IoT Strategies for Diversified Businesses

Building an IoT solution is complicated: sensors, short-range RF networks, gateways, security, web services, IT maintenance and monitoring, web and mobile development, and enterprise integration all have to come together. Enterprises entering the IoT space usually have deep expertise in building durable goods, but not in networking, sensor networks, or IT. And those enterprises are often diverse, with multiple divisions, product families, and business models that only add to the complexity.

This is a nine-step sequence for cutting through that noise and establishing a common framework that diverse product families across an organization can all build on, rather than each division reinventing IoT strategy on its own.

1. Identify the opportunities

Before anything else, it’s worth cataloging what a connected offering could actually do for the business:

Increased revenue. Connectivity adds features that can command a higher retail price and, unlike a one-time sale, opens the door to recurring revenue from monitoring and status-alert services.
Reduced operational expenses. Connected equipment can trigger service and maintenance notifications on a just-in-time basis instead of a fixed schedule, and historical data can help anticipate service needs before they become emergencies, informing smarter parts replenishment.
Increased differentiation. As connected products become the norm, new and cutting-edge features are a chance to establish your brand as an industry leader and stand out from competitors who haven’t made the shift yet.
Data discovery and insight. Whatever the primary purpose of the data you collect, it doubles as an internal platform for discovery: marketing insight into customer behavior, field diagnostics, and input into next-generation product design.
Streamlined customer service. Support staff can pull up usage and performance data for a specific customer’s equipment on demand, and proactive monitoring can flag a problem to the customer before they even notice it.
Reduced risk. Connected products can monitor and alert on problems before they become real (leak detection, driving-habit monitoring), which can also let insurers offer lower rates to policyholders whose equipment is monitored this way.
Increased security. Connected monitors can detect structural damage in a bridge or watch door locks and smoke alarms as part of a broader security system.
Regulatory compliance. In cold-chain systems, for example, FDA rules require certain foods be stored within specific temperature ranges, and a remotely monitored system can document compliance evidence automatically, a pattern that extends to the transport and storage of drugs and biological materials as well.
Connected brand strategy. As consumer expectations shift, there’s an opportunity for a brand itself to become “connected.” An engine-monitoring company becomes a connected engine-monitoring company, which deepens customer engagement and shows the brand is keeping up.

2. Be realistic about the challenges

The road to a successful IoT product isn’t guaranteed, and a good idea alone isn’t enough. A few of the recurring challenges worth planning for up front:

Integration. Building cloud-connected products from scratch means integrating a wide range of technologies spanning IT, web, and embedded development. Depth across that whole stack is rarely found in one company, especially one whose core competency isn’t IT.
Security. As IoT grows, security and privacy take center stage, and it’s tempting to treat security as a back-burner concern. But as connected devices take on more sensitive functions, like locking doors or handling sensitive data, the incentive for attackers only grows. Security isn’t one-size-fits-all; the right approach depends heavily on the device, the communication method, and the data involved, and choosing experienced IoT partners can help fill gaps in internal expertise.
Internal fragmentation. Enterprises with multiple divisions, subsidiaries, and P&Ls risk each division building its own one-off IoT solution instead of a shared, customizable framework. That fragmentation undermines both efficiency and consistency.
Customer needs. Understanding what customers actually want, and will pay for, is one of the hardest parts of becoming a connectivity-focused company. Surveys, market research, and focus groups belong early in the planning phase, not after the product is built.
Embracing innovation. Traditional durable-goods companies have deep expertise in their existing markets and technologies, and connected products bring an unfamiliar set of skills and support requirements. Succeeding here means being willing to build new core competencies and new partnerships, not just bolting connectivity onto an existing product line.

3. Assess the risks

Alongside the challenges above, watch for these recurring pitfalls: naive technology selections from teams new to IoT; poor execution from inadequate cross-team coordination; a missing or incomplete security strategy; an unrefined business model that doesn’t fit how the enterprise actually sells; support teams that aren’t equipped to remotely diagnose and troubleshoot connected products; and simply not moving fast enough while competitors build their own IoT strategy in the meantime. This isn’t an exhaustive list, and every enterprise will have risks specific to its own situation, but it’s worth assessing deliberately rather than discovering them mid-deployment.

