A third of all completed IoT projects are not considered success: Cisco survey

While IDC predicts that the worldwide installed base of Internet of Things (IoT) endpoints will grow from 14.9 billion at the end of 2016 to more than 82 billion in 2025, a new study by Cisco reveals that 60 percent of IoT initiatives stall at the Proof of Concept (PoC) stage and only 26 percent of companies have had an IoT initiative that they considered a complete success. Even worse: a third of all completed projects were not considered a success.

“It’s not for lack of trying,” said Rowan Trollope, Senior Vice President and General Manager, IoT and Applications, Cisco. “But there are plenty of things we can do to get more projects out of pilot and to complete success, and that’s what we’re here in London to do.”

Cisco released the findings at IoT World Forum (IoTWF). The company surveyed 1,845 IT and business decision-makers in the United States, UK, and India across a range of industries — manufacturing, local government, retail/hospitality/sports, energy (utilities/oil & gas/mining), transportation, and health care. All respondents worked for organisations that are implementing and/or have completed IoT initiatives.

Key Findings:

1. Human factor

IoT may sound like it is all about technology, but human factors like culture, organisation, and leadership are critical. In fact, three of the four top factors behind successful IoT projects had to do with people and relationships:

- Collaboration between IT and the business side was the #1 factor, cited by 54 percent.

- A technology-focused culture, stemming from top-down leadership and executive sponsorship, was called key by 49 percent.

- IoT expertise, whether internal or through external partnership, was selected by 48 percent.

In addition, organisations with the most successful IoT initiatives leveraged ecosystem partnerships most widely. They used partners at every phase, from strategic planning to data analytics after rollout.

Despite the strong agreement on the importance of collaboration among IT and business decision-makers, some interesting differences emerged:

- IT decision-makers place more importance on technologies, organisational culture, expertise, and vendors.

- Business decision-makers place greatest emphasis on strategy, business cases, processes, and milestones.

- IT decision-makers are more likely to think of IoT initiatives as successful. While 35 percent of IT decision-makers called their IoT initiatives a complete success, only 15 percent of business decision-makers did.

2. Partnerships are crucial

Sixty percent of respondents stressed that IoT initiatives often look good on paper but prove much more difficult than anyone expected. Top five challenges across all stages of implementation: time to completion, limited internal expertise, quality of data, integration across teams, and budget overruns. Our study found that the most successful organisations engage the IoT partner ecosystem at every stage, implying that strong partnerships throughout the process can smooth out the learning curve.

“We are seeing new IoT innovations almost every day,” said Inbar Lasser-Raab, VP of Cisco Enterprise Solutions Marketing. “We are connecting things that we never thought would be connected, creating incredible new value to industries. But where we see most of the opportunity, is where we partner with other vendors and create solutions that are not only connected but also share data. That shared data is the basis of a network of industries – sharing of insights to make tremendous gains for business and society, because no one company can solve this alone.”

3. Reap the Benefits

When critical success factors come together, organisations are in position to reap a windfall in smart-data insights.

Seventy-three percent of all participants are using data from IoT completed projects to improve their business. Globally the top 3 benefits of IoT include improved customer satisfaction (70 percent), operational efficiencies (67 percent) and improved product/service quality (66 percent). In addition, improved profitability was the top unexpected benefit (39 percent)

4. Learn from the failures

Taking on these IoT projects has led to another unexpected benefit: 64 percent agreed that learnings from stalled or failed IoT initiatives have helped accelerate their organization’s investment in IoT.

Despite the challenges, respondents said they are optimistic for the future of IoT — a trend that, for all its forward momentum, is still in its nascent stages of evolution. Sixty-one percent believe that companies have barely begun to scratch the surface of what IoT technologies can do for their businesses.