IIoT: 71% stuck in Pilot Purgatory

Industrial IOT is the area where it’s easiest to make a business case, and forecasters predict some $3.7 Trillion in value to be created here in the next 7 years. But adoption in the field is not going nearly as fast as this sizeable carrot would seem to justify.

41% of firms are in limbo in the pilot stage, and 30% are still discussing how to start. And these are all firms interviewed by McKinsey, so I assume large firms with big budgets, otherwise I rather doubt the firm would be talking with them.

The solution, according to McKinsey and Cisco, is of course to hire more consultants. It sounds very self-serving but I do think they have a point: in my experience factory engineers tend to be very busy people, and developing new IOT products from scratch is generally not what they focus on, their skill is in tweaking and optimizing the designs they are given. An internal IoT project is also likely to instantly be paused when yet another fire from a major paying customer needs to be fought. As a result, IMHO chances are low that internal engineers will be the hell-bent evangelists who are going to win over the always present resistance to change.

No wonder “lack of resources/knowledge to scale” is listed as the No. 1 problem. As a result, most pilots last well over a year, and by that time likely an even better technology has come out, which also needs to be piloted… Keeping abreast of all the latest developments is a full-time job, and shortening the learning curve by working with consultants who have a broad experience seems well worth the money. Cisco reported that only 26% of IOT projects survived the pilot stage, but most companies agreed that learnings from stalled or failed IoT initiatives have helped accelerate their investment in IoT. Nothing new there, quick iterations are key in all product development, few prototypes work 100% the first time around.

Consultants also have the befit of thinking outside of the corporate box, it's often in sharing data with other companies across the supply chain that the biggest benefits can be gained.

The most practical piece of advice I came across to deal with the open-ended pilot conundrum is to set up pilot ext-criteria up-front that would trigger the decision for full deployment of the solution. This will help everybody to understand the desired outcome in a quantitative way. Other sensible suggestions to increase buy-in include no longer talking about IOT, but rather "a solution to increase machine uptime", or whatever the user benefit is.

PS I am not a pilot consultant, so I consider myself fairly objective. For quick iterations, and dealing with company politics I feel it’s much better to manage and tweak a pilot as locally as possible. IOT consultants with more than 3 years experience are welcome to leave their site and city in the comments. Further tips on how to get things moving quicker also very welcome.

Update: I received so much helpful feedback on how to prevent Purgatory that I put it together in a summary here: https://www.dhirubhai.net/pulse/iiot-how-avoid-pilot-purgatory-lessons-from-field-engelen

Case Engelen is CEO of Titoma and has been designing and manufacturing electronic products in Taiwan & China for 20 years. He also wrote: The 9 Laws of Design For China Manufacturing. If you like this article, well, please like it!