The internet of things (IoT) may present the biggest opportunity to enterprises since the dawn of the internet age, and perhaps it will be bigger. Research firm Gartner predicts there will be nearly 20 billion devices on the IoT by 2020, and IoT product and service suppliers will generate $300 billion+ in revenue.
Successfully leveraging that opportunity—bringing together sensors, connectivity, cloud storage, processing, analytics and machine learning to transform business models and processes—requires a plan.
"In the course of my career, I've estimated and planned hundreds of projects," John Rossman, who spent four years launching and then running Amazon's Marketplace business (which represents more than 50% of all Amazon units sold today), wrote in his new book, The Amazon Way on IoT: 10 Principles for Every Leader from the World's Leading Internet of Things Strategies. "I've learned that, even before you start seeking answers, it's imperative to understand the questions. Guiding a team to a successful outcome on a complex project requires understanding of the steps and deliverables, necessary resources, and roles and every inherent risk and dependency."
Before you start the hardware and software design, and before you figure out how to engage developers, you need to start with a better set of questions.
Rossman said there are three key phases to building a successful IoT strategy. While he presents the steps sequentially, he noted that many steps are actually taken concurrently in practice and can be approached in many different ways.
Part 1. Develop and articulate your strategy
First and foremost, Rossman said that you must narrow and prioritize your options. IoT presents a broad swathe of opportunities. Success depends upon understanding your market, evaluating the opportunities with deliberation and attacking in the right place.
It all begins with a landscape analysis. You need to thoroughly understand your industry and competitors—strengths, weaknesses, opportunities and threats (SWOT). This will help you see the megatrends and forces at play in your market.
"Creating a landscape analysis and value chain of your industry is a very important thing to do," said Rossman. "Studying the market: What are they saying about IoT in your industry? Truly understanding what is your worst customer moment: Where do customers get frustrated? What data or what event improves that customer experience? What's the sensor or IoT opportunity that provides that data?"
Value-chain analysis and profit-pool analysis
The next step is to create a value-chain analysis and profit-pool analysis of your industry. It should be a broad view of the industry, don't give in to tunnel-vision with a narrow view of your current business. In some cases, this may involve launching a business in one part of the value chain as a way to gain perspective on the rest of the value chain and to identify other business opportunities.
Partner, competitor and vendor analysis
Create a map of other solutions providers in your space to develop a clear understanding of what exactly each one does, who their key clients are and what their IoT use cases are. Rossman said you should even pick a few to interview. Use this process to understand the needs of customers, the smart way those needs are already being met and where the gaps are.