Most IoT projects lack a winning business case (Analyst Angle)
While IOT is one of the key areas of development for next generation wireless technology, many discussions and conference presentations on IOT focus on technology and use cases. There are many companies that are building the necessary components, networks, and applications that enable the development of IOT networks. And lot of attention is paid to the myriad of use cases for IOT that can be enabled by these technologies. But very little attention has been paid to the actual business case for deploying IOT networks, either for a potential operator of IOT networks, or for the end enterprise user. This lack of hard financial analysis has led to the deployment of many Proof Of Concept networks for IOT, but very few production deployments.
The missing step for many of these projects is a dedicated business case analysis to understand the total investment required, analyze the revenues and cost savings that can be derived from the deployment of the IOT use case, and understand the key KPIs to optimize the cases for the best financial return. Wireless 20/20 has now developed the WiROI IOT Business Case tool, the latest version of it award-winning business case modeling tool. The tool can be adapted to most IOT deployment scenarios to understand the key economic drivers for a proposed IOT deployment. The model can support uses that fall under the definition of asset tracking, sensor networks, and operational networks. These categories cover almost all IOT use cases being proposed today, and many other use cases which are being floated in the industry. While many of today’s IOT solutions are very innovative, there is a lack of hard quantitative economic analysis to cost justify wide deployment of solutions. The WIROI IOT Business Case tool allows a solution provider, or an enterprise end user, to understand the costs for a deployment, do a cost comparison between a number of technology options for the network, and weigh those costs against either the cost savings afforded by the solution, or the revenue opportunity generated by the deployment. The model can compare Bluetooth, LPWAN, WiFi, NB-IOT, LTE-M, satellite, and other wireless technologies that can be applied to IOT use cases. The positive side of the cost equation could come from new revenues that can be generated, or cost savings, such as, asset recovery, operational savings, energy savings, speed of service, and numerous savings that can be modeled.
Most IOT projects start with a use case and a technology plan. The industry has focused on several kinds of use cases to date. Asset tracking either tracks assets to be able to locate them in real time, such as pet tracking, and tracking of valuable assets to cut down on loses. The value is typically provided by savings from reduction of loses. Many different sensor networks have been proposed, including environmental sensors, agricultrural sensors, control sensors, and numerous other applications where gathering and processing information can provide value. Often the challenge is being able to quantify the value of the deployment. While it is easy to outline the cost side of the equation, it is more interpretive and requires careful analysis to quantitative benefit for a sensor use case. Operational networks, provide near constant data, such as an industrial manufacturing control system or city traffic monitors. These network either provide operational savings or perhaps a new service that can be monetized. For each of these IOT network types, there are many use cases which are being tried through proof of concept projects. But a very small percentage of these test networks go to full production.
Often, what is lacking is a comprehensive business case analysis to ensure that the use case being tested has economic value in addition to technical validity. With tools like those developed by Wireless 20/20, operators and enterprise users can better understand how to maximize the economic returns for today’s emerging IOT deployments.