4. Identify problems to solve

Successful IoT products solve a specific, tangible problem. They don’t go looking for one after the fact. Before committing to a direction, it’s worth answering a short list of questions clearly: What is the customer need? What expense will be reduced? Where will the revenue come from? How will this further the corporate brand? How will it protect against competitive pressure? Getting clear, specific answers up front informs the technology and trade-off decisions that follow, and keeps the whole organization aligned on what “success” actually means.

5. Brainstorm business models

An unrefined business model is one of the bigger risks to any IoT deployment, so it’s worth deliberately considering the options rather than defaulting to whatever’s familiar:

Revenue generation: charging customers a recurring fee, building the cost into the hardware price, offering a free trial period, or having the cost subsidized by a carrier or insurer.
Expense reduction: using the connected product’s predictive, proactive nature to offset its own development and deployment costs, with a realistic plan for how those savings materialize.
Free: offering connectivity at no charge when the real value is in the data itself, used internally to differentiate, streamline support, or understand customer usage.

There are others worth considering too, including hybrid, subsidy, pre-paid, and advertising-supported models. Picking the right one (or combination) depends on the product, the organization, and the target market.

6. Select a technology framework

The technology framework determines how data is collected, stored, and shared, and how much value it delivers to customers, distributors, dealers, service personnel, and users. A few deployment patterns are worth considering, depending on the organization’s needs:

No cloud: connectivity limited to a local display device (an HMI, smartphone, tablet, or laptop), with no internet-based cloud infrastructure involved.
Standard: smart devices or sensors talk to a gateway, which relays data to a software platform that stores, processes, and visualizes it, sometimes routing common-device data on to a backend analytics solution.
Multi-site: each site has its own closed network and on-premise installation (a chain of grocery stores each monitoring refrigeration temperature, for example), periodically sending aggregate data up to a centralized instance for cross-site visibility.
Closed network: where regulation, policy, legal liability, or technical limits require data to stay local (municipalities, medical devices, aerospace, and similar), devices connect through an on-premise installation that collects, analyzes, and alerts on-site rather than in the cloud.
Comprehensive: every component is active: devices talk to gateways, which feed on-premise software connected to an IoT cloud platform, itself federated with a backend analytics platform.

When selecting a platform for a diverse enterprise that may need different deployment patterns in different parts of the business, look for: an open-API data storage and retrieval platform, flexible data schemas, IT infrastructure hosting options, an eventing system, firmware-over-the-air updates, a user dashboard system, billing-system integration, mobile UI support, and embedded hardware/firmware design capability.

7. Develop a prototype

The ideal set of technology choices is rarely clear from the start. Build a prototype first: end-to-end, with a thin thread connecting the sensor through the device, network, cloud, end-user interface, and enterprise integration, to surface the real pinch points before committing further.

8. Review with stakeholders

Once a prototype exists, run a post-mortem: understand what worked and what didn’t, gather customer input, and decide whether to refine the prototype or build additional ones. When a final prototype is ready, it needs to be evangelized to other divisions with clear documentation, descriptions, and diagrams showing what was built and how others can reuse it. The shape of an IoT solution for a diversified enterprise is often an hourglass: the middle (the platform) stays constant across deployments, while the bottom (device personality) and top (user interface) vary by product, user type, and business model. Part of this stakeholder review is deciding which parts of that hourglass should stay constant and which should be customized per division.

9. Develop a comprehensive enterprise IoT strategy

With the technology framework in place and an initial prototype reviewed, it’s time to formalize a strategy that covers: business modeling, competitive analysis, an IP portfolio strategy, the technology framework itself, concrete action plans across product development and go-to-market, checklists so every new product or division follows the same process, operational readiness (manufacturing, distribution, installation, billing), enterprise web-service federation, voice-of-customer research, engineering priorities, marketing and sales enablement, clear ownership for business unit leaders, and a support strategy for end customers.

Conclusion

IoT is perhaps the single biggest opportunity, and threat, facing diversified enterprises. Understanding the opportunities, being honest about the challenges and risks, and building a shared framework and set of steps gives an organization the best chance to succeed, rather than leaving every division to solve the same problems independently.