“If you don’t know where you’re going, any road will get you there.” Lewis Carroll
When starting out, the vast amount of information provided by Internet of Things (IoT) devices can be tantalizing. It can also be an overwhelming amount of data that has no meaning if you aren’t prepared.
Planning for metrics and reports may feel like the last thing you want to worry about when there are so many more important things to do during the launching of a new IoT project. Why look in the rear-view mirror when the road is in front of you?
And that’s the trap. Metrics aren’t the past. They’re an integral part of the roadmap to where you’re going. I learned this the hard way early in my career. My “measure of success” wasn’t management’s measure of success, and I found myself pushing for a project that had zero reason for survival.
Not putting key metrics in place, up front, is just one of the bad habits that happen in early-stage projects. Humans are narrative beings. We like stories, and we’re going to tell a good story about why our results make sense and the IoT project is a success. It’s what we expected… We can show how it all happened… Unfortunately, we unwittingly lie to ourselves. We see patterns that aren’t really there. It’s not malicious. It’s just the way it happens. You’ll find a few items below that can get overlooked. But do things right, and you’ll have a nice IoT project case study.
IoT Metrics Need to Tell the Right Story
Metrics are different than data. We have a lot of data. We need to think through the right data to measure, the handful of metrics meaningful to the business, and then write it down. (Really, don’t rely on memory.)
I strongly urge you to not, “track everything and we’ll figure it out later.” This leads to staring at a pile of data that you can’t make sense of.
Data can be collected and analyzed from millions of sources with IoT. Determine how your business will use it. What does your team want to measure, monitor, view or predict? Now you’re aligning the capabilities of IoT with your business goals. When you’re looking at your IoT project, using the appropriate IoT platform makes it easier to collect data from new and existing systems – regardless of whether your business is in manufacturing, construction, agricultural or other categories.
An older McKinsey article reported that sensor data used to predict equipment failure in a manufacturing environment could reduce maintenance costs by as much as 40 percent and cut unplanned downtime in half. With the right set of tools, users can easily calculate complex aggregations across one or a family of devices. Graph the data on dashboards for your own team or display it in a custom application for clients.
There’s a better way. It’s more work, and more mentally challenging than it appears, but vitally important.
Pick the Right IoT Key Performance Indicator
First, pick one IoT metric that is really material to the success of your business – the Key Performance Indicator (KPI). Don’t just follow what the industry does. Websites used to count unique visitors as most important. Advertisers valued that number. It was the norm. Facebook, however, questioned that metric. What they learned about their business was a user that made three friend connections came back to the service with much greater frequency. Facebook stopped focusing on visitors and optimized for friend connections.
For your IoT project, define the primary goal. Is it a reduction in cost, staff-hours or waste? Set a baseline with a pre-survey or with existing data and then measure again after the proof of concept using the same method. Now you have actionable data to work with.
An alternative is to measure the progress of the project against a set of criteria. Such measurement will be partially based on opinion, but still valuable. It can provide an early warning when the project isn’t doing well and will allow for intervention and course adjustment. It’s also your anchor of what good looks like. You will have, at least, one marker by which to judge your results.
Earn Support for New IoT Initiatives
Next, have each decision-maker commit to his or her definition of success before the IoT project begins. The assumption here is you have a cross-functional team working on your project. If not, form one. You’re going to need evangelists and additional pockets of support across the company. A Cisco study found 54% of successful IoT initiatives attributed collaboration between departments as the reason for success.
If it’s not the metric used for your KPI, confirm you have the ability to get the data you need. These metrics exercises help you to identify and address potential problems, such as site issues that often include power limits, connectivity issues and RF interference.
Who should do the evaluating? Select one or more individuals within your organization or external people who will benefit most from the project and will agree to act as its customers. The customers of the initiative will rate its progress monthly using any combination of the metrics established.
IoT MVP, Get Real Value from an IoT Project POC
Finally, keep your project focused. Too many variables and not enough information to know which variable is the material difference to your business. In startups, you hear the term MVP – minimum viable product. Sometimes referred to as minimum valuable product – because there is usually a missing component to what is being done today. If you can solve that, you deliver enough value to secure adoption.
To ensure focus is maintained on that MVP, I like using the Pareto principle to help winnow down to the most important features or outcomes needed for the IoT project. In the Pareto principle, twenty percent of what you do will have eighty percent of the impact. As the Pareto principle is fractal, twenty percent of the twenty percent is truly significant, and only a vital few can add tremendous value. Do that 2 or 3 times to drill down to the core features need.
These tips should get you going in the right direction. If you want to see how we made this work for one of our clients during an initiative, review the IoT case study here.