\nbenefits can always be sorted into two categories:<\/p>\n\n\n\n