Modern technology is like toddler; it’s quick, it’s imaginative, it’s always growing and changing, and if you turn your head, you might lose track of it. In today’s fast-paced market, no company can take the wait-and-see approach to innovation. The key to keeping or expanding your market share is getting ahead of the latest trends, and right now, no trend has more potential than the Internet of Things. As you likely know, the Internet of Things is the network of sensor-laden physical devices that communicate with other hardware and software via the Internet. What you may not know is there will be 20 to 30 billion
devices connected to the Internet by 2020. This includes the smartphone in your pocket, the tablet in your briefcase, the computer on your desk, and thousands of things that haven’t been invented yet. If executives want to turn this opportunity into profit, they’re going to have to understand not just how the IoT works, but it’s value – and fast.
What Do You Have to Lose?
In short, revenue. According to McKinsey & Company, the IoT is projected to generate $11.1 trillion a year
in economic value by 2025, with $5 trillion coming exclusively from B2B settings. From consumer-facing retailers to manufacturers, every company stands to benefit from the Internet of Things. The problem? Most businesses have yet to realize the potential:
- Over 50% of business leaders had no plans to pursue or implement IoT technology
- Only 32% of business leaders were taking any steps toward IoT connectivity
But brands are starting to catch up:
- Forrester reports that 50% of North American companies of 250+ employees are increasing technology budgets over the next 12 months, and
- 49% of business decision makers consider the expansion of IoT initiatives a “high” or “critical” priority over the next 12 months
If your executive team requires convincing before investing in IoT, now is the time to introduce them to the basics, including:
- How IoT is making an impact across industries
- The business risks of delaying or ignoring implementation of IoT technology
- How to begin incorporating IoT into product roadmaps
Are you sold on the value of IoT, but need a little help perfecting your pitch? Read on to learn how to win executive buy-in for your proposal.
Step 1: Teach Executives the Basics of IoT Technology
Despite what some executives may believe, IoT technology isn’t much different from the devices currently used on a daily basis. Lightbulbs, kitchen appliances, and even clothing can all become a part of the Internet of Things with the addition of a connected sensor. Here are four IoT building blocks your C-Suite should be familiar with:
- MEMS (Micro Electro-Mechanical Systems): MEMS are low-powered, miniature sensor sets that collect data, communicate with servers, and perform actions prompted by users and machinery. They come in all shapes and sizes and contain a variety of sensors including gyroscopes, accelerometers, eCompasses, thermometers, pressure and humidity detectors, etc.
- Strong Mobile Networks: As the population of connected hardware grows, so does the need for stronger and faster bandwidth. Intel believes the 5G mobile telecommunications standard will be crucial for connecting billions of devices to the Internet and ensuring optimal performance.
- Application Program Interfaces (API): APIs are a set of routines, protocols, and tools for building software applications that allow developers to continuously improve and alter the capabilities of a connected device. By opening their APIs to third-party developers, companies empower the entire development community to improve their products and push innovation further.
- Partnerships: The IoT is literally built on partnerships, starting with the alliance between hardware and the Internet, and extending into strategic partnerships between businesses. As more businesses begin investing in the Internet of Things, it will be increasingly important for companies to align their interests and priorities.
If your executives are familiar with these IoT factors, they’ll be equipped to better understand your Internet of Things proposal. Be sure to send them diagrams, infographics, and articles of real-world examples leading up to your pitch. And if you really want to impress your executives, build a quick prototype that demonstrates what MEMS and APIs are capable of.
Step 2: Demonstrate How IoT Is Transforming Industries
Although the Internet of Things is still in its early adopter phase, there are plenty of industries where it has made significant business impact.
IoT technology is the biggest revelation for the automotive industry since the internal-combustion engine. If you’ve ever used Uber or Lyft, you know the significance of IoT to modern commuters. However, ridesharing is only the beginning – the automotive industry is set to undergo a foundational transition. As PWC’s Connected Car Study states, “Automakers that have always seen themselves as product suppliers will take on a new identity as providers of mobility services.” The report estimates that by 2021, annual sales of connected car technology will triple to reach $140 billion.
