This is the second installment in 5-part series on Ayla Network’s IoT survey on the “Biggest Opportunities and Challenges of IoT-Enabled Products and Services.”
One of the big questions about creating connected products for the Internet of Things (IoT) is whether the potential benefits outweigh the risks.
It’s a valid question. The IoT is still pretty new, without the well-worn paths of more established technology areas. Plus, the IoT is really complex and requires levels of technical expertise and new perspectives that few manufacturers have had the resources or time to assemble.
But what if there was less to fear—and more to gain—than those waiting on the IoT sidelines believe?
That’s one of the results hinted at in our recent survey on the “Biggest Opportunities and Challenges of IoT-Enabled Products and Services.”
Overestimating Problems, Underestimating Benefits
Respondents to our online survey were divided into two groups, based on a question about whether they had products that were already IoT-enabled: The two groups were those that answered “yes,” and those that answered either “no” or “I don’t know.” That split allowed us to compare respondents who have had some experience launching IoT solutions with those who are still IoT newbies.
One question we asked: On a scale of 1 to 6 (1 being most problematic), how do/how would you expect the following problems to affect your implementation of IoT? The answer options were:
- Cost of solution
- Lack of internal resources
- Unable to show value to executives
- Compliance/security concerns
- End customer does not see value
- Lack of understanding of IoT and its benefits
About the same percentage of both groups saw cost, lack of internal resources, and compliance/security concerns as significant problems (i.e., rated 1 or 2). But when it came to the other questions—problems showing IoT value to executives or to end customers, or lack of understanding of the IoT and its benefits—those who had not yet launched their own IoT products were definitely more concerned than those who already have IoT products on the market.
In other words, compared to those with real-world IoT experience, the IoT newbies seem to overestimate the problems of justifying and explaining the value of IoT solutions. That difference might indicate that lack of experience with the IoT colors perceptions and assumptions about how much both bosses and customers know about or value the IoT.
At the other end of the spectrum, we asked a similar scale-of-1-to-6 question: What benefits do you expect to see by adopting IoT? Those answer options were:
- Improved consumer experience
- Ability to adopt new business models
- Ability to reduce cost and increase operational efficiency
- Improved product development
- Expanding product portfolios
- Opportunities to move up and down the value chain
For every answer except “improved product development,” those who haven’t yet embarked on IoT solutions underestimate the potential benefits. For instance, 51.2% of those with IoT products on the market ranked “increased consumer experience” 1 or 2 as a benefit, compared to only 32.4% of the IoT newbies. Similarly, 44.4% of the experienced IoT group ranked “expanding product portfolios” 1 or 2 as a benefit, compared to 27.5% of the inexperienced group.
It seems that those imagining the benefits of a future IoT implementation, without real-world experience, underestimate how much the IoT might help them expand their business models or product portfolios, extend their value chain, increase operational efficiencies, or reduce costs.
Taking the Plunge
Of course, we’re not here to claim that the IoT is all sunshine and happiness. Every manufacturer interested in creating IoT-enabled products needs to weigh the potential risks and rewards for themselves.
But our survey indicates that the perspective of hindsight—as expressed by those manufacturers that have already launched IoT-connected products into the marketplace—should give hope to those manufacturers still on the fence. Maybe jumping into the IoT is a good bet after all.
Be sure to check out the first post in this series on the IoT survey “Biggest Opportunities and Challenges of IoT-Enabled Products and Services,” which provided an overview of the survey results. And stay tuned for the upcoming installments in this series:
Survey Highlights #3: Taking a mixed approach
Survey Highlights #4: Top considerations for creating IoT-enabled products
Survey Highlights #5: Future directions for IoT