Health & Wellness
What began as a variety of glorified pedometers has exploded into an industry predicted to be worth $5.4 billion
by 2019. As the value of the wearable health and fitness market increases, product innovation will also boom. Activity trackers and smartwatches are now capable of monitoring our step counts and vital signs, and companies like Google are creating breakthrough products, including a contact lens
that detects the wearer’s blood glucose level–a crucial metric for diabetics. As more connected devices comply with medical regulations, the Internet of Things has the potential to transform the healthcare system by making accurate health-monitoring devices more accessible, affordable, and portable.
Connected home devices are gaining popularity, with two-thirds of consumers
planning to purchase an in-home device in the next five years. Revenue in this market is expected to grow 28.2% per year, resulting in a value of $20.86 billion by 2020
. Smart thermostats like Nest have ushered in a new wave of home technology by learning user habits and temperature preferences, even learning when a user is and isn’t at home. And thanks to Apple’s HomeKit and Google’s Brillo operating system, consumers will soon be able to control everything from their refrigerator to the garage door with nothing more than a smartphone or tablet.
Players in manufacturing, mining, oil and gas, and utilities are also joining the IoT movement, with investments in the Industrial Internet of Things (IIoT) market spanning industries representing 62% of gross domestic product
(GDP) among G20 nations. These large investments are predicted to result in even greater gains, according to analyst David Floyer, who predicts that the cumulative net value of IIoT spending will reach $1.7 trillion
Efficiency is key to profitability for manufacturing facilities. Wasted time or material costs businesses millions of dollars a year. According to a recent Microsoft case study
, KUKA Systems Group built a new factory for Jeep Wrangler bodies that utilizes over 60,000 IoT devices connected to a central data-management system. Once all the pieces were in place, the Wrangler factory increased capabilities to consecutively operate 24 hours a day for over eight years, resulting in the creation of a new car body every 77 seconds, or 830 car bodies a day.
Toys & Games
Children’s entertainment icons from Barbie to Disney are delivering connected toy experiences to take play to new levels of interactivity and profitability, with analysts expecting the smart toy sector to generate $2.8 billion
in revenue this year. As this generation becomes immersed with connected devices, the IoT movement will continue to grow exponentially. Gen Z, which is comprised of children born in 1995 and beyond, already makes up 26% of the US population
and has $44 billion in purchasing power. That economic impact is only going to strengthen as they enter the workforce, likely in positions requiring a high degree of technological aptitude. As you can see, the idea of a connected world is becoming a reality, and several industries are already making huge strides in the IoT. Seize this opportunity to join the stampede of innovation before it passes you by.
Step 3: Highlight Potential Consequences of Missing Out
Some executives are wary of the IoT waters, but standing on the shore can be riskier than diving in. Patience is rarely rewarded in modern markets. Case in point:
While industry disruptors like Redbox and Netflix began making their way into consumers’ DVD trays, Blockbuster doubled down on their brick-and-mortar business model and lost everything. In 2004, Blockbuster was a $5 billion company
($5.9 billion in revenue) with 60,000 employees and 9,000 stores worldwide. Now, it’s as non-existent as Betamax. By the time Blockbuster threw together a digital strategy, the market was already flooded with companies offering a wide array of content and original programming.
A little over a decade ago, Kodak was the king of the recreational photography market. Their affordable film cameras were perfect for amateur photographers looking to document their holidays and vacations. Now, with the advent of social media and smartphones with a 10+ megapixel camera, there’s no longer a need for point-and-shoot cameras full of film that needs to be developed. Although their industrial printing revenue has kept them afloat, Kodak’s stock price
continues to fade like a printed picture left in the sun.
Not long ago, every power player from Wall Street to Silicon Valley carried a Blackberry in their pocket. Fast forward to 2015, and we find BlackBerry clinging to a miniscule .4% smartphone market share
. BlackBerry may still be the most secure OS on the market, but that doesn’t resonate with consumers who prefer convenience to privacy. Apps, touchscreens, and efficiency are the keys to success in today’s smartphone industry, and BlackBerry took too long to see it. In summation, if Blockbuster started their streaming service first, Kodak expanded its digital offerings, and BlackBerry kicked its keyboard to the curb, we would be praising their acumen. Instead, they’ve become cautionary tales to the consequences of resisting innovation.
Step 4: Build a Solid IoT Proposal
By now, it should be clear that the Internet of Things is a worthy investment. The only thing left to do is sell its value to your executive team. To help nail your pitch, consider these tips to make your presentation run smoothly:
1) Create a Sound Strategy
Before you book time on a C-level’s calendar, be prepared to present an iron-clad business strategy that answers the following:
What is the value proposition?
Fully detail how IoT technology can enhance value across business units, including product, customer experience, and finance. For example, detail how IoT capabilities impact competitive positioning, what customer pain points it alleviates, and forecast financial impact based on gains in market share.
How long will the plan take to enact?
In business, time is money, and your executives need to know how long your proposal will take to execute. Although you’ll want to keep timelines as short as possible, do not underestimate the time it takes to successfully execute an IoT strategy.
What will it cost?
The only thing more precious than time for executives is money. When pitching your IoT strategy, highlight how inexpensive connected hardware currently is and will continue to become overtime. For example a 3-axis accelerometer that used to cost $3 in 2007
now costs around $0.50, with even smaller packaging and better performance than the former version.
How do we determine ROI?
Now that your timelines and budgets are set, bring the pitch home by establishing an attractive ROI. Similar to your time frames, don’t overpromise with your estimated ROI. See how other companies in your industry have succeeded in the IoT space and plan accordingly.
How will it impact the next five years?
From preparations to implementation, create a roadmap for how your IoT strategy will impact business over the next five years. Define clear variations in time commitments, cost requirements, and projected profits, ending with recommendations for the rest of the decade if everything goes according to plan.
2) Share Success Stories
Although the Internet of Things is still in its infancy, there are plenty of success stories to reference when meeting with the C-Suite. In addition to others mentioned in this report, sample these for your pitch:
- ATM leader Diebold placed IoT technology in 5,000 of their machines, resulting in a “17% increase in remote issue resolution, a 15% reduction in equipment downtime, and average downtime responses shortened to less than 30 minutes.”
- BSX Athletics uses IoT technology to provide elite athletes with their blood-lactate threshold level without the need for blood-based lab tests.
- The world’s largest agricultural equipment manufacturer, AGCO, uses IoT technology to help dealers achieve 10-15% fuel savings for customers through equipment optimization while reducing idle times by 15%.
- Global vending machine company Cantaloupe Systems connects over 100,000 of their machines to the Internet of Things for faster stocking and maintenance information.
It’s best to find a case study that is related to your industry, but the breadth of companies currently implementing an IoT strategy is worth noting.
3) Utilize an Expert IoT Partner for Support
Any C_O worth their bonus will respond to your proposal with several questions, comments, and potential concerns. The best way to prepare for this feedback is to consult with an IoT partner who knows:
- What is involved in executing a successful IoT strategy
- Best practices for implementation, including timeline
- What work flows look like for short-term and long-term projects
- Pricing for the parts and labor your plan will require
- Trusted hardware, cloud, and data partners
- Well-defined success metrics
- Best practices in design, usability, and promotion
Finding a partner with a breadth of IoT knowledge and experience can be difficult, but leaning on third-party expertise will better validate the ideas you’re selling to the C-suite.
Step 5: Pitch
By now, you can explain the basics of IoT technology in your sleep. You know how connected devices have revolutionized businesses across industries. You’ve seen what happens to companies that are slow to adopt modern technology. You’ve tailored your proposal and timeline to align with business goals. The only thing left to do is pitch. Call a meeting with your executives, present your IoT strategy, and then give us a ring. We’d love to help you get things started.